Synlogic
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K (Mark One)☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2018OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITIONPERIOD FROM TO Commission File Number 001-37566 SYNLOGIC, INC.(Exact name of Registrant as specified in its Charter) Delaware26-1824804(State or other jurisdiction ofincorporation or organization)(I.R.S. EmployerIdentification No.) 301 Binney St., Suite 402Cambridge, MA02142(Address of principal executive offices)(Zip Code)Registrant’s telephone number, including area code: (617) 401-9975 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per share Nasdaq Capital Market Securities registered pursuant to Section 12(g) of The Act:None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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 ☒ NO ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 ofthis chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. Seethe definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒Non-accelerated filer ☐ Small reporting company ☒Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒The aggregate market value of common stock held by non-affiliates of the registrant as of June 30, 2018, the last business day of the registrant’s most recently completed secondquarter, was $174.8 million, computed based on the closing price of $9.83 per share on June 30, 2018. As of March 5, 2019 there were 25,400,495 shares of the registrant’s common stock, par value $0.001 per share, outstanding.DOCUMENTS INCORPORATED BY REFERENCEThe following documents (or parts thereof) are incorporated by reference into the following parts of this Form 10-K: Certain information required in Part III of this Annual Report onForm 10-K is incorporated from the registrant’s definitive proxy statement for the 2019 annual meeting of stockholders to be filed pursuant to Regulation 14A with the Securities andExchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2018. Table of Contents PagePART I Item 1.Business2Item 1A.Risk Factors30Item 1B.Unresolved Staff Comments58Item 2.Properties58Item 3.Legal Proceedings58Item 4.Mine Safety Disclosures58 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities59Item 6.Selected Financial Data59Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations60Item 7A.Quantitative and Qualitative Disclosures About Market Risk72Item 8.Financial Statements and Supplementary Data72Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure72Item 9A.Controls and Procedures72Item 9B.Other Information73 PART III Item 10.Directors, Executive Officers and Corporate Governance74Item 11.Executive Compensation74Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters74Item 13.Certain Relationships and Related Transactions, and Director Independence74Item 14.Principal Accounting Fees and Services74 PART IV Item 15.Exhibits, Financial Statement Schedules75Item 16.Form 10-K Summary77 i FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. We make such forward-lookingstatements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statementsother than statements of historical facts contained herein are forward-looking statements. In some cases, you can identify forward-looking statements byterminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or thenegative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about: •the success of our research and development efforts; •the initiation, progress, timing, costs and results of clinical trials for our product candidates; •the time and costs involved in obtaining regulatory approvals for our product candidates; •the progress, timing and costs involved in developing manufacturing processes and agreements with third-party manufacturers; •the rate of progress and cost of our commercialization activities; •the expenses we incur in marketing and selling our product candidates; •the revenue generated by sales of our product candidates; •the emergence of competing or complementary technological developments; •the terms and timing of any additional collaborative, licensing or other arrangements that we may establish; •the acquisition of businesses, products and technologies; •our need to implement additional infrastructure and internal systems; •our need to add personnel and financial and management information systems to support our product development and potential futurecommercialization efforts, and to enable us to operate as a public company; and •other risks and uncertainties, including those listed under Part I, Item 1A. “Risk Factors”. Any forward-looking statements in this Annual Report on Form 10-K reflect our current views with respect to future events or to our future financialperformance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to bematerially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may causeactual results to differ materially from current expectations include, among other things, those listed under Part I, Item 1A. “Risk Factors” and elsewhere inthis Annual Report on Form 10-K. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required bylaw, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.This Annual Report on Form 10-K also contains estimates, projections and other information concerning our industry, our business, and the marketsfor certain diseases, including data regarding the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts,projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially fromevents and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data fromreports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications,government data and similar sources.1 PART IItem 1. Business.OverviewWe are a clinical-stage biopharmaceutical company focused on advancing our proprietary drug discovery and development platform to createSynthetic Biotic™ medicines, which are designed using synthetic biology to genetically reprogram beneficial microbes to treat metabolic and inflammatorydiseases and cancer. Synthetic Biotic medicines are generated by applying the principles and tools of synthetic biology to engineer beneficial microbes toperform or deliver critical therapeutic functions. As living medicines, Synthetic Biotic medicines can be designed to sense a local disease context within apatient’s body and to respond by metabolizing a toxic substance, compensating for missing or damaged metabolic pathways in patients, or by deliveringcombinations of therapeutic factors. Our goal is to lead in the discovery and development of Synthetic Biotic therapies as living medicines capable of robustand precise pathway complementation and delivery of therapeutic benefit to patients. We believe that our Synthetic Biotic platform has potential to address both metabolic and immune-mediated diseases and we are evaluating thesemedicines at different sites of action via different routes of administration, either orally or via injection. While we have designed and created a number ofbacterial strains that could potentially be used therapeutically in a range of diseases, our initial focus is on metabolic diseases that could potentially betreated following oral delivery of a living medicine to the gut. This includes metabolic diseases, which include rare genetic diseases as well as metabolicdiseases caused by organ dysfunction. When delivered orally, Synthetic Biotic medicines are designed to act from the gut to compensate for a dysfunctionalmetabolic pathway that results in the toxic accumulation of a metabolite with the intended consequence of reducing the systemic levels of the metabolite.We believe that success in our lead programs in rare metabolic diseases will enable us to demonstrate the potential of our oral Synthetic Biotic medicines toaddress metabolic dysfunction while bringing meaningful change to the lives of patients suffering from these debilitating conditions.Our two lead therapeutic programs are being developed for the treatment of hyperammonemia and phenylketonuria (PKU). SYNB1020, our firsttherapeutic program to enter clinical trials, is an oral therapy intended for the treatment of hyperammonemia, which includes patients with liver disease suchas hepatic encephalopathy (HE) and patients with urea cycle disorders (UCD). In these conditions ammonia accumulates in the body and becomes toxic,leading to neurocognitive crisis and risk of long-term cognitive or behavioral impairment, coma or death. SYNB1020 has received both Fast TrackDesignation and orphan drug designation for UCD from the U.S. Food and Drug Administration (FDA). We initiated a Phase 1 clinical trial in June 2017 toevaluate the safety and tolerability of SYNB1020 in healthy volunteers. In November 2017, we announced top-line data from this study that demonstratedthat SYNB1020 was safe and well-tolerated and achieved proof-of-mechanism. In March 2018, we initiated a clinical trial in patients with cirrhosis andelevated blood ammonia to evaluate the safety and tolerability of SYNB1020 as well as the ability of this Synthetic Biotic medicine to lower systemic levelsof ammonia. We expect to have top-line data from this study in mid-2019. Upon receipt of satisfactory evidence of ammonia lowering in patients withcirrhosis, we will determine the clinical development path for SYNB1020 for the treatment of conditions resulting in hyperammonemia.SYNB1618, our second program to enter clinical trials, is an oral therapy intended for the treatment of PKU, a rare metabolic disease in which theamino acid phenylalanine (Phe) accumulates in the body as a result of genetic defects. Elevated levels of Phe are toxic to the brain and can lead toneurological dysfunction. SYNB1618 is designed to function in the gut of patients to reduce excess Phe, with the goal of lowering levels in the blood andother tissues. SYNB1618 has received both Fast Track designation and orphan drug designation for PKU from the FDA. We initiated a Phase 1 / 2a clinicaltrial for SYNB1618 in April 2018 and announced top-line data from this study in September 2018 that demonstrated that SYNB1618 was safe and well-tolerated and achieved proof-of-mechanism in healthy volunteers and we are currently evaluating SYNB1618 in patients with PKU. We expect to havepatient data from this study in mid-2019.We have developed a portfolio of immuno-oncology (IO) programs designed to deliver activities to modify the tumor microenvironment, activate theimmune system and result in tumor reduction, and we envision that multiple engineered functions could be combined in one Synthetic Biotic medicine.These products could also be used in combination with other cancer therapies such as check-point inhibitors. In November 2018, we announced the selectionof our first Synthetic Biotic clinical IO candidate, SYNB1891, and have advanced it into preclinical studies to enable filing of an Investigational New Drug(IND) application with the FDA in the second half of 2019. SYNB1891 is an intratumorally administered Synthetic Biotic medicine designed to act as a dualinnate activator of the immune system by stimulation via the E.coli Nissle chassis and production of cyclic di-AMP, an activator of the STING pathway.2 Our early-stage metabolic pipeline includes discovery-stage product candidates for rare metabolic diseases, GI and immune disorders with high unmetneeds. We are also leveraging our proprietary technology platform to develop Synthetic Biotic medicines to treat a broader range of human diseases,including metabolic diseases, inflammation and cancer. Synthetic Biotic medicines can be designed to locally deliver combinations of complementarytherapeutics to treat these complex disease states.To progress our pipeline, we collaborate with key disease experts who have developed robust models of relevant diseases to guide selection of ourdevelopment candidates and to inform our translational medicine strategy. We focus on indications with clear biomarkers associated with disease progressionthat enable straightforward, early and ongoing assessment of potential clinical benefit throughout the development process. Our collaboration andintellectual property strategies additionally focus on building or leveraging existing third-party expertise in therapeutic research, preclinical and clinicaldevelopment, manufacturing and commercialization, while also enhancing our industry-leading position in synthetic biology and metabolic engineering.We have a collaboration with AbbVie S.à.r.l. (AbbVie) to develop Synthetic Biotic medicines for the treatment of inflammatory bowel disease (IBD)such as Crohn’s disease and ulcerative colitis. We have also established a technology collaboration with Ginkgo Bioworks, a privately held high-throughputsynthetic biology company, to enable the discovery of new living medicines. We may enter into additional strategic partnerships in the future to maximizethe value of our programs and our Synthetic Biotic platform.We are supported by our Board of Directors and our scientific advisory board, each of which offer complementary experience in drug discovery anddevelopment, as well as expertise in building public companies, management, and business development. Our founding science came from the laboratories ofProfessors James Collins and Timothy Lu from the Massachusetts Institute of Technology (MIT), who remain highly engaged in guiding development andapplication of our platform. Our pipeline of our programs is shown below. As we advance our lead programs, we continue to learn and improve our Synthetic Biotic platform, which will inform all future portfolio programs.Consequently, we believe we have a robust engine for building a sustainable pipeline of novel, living medicines across a range of diseases. Through thestrength of our internal team and network of partners, we believe we can deliver on the promise of Synthetic Biotic medicines to improve the lives of patientswith significant unmet medical needs.Our StrategyOur goal is to use our Synthetic Biotic platform to design, develop and commercialize living medicines to transform the lives of patients for whomconventional treatment approaches are either not available or have limited efficacy and safety. To achieve our goal, we are pursuing the following keystrategies:3 Advance Clinical Development of the SYNB1020 Hyperammonemia Program. We initiated our first Phase 1 clinical trial of SYNB1020 to assesssafety, tolerability and pharmacokinetics in healthy volunteers in June 2017. In November 2017, we announced top-line data from this study thatdemonstrated that SYNB1020 was safe, achieved proof-of-mechanism and enabled us to identify a dose that could be taken forward into a study in patients.In April 2018, we initiated the first clinical trial of a Synthetic Biotic medicine in patients to evaluate SYNB1020 in individuals with cirrhosis as a result ofliver disease who had elevated blood ammonia. We expect to have top-line data from this study by mid-2019. Further clinical development of SYNB1020 asa treatment for conditions resulting in hyperammonemia, including HE and UCDs, will be informed by a number of factors, including data from our Phase 1b/ 2a study in patients with cirrhosis.Advance Clinical Development of SYNB1618 for PKU. We initiated a Phase 1 / 2a clinical trial of SYNB1618 in April 2018. The Phase 1 / 2a clinicaltrial protocol included healthy volunteers, as well as adult patient cohorts, and is designed to assess safety, tolerability and pharmacodynamics. In September2018, we announced top-line data from this study that demonstrated that SYNB1618 was safe in healthy volunteers, achieved proof-of-mechanism andenabled us to identify a dose for evaluation in patients with PKU. We expect to have data from the patient cohorts of this study, including insights regardingtherapeutic potential from mechanistic biomarkers, by mid-2019. With supportive data from this study we expect to advance SYNB1618 to a larger clinicaltrial to assess its impact on blood Phe levels in patients with PKU.Advance our first IO program into Clinical Development and Continue to Advance our Preclinical Pipeline. We are advancing IND-enabling studiesof SYNB1891, our first IO program, with the goal of filing an IND application in the second half of 2019. We plan to continue to leverage our expertise fromour lead programs to accelerate development of discovery-stage Synthetic Biotic programs in lead optimization for the potential treatment of rare metabolic,GI and immune disorders with high unmet needs.Support Clinical Pipeline Progress with Expanded Manufacturing and Formulation Capability. In December 2018, we announced the expansion ofour manufacturing capabilities to produce clinical trial material for mid-stage studies of our rare metabolic disease and IO programs, through entry into anagreement to lease good manufacturing practice (GMP) clean-room space in Waltham, Massachusetts. The new clean-room facility provides an affordableand flexible option that maximizes control over our processes and timelines enabling us to move efficiently through clinical development to bring ourSynthetic Biotic medicines to patients.Maximize the Value of the Synthetic Biotic Platform by Leveraging Strategic Partnerships. Our current partnership with AbbVie is focused on thediscovery and development of Synthetic Biotic-based therapies for the treatment of IBD, and in November 2018 we announced receipt of a second milestonepayment for this program. We expect to continue to explore strategic partnerships that would leverage the complementary capabilities of our partners todevelop Synthetic Biotic medicines and maximize the value of our Synthetic Biotic platform.Expand the Synthetic Biotic Platform to Lead in the Discovery and Development of Additional Living Medicines and Enabling Technologies. Asleaders in the development of engineered non-pathogenic bacteria for therapeutic use, we intend to advance the field of living medicines by continuing toinnovate and broaden the potential of our Synthetic Biotic platform to deliver clinically meaningful benefits for patients. We intend to build on our expertisein design, optimization and manufacturing to further develop the Synthetic Biotic platform as a reproducible and scalable engine for generating a pipeline ofinnovative product candidates that address a broad range of diseases. We have established a technology collaboration with Ginkgo Bioworks, a privatelyheld high-throughput synthetic biology company, to enable the discovery of new living medicines.Protect and Leverage Our Intellectual Property Portfolio and Patents. We believe that we have a broad intellectual property portfolio that includespatents and patent applications relevant to the engineering, development, manufacturing and formulation of human therapeutic products based on syntheticbiology and the metabolic engineering of non-pathogenic bacteria. We intend to continue to protect and leverage our intellectual property assets bymaintenance and expansion of our worldwide portfolio of intellectual property, including the pursuit of composition of matter and other intellectual propertyfocused on our Synthetic Biotic programs and our technology platform. Our Focus: Living MedicinesOur novel proprietary Synthetic Biotic discovery and development platform combines synthetic biology and metabolic engineering to re-design thegenetic circuitry of beneficial non-pathogenic microbes, including probiotic bacteria, and generate living medicines.4 We believe living medicines have unique advantages as potential therapeutics. Living cells can carry out functions that cannot be performed by manyconventional drug treatments, such as small molecules or antibodies. In contrast to conventional therapeutics that largely engage a single target and addressone molecular dysfunction, living medicines can be designed to dynamically sense diseased environments and respond with a programmed andcombinatorial effect compensating for the dysfunction of entire processes or pathways missing in disease. Moreover, a living medicine can also function“catalytically,” since a single living cell can carry out multiple cycles of the intended therapeutic activity during its time in the patient. Synthetic Bioticmedicines can be designed to sense a local disease context within a patient’s body and to respond by metabolizing toxic substances or deliveringcombinations of therapeutic factors.Leveraging Synthetic Biology and Metabolic Engineering of Non-Pathogenic Bacteria to Produce Living MedicinesNon-Pathogenic Bacteria. Bacteria is isolated from the human microbiota and widely used as supplements that are believed to provide healthbenefits. Bacteria have evolved over millions of years to adapt, survive, and carry out active metabolism in many different environments. They are alsoamenable to genetic manipulation. To confer a therapeutic effect, we leverage basic biological properties of bacteria and tools of synthetic biology todevelop Synthetic Biotic medicines.Using Synthetic Biology to Generate Synthetic Biotic Medicines. Our scientists genetically engineer a beneficial non-pathogenic bacterium with“wiring” or biological circuits to direct cellular biological processes in a manner analogous to designing electrical circuits. The critical parts of an engineeredSynthetic Biotic medicine include (1) the chassis, or non-pathogenic bacterium, (2) the effector module, which is a gene or pathway encoding the corebiological activity that provides the therapeutic function, and (3) tunable switches to precisely determine the circumstances under which the effector modulewill be activated, as well as the potency, performance and output of the effectors themselves. We aim to precisely and appropriately control the amount,location and activity of our Synthetic Biotic medicines to address specific diseases. Schematic of the Synthetic Biotic Platform Components: Chassis, Effector, Switch5 (1) The Chassis: Our Synthetic Biotic platform currently employs well-characterized bacteria used as probiotics to serve as the chassis upon which webuild our living medicines. Our initial programs use E. coli Nissle, which is one of many non-pathogenic strains isolated from the human microbiota. E. coliNissle is non-colonizing in the GI and has been used as a probiotic bacterial supplement for the last 20 years to promote gut health. Clinical studies havedemonstrated that E.coli Nissle is rapidly cleared from most individuals with no significant safety issues (Clin. Transl. Sci. (2017) 00, 1—8). We alsoobserved similar rates of clearance from subjects in our recent Phase 1 clinical trial of SYNB1020 in healthy volunteers (Sci. Transl. Med. 2019: Vol. 11, Issue475, eaau7975). We believe E. coli Nissle’s widespread use as a probiotic is evidence of its utility as a safe background chassis to apply synthetic biology toconfer a therapeutic benefit. E. coli Nissle’s metabolic systems and its genetic and metabolic machinery are well understood and provide a robust cellularcontext into which genetic information can be introduced with high efficiency and little or no damage to the fitness of the bacterium. In addition, theadvanced nature of the synthetic biology toolkit available for E. coli Nissle enables rapid iterative design, assembly, and testing of prototype productcandidates and remains unique among other bacterial and cellular engineering approaches.(2) Building the Effector Module or Circuit: Synthetic Biotic medicines have the advantage that they can be designed with multiple pathwaycomponents. We have developed proprietary integration systems to direct stable insertion of multiple genetic circuits and pathways into optimalchromosomal locations, or “landing pads,” of E. coli Nissle. This enables efficient and stable expression of multiple genes encoding enzymes and otherproteins. These activities may be further improved for therapeutic effect when combined or when under the control of tunable switches that determine whenthe mechanisms should be activated. Our Synthetic Biotic platform allows us to engineer two types of mechanistic activities into our Synthetic Bioticmedicines: we can engineer living medicines that act as engines capable of metabolic transformations that can substitute or compensate for missing ordefective pathways in a patient, and we can also engineer living medicines to produce therapeutically beneficial molecules. We have leveraged proprietarytools, know-how and intellectual property to build multiple Synthetic Biotic lead strains that produce therapeutically relevant effects in preclinicalexperiments. Progression of these strains as product candidates in diseases with high unmet need is based on prioritizing those with feasible drugdevelopment paths in terms of availability of informative animal models and existence of biomarkers to guide efficient clinical development.(3) Tunable Switches: We also design and engineer proprietary switches to mediate the activity of the new pathways we introduce into our SyntheticBiotic medicines, with the goal of controlling the engineered circuit or its therapeutic output. To optimize the fitness of a Synthetic Biotic strain, it is criticalthat the effector is activated only at the appropriate time and place. The switches are based on engineering DNA elements called “inducible promoters” thatare designed to sense and respond to disease states, specific environmental signals, or exogenously added inducing molecules. Our goal is to design anddevelop Synthetic Biotic medicines programmed with switches to produce therapeutic effects at precisely the right time and location such as the anaerobicenvironment of the gut, or in the context of local inflammation or other pathogenic factors.Synthetic Biotic Portfolio: Initial Applications Designed to Target Different Sites of Action in Metabolic and Immune-mediated Diseases 6 Advantages of Our Synthetic Biotic Drug Development Platform and Synthetic Biotic Living MedicinesWe believe our platform has the potential to provide safe and effective therapies for patients given several attributes of our Synthetic Biotic approach:Unique Mechanisms to Treat Systemic Metabolic and Immune DysfunctionSynthetic Biotic medicines may be programmed with entire pathways to degrade unwanted molecules or produce those that are beneficial. We believemetabolic pathway complementation is advantageous as compared to gene, RNA or enzyme replacement therapies that are limited to targeting a single geneor protein defect and may require several unique drug products to address genetically heterogeneous patient populations. By compensating with an entirepathway, Synthetic Biotic medicines may provide a therapeutic solution to broader disease populations as a single engineered therapeutic. We believe thatour approach has advantages for the treatment of metabolic diseases, GI and immune disorders versus those other modalities that may be limited by delivery,transduction efficiency, duration of therapeutic expression and unclear potential for long-term dosing. Synthetic Biotic medicines can also be designed to consume or produce metabolites or secrete and display proteins that may shift the tumormicroenvironment of the immune system towards anti-tumor activity.Local Therapeutic Delivery: Production of One or More Effectors at the Site of DiseaseWe believe that when delivered locally, Synthetic Biotic medicines have the potential to avoid the risks of dose-limiting side effects often associatedwith systemic therapies, especially when combinations of systemic therapies are required.Our Synthetic Biotic programs for rare metabolic diseases are designed to be dosed orally, and act locally while transiting through the gut and, as aconsequence, decrease toxic metabolite levels in the blood, thereby providing a systemic therapeutic benefit to the patient. This approach is well suited toregulate the amount of a metabolic byproduct in a patient’s body, particularly when there is unconstrained metabolite flux between the systemic circulationand the gut. Given the potential for chronic oral dosing, Synthetic Biotic medicines may have benefits in terms of dose prediction and reversibility ofactivity.Currently, many complex diseases, such as inflammatory and autoimmune indications and cancer, require that patients are treated systemically with acombination of therapeutic agents, often resulting in poor tolerability, multiple adverse events and increased cost of therapy. Combinations of cytokine,antibody and protein therapies have potential for great benefit, but can be restricted by dose-limiting side effects when administered systemically. Ourapproach is to leverage the adaptability of E. coli Nissle to enable the combination of multiple activities into one therapy, which therefore could have greaterefficacy while avoiding the toxic negative impact of multiple systemic therapies. We believe that the potential to program the control of expression of one ormore proteins at the local disease site represents a unique approach to targeted therapy. We have also developed approaches to enhance the secretion ofprotein effectors to the extracellular environment. We are developing Synthetic Biotic medicines with the potential to normalize function of a dysregulatedimmune system. For example, in the case of inflammatory conditions, Synthetic Biotic medicines may be programmed to detect inflammation and respondwith the production of one or more anti-inflammatory molecules. In oncology, our programs are being designed to produce effectors to promote immunesystem activity against a tumor. These activities may further be combined with mechanisms that target tumor metabolism. By incorporating multiple actions,Synthetic Biotic medicines have the potential to address complex diseases while avoiding the risk of systemic toxicity and reducing development costsassociated with combining systemic therapies. Ability to Tune and Enhance Efficacy in Context of DiseaseOur Synthetic Biotic platform includes a suite of switches to permit precise control of the timing and amount of therapeutic effect produced. SyntheticBiotic therapies may be designed such that they are activated to produce the desired effect in a particular disease environment, such as sites of inflammation.This tuning has the potential to increase the therapeutic window by increasing the margin between the level of medicine needed for efficacy relative to therisk of systemic toxic side effects.7 Rational Design to Achieve Predictable Drug-like PropertiesWe have demonstrated the ability to move a program from concept to clinical development in as little as three years for our lead programs. Features ofour Synthetic Biotic platform enable a highly efficient drug discovery and development process and have the potential to advance product candidates morerapidly and efficiently than is typically possible with other novel or emerging modalities. These include: •Single Strain as Safe Chassis. There are several benefits of employing a single, safe and well-characterized probiotic bacterium such as E. coliNissle as the background chassis. First, because our lead programs are based on E. coli Nissle, experience can be leveraged broadly across theportfolio, further optimizing the efficiency and reproducibility of discovery, development and manufacturing efforts. Next, the non-colonizingnature of E. coli Nissle can be combined with engineering approaches to optimize safety in terms of impact on the patient and the environment.E. coli Nissle can be engineered to require a specific exogenous nutrient supplement for growth, which limits the ability to replicate in thehuman body and environment. By controlling replication, we can control the number of cells being administered to a patient, which limitspatient-to-patient variability. Also, dependence on an essential nutritional supplement not available in the environment reducesbiocontainment risk. Moreover, the risk of a Synthetic Biotic medicine to the environment is further limited given that it is disadvantaged interms of fitness due to its modifications. •Predictive Pharmacology and Biomarkers. Synthetic Biotic programs are designed to achieve a target activity, and the platform supports aniterative design-build-test cycle to improve performance for achieving this target. For example, Synthetic Biotic programs can be optimized byincluding multiple copies or regulated control of certain genes, by adding transporters for particular substrates or by optimizing enzymes forbasic bacterial metabolism. These tools enable rational and iterative engineering cycles in the discovery phase.Biomarkers as indicators of mechanistic and clinical activity may also be engineered into Synthetic Biotic medicines from the beginning todrive optimization and decision-making. By assessing the activities of our Synthetic Biotic programs in in vitro and in vivo preclinical models,we can model activity in humans. As we progress through clinical studies, we expect our predictive pharmacology models will be furtherrefined to inform dosing and development decisions for our additional programs. •Stability and Manufacturing. Our lead Synthetic Biotic programs have advanced the platform by defining manufacturing processes that can beused for the entire portfolio. Our use of synthetic biology switches permits the precise control of engineered metabolic pathway activation. Weuse switches to suppress effector activity during manufacturing, enabling development of reproducible processes for generation of biomass androbust, cost-efficient scale up of product candidates.Manufacturing efforts have demonstrated reproducibility, yield and stability during small, medium and Phase 1 clinical-scale campaigns wherewe have developed and executed processes to manufacture 3,000 to 5,000 doses of active drug. In December 2018, we entered into anagreement to lease GMP clean-room space from the Azzur Group, LLC. The agreement has expanded our manufacturing capabilities to enablein-house manufacturing of liquid and solid formulations for mid-stage clinical trials of our orally administered and IO Synthetic Bioticmedicines.Our Product PipelineApproach to Selection of Therapeutic AreaWe believe that our Synthetic Biotic platform has potential to address both metabolic and immune-mediated diseases and we are evaluating thesemedicines at different sites of action via different routes of administration, either orally or via injection. Our approach to selecting our initial metabolicprograms was based on the potential of the Synthetic Biotic platform to uniquely address conditions in which there is (1) unmet medical need with (2) wellunderstood biology that is (3) based on an imbalance of a metabolite and (4) where that metabolite is available within or originates from the gut lumen.Additional considerations include the availability of animal models, relevant biomarkers and feasible clinical development paths. Our initial clinical andpreclinical programs have been focused on certain rare metabolic diseases and acquired metabolic diseases that share these characteristics. When deliveredorally, these Synthetic Biotic medicines are designed to act from the gut to compensate for the dysfunctional metabolic pathway with the intendedconsequence of reducing systemic levels of the toxic metabolites. We believe that clinical success in these programs will enable us to demonstrate thepotential of our oral Synthetic Biotic medicines to address metabolic dysfunction, while bringing meaningful change to lives of patients suffering from thesedebilitating conditions. Our two lead therapeutic programs are being developed for the treatment of hyperammonemia (SYNB1020) and PKU (SYNB1618).Our early-stage metabolic pipeline includes discovery-stage product candidates for rare metabolic and GI tract diseases. 8 We are also leveraging our proprietary technology platform to develop Synthetic Biotic medicines to treat a broader range of human diseases,including metabolic diseases, inflammation and cancer. We are developing a portfolio of IO programs capitalizing on the natural immunostimulatorycharacteristic of our bacterial chassis and using a rational approach to engineer specific effectors to stimulate the innate and adaptive arms of the immunesystem, alter the tumor microenvironment and to select combinations of relevant mechanisms and treatments to address specific tumor types. Our Initial Programs: Overview of Rare Metabolic DiseasesPatients with rare metabolic diseases are born with mutations in certain genes that result in the loss of a necessary enzyme function in an essentialmetabolic pathway and prevent the body from metabolizing commonly occurring byproducts of digestion. In patients with such diseases, these byproductscan accumulate to toxic levels in the gut and systemically throughout the body to cause serious health consequences, including irreversible neurologicaldysfunction. Although in some cases diet modification can be beneficial, high unmet medical need remains as there are few current therapeutic treatments.While there are hundreds of genetic conditions that fall into this class, individual disorders are considered orphan diseases, with each disease affectingfewer than 200,000 patients in the United States and fewer than five per 10,000 people in the European Union. This includes diseases such as urea cycle andamino acid metabolism disorders. Many rare metabolic diseases are thought to be underdiagnosed given the rarity of the conditions, potential for infant deathand lack of available diagnostics and limited therapies.SYNB1020 for Hyperammonemia: Urea Cycle Disorders and Hepatic EncephalopathyHyperammonemia is a metabolic condition characterized by an excess of ammonia in the blood. In healthy individuals, ammonia is primarilyproduced in the intestine as a byproduct of protein metabolism and microbial degradation of nitrogen-containing compounds. Ammonia itself is thenconverted to urea in the liver and is excreted in urine. However, if the liver’s ability to convert ammonia to urea is compromised, either due to a genetic defector acquired liver disease, ammonia accumulates in the blood. Elevated blood ammonia levels are toxic to the brain and can have severe consequencesincluding neurologic crises requiring hospitalization, irreversible cognitive damage and death.We believe that because the majority of ammonia is produced in the gastrointestinal (GI) tract, an orally administered Synthetic Biotic medicine couldbe an effective therapeutic to reduce the levels of excess ammonia in the blood of patients with HE and UCDs without the need for severe protein restrictionand the risk of systemic toxicities. The FDA granted SYNB1020 orphan drug designation for UCDs in August 2016 and Fast Track designation in June 2017.Overview of HEThe primary function of the liver is to filter out toxins, particularly ammonia, that are harmful if not correctly metabolized. In patients whose liverfunction is impaired, these toxins can accumulate in the blood stream and cause organ damage, particularly in the brain, which leads to a decline in brainfunction that is referred to as HE. Ammonia, a highly toxic substance produced in the body as a byproduct of protein metabolism, plays a key role in thedevelopment and prognosis of HE. While ammonia can be minimally metabolized by the brain in patients whose liver function is impaired, excessiveammonia levels can overwhelm the capacity of brain tissue and lead to a greater chance of developing brain swelling, coma and death for patients with HE. Itis estimated that 30-45% of patients with chronic liver disease are affected by episodes of HE, and while many HE symptoms can be reversed with appropriatetreatment, persistent impairment of memory and learning can occur.HE severity is typically classified as covert or overt based largely on a patient’s mental state. Covert HE is difficult to diagnose and is often observedin patients with cirrhosis who appear to have no obvious disorientation, but who display mild to moderate symptoms, such as difficulty concentrating,forgetfulness, changes in personality or behavior, and poor sleep. Patients with covert disease are at a higher risk of developing the more severe overt HE andhave increasingly been recognized as a cause of morbidity linked with increased risk of traffic accidents and unemployment. Overt HE is associated withobvious mental disorientation and physical symptoms such as lethargy, seizures, tremors, organ failure, or brain swelling, that arise suddenly and may inducea coma or even death, particularly if not adequately treated. Overt HE is associated with a poor prognosis, with one-year survival estimates of 20% to 55%.The current standard of care for overt HE includes lactulose, a non-absorbable disaccharide that prevents the absorption of ammonia in the gut.Lactulose is associated with GI side effects including both painful abdominal cramping and diarrhea. Non-absorbable antibiotics are also used to treat HE,often concurrently with lactulose. Xifaxan® (rifaximin), a broad-spectrum antibiotic used to reduce growth of bacteria that produce ammonia in the colon,was approved for HE based on improvements in the duration of remission, reduced hospitalizations over six months, and improved quality of life in patientswith HE. Although rifaximin and lactulose are used therapeutically for overt HE, there are no approved treatments for covert HE.9 Morbidity and mortality associated with overt HE remains high and hospitalizations for HE impose a high burden on community resources. Whencurrent therapies fail to control overt HE, patients may be candidates for a potentially curative liver transplantation. There is a need for an effective therapyfor patients with HE to reduce episodes of cognitive dysfunction and hospitalizations. Overview of UCDUCDs are a group of rare but serious and potentially fatal, genetic diseases. The urea cycle is an enzymatic pathway in which waste nitrogen, producedas a byproduct of protein metabolism, is converted into urea by the liver and eliminated from the body through urine. Patients with a UCD carry a deficiencyin one of the six enzymes necessary for completion of the urea cycle, resulting in accumulation of waste nitrogen throughout the body in the form ofammonia, a substance that is highly toxic even in small amounts. Functional Urea Cycle Urea Cycle: The urea cycle is a series of five enzymes as well as transporters and cofactors found primarily and the liver and intestine that areinvolved in the detoxification of ammonia. A sixth enzyme, N-acetylglutamate synthase (not shown) forms an important precursor for thispathway. Deficiencies in any of these six enzymes or damage to hepatocytes containing these enzymes can result in the toxic accumulation ofammonia or urea cycle intermediates. UCD patients have intermittent periods of hyperammonemia, the symptoms of which can range from mild (loss of appetite, vomiting, and lethargy) toa severe hyperammonemic crisis associated with long-term cognitive or behavioral impairment, toxic encephalopathy, and even death. Symptoms oftendepend on the severity of the enzyme deficiency, and patients with the most severe disease present shortly after birth. Hyperammonemia in newborn infantsdue to UCD could be catastrophic and is associated with 24% mortality. Patients with later onset disease could suffer from a period of hyperammonemia thatis often triggered by stress or illness resulting in severe neurological symptoms and associated with a high risk of mortality.While it is difficult to estimate the exact incidence and prevalence of UCD, as it is thought that many patients go undiagnosed, it is estimated thatUCD occurs in approximately one in 35,000 births in the United States. Based on analysis of the newborn screening data and demographic data from theUCD Longitudinal Registry Study sponsored by the NIH, we believe the size of the diagnosed prevalent population in the United States to be approximately2,000 patients and that approximately two-thirds of these patients are under 18 years of age.10 The mainstay of management of UCD is dietary protein restriction. Patients must carefully balance their protein intake to ensure the body receivesadequate nutrients for growth and development, while avoiding triggering hyperammonemia. However, varying protein requirements and variable growthand activity levels often elicit episodes of hyperammonemia that can result in irreversible neurological damage. To supplement for the lower protein intake,patients may incorporate amino acid dietary formulations, such as L-citrulline or L-arginine, into their diet. However, dietary management remainschallenging, especially in infants and children.The only available drugs, Buphenyl® (sodium phenylbutyrate) and Ravicti® (glycerol phenylbutyrate), are approved for the chronic management ofpatients with UCD and create an alternate pathway for nitrogen/ammonia elimination from the body, although patients must maintain protein restricted diets.Use of sodium phenylbutyrate is limited by pill burden, taste, and tolerability issues that can make compliance challenging. These therapies aremechanistically similar treatment options with limitations on maximal effect due to dose-related neurological safety issues (e.g., vomiting, nausea, headache,somnolence, confusion, or sleepiness) and enzymatic saturation and, therefore, the unmet need remains high.When these management approaches fail to control chronic UCD-induced hyperammonemia, patients may be candidates for liver transplantation,which is potentially curative as it may correct the enzyme deficiency that causes UCD. However, transplants are limited by availability of donor organs, areassociated with potentially life-threatening risks and require life-long suppression of the immune system. Ultimately, morbidity and mortality remain high inUCD, and patients continue to suffer hyperammonemic crises. We believe that a truly transformative therapy for UCD would be an effective oral medicinewithout systemic toxicity that will maintain blood ammonia concentrations at a safe level while allowing patients to eat a normal or only moderatelyrestricted diet. SYNB1020 DesignSYNB1020 is an orally administered, engineered strain of E. coli Nissle. SYNB1020 was designed to complement the missing or deficient enzymefunctions in patients with hyperammonemia with an enhanced pathway to consume ammonia. This mechanism has applicability in liver disease where thereis a need to reduce excess ammonia in the colon before it can be absorbed into the blood and cause HE episodes as well as the potential to treat the spectrumof enzyme deficiencies that underlie UCD.Our approach was to create a Synthetic Biotic medicine that would continuously consume excess ammonia where it is naturally produced in the colonand produce arginine. Arginine production is deficient in UCD patients due to a defect in the urea cycle, and patients are often treated with argininesupplements. E. coli Nissle has an endogenous arginine production pathway that uses four molecules of ammonia for every new molecule of arginineproduced. We modified this pathway to significantly enhance arginine production.A detailed description of the engineering of SYNB1020, data from preclinical studies in animal models of disease and healthy non-human primates aswell as data from our clinical study of SYNB1020 in healthy volunteers was published in January 2019 (Sci. Transl. Med. 2019:Vol. 11, Issue 475,eaau7975).In summary, we have demonstrated in in vitro studies, that SYNB1020 consumes ammonia and produces arginine at substantially higher ratescompared with a control strain of E. coli Nissle that had not been engineered.In an animal model of hyperammonemia, the spf-ash/F1 mouse, we observed a dose-dependent decrease in blood ammonia in mice fed a high proteindiet that received orally administered SYNB1020 compared to heat inactivated SYNB1020 at the highest dose. This reduction in blood ammonia resulted inimproved survival of animals dosed with SYNB1020, compared to animals given the heat-inactivated control. Similar data demonstrating reduction in bloodammonia with SYNB1020 administration have been generated in both a mouse model (the thioacetamide, or TAA model) and in the rat bile duct ligationmodel of liver damage. SYNB1020 Clinical Development PlanIn June 2017, we initiated a Phase 1 trial to evaluate the safety, tolerability, and gastrointestinal clearance of single and multiple doses of SYNB1020in healthy volunteers. In November 2017, we announced top-line data that demonstrated that SYNB1020 was safe and achieved proof-of-mechanism. ThePhase 1 trial was a randomized, double-blind, placebo-controlled trial of orally administered SYNB1020 evaluating ascending doses each administered on asingle day and multiple ascending doses administered over 14 days. The primary objective of the trial was to assess safety and tolerability of SYNB1020 inhealthy volunteers. Secondary objectives were to characterize the microbial kinetics of SYNB1020 in feces as measured by quantitative polymerase chainreaction (qPCR) and gastrointestinal tolerability assessed by the Gastrointestinal Symptom Rating Scale. Exploratory endpoints were designed to evaluatethe pharmacodynamic effects of SYNB1020, including measurements of blood ammonia levels and other related biomarkers.11 Fifty-two healthy volunteers were dosed orally with either SYNB1020 or placebo (ratio three to one), including 28 in seven cohorts in the singleascending dose (SAD) portion of the study and 24 subjects in three cohorts of the multiple ascending dose (MAD) portion of the trial. Complete safety resultsfrom the SAD and MAD Phase 1 trials demonstrate that SYNB1020 was well tolerated at doses of up to 5x1011 CFU three times a day for 14 days. Higherdoses were associated with mild to moderate gastrointestinal symptoms, mainly nausea and vomiting.As expected, we did not observe changes in blood ammonia levels during the trial, as all subjects were healthy volunteers who entered the trial withwell-controlled normal blood ammonia levels. In a stable-isotope tracer study in which subjects were orally administered 15N-ammonium chloride, weobserved a dose-dependent increase in 15Nitrate, a terminal metabolite of arginine metabolism, in plasma and urine compared to baseline in SYNB1020-treated subjects but not in the placebo group. In subjects treated with the highest dose, the increase in blood and urinary nitrate was statistically-significantcompared to placebo-treated subjects. This observation is consistent with SYNB1020’s mechanism of action which converts ammonia into arginine. Inaddition, conversion of ammonia into arginine was demonstrated in bacteria collected from the feces of treated subjects but not from placebo treatedindividuals thus demonstrating SYNB1020 retained activity during transit through the colon.In addition to demonstrating that SYNB1020 was active in vivo, we obtained data on the exposure and clearance of SYNB1020 in treated subjects. Weobserved that amounts of SYNB1020 detected in the feces increased with increasing SYNB1020 dose and that the bacteria behave in a consistent andpredictable way with all subjects completely excreting and clearing SYNB1020 from their systems within two weeks after the final dose. SYNB1020 Upcoming MilestonesIn April 2018, we initiated the first clinical trial of SYNB1020 in patients with cirrhosis as a result of liver disease who had elevated blood ammoniaand we expect to have top-line data by mid-2019. Further clinical development of SYNB1020 for conditions resulting in hyperammonemia, including HEand UCDs, will be informed by a number of factors, including data from our Phase 1b / 2a study in patients with cirrhosis.SYNB1618 for PKUPKU is a rare metabolic disease caused by a genetic defect in the gene phenylalanine hydroxylase (PAH) leading to Phe accumulation in the bloodand brain, where it is neurotoxic and can lead to neurological deficits and even death. Current disease management of PKU involves dietary proteinrestriction with the consumption of phenylalanine-free protein supplements. There are currently two approved medications for treatment of PKU: •Kuvan ® (sapropterin dihydrochloride), an oral medication that is indicated for a subgroup of patients who have some residual PAH activityand does not eliminate the need for ongoing dietary management. •PalynziqTM (pegvaliase-pqpz), an injectable, pegylated, bacterial enzyme (phenylalanine ammonia-lyase or PAL) that metabolizes Phe andthat is indicated for treatment of adult patients.Despite recommendations supporting life-long control of phenylalanine levels, compliance is challenging due to the highly restrictive nature of thediet, putting patients at risk for cognitive and psychiatric disease and supporting the need for novel treatment approaches.Our Synthetic Biotic platform is well-suited to complement the missing enzyme function in PKU patients by providing alternative metabolicpathways to consume Phe. Our second rare metabolic disease program, SYNB1618 for PKU, is designed to remove excess Phe from the blood by transformingit into non-toxic metabolites. The FDA granted SYNB1618 orphan drug designation for PKU in October 2017 and Fast Track designation in April 2018.Overview of PKUPhe is an essential amino acid that enters the body primarily through dietary protein and can be toxic if not sufficiently broken down and eliminated.The metabolism of Phe by the liver is dependent on adequate function of the liver enzyme PAH and the cofactor tetrahydrobiopterin (BH4) necessary for itsactivity. When the PAH gene is mutated and/or the production of BH4 is blocked, Phe cannot be sufficiently broken down and accumulates to toxic levels(i.e., hyperphenylalaninemia), which can cause irreversible brain damage. PKU is an inherited metabolic disease that presents as a severe form ofhyperphenylalaninemia.12 The disease course of PKU typically involves worsening neurological function that begins in infancy or early childhood. The clinical manifestationsvary depending on severity of the enzyme mutation, the time of diagnosis and treatment initiation, and compliance. Symptoms may be extensive, such assevere cognitive impairment, or they may reflect more moderate neurocognitive or physical issues, such as below average intelligence, behavioral or mooddisorders, memory loss, difficulty concentrating, decreased motor function, eczema, body odor, and tremors or seizures. A woman with PKU who becomespregnant could develop maternal PKU if her diet is not strictly controlled, and there is a risk that the baby will be born with one or more birth defects such ascognitive impairment, microcephaly or congenital heart disease.Based on the success of newborn screening efforts that began in developed countries in the 1960s, it is believed that nearly all PKU patients under theage of 40 have been diagnosed at birth. The National PKU Alliance estimates that in the United States there are currently 16,500 people living with PKU.Currently, management of PKU requires a heavily modified diet that restricts protein intake, combined with essential amino acid and vitaminsupplementation. Special medical foods, including phenylalanine-free protein formula, provide patients with dietary protein and fulfill other nutrient needs.However, it is challenging for most PKU patients to adhere to the restricted diet to the level that provides the necessary control of phenylalanine levels evenwith the efforts of supportive family and social networks. Patients often have trouble adhering to the diet, with particular challenges arising during times ofincreasing independence during adolescence. Furthermore, access to low protein foods can be challenging, as they are costlier and less nutritious than theirhigher protein, non-modified counterparts.Kuvan® (sapropterin dihydrochloride) was the first drug approved for the treatment of PKU in 2007. It is indicated for the reduction of bloodphenylalanine in patients with hyperphenylalaninemia with residual PAH activity as it is a synthetic form of the BH4 cofactor. Oral administration of Kuvan,along with protein restriction, has lowered phenylalanine levels in patients who have residual PAH activity and/or mild forms of the disease, which accountsfor approximately 20-50% of the PKU population. However, Kuvan does not eliminate the need for ongoing dietary management in all patients. Largeneutral amino acids have also demonstrated activity in blocking absorption of excess phenylalanine by the intestines and brain but are currently onlyadministered in adolescents and adults.PaylnziqTM (pegvaliase-pqpz), a pegylated form of recombinant phenylalanine ammonia lyase (PAL), an enzyme that metabolizes phenylalanine butdoes not require cofactor activity, was approved by the FDA in 2018. While daily Palynziq injections have been proven to lower phenylalanine levels, manypatients experience injection site reactions and/or develop antibodies to the product. A Black Box warning of a risk of anaphylaxis is included on thePalynziq label and Palynziq is currently only indicated for adult patients. Other therapeutics in early development include various gene therapy approaches,modified cell therapies and a modified orally delivered enzyme replacement therapy.Despite recent improvements in PKU therapy, patients continue to suffer from poor outcomes. Even patients who are diagnosed and treated early haveincreased risk of neurocognitive abnormalities and psychiatric complications and are burdened by the life-long struggle to comply with strict dietarymodifications. Available drug therapies demonstrate limited effectiveness, are accompanied by immunologic and other toxicities, and may still requirepatients to maintain a heavily restricted diet. We believe a truly transformative therapy would be orally-dosed and provide sustained, safe concentrations ofphenylalanine while allowing for a normal or only moderately restricted diet. We believe that a Synthetic Biotic medicine could be an effective oraltherapeutic that acts from the gut to consume excess phenylalanine with the consequent effect of reducing levels in the blood without the need for severephenylalanine restriction or risk of systemic toxicities.SYNB1618 DesignSYNB1618 is a genetically-modified strain of E. coli Nissle engineered to express a synthetic pathway for transporting and metabolizing Phe inpatients with PKU following oral administration. SYNB1618 was designed to overcome the missing enzyme function in patients with PKU withcomplementary pathways to reduce phenylalanine levels.In designing SNYB1618, we integrated genes, including a form of the PAL enzyme that converts phenylalanine to the non-toxic byproduct transcinnamic acid (TCA), which is then converted in the liver to hippurate (HA) and excreted in the urine. TCA and HA function as useful biomarkers ofSYNB1618 activity in vivo. A detailed description of the engineering of SYNB1618 and data from preclinical studies in an animal model of disease andhealthy non-human primates was published in September 2018 (Nat. Biotechnol. 36, 857–864 (2018)). 13 SYNB1618 Nonclinical ProgramPreclinical Efficacy StudiesIn vivo studies in a mouse model of PKU (enu2-/-) demonstrated that urinary HA concentrations increased in a dose-dependent fashion in SYNB1618-treated mice compared to mice treated with an unengineered E. coli Nissle control that did not have the phenylalanine degradation pathway. We alsoobserved that subcutaneous injection of mice on a Phe-restricted diet with phenylalanine resulted in a rapid increase in blood phenylalanine concentrations.The increase associated with this phenylalanine challenge was significantly blunted upon oral administration of SYNB1618 compared to administration ofthe non-engineered control strain. Similar data were generated with SYNB1618 in healthy non-human primates. With increasing oral doses of SYNB1618, weobserved increasing levels of plasma TCA and urinary HA demonstrating that SYNB1618 is functional in the primate gut. Taken together, these datademonstrate that SYNB1618 has activity in the GI tract and can decrease blood Phe levels by degradation of recirculating phenylalanine, as well as dietaryPhe. A detailed description of the engineering of SYNB1618 and data from preclinical studies in an animal model of disease and healthy non-humanprimates was published in September 2018 (Nat. Biotechnol. 36, 857–864 (2018)). SYNB1618 Clinical Development PlanIn April 2018, we initiated a Phase 1 / 2a, randomized, double-blinded, placebo-controlled study to evaluate the safety, tolerability, andgastrointestinal clearance of SYNB1618. We treated healthy adult volunteers with single- or multiple-ascending doses of SYNB1618 and are currentlyevaluating SYNB1618 in cohorts of patients with PKU.Primary endpoints of the study were safety, tolerability and identification of a suitable dose to evaluate in patients with PKU. In addition, exploratoryendpoints were designed to evaluate the pharmacodynamic effects of SYNB1618, including production of previously identified biomarkers related toSYNB1618 activity, TCA in plasma and HA in urine, and to provide mechanistic and clinical insights in both healthy volunteers and patients with PKU.Fifty-six healthy volunteers were dosed orally with either SYNB1618 or placebo (ratio three to one), including 24 in six cohorts in the SAD portion ofthe study and 32 subjects in three cohorts of the MAD portion of the trial. In September 2017, we announced top-line data demonstrating that in healthyvolunteers SYNB1618 was safe and well tolerated at doses up to 2x1011 CFU three times a day for seven days. Higher doses were associated with mild tomoderate gastrointestinal symptoms, mainly nausea and vomiting. The data also demonstrated proof-of-mechanism for SYNB1618.During the treatment part of the study, subjects were housed in a clinical unit and provided a defined diet. The activity of SYNB1618 was evaluated infasted subjects in both the SAD and MAD cohorts after administration of a standardized breakfast drink containing a defined amount of protein. At one doselevel in the SAD portion of the study, solid food containing an equivalent amount of protein was substituted for the liquid meal. In addition, a labeled Phetracer (D5-Phe) was orally administered. Blood and urine were collected over a subsequent six-hour period and several metabolites were measured includingPhe and SYNB1618-specific biomarkers of Phe metabolism, TCA in blood and HA in urine. This was conducted in the SAD cohorts on the day of dosing andin the MAD cohorts on Day -1 (baseline) and Day 7 (the last day of dosing).A statistically significant dose-dependent increase in both plasma TCA and urinary HA was observed in SYNB1618-treated subjects but not in thosetreated with placebo. Production of metabolites from Phe administered as a free amino acid was similar to Phe administered as whole protein. In addition,production of metabolites was similar whether the protein was administered as a liquid or as a solid meal. In healthy volunteers, who all have normal Phemetabolism, there was no impact on blood Phe levels. All healthy volunteers enrolled in the study cleared SYNB1618 from their GI tracts within theexpected timeframeSYNB1618 Upcoming MilestonesThe Phase 1/2a trial is ongoing and we are currently evaluating single and multiple doses of SYNB1618 in patients with PKU. The primary endpointsof the study are safety and tolerability. In addition, while the study was not designed to demonstrate and effect on Phe lowering it will enable evaluation ofthe pharmacodynamic effects of SYNB1618, including production of TCA in plasma and HA in urine in order to characterize the kinetics of SYNB1618 andto provide mechanistic and clinical insights in patients with PKU. We expect to have data in mid-2019.14 Synthetic Biotic Medicines for Rare Metabolic, GI and Immune Disorders with High Unmet NeedsThe design, preclinical research, clinical planning and scalable manufacturing of our lead programs have already informed development of futureclinical candidates. Our initial programs were selected based on applicability of the Synthetic Biotic platform to provide pathway complementation in raremetabolic diseases in which the toxic metabolite was known to be associated with the relevant clinical endpoint and to be accessible in the GI tract.Additional examples in which there is opportunity to expand the potential of Synthetic Biotic medicines include discovery-stage programs for raremetabolic, GI and immune disorders with high unmet needs.Synthetic Biotic Medicines for Broader Metabolic DiseaseOur Synthetic Biotic platform combined with our product discovery and development capabilities drive the potential for multiple clinicallymeaningful opportunities for patients affected by a broad set of metabolic diseases of the liver and central nervous system. For these indications, there is needfor a safe, oral therapies with local activity in the gut to reset a metabolic dysfunction.Synthetic Biotic Medicines for ImmunomodulationOur Synthetic Biotic platform has the potential to generate clinically meaningful therapies for patients affected by immune-mediated diseases.Our Synthetic Biotic Medicines for Immuno-Oncology (IO)We believe boosting the body’s immune response against tumor cells is one of the most promising advances in the treatment of cancer. The so-called“hot tumors”, those with robust immune cell infiltration, specifically by T cells, have responded well to immunotherapies such as the PD-1 and CTLA-4checkpoint inhibitors. Checkpoint inhibitors work by blocking pathways that inhibit T cells thus enabling them to recognize and destroy the tumor.Checkpoint inhibitors have significantly extended the lives of patients with several cancer types and, in some cases, have resulted in complete clinicalresponses. However, a large proportion of tumors are “cold” (i.e., they lack T cells), and respond poorly to current immunotherapy.Our goal is to leverage our Synthetic Biotic platform to design living medicines that can engage multiple immunomodulatory pathways to enhancetumor inflammation and promote robust T cell responses enabling broad tumor response and remission. We believe that such medicines have the potential toexpand the patient population that could benefit from immunotherapy. Our approach is designed to deliver robust therapeutic combinations directly to thetumors, without significant systemic exposure. Synthetic Biotic medicines are being developed to be administered by an intra-tumor injection or, in the caseof GI cancers, by oral administration and can be engineered to perform three types of functions: metabolic conversions (consumption of an immune-suppressive metabolite or production of an immuno-activating metabolite, secretions or bacterial surface display of proteins (cytokines, chemokines, receptorligands), and secretion or bacterial surface display of specific single chain antibody domains, known as scFv.We believe our Synthetic Biotic platform can be deployed in a rational, mechanistic way, and can deliver multiple validated mechanisms to elicitspecific immune responses in the tumor microenvironment. Our main mechanistic areas of focus in the context of tumor immunology include: •Immune activation and priming: Our bacterial Synthetic Biotic chassis is predicted to engage innate immune cells in the tumormicroenvironment, thereby initiating an immune cascade to activate and direct T cells to the tumor. Lack of effective presentation of tumor-specific antigens to T cells is recognized as a significant limitation to the initiation of immune responses in tumors. We are building andoptimizing Synthetic Biotics medicines with the potential of addressing this issue. For example, our first Synthetic Biotic developmentprogram is SYNB1891, an engineered E.coli Nissle designed to produce a STING (STimulator of INterferon Genes) agonist while takingadvantage of the chassis effect. The STING pathway plays a critical role in the control of tumor growth at both steady state and following avariety of cytolytic and immune-based therapies by initiating an antitumor immune response and driving tumor regression. SYNB1891 can bedelivered directly into the tumor enabling its localized site of action in the tumor microenvironment. The approach of using intra-tumoralinjection elicits STING activation in the tumor but not systematically, potentially decreasing the risk of adverse events that may arise from theproduction of systemic interferon. •Immune augmentation/Reversal of immunosuppression: We have developed strains that actively consume and transform immunosuppressivemetabolites in the tumor microenvironment, with the goal of setting up a milieu conducive to immune activation and tumor destruction. Forexample, we have built Synthetic Biotic candidates that consume kynurenine to reprogram the tumor microenvironment and to enablerecognition of the tumor by the adaptive immune system.15 •T cell expansion: Tumor antigen-specific T cell expansion and prevention of exhaustion are recognized as key objectives for successful cancerimmunotherapy. We are developing Synthetic Biotic medicines programs to secrete specific cytokines and scFvs to promote T cell survival andexpansion. •Stromal modulation: The physical structure of tumors is receiving increasing attention as emerging data demonstrate its importance inorchestrating tumor growth, immune evasion and resistance to chemotherapy, such as in pancreatic ductal adenocarcinoma. Tumor-derivedextracellular matrix proteins can limit the perfusion of drugs or antibodies, contributing to the remarkable resistance of this tumor type totherapy. We have developed strains that secrete active enzymes with the capacity to remodel extracellular matrix proteins to make the tumormore permeable.Our product vision for immuno-oncology is to use a rational approach to selecting and combining relevant mechanisms of action for themicroenvironment of specific tumor types. For example, in animal models we are evaluating Synthetic Biotic medicines that combine the antigen release,activation and priming activities of a STING agonist with the immune augmentation and T cell expansion effects of kynurenine consumption. In early studieswith intra-tumoral administration, in preclinical mouse models, we have observed high rates of durable response with evidence of an effect not only on thetreated tumor, but also a shrinking of tumors outside the scope of the localized treatment (abscopal effect), while avoiding systemic toxicity.In 2018, we selected SYNB1891 as our first Synthetic Biotic IO development candidate and are advancing it through IND-enabling studies. We expectto file an IND application for SYNB1891 in the second half of 2019.Our Synthetic Biotic Medicines for Inflammatory Bowel DiseaseAmong immune conditions, IBD is particularly attractive for our Synthetic Biotic platform, as it allows us to leverage knowledge and expertisegleaned from our metabolic programs to develop living medicines that can act locally at the site of disease in the gut. Because our approach is based on localdelivery to the site of inflammation and not on systemic administration, we anticipate that our Synthetic Biotic medicines may offer an attractive safetyprofile in this setting. In 2015, we entered into a multi-year global collaboration with AbbVie focused on the discovery and development of Synthetic Bioticmedicines for the treatment of IBD. In June 2017 and September 2018, we announced the achievement of the first and second milestones, respectively in thiscollaboration.IBD is a group of diseases characterized by significant local inflammation in the GI tract typically driven by T cells, activated macrophages andcompromised function of the epithelial barrier. IBD pathogenesis is linked to both genetic and environmental factors and may be caused by alteredinteractions between gut microbes and the intestinal immune system. Current approaches to treat IBD are focused on therapeutics that modulate the immunesystem and suppress inflammation. These therapies include steroids, such as prednisone, and tumor necrosis factor inhibitors, such as Humira® (adalimumab).However, these approaches are associated with systemic immunosuppression, which includes greater susceptibility to infectious diseases and cancer. It isestimated that between 1.0-1.3 million patients have IBD in the United States.Compromised gut barrier function also plays a central role in autoimmune diseases pathogenesis. A single layer of epithelial cells separates theluminal contents of the gut from the host circulatory system and the immune cells in the body. Disrupting the epithelial layer can lead to pathologicalexposure of foreign antigens from the lumen resulting in increased susceptibility to autoimmune disorders. The interplay between the gut microbiota and thehost is thought to play a key role in the maintenance of the epithelial barrier as well as homeostatic immunity. Thus, enhancing barrier function and reducinginflammation in the gastrointestinal tract are potential therapeutic mechanisms for the treatment or prevention of autoimmune disorders. Our Synthetic Bioticplatform allows for the effective programming of E. coli Nissle to execute these functions, including the metabolic production of factors such short chainfatty acids to enhance barrier function, and secreting proteins, such as immunomodulatory cytokines.Collaboration AgreementsTo accelerate the development and commercialization of Synthetic Biotic medicines to patients, we have formed, and intend to seek otheropportunities to form, strategic alliances with collaborators that can expand our pipeline of therapeutic development and product candidates. We also work,and intend to seek additional opportunities to work, with multiple academic, research and translational medicine organizations and entities to deepen ourunderstanding and development of living medicines with the potential to treat disease and disorders.16 AbbVieIn July 2015, we entered into a license agreement with our subsidiary Synlogic IBDCo, Inc. (IBDCo) and an Agreement and Plan of Merger withAbbVie (together, the AbbVie Agreements) to collaborate on the discovery and development of Synthetic Biotic medicines for the treatment of IBD. TheAbbVie Agreements provide AbbVie with an exclusive option to acquire IBDCo, which would then have an exclusive worldwide license to develop andcommercialize up to three specified Synthetic Biotic medicines for the treatment of IBD.Under the terms of the collaboration with AbbVie, we have the responsibility to discover, characterize and optimize one lead Synthetic Biotic productcandidate to the point of an IND-enabling package, together with two backup product candidates, through a research and development program covering alimited number of effectors that modulate the IBD pathophysiology. The multi-year collaboration combines AbbVie’s expertise in inflammatory diseaseswith our expertise in synthetic biology and metabolic engineering. AbbVie agreed to pay IBDCo an upfront payment of $2.0 million, received in December2015, and up to $16.5 million upon the achievement of certain research milestones.In May 2017, IBDCo achieved the first of these research milestones under the AbbVie Agreements for which it received $2.0 million. On September27, 2018, AbbVie and the Company signed an amendment (the Second Amendment) to the AbbVie Agreements. The Second Amendment clarified therequirements necessary to complete the second phase which resulted in additional time and effort in the second phase of the research plan. Additionally, theSecond Amendment split the next milestone payment under the AbbVie Agreements into two payments: a milestone payment of $2.0 million earned by theCompany upon execution of the Second Amendment and the remaining milestone payment of the balance due upon the successful achievement of specifiedresearch and pre-clinical events and the advancement to the third phase of the research plan.On December 18, 2018, AbbVie and the Company signed an amendment (the Third Amendment) to the AbbVie Agreements. The Third Amendmentprovides that in the event AbbVie determines that it is necessary to enter into license agreements with certain third parties in a particular country or otherjurisdiction which, but for such license, would be infringed by the manufacture, use or sale of any product governed by the AbbVie Agreements, AbbViewould be entitled to deduct certain expenses related to such license agreements from particular payments made to the Company.If AbbVie accepts our IND-enabling package covering the lead Synthetic Biotic product candidate, AbbVie may exercise its exclusive option toacquire IBDCo, which would house the lead and two backup product candidates. If this option is exercised, AbbVie would pay us an option exercise fee uponthe closing of the IBDCo merger and we would be eligible to receive future development, regulatory and commercial milestone payments, and low singledigit royalties on sales of the Synthetic Biotic medicines. In addition, AbbVie would then assume full control of all further clinical development andcommercial activity, including responsibility for all expenses and decisions.Potential Future CollaborationsWe view strategic partnerships as important drivers for helping accelerate our goal of effectively treating patients, and we will continue to seekstrategic alliances with collaborators who can help fund, develop and commercialize our novel therapeutic development and product candidates, particularlyin large metabolic indications and immuno-oncology. As the potential application of our Synthetic Biotics platform is extremely broad, we also plan tocontinue to identify academic, research and translational medicine organizations and entities that can contribute expertise and resources to our programs, toallow us to more rapidly expand our impact to broader patient populations.Intellectual Property and Technology LicensesWe strive to protect and enhance the proprietary technology, inventions, and improvements that are commercially important to our business,including seeking, maintaining, and defending patent rights, whether developed internally or licensed from our collaborators or other third parties. Ourpolicy is to seek to protect our proprietary position by, among other methods, filing patent applications in the United States and in certain jurisdictionsoutside of the United States related to our proprietary technology, inventions, improvements, and product candidates that are important to the developmentand implementation of our business. We also rely on trade secrets and know-how relating to our proprietary technology and product candidates, continuinginnovation, and in-licensing opportunities to develop, strengthen, and maintain our proprietary position in the field of synthetic biology. We additionallyrely on data exclusivity, market exclusivity, and patent term extensions when available, and plan to seek and rely on regulatory protection afforded throughorphan drug designations. Our commercial success may depend in part on our ability to obtain and maintain patent and other proprietary protection for ourtechnology, inventions, and improvements; to preserve the confidentiality of our trade secrets; to maintain our licenses to use intellectual property owned bythird parties; to defend and enforce our proprietary rights, including our patents; and to operate without infringing on the valid and enforceable patents andother proprietary rights of third parties.17 We believe we are well positioned in terms of intellectual property because we: •have built and expanded, and intend to continue expansion in, a broad worldwide portfolio of intellectual property, including patents andpatent applications, in areas relevant to the development, manufacturing and formulation of human therapeutic products using livebiotherapeutics based on synthetic biology; •intend to take additional steps, where appropriate, to further protect our intellectual property rights, including, for example, through the use ofcopyright and trademark protection, as well as regulatory protection available via orphan drug designations, data exclusivity, marketexclusivity and patent term extensions.We believe our intellectual property portfolio provides broad coverage of our Synthetic Biotic platform and applicable disease-related technologies,which are directed to diseases and conditions associated with hyperammonemia, hyperphenylalanemia, other IEMs and metabolic disorders, autoimmune andother inflammatory disorders and oncology. As of March 5, 2019, we had 106 Synlogic-owned patents and patent applications in U.S. and foreignjurisdictions, of which 5 have been issued or allowed.Synlogic Intellectual PropertyDisease-related applicationsThe disease-related applications in our intellectual property portfolio relate to certain pathological conditions including, but not limited tohyperammonemia, hyperphenylalaninemia, diseases and conditions arising from IEMs, metabolic disorders diseases and conditions associated with aninflammatory state, diseases associated with gut inflammation, compromised gut mucosal barrier (leaky gut), and various autoimmune disorders as well as usein immuno-oncology and provide coverage for engineered bacteria having genetic circuitry designed to specifically address those conditions and theassociated disease states. The intellectual property portfolio provides coverage for compositions directed to engineered bacterial strains, methods of makingthe bacterial strains and methods for treating diseases. Currently, intellectual property relating to this technology includes pending applications in U.S. andforeign jurisdictions, as well as several issued U.S. patents directed to composition of matter and pharmaceutical composition claims covering our clinicalcandidates. The patent term for our current IP has expiration dates ranging from December 2035 to February 2037, depending on the indication andexcluding any patent term adjustments or extensions.Platform Technology ApplicationsIn addition to the disease-related technology, our intellectual property portfolio also includes applications directed to platform technologiesdeveloped internally by us. Exemplary platform technologies include bacterial chassis-related and genetic circuitry-related technological developments,including, for example, improvements in inducible gene regulation, control of bacterial cell growth, including auto-regulation thereof, and systems forimporting metabolites, as well as secreting therapeutic effectors. These platform technologies, and our intellectual property coverage thereof, are broadlyapplicable to our therapeutic Synthetic Biotic medicines.Technology LicensesIn addition to our own patent applications, we have historically licensed patents and patent applications from MIT and Trustees of Boston University(BU) to access intellectual property covering synthetic biology circuitry. The intellectual property licensed from MIT and BU related to genetic circuitry(designed to be modular components for integration into biological systems), cells containing the genetic circuitry, and methods and systems for generegulation using the genetic circuitry.During 2018, we determined our growing portfolio of internally generated intellectual property superseded the in-licensed intellectual property in theBU license and the MIT license. Accordingly, on December 18, 2018, we provided notice to terminate the license agreements with MIT and BU/MIT. The BUlicense will be terminated effective February 16, 2019 and the MIT license will be terminated effective June 19, 2019.18 General ConsiderationsIndividual patents extend for varying periods of time, depending upon the date of filing of the patent application, the date of patent issuance, and thelegal term of patents in the countries in which they are obtained. Generally, patents issued for applications filed in the United States are effective for 20 yearsfrom the earliest effective non-provisional filing date. In addition, in certain instances, a patent term can be extended to account for delays in prosecution atthe U.S. Patent and Trademark Office (USPTO) and/or to recapture a portion of the term effectively lost as a result of the FDA regulatory review period. Forregulatory delays, the restoration period cannot be longer than five years and the total patent term, including the restoration period, must not exceed 14 yearsfollowing FDA approval. The duration of patents outside of the United States varies in accordance with provisions of applicable local law, but typically isalso 20 years from the earliest effective non-provisional filing date. However, the actual protection afforded by a patent varies on a product-by-product basis,from country-to-country, and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-relatedextensions, the availability of legal remedies in a particular country, and the validity and enforceability of the patent.The patent positions of companies like us are generally uncertain and involve complex legal and factual questions. No consistent policy regarding thescope of claims allowable in patents in the field of synthetic biology has emerged in the United States. The patent situation outside of the United States iseven more uncertain. With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect toany of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patentsor any patents that may be granted to us the future will be commercially useful in protecting our products and the methods used to manufacture thoseproducts. For additional risks, please see the section entitled “Risk Factors—Risks Related to Intellectual Property”. TrademarksOur registered trademark portfolio currently contains 14 registered trademarks, and eight pending applicationsOtherGenerally, we seek to protect our technology and product candidates, in part, by entering into confidentiality agreements with those who have accessto our confidential information, including employees, contractors, consultants, collaborators, and advisors. In some circumstances, we may rely on tradesecrets to protect our technology. We seek to preserve the integrity and confidentiality of our proprietary technology, trade secrets and processes bymaintaining physical security of our premises and physical and electronic security of our information technology systems. Although we have confidence inthese individuals, organizations, and systems, agreements or security measures may be breached and we may not have adequate remedies for any breach. Inaddition, our trade secrets may otherwise become known or may be independently discovered by competitors. To the extent that company employees,contractors, consultants, collaborators, and advisors use intellectual property owned by others in their work for us, disputes may arise as to the rights inrelated or resulting know-how and inventions. For this and more comprehensive risks related to our proprietary technology, inventions, improvements andproducts, please see the section entitled “Risk Factors—Risks Related to Intellectual Property”.Regulatory MattersGovernment Regulation and Product ApprovalGovernment authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, theresearch, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record keeping, promotion, advertising, distribution,marketing and export and import of products such as those we are developing. A new drug must be approved by the FDA through the NDA process and a newbiologic must be approved by the FDA through the Biologics License Application (BLA), process before it may be legally marketed in the United States.19 U.S. Drug Development ProcessIn the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (FDCA) and in the case of biologics, also under thePublic Health Service Act (PHSA) and implementing regulations. Our product candidates will be regulated by the FDA as biologics. The process of obtainingregulatory approvals and the subsequent compliance with applicable federal, state, local, and foreign statutes and regulations require the expenditure ofsubstantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process,approval process or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDA’s refusal toapprove pending applications, withdrawal of an approval, license revocation, a clinical hold, warning letters, product recalls, product seizures, total or partialsuspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. Anyagency or judicial enforcement action could have a material adverse effect on us. The process required by the FDA before a biologic may be marketed in theUnited States generally involves the following: •completion of preclinical laboratory tests, animal studies and formulation studies according to GLP other applicable regulations; •submission to the FDA of an IND application which must become effective before human clinical trials may begin; •performance of adequate and well controlled human clinical trials according to GCP to establish the safety and efficacy of the proposed drugfor its intended use; •development and approval of a companion diagnostic device if the FDA or the sponsor believes that its use is essential for the safe andeffective use of a corresponding product; •submission to the FDA of a BLA; •satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance withGMP to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and •FDA review and approval of the BLA.Once a pharmaceutical candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluationsof product chemistry, toxicity and formulation, as well as animal studies. An IND sponsor must submit the results of the preclinical tests, together withmanufacturing information and analytical data, to the FDA as part of the IND. In June 2016, the FDA issued an updated guidance for the industry entitled“Early Clinical Trials with Live Biotherapeutic Products: Chemistry, Manufacturing and Control Information,” which included recommendations from theFDA regarding the chemistry, manufacturing and control information that should be included in an IND for early clinical trials with live biotherapeuticproducts. This Guidance reflects the FDA’s thinking on a topic at the time that it was issued and although it is not binding on the FDA or a sponsor, itprovided us with additional information about what should be included in our IND. The sponsor will also include a protocol detailing, among other things,the objectives of the first phase of the clinical trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated, if the firstphase lends itself to an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective30 days after receipt by the FDA, unless the FDA, within the 30-day time period, places the clinical trial on a clinical hold. In such a case, the IND sponsorand the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before orduring clinical trials due to safety concerns about ongoing or proposed clinical trials or non-compliance with specific FDA requirements, and the trials maynot begin or continue until the FDA notifies the sponsor that the hold has been lifted.All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP requirements. They must beconducted under protocols detailing the objectives of the trial, dosing procedures, subject selection and exclusion criteria and the safety and effectivenesscriteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND, and timely safety reports must be submitted to the FDA and theinvestigators for serious and unexpected adverse events. An institutional review board (IRB) at each institution participating in the clinical trial must reviewand approve each protocol before a clinical trial commences at that institution and must also approve the information regarding the trial and the consent formthat must be provided to each trial subject or his or her legal representative, monitor the study until completed and otherwise comply with IRB regulations. 20 Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: •Phase 1: The product candidate is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption,metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, such as cancer, especially when theproduct may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. •Phase 2: This phase involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarilyevaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. •Phase 3: Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population atgeographically dispersed clinical study sites. These clinical trials are intended to establish the overall risk benefit ratio of the productcandidate and provide, if appropriate, an adequate basis for product labeling.Post-approval trials, sometimes referred to as Phase 4, may be conducted after initial marketing approval. These trials are used to gain additionalexperience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4clinical trials as a condition of approval of a BLA.The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are beingexposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not beingconducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. Additionally, some clinicaltrials are overseen by an independent group of qualified experts organized by the sponsor, known as a data safety monitoring board or committee. Dependingon its charter, this group may determine whether a trial may move forward at designated check points based on access to certain data from the trial. Phase 1,Phase 2, and Phase 3 testing may not be completed successfully within any specified period, if at all.During the development of a new drug, sponsors are given opportunities to meet with the FDA at certain points. These points may be prior tosubmission of an IND, at the end of Phase 2, and before a BLA is submitted. Meetings at other times may be requested. These meetings can provide anopportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reachagreement on the next phase of development. Sponsors typically use the end of Phase 2 meeting to discuss their Phase 2 clinical results and present theirplans for the pivotal Phase 3 clinical trial that they believe will support approval of the new drug. If this type of discussion occurs, a sponsor may be able torequest a Special Protocol Assessment (SPA), the purpose of which is to reach agreement with the FDA on the design of the Phase 3 clinical trial protocoldesign and analysis that will form the primary basis of an efficacy claim.Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about thechemistry and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with GMPrequirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things themanufacturer must develop methods for testing the identity, strength, quality and purity of the final drug. Additionally, appropriate packaging must beselected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over itsshelf life.While the IND is active and before approval, progress reports summarizing the results of the clinical trials and nonclinical studies performed since thelast progress report must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for seriousand unexpected suspected adverse reactions, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs,findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspectedadverse reaction compared to that listed in the protocol or investigator brochure.There are also requirements governing the reporting of ongoing clinical trials and completed trial results to public registries. Sponsors of certainclinical trials of FDA-regulated products are required to register and disclose specified clinical trial information, which is publicly available atwww.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, trial sites and investigators and other aspects of theclinical trial is then made public as part of the registration. Sponsors are also obligated to discuss the results of their clinical trials after completion.Disclosure of the results of these trials can be delayed until the new product or new indication being studied has been approved. However, there are evolvingrules and increasing requirements for publication of all trial related information, and it is possible that data and other information from trials involving drugsthat never garner approval could require disclosure in the future.21 U.S. Review and Approval ProcessesThe results of product development, preclinical and other nonclinical studies and clinical trials, along with descriptions of the manufacturing process,analytical tests conducted on the chemistry of the drug, proposed labeling, and other relevant information are submitted to the FDA as part of a BLArequesting approval to market the product. The submission of a BLA is subject to the payment of a significant user fee; although a waiver of such fee may beobtained under certain limited circumstances, including where the biologic has been designated as an orphan drug. The FDA reviews all BLAs submitted toensure that they are sufficiently complete for substantive review before it accepts them for filing. The FDA may request additional information rather thanaccept a BLA for filing. In this event, the BLA must be resubmitted with the additional information. The resubmitted application also is subject to reviewbefore the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in depth substantive review. The FDA may refer the BLA toan advisory committee for review, evaluation and recommendation as to whether the application should be approved and under what conditions. The FDA isnot bound by the recommendation of an advisory committee, but it generally follows such recommendations. The approval process is lengthy and oftendifficult, and the FDA may refuse to approve a BLA if the applicable regulatory criteria are not satisfied or may require additional clinical or other data andinformation. Even if such data and information are submitted, the FDA may ultimately decide that the BLA does not satisfy the criteria for approval. Dataobtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data. The FDA may issue acomplete response letter, which may require additional clinical or other data or impose other conditions that must be met in order to secure final approval ofthe BLA, or an approval letter following satisfactory completion of all aspects of the review process. The FDA reviews a BLA to determine, among otherthings, whether the product is safe, pure and potent and the facility in which it is manufactured, processed, packed or held meets standards designed to assurethe product’s continued safety, purity and potency. Before approving a BLA, the FDA will inspect the facility or facilities where the product is manufactured.BLAs receive either standard or priority review. A drug representing a significant improvement in treatment, prevention or diagnosis of disease mayreceive priority review. Priority review for an original BLA will be six months from the date that the BLA is filed. In addition, products studied for their safetyand effectiveness in treating serious or life threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receiveaccelerated approval and may be approved on the basis of adequate and well controlled clinical trials establishing that the drug product has an effect on asurrogate endpoint that is reasonably likely to predict clinical benefit or on the basis of an effect on a clinical endpoint other than survival or irreversiblemorbidity. As a condition of approval, the FDA may require that a sponsor of a drug receiving accelerated approval perform adequate and well controlledPhase 4 clinical trials. Priority review and accelerated approval do not change the standards for approval, but may expedite the approval process.After the FDA evaluates a BLA, it will issue an approval letter or a Complete Response Letter (CRL). An approval letter authorizes commercialmarketing of the drug with prescribing information for specific indications. A CRL indicates that the review cycle of the application is complete and theapplication will not be approved in its present form. A CRL usually describes the specific deficiencies in the BLA identified by the FDA and may requireadditional clinical data, such as an additional pivotal Phase 3 trial or other significant and time-consuming requirements related to clinical trials, nonclinicalstudies or manufacturing. If a CRL is issued, the sponsor must resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw theapplication. Even if such data and information are submitted, the FDA may decide that the BLA does not satisfy the criteria for approval.If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use mayotherwise be limited, which could restrict the commercial value of the product. In addition, the FDA may require a sponsor to conduct Phase 4 testing whichinvolves clinical trials designed to further assess a drug’s safety and effectiveness after BLA approval and may require testing and surveillance programs tomonitor the safety of approved products which have been commercialized. The FDA may also place other conditions on approval including the requirementfor a Risk Evaluation and Mitigation Strategy (REMS), to assure the safe use of the drug. If the FDA concludes a REMS is needed, the sponsor of the BLAmust submit a proposed REMS. The FDA will not approve the BLA without an approved REMS, if required. A REMS could include medication guides,physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Marketingapproval may be withdrawn for non-compliance with regulatory requirements or if problems occur following initial marketing.22 The Pediatric Research Equity Act (PREA), requires a sponsor to conduct pediatric clinical trials for most newly approved drugs and biologics, for anew active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. Under PREA, original BLAs and supplementsthereto, must contain a pediatric assessment unless the sponsor has received a deferral or waiver. The required assessment must evaluate the safety andeffectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatricsubpopulation for which the product is safe and effective. The sponsor or the FDA may request a deferral of pediatric clinical trials for some or all of thepediatric subpopulations. A deferral may be granted for several reasons, including a finding that the drug or biologic is ready for approval for use in adultsbefore pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin.Orphan indications are exempt from PREA. The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep adeferral current or fails to submit a request for approval of a pediatric formulation.Patent Term Restoration and Marketing ExclusivityDepending upon the timing, duration and specifics of FDA approval of our drugs, some of our U.S. patents may be eligible for limited patent termextension under the Drug Price Competition and Patent Term Restoration Act of 1984 (referred to as the Hatch Waxman Amendments). The Hatch WaxmanAmendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatoryreview process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date.The patent term restoration period is generally one half the time between the effective date of an IND, and the submission date of a BLA, plus the timebetween the submission date of a BLA and the approval of that application. Only one patent applicable to an approved drug is eligible for the extension, andthe extension must be applied for prior to expiration of the patent. The USPTO, in consultation with the FDA, reviews and approves the application for anypatent term extension or restoration. In the future, we intend to apply for restorations of patent term for some of its currently-owned or licensed patents to addpatent life beyond their current expiration date, depending on the expected length of clinical trials and other factors involved in the filing of the relevantBLA.Pediatric exclusivity is a type of marketing exclusivity available in the United States. Under the Best Pharmaceuticals for Children Act (BPCA), anadditional six months of marketing exclusivity may be available if a sponsor conducts clinical trials in children in response to a written request from theFDA. If a written request does not include clinical trials in neonates, the FDA is required to include its rationale for not requesting those clinical trials. TheFDA may request studies on approved or unapproved indications in separate written requests. The issuance of a written request does not require the sponsorto undertake the described clinical trials. To date, we have not received any written requests.Biologics Price Competition and Innovation Act of 2009The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively,ACA), which included the BPCIA, amended the PHSA to create an abbreviated approval pathway for two types of “generic” biologics, biosimilars andinterchangeable biologic products, and provides for a 12-year data exclusivity period for the first approved biological product, or reference product, againstwhich a biosimilar or interchangeable application is evaluated; however if pediatric clinical trials are performed and accepted by the FDA, the 12-year dataexclusivity period will be extended for an additional six months. Because our product candidates will be regulated as biologics, if they are approved, theymay be subject to competition from biosimilars. A biosimilar product is defined as one that is highly similar to a reference product notwithstanding minordifferences in clinically-inactive components and for which there are no clinically meaningful differences between the biological product and the referenceproduct in terms of the safety, purity and potency of the product. An interchangeable product is a biosimilar product that may be substituted for the referenceproduct without the intervention of the health care provider who prescribed the reference product.The biosimilar applicant must demonstrate that the product is biosimilar based on data from (1) analytical studies showing that the biosimilar productis highly similar to the reference product; (2) animal studies (including toxicity); and (3) one or more clinical trials to demonstrate safety, purity and potencyin one or more appropriate conditions of use for which the reference product is approved. In addition, the applicant must show that the biosimilar andreference products have the same mechanism of action for the conditions of use on the label, route of administration, dosage and strength, and the productionfacility must meet standards designed to assure product safety, purity and potency.An application for a biosimilar product may not be submitted until four years after the date on which the reference product was first approved. The firstapproved interchangeable biologic product will be granted an exclusivity period of up to one year after it is first commercially marketed, but the exclusivityperiod may be shortened under certain circumstances.23 Orphan Drug DesignationUnder the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally adisease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for whichthere is no reasonable expectation that the cost of developing and making available in the United States a drug for this type of disease or condition will berecovered from sales in the United States for that drug. Orphan drug designation must be requested before submitting a BLA. After the FDA grants orphandrug designation, the identity of the therapeutic agent and its potential orphan use will be disclosed publicly by the FDA; the posting will also indicatewhether a drug is no longer designated as an orphan drug. More than one product candidate may receive an orphan drug designation for the same indication.Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, theproduct is entitled to seven years of orphan product exclusivity, except in very limited circumstances. The FDA will not recognize orphan drug exclusiveapproval if a sponsor fails to demonstrate upon approval that the drug is clinically superior to a previously approved drug, regardless of whether or not theapproved drug was designated an orphan drug or had orphan drug exclusivity. Thus orphan drug exclusivity could also block the approval of one of ourproducts for seven years if a competitor obtains approval of the same drug as defined by the FDA and we are not able to show the clinical superiority of ourdrug or if our product candidate is determined to be contained within the competitor’s product for the same indication or disease.In August 2016, the FDA granted orphan drug designation for SYNB1020 for the treatment of UCDs. In October 2017, the FDA granted SYNB1618orphan drug designation for the treatment of PKU.Expedited Review and ApprovalThe FDA has various programs, including Fast-Track, priority review, and accelerated approval, which are intended to expedite or simplify the processfor reviewing drugs, and/or provide for approval on the basis of surrogate endpoints. Even if a drug qualifies for one or more of these programs, the FDA maylater decide that the drug no longer meets the conditions for qualification or that the time period for FDA review or approval will not be shortened. Generally,drugs that may be eligible for these programs are those for serious or life-threatening conditions, those with the potential to address unmet medical needs, andthose that offer meaningful benefits over existing treatments. For example, Fast-Track is a process designed to facilitate the development, and expedite thereview, of drugs to treat serious diseases and fill an unmet medical need. The request may be made at the time of IND submission and generally no later thanthe pre-BLA meeting. The FDA will respond within 60 calendar days of receipt of the request. Priority review, which is requested at the time of BLAsubmission, is designed to give drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists an initial review withinsix months as compared to a standard review time of 10 months. Although Fast-Track and priority review do not affect the standards for approval, the FDAwill attempt to facilitate early and frequent meetings with a sponsor of a Fast-Track designated drug and expedite review of the application for a drugdesignated for priority review. Accelerated approval provides approval of drugs that treat serious diseases, and that fill an unmet medical need based on asurrogate endpoint, which is a laboratory measurement or physical sign used as an indirect or substitute measurement representing a clinically meaningfuloutcome. Discussions with the FDA about the feasibility of an accelerated approval typically begin early in the development of the drug in order to identify,among other things, an appropriate endpoint. As a condition of approval, the FDA may require a sponsor of a drug receiving accelerated approval to performpost-marketing clinical trials to confirm the appropriateness of the surrogate marker trial.A Breakthrough Therapy designation is designed to expedite the development and review of drugs that are intended to treat a serious condition wherepreliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on a clinically significant endpoint. Asponsor may request Breakthrough Therapy designation at the time that the IND is submitted, or no later than at the end of Phase 2 meeting. The FDA willrespond to a Breakthrough Therapy designation request within 60 days of receipt of the request. A drug that receives Breakthrough Therapy designation iseligible for all Fast-Track designation features, intensive guidance on an efficient drug development program, beginning as early as Phase 1.In June 2017, the FDA granted Fast-Track designation for the use of SYNB1020 for the treatment of UCDs.In April 2018, the FDA granted Fast-Track designation for the use of SYNB1618 for the treatment of PKU.24 Post-Approval RequirementsOnce an approval is granted, the FDA may withdraw the approval if compliance with regulatory standards is not maintained or if problems occur afterthe product reaches the market. Later discovery of previously unknown problems with a product may result in restrictions on the product or even completewithdrawal of the product from the market. After approval, some types of changes to the approved product, such as adding new indications, certainmanufacturing changes and additional labeling claims, are subject to further FDA review and approval. Drug manufacturers and other entities involved in themanufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies and are subject toperiodic unannounced inspections by the FDA and certain state agencies for compliance with GMP and other laws and regulations. We rely, and expect tocontinue to rely, on third parties for the production of clinical and commercial quantities of our products. Future inspections by the FDA and other regulatoryagencies may identify compliance issues at the facilities of our contract manufacturers that may disrupt production or distribution or require substantialresources to correct.Any drug products manufactured or distributed by us or our partners pursuant to FDA approvals are subject to continuing regulation by the FDA,including, among other things, record keeping requirements, reporting of adverse experiences with the drug, providing the FDA with updated safety andefficacy information, drug sampling and distribution requirements, complying with certain electronic records and signature requirements, and complyingwith FDA promotion and advertising requirements. The FDA strictly regulates labeling, advertising, promotion and other types of information on productsthat are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label.From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing theapproval, manufacturing and marketing of products regulated by the FDA. It is impossible to predict whether further legislative changes will be enacted, orFDA regulations, guidance or interpretations changed or what the impact of such changes, if any, may be.Foreign RegulationIn addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales anddistribution of our products. Whether or not we obtain FDA approval for a product, we must obtain approval by the comparable regulatory authorities offoreign countries or economic areas, such as the European Union, before we may commence clinical trials or market products in those countries or areas. Theapproval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from place to place,and the time may be longer or shorter than that required for FDA approval.Under European Union regulatory systems, a company may submit marketing authorization applications either under a centralized or decentralizedprocedure. The centralized procedure, which is compulsory for medicinal products produced by biotechnology or those medicinal products containing newactive substances for specific indications such as the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, viral diseases and designated orphanmedicines, and optional for other medicines which are highly innovative. Under the centralized procedure, a marketing application is submitted to theEuropean Medicines Agency where it will be evaluated by the Committee for Medicinal Products for Human Use and a favorable opinion typically results inthe grant by the European Commission of a single marketing authorization that is valid for all European Union member states within 67 days of receipt of theopinion. The initial marketing authorization is valid for five years, but once renewed is usually valid for an unlimited period. The decentralized procedureprovides for approval by one or more “concerned” member states based on an assessment of an application performed by one member state, known as the“reference” member state. Under the decentralized approval procedure, an applicant submits an application, or dossier, and related materials to the referencemember state and concerned member states. The reference member state prepares a draft assessment and drafts of the related materials within 120 days afterreceipt of a valid application. Within 90 days of receiving the reference member state’s assessment report, each concerned member state must decide whetherto approve the assessment report and related materials. If a member state does not recognize the marketing authorization, the disputed points are eventuallyreferred to the European Commission, whose decision is binding on all member states.As in the United States, we may apply for designation of a product as an orphan drug for the treatment of a specific indication in the European Unionbefore the application for marketing authorization is made. Orphan drugs in Europe enjoy economic and marketing benefits, including up to 10 years ofmarket exclusivity for the approved indication unless another applicant can show that its product is safer, more effective or otherwise clinically superior tothe orphan designated product.25 ReimbursementSales of pharmaceutical products depend in significant part on the availability of third-party reimbursement. Third-party payors include governmenthealthcare programs such as Medicare, managed care providers, private health insurers and other organizations. We anticipate third-party payors will providereimbursement for our products. However, these third-party payors are increasingly challenging the price and examining the cost effectiveness of medicalproducts and services. In addition, significant uncertainty exists as to the reimbursement status of newly-approved healthcare products. We may need toconduct expensive pharmacoeconomic studies in order to demonstrate the cost effectiveness of our products. Our product candidates may not be consideredcost effective. It is time consuming and expensive for us to seek reimbursement from third-party payors. Reimbursement may not be available or sufficient toallow us to sell our products on a competitive and profitable basis.Medicare is a federal healthcare program administered by the federal government that covers individuals age 65 and over as well as individuals withcertain disabilities. Drugs may be covered under one or more sections of Medicare depending on the nature of the drug and the conditions associated withand site of administration. For example, under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities which providecoverage for outpatient prescription drugs. Part D plans include both stand-alone prescription drug benefit plans and prescription drug coverage as asupplement to Medicare Advantage plans. Unlike Medicare Parts A and B, Part D coverage is not standardized. Part D prescription drug plan sponsors are notrequired to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies which drugs it will cover and at what tieror level.Medicare Part B covers most injectable drugs given in an in-patient setting and some drugs administered by a licensed medical provider in hospitaloutpatient departments and doctors’ offices. Medicare Part B is administered by Medicare Administrative Contractors, which generally have theresponsibility of making coverage decisions. Subject to certain payment adjustments and limits, Medicare generally pays for a Part B-covered drug based ona percentage of manufacturer-reported average sales price, which is regularly updated. We believe that our product candidates that are intended to beadministered intratumorally will be subject to the Medicare Part B rules. 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 ACA enacted in March 2010, was expected to have a significant impact on thehealth care industry. The ACA has been under scrutiny by the U.S. Congress almost since its passage, and certain sections of the ACA have not been fullyimplemented or effectively repealed. As a result, its longevity continues to be uncertain. In addition, ongoing initiatives in the U.S. have increased and willcontinue to increase pressure on drug pricing. The announcement or adoption of any such initiative could have an adverse effect on potential revenues fromany product candidate that we may successfully develop.In addition, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirementsgoverning drug pricing vary widely from country to country. For example, the European Union provides options for its member states to restrict the range ofmedicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. Amember state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on our profitability placingthe medicinal product on the market. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceuticalproducts will allow favorable reimbursement and pricing arrangements for any of our products. Historically, products launched in the European Union do notfollow price structures of the United States and generally prices tend to be significantly lower.Other Regulatory MattersWe are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling,use, storage, treatment and disposal of hazardous materials and wastes. These operations may involve the use of hazardous and flammable materials,including chemicals and biological materials. Our operations may also produce hazardous waste products. We contract with third parties for the disposal ofthese materials and wastes.26 ManufacturingWe have made and continue to make significant investments to develop manufacturing processes designed to allow us to reproducibly manufacturehigh quality living medicines at clinical scale and, later, at commercial scale to enable approval of our product candidates. We have an internal developmentgroup and have recently expanded our manufacturing and process development capabilities with the lease of GMP cleanroom space in Waltham,Massachusetts. This facility enables us to produce clinical trial material for early to mid-stage studies of our rare metabolic disease and IO programs. Wecontinue to build the organization to support scale-up and development towards commercialization. We currently expect to continue to work with contractmanufacturing organizations (CMOs) for production of late-stage clinical trial material.Clinical trial material for our Phase 1 studies of SYNB1020 for hyperammonemia and SYNB1618 for PKU were manufactured by a CMO. These firstclinical trials used a liquid formulation. We have invested in the development of a solid dose oral formulation for later stage clinical development andcommercial use.To enable the production of high levels of cells, or biomass, we can engineer our Synthetic Biotic medicines with switches. These switches arecomprised of transcription factor and promoter pairs that allow for controlled expression of the therapeutic effectors produced by our Synthetic Bioticmedicines. To ensure the metabolic capacity of the cells is allotted to the production of a high level of biomass during manufacturing, the effector circuits inthe Synthetic Biotic programs are not expressed during this growth phase. At the end of the manufacturing process, the circuits are then induced, or activated.This two-step approach was designed to enable a high level of biomass production as well as to deliver the required activity necessary at the time ofadministration.As we progress in clinical development, we will need to increase our scale and eventually to commercial-scale manufacturing. We are in the process ofassessing CMOs who meet our criteria to supply our later-stage clinical development and commercial supply. We will compare the merits of working withone or more CMOs who meet our criteria with the possibility of building GMP manufacturing capacity and capabilities internally.CompetitionThe biotechnology industry is extremely competitive in the race to develop new products. While we believe we have significant competitiveadvantages with our industry-leading expertise in synthetic biology and metabolic engineering of non-pathogenic bacteria, our clinical developmentexpertise, and strong intellectual property position, we currently face and will continue to face competition for our development programs from companiesthat use synthetic biology or cell therapy development platforms and from companies focused on more conventional therapeutic modalities such as smallmolecules and antibodies. The competition is likely to come from multiple sources, including larger pharmaceutical companies, biotechnology companiesand academia. Many of these competitors may have access to greater capital and resources than us. These competitors also compete with us in recruiting andretaining qualified scientific and management personnel, in establishing clinical trial sites and patient registration for clinical trials, and in accessingtechnologies to enable our programs. For any products that we may ultimately commercialize, not only will we compete with any existing therapies and thosetherapies currently in development, but we will also have to compete with new therapies that may become available in the future.Competitors to our efforts to provide living medicines to patients with a wide range of indications include other synthetic biology companiesdeveloping other synthetic biology methods, cellular and microbiome-based companies, DNA and RNA-based companies, as well as companies developingsmall molecules or other biologics. In the case of indications that we are targeting with our own Synthetic Biotic medicines, competitors include, but are notlimited to: •UCD •Horizon Pharma plc has an approved product; and •Acer Therapeutics Inc., Aeglea Biotherapeutics, Inc. and Ultragenyx Pharmaceutical Inc., have products in clinical testing. KaleidoBiosciences, Inc. is evaluating a product in a non-IND study. Arcturus Therapeutics Inc., Selecta Biosciences, Inc., Translate Bio, Inc.and Versantis AG each have discovery or pre-clinical stage product candidates in development. •HE •Bausch Health Companies has an approved product; and •Mallinckrodt plc, Rebiotix, Inc./Ferring and Umecrine Cognition AB have programs in clinical testing. Kaleido Biosciences, Inc. isevaluating a product in a non-IND study. Several other pre-clinical and discovery stage companies are developing product candidates.27 •PKU •BioMarin, Inc. has two approved products and a development stage product; and •Censa Pharmaceuticals, Inc. and Codexis, Inc. have products in clinical trials. Rubius Therapeutics, Inc., Homology Medicines, Inc.,Moderna Inc., Agios Pharmaceuticals, Inc. and others are developing product candidates. •IO •The field of immuno-oncology is highly competitive with many companies developing and commercializing a wide range of types ofpharmaceutical products and combinations. Companies with STING agonists in clinical development include Aduro BioTech, Inc., inpartnership with Novartis AG, Merck & Co. Inc. and GlaxoSmithKline plc. Examples of companies developing other modalities includecompanies such as Merck and Bristol-Myers Squibb Company that develop and market antibodies called checkpoint inhibitors.Celgene Corporation (currently undergoing a merger with Bristol-Myers Squibb) and Gilead Sciences, Inc. market autologous cell-based therapies called CAR-T. Other companies are developing and or marketing oncolytic viruses, cancer vaccines, cytotoxic agents,and other approaches to treating cancer.Our Team: Executives, Founders and Scientific AdvisorsOur team of executives has proven track records of successfully translating scientific visions into successful commercial therapeutic products, solvingcomplex issues in developing novel therapeutics and progressing new and novel products through regulatory approval. Our scientific founders, Timothy Lu,M.D., Ph.D., and James Collins, Ph.D., are experts in the emerging field of synthetic biology. In addition to our management team and founders, we haveestablished advisory relationships with researchers and clinicians dedicated to the development of Synthetic Biotic therapeutic products for patients withsignificant unmet medical needs and whose expertise spans synthetic biology, metabolic engineering, metabolism, immuno-modulation and immuno-oncology arenas. Our scientific advisors include Dr. Lu and Dr. Collins; Paul Miller, Ph.D., Christopher Voigt, Ph.D., Cammie Lesser, M.D., Ph.D. and KristalaPrather, Ph.D., experts in synthetic biology and bacterial metabolism; and Charles Mackay, Ph.D., Ulrich von Andrian, M.D., Ph.D. and Sangeeta Bhatia,M.D., Ph.D., experts in immunomodulation and oncology. We intend to expand our advisory boards as we grow. All of our founders and advisors are equityholders in us and receive compensation as scientific advisors. Although they are regularly available for scientific consultation, our arrangements with theseindividuals do not entitle us to any of their existing or future intellectual property derived from their independent research or research with other third parties.EmployeesAs of March 5, 2019, we had 74 full-time employees. Of our full-time employees, 58 were primarily engaged in research and development activities.None of our employees are subject to a collective bargaining agreement. We believe that we have good relations with our employees.Corporate Information and HistoryWe were originally incorporated in the State of Delaware in December 2007 under the name “Mirna Therapeutics, Inc.” We carry on our businessdirectly and through our subsidiaries.Our subsidiary, Synlogic Operating Company, Inc. was incorporated in Delaware as TMC Therapeutics, Inc. on March 14, 2014. On July 15, 2014,TMC Therapeutics, Inc. changed its name to Synlogic, Inc. (Private Synlogic when referred to prior to the Merger (as defined below)). On July 2, 2015, thecommon and preferred shareholders of Private Synlogic executed the Synlogic, LLC Contribution Agreement, pursuant to which such common and preferredshareholders contributed such shareholders’ equity interests in Private Synlogic in exchange for common and preferred units in a newly formed parentcompany named Synlogic, LLC (the 2015 Reorganization). In addition, IBDCo was formed as a subsidiary of Synlogic, LLC, as part of the 2015Reorganization, and we entered into a license, option and merger agreement with AbbVie for the development of treatments for IBD. In May 2017, wecompleted a series of transactions pursuant to which Synlogic, LLC merged with and into Private Synlogic with Private Synlogic continuing as the survivingcorporation.28 On August 28, 2017, Synlogic, Inc., formerly known as Mirna Therapeutics, Inc. (NASDAQ: MIRN) (Mirna), completed its business combination withSynlogic, Inc. in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of May 15, 2017, by and among Mirna,Meerkat Merger Sub, Inc. (Merger Sub), and Private Synlogic (the Merger Agreement), pursuant to which Merger Sub merged with and into Private Synlogic,with Private Synlogic surviving as a wholly owned subsidiary of Mirna (the Merger). On August 25, 2017, in connection with, and prior to the completion of,the Merger, Mirna effected a 1:7 reverse stock split of its common stock (the Reverse Stock Split), and on August 28, 2017, immediately after completion ofthe Merger, Mirna changed its name to “Synlogic, Inc.” (NASDAQ: SYBX).Under the terms of the Merger Agreement, Mirna issued shares of its common stock to Private Synlogic’s stockholders, at an exchange ratio of 0.5532shares of Mirna’s common stock, after taking into account the Reverse Stock Split, for each share of Private Synlogic common stock and preferred stockoutstanding immediately prior to the Merger (Exchange Ratio). In addition, Mirna assumed all of the stock options outstanding under the Synlogic 2017Stock Incentive Plan (2017 Plan), with such stock options henceforth representing the right to purchase a number of shares of Mirna’s common stock equal tothe Exchange Ratio multiplied by the number of shares of Private Synlogic common stock previously represented by such options. Mirna also assumed the2017 Plan.Our Internet address is www.synlogictx.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and allamendments to those reports, are available to you free of charge through our website as soon as reasonably practicable after such materials have beenelectronically filed with, or furnished to, the Securities and Exchange Commission (SEC). 29 Item 1A. Risk Factors.Investing in our common stock involves a high degree of risk. Our business, prospects, financial condition or operating results could be materiallyadversely affected by the risks identified below, as well as other risks not currently known to us or that we currently consider immaterial. Furthermore, thesefactors represent risks and uncertainties that could cause actual results to differ materially from those implied by forward-looking statements. Accordingly,in evaluating our business, we encourage you to consider the following discussion of risk factors, in its entirety, in addition to other information containedin this Quarterly Report on Form 10-Q and our other public filings with the SEC. The following risk factors may be amended, supplemented or supersededfrom time to time by other reports we file with the SEC in the future.In the following discussion of risk factors, References to “we”, “us”, “our” and similar terms refer to the combined business of Synlogic, Inc. after theMerger on August 28, 2017.Risks Related to Our Financial Condition, Capital Requirements and Operating ResultsWe are a clinical-stage biopharmaceutical company with a history of losses, and we expect to continue to incur losses for the foreseeable future, and wemay never achieve or maintain profitability.We are a clinical-stage biopharmaceutical company focused on the development of Synthetic Biotic medicines and we have incurred significantoperating losses since our inception. Our net loss was approximately $48.4 million and $40.4 million for the fiscal years ended December 31, 2018 and 2017,respectively. As of December 31, 2018, we had an accumulated deficit of approximately $119.8 million. To date, we have not generated any product revenue.Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general andadministrative costs associated with our operations. We have no products on the market and expect that it will be many years, if ever, before we have aproduct candidate ready for commercialization.We have not generated, and do not expect to generate, any product revenue for the foreseeable future, and we expect to continue to incur significantoperating losses for the foreseeable future due to the cost of research and development, preclinical studies and clinical trials, the regulatory review process forproduct candidates, and the development of manufacturing and marketing capabilities for any product candidates approved for commercial sale. The amountof our potential future losses is uncertain. To achieve profitability, we must successfully develop product candidates, obtain regulatory approvals to marketand commercialize product candidates, manufacture any approved product candidates on commercially reasonable terms, establish a sales and marketingorganization or suitable third-party alternatives for any approved product candidates and raise sufficient funds to finance our business activities. We maynever succeed in these activities and, even if we do, may never generate revenues that are significant or large enough to achieve profitability. Even if we doachieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable woulddecrease our value and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue ouroperations. A decline in our value could also cause our stockholders to lose all or part of their investment.We will require substantial additional funding, which may not be available on acceptable terms, or at all.We have used substantial funds to discover and develop our programs and proprietary drug development platform and will require substantialadditional funds to conduct further research and development, including preclinical studies and clinical trials of our product candidates, seek regulatoryapprovals for our product candidates and manufacture and market any products that are approved for commercial sale. Our future capital requirements and theperiod for which we expect our existing resources to support our operations may vary significantly from what we expect. Our monthly spending levels varybased on new and ongoing research and development and corporate activities. Because we cannot be certain of the length of time or activities associated withsuccessful development and commercialization of our product candidates, we are unable to estimate the actual funds we will require to develop andcommercialize them.30 We do not expect to realize any appreciable revenue from product sales or royalties in the foreseeable future, if at all. Our revenue sources will remainvery limited unless and until our product candidates complete clinical development and are approved for commercialization and successfully marketed. Todate, we have primarily financed our operations through sales of our securities, our third-party collaborations and the Merger. We intend to seek additionalfunding in the future through collaborations, equity or debt financings, credit or loan facilities or a combination of one or more of these financing sources.Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control. Additional funds may notbe available to us on acceptable terms or at all. If we raise additional funds by issuing equity or convertible debt securities, our stockholders will sufferdilution and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing additional funds to us,future investors may demand, and may be granted, rights superior to those of existing stockholders. Debt financing, if available, may involve restrictivecovenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, debt holders would be repaid before holders ofequity securities received any distribution of corporate assets.If we are unable to obtain funding on a timely basis or on acceptable terms, or at all, we may have to delay, limit or terminate our research anddevelopment programs and preclinical studies or clinical trials, if any, limit strategic opportunities or undergo reductions in our workforce or other corporaterestructuring activities. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights tosome of our product candidates or technologies that we would otherwise pursue on our own.Our quarterly and annual operating results may fluctuate in the future. As a result, we may fail to meet the expectations of research analysts or investors,which could cause our stock price to decline.Our financial condition and operating results may fluctuate from quarter to quarter and year to year in the future due to a variety of factors, many ofwhich are beyond our control. Factors relating to our business that may contribute to these fluctuations include the following factors, as well as factorsdescribed elsewhere in this Annual Report on Form 10-K and others: •our ability to achieve or maintain profitability; •our ability to develop and maintain Synthetic Biotic technologies; •our ability to manage our growth; •the outcomes of research programs, clinical trials, or other product development and approval processes; •our ability to accurately report our financial results in a timely manner; •our dependence on, and the need to attract and retain, key management and other personnel; •our ability to obtain, protect and enforce our intellectual property rights; •our ability to prevent the theft or misappropriation of our intellectual property, know-how or technologies; •potential advantages that our competitors and potential competitors may have in securing funding or developing competing technologies orproducts; and •our ability to obtain additional capital that may be necessary to expand our business.Due to the various factors mentioned above, and others, the results of any prior quarterly or annual periods should not be relied upon as indications ofour future operating performance.Our stock price is volatile and our stockholders may not be able to resell shares of our common stock at or above the price they paid.The trading price of our common stock is highly volatile and could be subject to wide fluctuations in response to various factors, some of which arebeyond our control, such as reports by industry analysts, investor perceptions or negative announcements by other companies involving similar technologiesor diseases. These factors also include those discussed in this “Risk Factors” section of this Annual Report on Form 10-K and others such as: •announcements relating to collaborations that we may enter into with respect to the development or commercialization of our productcandidates; •announcements relating to the receipt, modification or termination of government contracts or grants; •termination or delay of a development program;31 •product liability claims related to our clinical trials or product candidates; •prevailing economic conditions; •additions or departures of key personnel; •business disruptions caused by earthquakes or other natural disasters; •disputes concerning our intellectual property or other proprietary rights; •FDA or other U.S. or foreign regulatory actions affecting us or our industry; •sales of our common stock by the company, our executive officers and directors or our stockholders in the future; •future sales or issuances of equity or debt securities by us; •lack of an active, liquid and orderly market in our common stock; •fluctuations in our quarterly operating results; and •the issuance of new or changed securities analysts’ reports or recommendations regarding us.In addition, the stock markets in general, and the markets for pharmaceutical, biopharmaceutical and biotechnology stocks in particular, haveexperienced extreme volatility that have been often unrelated to the operating performance of the issuer. These broad market fluctuations may adverselyaffect the trading price or liquidity of our common stock. In the past, when the market price of a stock has been volatile, holders of that stock have sometimesinstituted securities class action litigation against the issuer. If any of our stockholders were to bring such a lawsuit against us, we could incur substantialcosts defending the lawsuit and the attention of our management would be diverted from the operation of our business.Our short operating history may make it difficult for stockholders to evaluate the success of our business to date and to assess our future viability.We are a clinical-stage biopharmaceutical company with a limited operating history. We commenced active operations in 2014. Our operations to datehave been limited to organizing and staffing our company, research and development activities, business planning and raising capital. In June 2017, weinitiated a Phase 1 clinical trial with SYNB1020 in healthy volunteers, in April 2018, we announced that we dosed the first patient in our Phase 1b / 2aclinical trial of SYNB1020 for treatment of hyperammonemia in patients with cirrhosis, and in April 2018 we dosed our first subject in a Phase 1 / 2a clinicaltrial of SYNB1618 which is being developed for the treatment of patients with PKU, however all of our other therapeutic programs are still in the preclinicaldevelopment stage. We will need to transition from a company with a research focus to a company capable of supporting clinical development andcommercial activities. We have not yet demonstrated our ability to successfully complete large-scale, pivotal clinical trials, obtain marketing approvals,manufacture a commercial-scale product, or arrange for a third-party to do so on our behalf, or conduct sales and marketing activities necessary for successfulproduct commercialization. Typically, it takes many years to develop one new product candidate from the time it is discovered to the time that it becomesavailable for treating patients. We may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors that mayhinder our success in commercializing one or more of our product candidates. Further, drug development is a capital-intensive and highly speculativeundertaking that involves a substantial degree of risk. You should consider our prospects in light of the costs, uncertainties, delays and difficulties frequentlyencountered by companies in the early stages of development and clinical trials. Any forward-looking statements regarding our future prospects, plans orviability may not be as accurate as they may be if we had a longer operating history or a history of successfully developing and commercializingpharmaceutical products.32 Risks Related to the Development of Our Product CandidatesClinical trials are costly, time consuming and inherently risky, and we may fail to demonstrate safety and efficacy to the satisfaction of applicableregulatory authorities.Clinical development of a product candidate is expensive, time consuming and involves significant risk. We cannot guarantee that any clinical trialswe undertake to conduct will be conducted as planned or completed on schedule or at all. A failure of one or more clinical trials can occur at any stage ofdevelopment. Events that may prevent successful or timely completion of clinical development of our product candidates include but are not limited to: •inability to generate satisfactory preclinical or other nonclinical data, including, toxicology, or other in vivo or in vitro data or diagnostics tosupport the initiation or continuation of clinical trials; •delays in reaching agreement on acceptable terms with CROs and clinical trial sites, the terms of which can be subject to extensive negotiationand may vary significantly among different CROs and clinical trial sites; •delays in obtaining required institutional review board approval at each clinical trial site; •failure to permit the conduct of a clinical trial by regulatory authorities, after review of an investigational new drug or equivalent foreignapplication or amendment; •delays in recruiting qualified patients in our clinical trials; •failure by clinical sites or CROs or other third parties to adhere to clinical trial requirements; •failure by us, clinical sites, CROs or other third parties to perform in accordance with the good clinical practices requirements of the FDA orapplicable foreign regulatory guidelines; •patients dropping out of the clinical trials; •occurrence of adverse events, unacceptable side effects or toxicity issues associated with our product candidates; •imposition by the FDA of a clinical hold or the requirement by other similar regulatory agencies that one or more clinical trials be delayed orhalted; •changes in regulatory requirements and guidance that require amending or submitting new clinical protocols or performing additionalnonclinical studies; •the ultimate affordability of the cost of clinical trials of our product candidates; •negative or inconclusive results from our clinical trials that may result in us deciding, or regulators requiring us, to conduct additional clinicaltrials or abandon such clinical trials and/or clinical trials or development programs in other ongoing or planned indications for a productcandidate; and •delays in identifying or reaching agreement on acceptable terms with third-party manufacturers, delays in developing and transferring areproducible, scalable manufacturing process, or delays or failure in manufacturing sufficient quantities of our product candidates for use inclinical trials.Any inability to successfully complete clinical development and obtain regulatory approval for our product candidates could result in additionalcosts to us or impair our ability to generate revenue. In addition, if we make manufacturing or formulation changes to our product candidates, we may need toconduct additional preclinical studies and/or clinical trials, or the results obtained from such new formulation may not be consistent with previous resultsobtained. Clinical trial delays could also shorten any anticipated periods of patent exclusivity for our product candidates and may allow competitors todevelop and bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm ourbusiness and results of operations.33 The approach we are taking to discover and develop novel therapeutics using synthetic biology to create novel medicines is unproven and may never leadto marketable products.The scientific discoveries that form the basis for our efforts to generate and develop our product candidates are relatively recent. The scientificevidence to support the feasibility of developing drugs based on our approach is both preliminary and limited. Synthetic Biotic medicines represent a noveltherapeutic modality and their successful development by us may require additional studies and efforts to optimize their therapeutic potential. Any productcandidates that we develop may not demonstrate in patients the therapeutic properties ascribed to them in laboratory and other preclinical studies, and theymay interact with human biological systems in unforeseen, ineffective or even harmful ways. If we are not able to successfully develop and commercializeproduct candidates based upon this technological approach, we may never become profitable and the value of our capital stock may decline.Our Synthetic Biotic product candidates are based on a relatively novel technology, which makes it difficult to predict the time and cost of developmentand of subsequently obtaining regulatory approval, if at all.We have concentrated our research and development efforts to date on a limited number of product candidates based on our Synthetic Biotictherapeutic platform and identifying our initial targeted disease indications. Our future success depends on our successful development of viable productcandidates. There can be no assurance that we will not experience problems or delays in developing our product candidates and that such problems or delayswill not cause unanticipated costs, or that any such development problems can be solved.The clinical trial and manufacturing requirements of the FDA, the European Medicines Agency and other regulatory authorities, and the criteria theseregulators use to determine the safety and efficacy of a product candidate, vary substantially according to the type, complexity, novelty and intended use andmarket of the product candidate. The regulatory approval process for novel product candidates such as Synthetic Biotic medicines may be more expensiveand take longer than for other, better known or more extensively studied therapeutic modalities. It is difficult to determine how long it will take or how muchit will cost to obtain regulatory approvals for our product candidates in either the United States or the European Union or how long it will take tocommercialize our product candidates, even if approved for marketing. Approvals by the European Medicines Agency or national regulatory agencies maynot be indicative of what the FDA, and vice versa, may require for approval and different or additional preclinical studies or clinical trials may be required tosupport regulatory approval in each respective jurisdiction. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary tobring a potential product candidate to market could decrease our ability to generate sufficient product revenue, and our business, financial condition, resultsof operations and prospects may be harmed.We may not be successful in our efforts to use and expand our development platform to build a pipeline of product candidates.A key element of our strategy is to use our targeted focus and experienced management and scientific team to create Synthetic Biotic medicines thatcan be deployed against a broad range of human diseases in order to build a pipeline of product candidates. Although our research and development efforts todate have resulted in potential product candidates, we may not be able to continue to identify and develop additional product candidates. Even if we aresuccessful in continuing to build our pipeline, the potential product candidates that we identify may not be suitable for clinical development. For example,these potential product candidates may be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be drugs that willreceive marketing approval and achieve market acceptance. If we do not successfully develop and commercialize product candidates based upon ourapproach, we will not be able to obtain product revenue in future periods, which likely would result in significant harm to our financial position. There is noassurance that we will be successful in our preclinical and clinical development, and the process of obtaining regulatory approvals will, in any event, requirethe expenditure of substantial time and financial resources.Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit thecommercial viability of an approved label, or result in significant negative consequences following marketing approval, if any.Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or terminate our clinical trials orresult in a restrictive label or delay regulatory approval by the FDA or comparable foreign authorities. Undesirable side effects and negative results for otherindications may negatively impact the development and potential for approval of our product candidates for their proposed indications.34 Additionally, even if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effectscaused by such products, potentially significant negative consequences could result, including but not limited to: •regulatory authorities may withdraw approvals of or revoke licenses for such products; •regulatory authorities may require additional warnings on the labels of such products; •we may be required to create a REMS plan, which could include a medication guide outlining the risks of such side effects for distribution topatients, a communication plan for healthcare providers, and/or other elements to assure safe use; •we could be sued and held liable for harm caused to patients; and •our reputation may suffer.Any of these events could prevent us from achieving or maintaining market acceptance of a product candidate, even if approved, and couldsignificantly harm our business, results of operations, and prospects.Our product development program may not uncover all possible adverse events that patients who take our product candidates may experience. The numberof subjects exposed to our product candidates during clinical trials and the average exposure time in the clinical development program may be inadequateto detect rare adverse events, or chance findings, that may only be detected once the product is administered to more patients and for greater periods oftime.Clinical trials by their nature utilize a sample of the potential patient population. However, with a limited number of patients and limited duration ofexposure, we cannot be fully assured that uncommon or severe side effects of our product candidates will be uncovered. Such side effects may only beuncovered with a significantly larger number of patients exposed to the drug. If such safety problems occur or are identified after a product candidate reachesthe market, the FDA may require that we amend the labeling of the product or recall the product, or may even withdraw approval for the product. Any of theseevents could prevent us from achieving or maintaining market acceptance of a product candidate, even if approved, and could significantly harm ourbusiness, results of operations, and prospects.We are heavily dependent on the success of our product candidates. Some of our product candidates have produced results in preclinical settings to date,but none of our product candidates has completed all required clinical trials, and we cannot give any assurance that we will generate data for any of ourproduct candidates sufficient to receive regulatory approval in our planned indications, which will be required before they can be commercialized.We have invested substantially all of our efforts and financial resources to identify, acquire and develop our portfolio of product candidates. Ourfuture success is dependent on our ability to successfully further develop, obtain regulatory approval for, and commercialize one or more product candidates.We currently generate no revenue from sales of any products, and we may never be able to develop or commercialize a product candidate.In addition, none of our product candidates has advanced into any pivotal clinical trial, for our proposed indications and it may be years before anypivotal clinical trials are initiated and completed, if at all. We are not permitted to market or promote any of our product candidates before we receiveregulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our productcandidates. We cannot be certain that any of our product candidates will be successful in clinical trials or receive regulatory approval. Further, our productcandidates may not receive regulatory approval even if they are successful in clinical trials. If we do not receive regulatory approvals for our productcandidates, we may not be able to continue our operations.If we fail to obtain or maintain orphan drug exclusivity for some of our products, our competitors may obtain approval to sell competing drugs to treat thesame conditions and our revenues will be reduced.As part of our business strategy, we have developed and may in the future develop product candidates that may be eligible for FDA and EuropeanCommission orphan drug designation. In August 2016, the FDA granted orphan drug designation to SYNB1020 for the treatment of UCD and in October2017, the FDA granted orphan drug designation to SYNB1618 for the treatment of PKU. Under the Orphan Drug Act, the FDA may designate a product as anorphan drug if it is intended to treat, diagnose or prevent rare diseases or conditions that affect fewer than 200,000 people in the United States. In the EU,orphan drug designation may be granted to drugs intended to treat, diagnose or prevent a life-threatening or chronically debilitating disease having aprevalence of no more than five in 10,000 people in the EU. The company that first obtains FDA approval for a designated orphan drug for the associated raredisease receives marketing exclusivity for use of that drug for the stated condition for a period of seven years. Orphan drug exclusive marketing rights may belost under several circumstances, including a later determination by the FDA that the request for designation was materially defective or if the manufacturer isunable to assure sufficient quantity of the drug. Similar regulations are in effect in the EU with a ten-year period of market exclusivity.35 Because the extent and scope of patent protection for some of our product candidates may be limited, obtaining orphan drug designation is especiallyimportant for any product candidates that may be eligible for orphan drug designation. For eligible products, we plan to rely on the exclusivity period underthe Orphan Drug Act to maintain a competitive position. If we do not obtain orphan drug designation for our product candidates that do not have broadpatent protection, our competitors may then seek to sell a competing drug to treat the same condition and our revenues, if any, may be adversely affectedthereby.Even though we have obtained orphan drug designation for certain of our product candidates and intend to seek orphan drug designation for otherproduct candidates, there is no assurance that we will be the first to obtain marketing approval for any particular rare indication. Further, even though wehave obtained orphan drug designation for certain of our product candidates, or even if we obtain orphan drug designation for other potential productcandidates, such designation may not effectively protect us from competition because different drugs can be approved for the same condition and the samedrug can be approved for different conditions and potentially used off-label in the orphan indication. Even after an orphan drug is approved, the FDA cansubsequently approve a competing drug for the same condition for several reasons, including, if the FDA concludes that the later drug is safer or moreeffective or makes a major contribution to patient care. Orphan drug designation neither shortens the development time or regulatory review time of a drug,nor gives the drug any advantage in the regulatory review or approval process.Product development involves a lengthy and expensive process with an uncertain outcome, and results of earlier preclinical studies and clinical trials maynot be predictive of future clinical trial results.The results from preclinical studies or early clinical trials of a product candidate may not predict the results that will be obtained in subsequentsubjects or in later stage clinical trials of that product candidate or any other product candidate. Flaws in the design of a clinical trial may not becomeapparent until the clinical trial is well advanced. We have limited experience in designing clinical trials and we may be unable to design and execute clinicaltrials to support regulatory approval of our product candidates. In addition, preclinical study and clinical trial data are often susceptible to varyinginterpretations and analyses. Product candidates that seemingly perform satisfactorily in preclinical studies and clinical trials may nonetheless fail to obtainregulatory approval. There is a high failure rate for drugs proceeding through clinical trials. A number of companies in the pharmaceutical and biotechnologyindustries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies, and any such setbacks in ourclinical development could negatively affect our business and operating results.If we experience delays or difficulties in the enrollment of patients in clinical trials, our costs might be higher than expected and our receipt of necessaryregulatory approvals could be delayed or prevented.Clinical trials of a new product candidate require the enrollment of a sufficient number of patients suffering from the disease or condition the productcandidate is intended to treat and who meet other eligibility criteria. Rates of patient enrollment are affected by many factors, including the size of thepotential patient population, the age and condition of the patients, the stage and severity of disease or condition, the nature and requirements of the protocol,the proximity of patients to clinical sites, the availability of effective treatments for the relevant disease or condition, the perceived risks, benefits andconvenience of administration of the product candidate being studied, the patient referral practices of physicians, our efforts to facilitate timely enrollment inclinical trials, and the eligibility criteria for the clinical trial. Delays or difficulties in patient enrollment or difficulties retaining trial participants, includingas a result of the availability of existing or other investigational treatments, can result in increased costs, longer development times or termination of aclinical trial.In addition, our success may depend, in part, on our ability to identify patients who qualify for our clinical trials, or are likely to benefit from anyproduct candidate that we may develop, which will require those potential patients to undergo a screening assay for the presence or absence of a particulargenetic sequence or clinical trait. Genetically defined diseases generally, and especially those for which our current product candidates are targeted, mayhave relatively low prevalence. For example, we estimate there are approximately 2,000 patients diagnosed with UCD in the United States, andapproximately 16,500 patients that may be diagnosed with PKU in the United States. If we, or any third parties that we engage to assist us, are unable tosuccessfully identify patients with these diseases, or experience delays in doing so, then we may not realize the full commercial potential of any productcandidate we develop.36 We may face potential product liability claims, and, if successful claims are brought against us, we may incur substantial liability and costs. If the use ormisuse of our product candidates harms patients, or is perceived to harm patients even when such harm is unrelated to our product candidates, ourregulatory approvals, if any, could be revoked or otherwise negatively impacted and we could be subject to costly and damaging product liability claims.If we are unable to obtain adequate insurance or are required to pay for liabilities resulting from a claim excluded from, or beyond the limits of, ourinsurance coverage, such liability could adversely affect our financial condition.The use or misuse of our product candidates in clinical trials and the sale of any products for which we may obtain marketing approval exposes us tothe risk of potential product liability claims. Product liability claims might be brought against us by consumers, healthcare providers, pharmaceuticalcompanies or others selling or otherwise coming into contact with our product candidates and approved products, if any. There is a risk that our productcandidates may induce adverse events. If we cannot successfully defend against product liability claims, we could incur substantial liability and costs.Patients with the diseases targeted by our product candidates may already be in severe and advanced stages of disease and have both known and unknownsignificant pre-existing and potentially life-threatening health risks. During the course of treatment, patients may suffer adverse events, including death, forreasons that may be related to our product candidates. Such events could subject us to costly litigation, require us to pay substantial amounts of money toinjured patients, delay, negatively impact or end our opportunity to receive or maintain regulatory approval to market our products, or require us to suspendor abandon our commercialization efforts. Even in a circumstance in which an adverse event is unrelated to our product candidates, the investigation into thecircumstance may be time-consuming or inconclusive. These investigations may delay our regulatory approval process or impact and limit the type ofregulatory approvals our product candidates receive or maintain. As a result of these factors, a product liability claim, even if successfully defended, couldhave a material adverse effect on our business, financial condition or results of operations.Although we have product liability insurance, which covers any clinical trial we may conduct in the United States, our insurance may be insufficientto reimburse us for any expenses or losses we may suffer. We will also likely be required to increase our product liability insurance coverage for the advancedclinical trials that we plan to initiate. If we obtain marketing approval for any of our product candidates, we will need to expand our insurance coverage toinclude the sale of commercial products. There is no way to know if we will be able to continue to obtain product liability coverage and obtain expandedcoverage we may require, in sufficient amounts to protect us against losses due to liability, on acceptable terms, or at all. We may not have sufficientresources to pay for any liabilities resulting from a claim excluded from, or beyond the limits of, our insurance coverage. Where we have providedindemnities in favor of third parties under our agreements with them, there is also a risk that these third parties could incur liability and bring a claim undersuch indemnities. An individual may bring a product liability claim against us alleging that one of our product candidates or products causes, or is claimed tohave caused, an injury or is found to be unsuitable for consumer use. Any such product liability claims may include allegations of defects in manufacturing,defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, and a breach of warranties. Claims could also be assertedunder state consumer protection acts. Any product liability claim brought against us, with or without merit, could result in: •withdrawal of clinical trial volunteers, investigators, patients or trial sites or limitations on approved indications; •the inability to commercialize, or if commercialized, decreased demand for, our product candidates; •if commercialized, product recalls, withdrawals of labeling, marketing or promotional restrictions or the need for product modification; •initiation of investigations by regulators; •loss of revenues; •substantial costs of litigation, including monetary awards to patients or other claimants; •liabilities that substantially exceed our product liability insurance, which we would then be required to pay ourselves; •an increase in our product liability insurance rates or the inability to maintain insurance coverage in the future on acceptable terms, if at all; •the diversion of management’s attention from our business; and •damage to our reputation and the reputation of our products and our technology.Product liability claims may subject us to the foregoing and other risks, which could have a material adverse effect on our business, financialcondition or results of operations.37 Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance MattersWe may seek breakthrough therapy designation for one or more of our product candidates, but we might not receive such designation, and even if we do,such designation may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that our productcandidates will receive marketing approval.We may seek a breakthrough therapy designation from the FDA for some of our product candidates. A breakthrough therapy is defined as a drug orbiological product that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and forwhich preliminary clinical evidence indicates that the drug or biological product may demonstrate substantial improvement over existing therapies on one ormore clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For drugs or biological products that havebeen designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the mostefficient path for clinical development. Drugs designated as breakthrough therapies by the FDA could also be eligible for accelerated approval.Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe one of our product candidates meets thecriteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of abreakthrough therapy designation for a product candidate may not result in a faster development process, review or approval compared to drugs consideredfor approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our productcandidates qualify and are designated as breakthrough therapies, the FDA may later decide that the drugs or biological products no longer meet theconditions for designation and the designation may be rescinded.We may seek Fast-Track designation for one or more of our product candidates, but we might not receive such designation, and even if we do, suchdesignation may not actually lead to a faster development or regulatory review or approval process.If a product candidate is intended for the treatment of a serious condition and nonclinical or clinical data demonstrate the potential to address unmetmedical need for the condition, a product sponsor may apply for FDA Fast-Track designation. We were awarded Fast-Track designation for SYNB1020 inJune 2017 and for SYNB1618 in April 2018. Fast-Track designation does not ensure that we will receive marketing approval for the product candidate or thatapproval will be granted within any particular timeframe. We may not experience a faster development or regulatory review or approval process with Fast-Track designation compared to conventional FDA procedures. In addition, the FDA may withdraw Fast-Track designation if it believes that the designation isno longer supported by data from our clinical development program. Fast-Track designation alone does not guarantee qualification for the FDA’s priorityreview procedures.Even if we obtain regulatory approval for a product candidate, we will remain subject to ongoing regulatory requirements.If any of our product candidates are approved for marketing, we will be subject to ongoing regulatory requirements, including with respect tomanufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing clinical trials, and submission ofsafety, efficacy and other post-approval information, including both federal and state requirements in the United States and requirements of comparableforeign regulatory authorities.Manufacturers and manufacturers’ facilities are required to continuously comply with FDA and comparable foreign regulatory authority requirements,including ensuring that quality control and manufacturing procedures conform to current Good Manufacturing Practices (GMP) regulations andcorresponding foreign regulatory manufacturing requirements. As such, we and our contract manufacturers will be subject to continual review andinspections to assess compliance with GMP and adherence to commitments made in any BLA or marketing authorization application.Any regulatory approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which theproduct candidate may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4clinical trials, and surveillance to monitor the safety and efficacy of the product candidate. We will be required to report adverse reactions and productionproblems, if any, to the FDA and comparable foreign regulatory authorities. Any new legislation addressing drug safety issues could result in delays inproduct development or commercialization, or increased costs to assure compliance. If our original marketing approval for a product candidate was obtainedthrough an accelerated approval pathway, we could be required to conduct a successful post-marketing clinical trial in order to confirm the clinical benefitfor our products. An unsuccessful post-marketing clinical trial or failure to complete such a trial could result in the withdrawal of marketing approval.38 If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, orproblems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of a product, the regulatory agency mayimpose restrictions on that product or us, including requiring withdrawal of the product from the market. If we fail to comply with applicable regulatoryrequirements, a regulatory agency or enforcement authority may, among other things: •issue warning letters; •impose civil or criminal penalties; •suspend or withdraw regulatory approval or revoke a license; •suspend any of our ongoing clinical trials; •refuse to approve pending applications or supplements to approved applications submitted by us; •impose restrictions on our operations, including closing our contract manufacturers’ facilities; or •require a product recall.Any government investigation of alleged violations of law would be expected to require us to expend significant time and resources in response andcould generate adverse publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to developand commercialize our products and our value and operating results would be adversely affected.Inadequate funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel,prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performingnormal business functions on which the operation of our business may rely, which could negatively impact our business.The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels,ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at theagency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations mayrely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary governmentagencies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certainregulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If aprolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, whichcould have a material adverse effect on our business. Further, upon completion of this offering and in our operations as a public company, future governmentshutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.Healthcare legislative reform measures may have a material adverse effect on our financial condition or results of operations.In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs. For example, in March 2010,the ACA, was passed, which was intended to substantially change the way health care is financed by both governmental health programs and private insurers,and significantly impact the U.S. pharmaceutical industry. The ACA, among other things, introduced a new methodology by which rebates owed bymanufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected, increases theminimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled inMedicaid managed care organizations, establishes annual fees and taxes on manufacturers of specified branded prescription drugs, and promotes a newMedicare Part D coverage gap discount program.39 The ACA has been under scrutiny by the U.S. Congress almost since its passage, and certain sections of the ACA have not been fully implemented oreffectively repealed. As a result, its longevity continues to be uncertain. In addition, ongoing initiatives in the U.S. have increased and will continue toincrease pressure on drug pricing. The announcement or adoption of any such initiative could have an adverse effect on potential revenues from any productcandidate that we may successfully develop.It is anticipated that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coveragecriteria and an additional downward pressure on the reimbursement our customers may receive for our products. Further, there have been judicial andCongressional challenges to certain aspects of the ACA, and it is expected there will be additional challenges and amendments to the ACA in the future,especially with the recent change in administration. Any reduction in reimbursement from Medicare and other government programs may result in a similarreduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able togenerate revenue, attain profitability or commercialize our products.We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, and health information privacy andsecurity laws. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.If we obtain FDA approval for any of our product candidates and begin commercializing those products in the United States, our operations may besubject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, the federal False Claims Act, andphysician sunshine laws and regulations. These laws may impact, among other things, our proposed sales, marketing, and education programs. In addition, wemay be subject to patient privacy regulation by both the federal government and the states in which we conduct our business. The laws that may affect ourability to operate include: •the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering orpaying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable undera federal healthcare program, such as the Medicare and Medicaid programs; •federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities fromknowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false orfraudulent; •the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created new federal criminal statutes that prohibitexecuting a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; •HIPAA, as amended by the Health Information Technology and Clinical Health Act, and its implementing regulations, which imposes specifiedrequirements relating to the privacy, security, and transmission of individually identifiable health information; •the federal physician sunshine requirements under the ACA require manufacturers of drugs, devices, biologics, and medical supplies to reportannually to the U.S. Department of Health and Human Services information related to payments and other transfers of value to physicians, otherhealthcare providers, and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers andtheir immediate family members and applicable group purchasing organizations; and •state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or servicesreimbursed by any third-party payor, including governmental and private payors, to comply with the pharmaceutical industry’s voluntarycompliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that maybe made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related topayments and other transfers of value to physicians and other healthcare providers or marketing expenditures, and state laws governing theprivacy and security of health information in specified circumstances, many of which differ from each other in significant ways and may nothave the same effect, thus complicating compliance efforts.Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our businessactivities could be subject to challenge under one or more of such laws. In addition, recent health care reform legislation has strengthened these laws. Forexample, the ACA, among other things, amends the intent requirement of the federal anti-kickback and criminal healthcare fraud statutes. A person or entityno longer needs to have actual knowledge of this statute or specific intent to violate it. Moreover, the ACA provides that the government may assert that aclaim including items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes of the FalseClaims Act.40 If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may besubject to penalties, including civil and criminal penalties, damages, fines, exclusion from participation in government health care programs, such asMedicare and Medicaid, imprisonment, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate ourbusiness and our results of operations.We may be subject to, or may in the future become subject to, U.S. federal and state, and foreign laws and regulations imposing obligations on how wecollect, use, disclose, store and process personal information. Our actual or perceived failure to comply with such obligations could result in liability orreputational harm and could harm our business. Ensuring compliance with such laws could also impair our efforts to maintain and expand our customerbase, and thereby decrease our revenue.In many activities, including the conduct of clinical trials, we are subject to laws and regulations governing data privacy and the protection of health-related and other personal information. These laws and regulations govern our processing of personal data, including the collection, access, use, analysis,modification, storage, transfer, security breach notification, destruction and disposal of personal data. We must comply with laws and regulations associatedwith the international transfer of personal data based on the location in which the personal data originates and the location in which it is processed. Althoughthere are legal mechanisms to facilitate the transfer of personal data from the European Economic Area (EEA), and Switzerland to the United States, thedecision of the European Court of Justice that invalidated the safe harbor framework has increased uncertainty around compliance with EU privacy lawrequirements. As a result of the decision, it was no longer possible to rely on safe harbor certification as a legal basis for the transfer of personal data from theEuropean Union to entities in the United States. In February 2016, the European Commission announced an agreement with the Department of Commerce, orDOC, to replace the invalidated safe harbor framework with a new EU-U.S. “Privacy Shield.” On July 12, 2016, the European Commission adopted a decisionon the adequacy of the protection provided by the Privacy Shield. The Privacy Shield is intended to address the requirements set out by the European Courtof Justice in its recent ruling by imposing more stringent obligations on companies, providing stronger monitoring and enforcement by the DOC and FederalTrade Commission and making commitments on the part of public authorities regarding access to information.The privacy and security of personally identifiable information stored, maintained, received or transmitted, including electronically, is subject tosignificant regulation in the United States and abroad. While we strive to comply with all applicable privacy and security laws and regulations, legalstandards for privacy continue to evolve and any failure or perceived failure to comply may result in proceedings or actions against us by governmententities or others, or could cause reputational harm, which could have a material adverse effect on our business.Numerous foreign, federal and state laws and regulations govern collection, dissemination, use and confidentiality of personally identifiable healthinformation, including state privacy and confidentiality laws (including state laws requiring disclosure of breaches); federal and state consumer protectionand employment laws; HIPAA; and European and other foreign data protection laws. These laws and regulations are increasing in complexity and number,may change frequently and sometimes conflict.HIPAA establishes a set of national privacy and security standards for the protection of individually identifiable health information, includingprotected health information, or PHI, by health plans, certain healthcare clearinghouses and healthcare providers that submit certain covered transactionselectronically, or covered entities, and their ‘‘business associates,’’ which are persons or entities that perform certain services for, or on behalf of, a coveredentity that involve creating, receiving, maintaining or transmitting PHI. While we are not currently a covered entity or business associate under HIPAA, wemay receive identifiable information from these entities. Failure to receive this information properly could subject us to HIPAA’s criminal penalties, whichmay include fines up to $250,000 per violation and/or imprisonment. In addition, responding to government investigations regarding alleged violations ofthese and other laws and regulations, even if ultimately concluded with no findings of violations or no penalties imposed, can consume company resourcesand impact our business and, if public, harm our reputation.In addition, various states, such as California and Massachusetts, have implemented similar privacy laws and regulations, such as the CaliforniaConfidentiality of Medical Information Act, that impose restrictive requirements regulating the use and disclosure of health information and other personallyidentifiable information. In addition to fines and penalties imposed upon violators, some of these state laws also afford private rights of action to individualswho believe their personal information has been misused. California’s patient privacy laws, for example, provide for penalties of up to $250,000 and permitinjured parties to sue for damages. The interplay of federal and state laws may be subject to varying interpretations by courts and government agencies,creating complex compliance issues for us and our clients and potentially exposing us to additional expense, adverse publicity and liability. Further, asregulatory focus on privacy issues continues to increase and laws and regulations concerning the protection of personal information expand and becomemore complex, these potential risks to our business could intensify.41 In addition, the interpretation and application of consumer, health-related, and data protection laws are often uncertain, contradictory, and in flux.U.S.-based companies may certify compliance with the privacy principles of the Privacy Shield. Certification to the Privacy Shield, however, is notmandatory. If a U.S.-based company does not certify compliance with the Privacy Shield, it may rely on other authorized mechanisms to transfer personaldata.The privacy and data security landscape is still in flux. In October 2016, an action for annulment of the European Commission decision on theadequacy of Privacy Shield was brought before the European Court of Justice by three French digital rights advocacy groups, La Quadrature du Net, FrenchData Network and the Fédération FDN. This case, Case T738/16, is currently pending before the European Court of Justice. Should the European Court ofJustice invalidate the Privacy Shield, it will no longer be possible to transfer data from the European Union to entities in the United States under a PrivacyShield certification, in which case other legal mechanisms would need to be put in place.The legislative and regulatory landscape for privacy and data security continues to evolve, and there has been an increasing focus on privacy and datasecurity issues which may affect our business. Failure to comply with current and future laws and regulations could result in government enforcement actions(including the imposition of significant penalties), criminal and civil liability for us and our officers and directors, private litigation and/or adverse publicitythat negatively affects our business.In the United States, California recently adopted the California Consumer Privacy Act of 2018, or CCPA, which will come into effect beginning inJanuary 2020. The CCPA has been characterized as the first “GDPR-like” privacy statute to be enacted in the United States because it mirrors a number of thekey provisions of the EU General Data Protection Regulation. The CCPA establishes a new privacy framework for covered businesses by creating anexpanded definition of personal information, establishing new data privacy rights for consumers in the State of California, imposing special rules on thecollection of consumer data from minors, and creating a new and potentially severe statutory damages framework for violations of the CCPA and forbusinesses that fail to implement reasonable security procedures and practices to prevent data breaches.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 couldhave a material adverse effect on our business, financial condition or results of operations.Our research and development activities and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use, and disposalof hazardous materials, including the components of our product candidates and other hazardous compounds. We and our manufacturers and suppliers aresubject to laws and regulations governing the use, manufacture, storage, handling, and disposal of these hazardous materials. In some cases, these hazardousmaterials and various wastes resulting from their use are stored at our and our manufacturers’ facilities pending their use and disposal. We cannot eliminatethe risk of contamination, which could cause an interruption of our research and development efforts, commercialization efforts and business operations andenvironmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling, and disposal ofthese materials and specified waste products. Although we believe that the safety procedures utilized by us and our third-party manufacturers for handlingand disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot guarantee that this is the case oreliminate the risk of accidental contamination or injury from these materials. In such an event, we may be held liable for any resulting damages and suchliability could exceed our resources and state or federal or other applicable authorities may curtail our use of specified materials and/or interrupt our businessoperations. Furthermore, environmental laws and regulations are complex, change frequently, and have tended to become more stringent. We cannot predictthe impact of such changes and cannot be certain of our future compliance. Given the nature of the research and development work conducted by us, we donot currently carry biological or hazardous waste insurance coverage.Laws and regulations governing international operations may preclude us from developing, manufacturing and selling certain products outside of theUnited States and require us to develop, implement and maintain costly compliance programs.To develop, manufacture and sell certain products outside the United States, we must dedicate resources to comply with numerous laws andregulations in each jurisdiction in which we operate. The Foreign Corrupt Practices Act (FCPA), prohibits any United States individual or business frompaying, offering, authorizing payment or offering anything of value, directly or indirectly, to any foreign official, political party or candidate for the purposeof influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA alsoobligates companies whose securities are listed in the United States to comply with certain accounting provisions requiring the company to maintain booksand records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequatesystem of internal accounting controls for international operations.42 Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, the FCPApresents particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and doctors and otherhospital employees may be considered government employees or foreign officials. In other circumstances, certain payments to hospitals in connection withclinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions.Various laws, regulations and executive orders also restrict the use and dissemination outside of the United States, or the sharing with certain non-United States nationals, of information classified for national security purposes, as well as certain products and technical data relating to those products.These laws may preclude us from developing, manufacturing, or selling certain products and product candidates outside of the U.S., which could limit ourgrowth potential and increase our development costs.The failure to comply with laws governing international business practices may result in substantial civil and criminal penalties and suspension ordebarment from government contracting. The SEC also may suspend or bar issuers from trading securities on U.S. exchanges for violations of the FCPA’saccounting provisions and export control laws.Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer security breaches, which could result ina material disruption of our product development programs.Our internal computer systems and those of our current and any future collaborators and other contractors or consultants are vulnerable to damagefrom computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. If such an event were to occur andcause interruptions in our operations, it could result in a material disruption of our development programs and our business operations, whether due to a lossof our trade secrets or other proprietary information or other similar disruptions. For example, the loss of preclinical or clinical trial data could result in delaysin our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breachwere to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incurliability, our competitive position could be harmed, and the further development and commercialization of our product candidates could be delayed.Ethical, legal and social concerns about synthetic biology and genetic engineering could limit or prevent the use of our technologies and limit ourrevenues.Our technologies involve the use of synthetic biology and genetic engineering. Public perception about the safety and environmental hazards of, andethical concerns over, synthetic biology and genetic engineering could influence public acceptance of our technologies, product candidates and processes. Ifwe and our collaborators are not able to overcome the ethical, legal and social concerns relating to synthetic biology and genetic engineering, ourtechnologies, product candidates and processes may not be accepted. These concerns could result in increased expenses, regulatory scrutiny and increasedregulation, trade restrictions on imports of Synthetic Biotic medicines, delays or other impediments to our programs or the public acceptance andcommercialization of Synthetic Biotic medicines. Further, there is a risk that Synthetic Biotic medicines made using our technologies could result in adversehealth effects or other adverse events, which could also lead to negative publicity. We design and produce product candidates with characteristicscomparable or disadvantaged to those found in naturally occurring organisms or enzymes in a controlled laboratory; however, the release of such organismsinto uncontrolled environments could have unintended consequences. Any adverse effect resulting from such a release could have a material adverse effecton our business, financial condition or results of operations and we may have exposure to liability for any resulting harm.Risks Related to Our Intellectual PropertyWe may not be successful in obtaining or maintaining necessary rights to Synthetic Biotic medicines, product candidates and processes for ourdevelopment pipeline through acquisitions and in-licenses.Presently, we have rights to certain intellectual property, through licenses from third parties and under patents and patent applications owned by us.The growth of our business will likely depend in part on our ability to obtain, maintain or enforce our and our licensors’ intellectual property rights and toacquire or in-license additional proprietary rights. For example, our programs may involve additional product candidates or delivery systems that may requirethe use of additional proprietary rights held by third parties. Our ultimate product candidates may also require specific formulations to work effectively andefficiently. These formulations may be covered by intellectual property rights held by others. We may be unable to acquire or in-license any relevant third-party intellectual property rights that we identify as necessary or important to our business operations.43 In addition, our product candidates may require specific formulations to work effectively and efficiently and these rights may be held by other thirdparties. We may be unable to develop, acquire or in-license compositions, methods of use, processes or other third-party intellectual property rights from thirdparties that we identify. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of other companies mayalso be pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive. These companies could have acompetitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.For example, we have previously and may continue to collaborate with academic institutions to accelerate our preclinical research or developmentunder written agreements with these institutions. Typically, these institutions provide an option to negotiate a license to any of the institution’s rights intechnology resulting from the collaboration. Regardless of such right of first negotiation for intellectual property, we may be unable to negotiate a licensewithin the specified time frame or under terms that are acceptable to it. If we are unable to do so, the institution may offer the intellectual property rights toother parties, potentially blocking our ability to pursue our program.In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license oracquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment. If we are unable to successfullyobtain rights to third-party intellectual property rights, our business, financial condition and prospects for growth could suffer.We intend to rely on patent rights and the status of our product candidates, if approved, as biologics eligible for exclusivity under the Biologics PriceCompetition and Innovation Act (BPCIA). If Synlogic is unable to obtain or maintain exclusivity from the combination of these approaches, Synlogic maynot be able to compete effectively in our markets.We rely or will rely upon a combination of patents, trade secret protection, and confidentiality agreements to protect the intellectual property relatedto our technologies and product candidates. Our success depends in large part on our and our licensors’ ability to obtain regulatory exclusivity and maintainpatent and other intellectual property protection in the United States and in other countries with respect to our proprietary technology and products.We have sought to protect our proprietary position by filing patent applications in the United States and abroad related to our product candidates thatare important to our business. This process is expensive and time consuming, and we may not be able to file and prosecute all necessary or desirable patentapplications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and developmentoutput before it is too late to obtain patent protection.The patent position of biotechnology and pharmaceutical companies generally is highly uncertain and involves complex legal and factual questionsfor which legal principles remain unsolved. The patent applications that we own or in-license may fail to result in issued patents with claims that cover ourproduct candidates in the United States or in other foreign countries. There is no assurance that all potentially relevant prior art relating to our patents andpatent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents dosuccessfully issue, and even if such patents cover our product candidates, third parties may challenge their validity, enforceability, or scope, which may resultin such patents being narrowed, found unenforceable or invalidated. Furthermore, even if they are unchallenged, our patents and patent applications may notadequately protect our intellectual property, provide exclusivity for our product candidates, or prevent others from designing around our claims. Any of theseoutcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.We, independently or together with our licensors, have filed several patent applications covering various aspects of our product candidates. Wecannot offer any assurances about which, if any, patents will issue, the breadth of any such patent or whether any issued patents will be found invalid andunenforceable or will be threatened by third parties. Any successful opposition to these patents or any other patents owned by or licensed to us after patentissuance could deprive us of rights necessary for the successful commercialization of any product candidates that we may develop. Further, if we encounterdelays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced.44 Even if we cannot obtain and maintain effective protection of exclusivity from our regulatory efforts and intellectual property rights, including patentprotection, data exclusivity or orphan drug exclusivity, for our product candidates, we believe that our product candidates will be protected by exclusivitythat prevents approval of a biosimilar in the United States for a period of twelve years from the time the product to which it claims similarity was firstapproved. However, The Biologics Price Competition and Innovation Act of 2009, Title VII, Subtitle A of the Patent Protection and Affordable Care Act,Pub.L.No.111-148, 124 Stat.119, Sections 7001-02 signed into law March 23, 2010, and codified in 42 U.S.C. §262 (the BPCIA), created an elaborate andcomplex patent dispute resolution mechanism for biosimilars that could prevent us from launching our product candidates in the United States or couldsubstantially delay such launches. Current biosimilars litigation are addressing certain requirements of the BPCIA which is creating uncertainty over howcertain terms of the BPCIA should be construed and this, presents uncertainty for both the biologics innovator and biosimilar party. The BPCIA mechanismrequired for biosimilar applicants may pose greater risk that patent infringement litigation will disrupt our activities and add increased expenses as well asdivert management’s attention. If a biosimilar version of one of our product candidates were approved in the United States, it could have a negative effect onour business.We may not have sufficient patent term protections for our product candidates to effectively protect our business.Patents have a limited term. In the United States, the statutory expiration of a patent is generally 20 years after it is filed. Although various extensionsmay be available, the life of a patent, and the protection it affords, is limited. Even if patents covering our product candidates are obtained, once the patentlife has expired for a product candidate, we may be open to competition. In addition, upon issuance in the United States any patent term can be adjustedbased on specified delays caused by the applicant(s) or the USPTO.Patent term extensions under the Hatch-Waxman Act in the United States and under supplementary protection certificates in Europe may be availableto extend the patent or data exclusivity terms of our product candidates. We will likely seek patent term extensions, and we cannot provide any assurancesthat any such patent term extensions will be obtained and, if so, for how long. As a result, we may not be able to maintain exclusivity for our productcandidates for an extended period after regulatory approval, if any, which would negatively impact our business, financial condition, results of operationsand prospects. If we do not have sufficient patent terms or regulatory exclusivity to protect our product candidates, our business and results of operations willbe adversely affected.Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products, and recent patent reformlegislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issuedpatents.As is the case with other biotechnology companies, our success is heavily dependent on patents. Obtaining and enforcing patents in thebiotechnology industry involves both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. In addition, theUnited States has recently enacted and is currently implementing wide-ranging patent reform legislation. Recent U.S. Supreme Court rulings have narrowedthe scope of patent protection available in specified circumstances and weakened the rights of patent owners in specified situations. In addition to increasinguncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents,once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change inunpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.If we are unable to maintain effective proprietary rights for our product candidates or any future product candidates, we may not be able to competeeffectively in our proposed markets.In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-howthat is not patentable or that we elect not to patent. We also utilize processes for which patents are difficult to enforce. In addition, other elements of ourproducts, and many elements of our product candidate discovery and development processes involve proprietary know-how, information or technology thatis not covered by patents. Trade secrets may be difficult to protect. We seek to protect our proprietary technology and processes, in part, by entering intoconfidentiality agreements with our employees, consultants, collaborators, advisors, independent contractors or other third parties. We also seek to preservethe integrity and confidentiality of our data and trade secrets, including by maintaining physical and electronic security of our premises and our informationtechnology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and wemay not have adequate remedies for any breach. In addition, competitors may otherwise gain access to our trade secrets or independently developsubstantially equivalent information and techniques. Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or inthe same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual propertyboth in the United States and abroad. If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, ormisappropriation of our intellectual property by third parties, we may not be able to establish or maintain a competitive advantage in our market, whichcould materially adversely affect our business, operating results, and financial condition.45 Although we expect all of our employees and consultants to assign their inventions to us, and all of our employees, consultants, collaborators,advisors, independent contractors and any third parties who have access to our proprietary know-how, information, or technology to enter intoconfidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed or that our trade secrets and otherconfidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently developsubstantially equivalent information and techniques. Misappropriation or unauthorized disclosure of our trade secrets could impair our competitive positionand may have a material adverse effect on our business, financial condition or results of operations. Additionally, if the steps taken to maintain our tradesecrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret.Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.Our commercial success depends in part on our ability to develop, manufacture, market and sell our product candidates and use our proprietarytechnology without infringing the patent rights of third parties. Numerous third-party U.S. and non-U.S. issued patents and pending applications exist in thearea of Synthetic Biotic medicines. We are aware of U.S. and foreign patents and pending patent applications owned by third parties that cover similartherapeutic uses as the product candidates we are developing. We are currently monitoring these patents and patent applications. We may in the future pursueavailable proceedings in the U.S. and foreign patent offices to challenge the validity of these patents and patent applications. In addition, or alternatively, wemay consider whether to seek to negotiate a license of rights to technology covered by one or more of such patents and patent applications. If any patents orpatent applications cover our product candidates or technologies, we may not be free to manufacture or market our product candidates as planned, absentsuch a license, which may not be available to us on commercially reasonable terms, or at all.It is also possible that we have failed to identify relevant third-party patents or applications. For example, applications filed before November 29,2000 and applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Moreover, it is difficult forindustry participants, including us, to identify all third-party patent rights that may be relevant to our product candidates and technologies because patentsearching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims.We may fail to identify relevant patents or patent applications or may identify pending patent applications of potential interest but incorrectly predict thelikelihood that such patents may issue with claims of relevance to our technology. In addition, we may be unaware of one or more issued patents that wouldbe infringed by the manufacture, sale or use of a current or future product candidate, or we may incorrectly conclude that a third-party patent is invalid,unenforceable or not infringed by our activities. Additionally, pending patent applications that have been published can, subject to specified limitations, belater amended in a manner that could cover our technologies, our product candidates or the use of our product candidates.There have been many lawsuits and other proceedings filed by third parties involving patent and other intellectual property rights in thebiotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions, and reexamination, post-grant review andequivalent proceedings before the USPTO and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patentapplications, which are owned by third parties, exist in the fields in which we are developing product candidates. As the biotechnology and pharmaceuticalindustries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights ofthird parties.Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop andcommercialize one or more of our product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense andwould be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to paysubstantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one ormore licenses from third parties, which may be impossible or require substantial time and monetary expenditure.We depend, in part, on our licensors to file, prosecute, maintain, defend and enforce patents and patent applications that are material to our business.While we normally seek and gain the right to fully prosecute the patent applications relating to our product candidates, there may be times when thepatent applications enabling our product candidates are controlled by our licensors. If any of our existing or future licensors fail to appropriately and broadlyprosecute and maintain patent protection for patents covering any of our product candidates, our ability to develop and commercialize those productcandidates may be adversely affected and we may not be able to prevent competitors from making, using, importing, and selling competing products. Inaddition, even where we now have the right to control patent prosecution of patents and patent applications we have licensed from third parties, we may stillbe adversely affected or prejudiced by actions or inactions of our licensors in effect from actions prior to us assuming control over patent prosecution.46 If we fail to comply with obligations in the agreements under which we license intellectual property and other 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 are a party to certain intellectual property license agreements and expect to enter into additional license agreements in the future. Our existingagreements impose, and future license agreements may impose, certain obligations, including the payment of milestones and royalties based on revenuesfrom sales of our products utilizing the technologies licensed from our licensors, and such obligations could adversely affect the overall profitability for us ofany products that we may seek to commercialize. In addition, we will need to outsource and rely on third parties for many aspects of the clinicaldevelopment, sales and marketing of our product candidates covered under our license agreements. Delay or failure by these third parties could adverselyaffect the continuation of our license agreements with our third-party licensors. If we fail to comply with our obligations under these agreements, or we aresubject to a bankruptcy, these agreements may be subject to termination by the licensor which could have a material adverse effect on our business.We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time consuming, andunsuccessful.Competitors may infringe our patents or the patents of our licensors. To cease such infringement or unauthorized use, we or one of our licensingpartners may be required to file patent infringement claims against a third-party to enforce one of our patents which can be expensive, time-consuming andunpredictable. In addition, in an infringement proceeding or a declaratory judgment action against us, a court may decide that one or more of our patents isnot valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover thetechnology in question. An adverse result in any litigation or defense proceeding could put one or more of our patents at risk of being invalidated, heldunenforceable or interpreted narrowly and could put our patent applications at risk of not issuing. Defense of these claims, regardless of their merit, wouldinvolve substantial litigation expense and would be a substantial diversion of employee resources from our business.If we or one of our licensing partners were to initiate legal proceedings against a third-party to enforce a patent covering one of our productcandidates, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in theUnited States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third-party can assert invalidity or unenforceability of a patent. Grounds for a validity challenge could be an alleged failure to meet any of several statutoryrequirements, including lack of novelty, obviousness, written description, clarity or non-enablement. Grounds for an unenforceability assertion could be anallegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, duringprosecution. Third parties may also raise similar claims before administrative bodies in the United States or other jurisdictions, even outside the context oflitigation. Such mechanisms include re-examination, inter partes review, post-grant review and equivalent proceedings in foreign jurisdictions, such asopposition or derivation proceedings. Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover andprotect our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity of ourpatents, for example, we cannot be certain that there is no invalidating prior art of which we, our patent counsel, and the patent examiner were unaware duringprosecution. If a defendant were to prevail on a legal assertion of invalidity, unpatentability and/or unenforceability, we may lose at least part, and perhapsall, of the patent protection on our product candidates. Such a loss of patent protection could have a material adverse impact on our business.Interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine thepriority of inventions or correct inventorship with respect to our patents or patent applications or those of our licensors. An unfavorable outcome could resultin a loss of our current patent rights and could require us to cease using the related technology or to attempt to license rights to us from the prevailing party.Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of litigation, derivation orinterference proceedings may result in a decision adverse to our interests and, even if successful, may result in substantial costs and distract our managementand other employees. In addition, we may be unable to raise the funds necessary to conduct our clinical trials, continue our research programs, licensenecessary technology from third parties, or enter into development partnerships that would help us bring our product candidates to market.Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some ofour confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results ofhearings, motions, or other interim proceedings or developments. Any disclosure of confidential information could adversely affect our business. If securitiesanalysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.47 We may be subject to claims challenging the inventorship of our patents and other intellectual property.We may in the future be subject to claims that former employees, consultants, collaborators, advisors, independent contractors or other third partieshave an interest in our patents or other intellectual property as an inventor or co-inventor or other claims challenging the inventorship of our patents orownership of our intellectual property (including patents and intellectual property that we in-license). Therefore, our rights to these patents may not beexclusive and third parties, including competitors, may have access to intellectual property that is important to our business. In addition, co-owners fromwhom we do not yet have a license or assignment may raise claims surrounding inventorship or ownership of patents that ultimately issue from this patentfamily, potentially resulting in issued patents to which we would not have rights under our existing license agreements. Further, in jurisdictions outside theUnited States, a license may not be enforceable unless all the owners of the intellectual property agree or consent to the license. In addition, we may haveinventorship disputes arising from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may benecessary to defend against these and other claims challenging inventorship of our patents. If we fail in defending any such claims, in addition to payingmonetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such anoutcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantialcosts and be a distraction to management and other employees.We may be subject to claims that our employees, consultants, collaborators, advisors, independent contractors or other third parties have wrongfully usedor disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their formeremployers.We have received confidential and proprietary information from third parties. In addition, we employ individuals who were previously employed atuniversities, academic research institutions and at other biotechnology or pharmaceutical companies, including our competitors or potential competitors.Although we have written agreements with and make every effort to ensure that our employees, consultants, collaborators, advisors, independent contractorsor other third parties do not use the proprietary information or intellectual property rights of others in their work for us, we may in the future be subject toclaims that our employees, consultants, collaborators, advisors, independent contractors or other third parties have inadvertently or intentionally used ordisclosed confidential information of these third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such claims,in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely impact our business. Even ifwe are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.We may not be able to protect our intellectual property rights throughout the world.We have limited intellectual property rights outside the United States. Filing, prosecuting, and defending patents on product candidates in allcountries throughout the world would be prohibitively expensive, and intellectual property rights in some countries outside the United States can have adifferent scope and strength and be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectualproperty rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties (includingcompetitors) from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in andinto the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to developtheir own products and, further, may export otherwise infringing products to territories where we have patent protection, but where enforcement rights are notas strong as those in the United States. These products may compete with our products and our patents or other intellectual property rights may not beeffective or sufficient to prevent them from competing.Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legalsystems of some countries, particularly some developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual propertyprotection, particularly those relating to biopharmaceutical products, which could make it difficult in those jurisdictions for us to stop the infringement ormisappropriation of our patents or other intellectual property rights, or the marketing of competing products in violation of our proprietary rights.Proceedings to enforce our patents and other intellectual property rights in foreign jurisdictions, whether or not successful, could result in substantial costsand divert our efforts and attention from other aspects of our business. Furthermore, such proceedings could put our patents at risk of being invalidated, heldunenforceable or interpreted narrowly and could put our patent applications at risk of not issuing and could provoke third parties to assert claims ofinfringement or misappropriation against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may notbe commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significantcommercial advantage from the intellectual property that we develop or license.48 If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our businessmay be adversely affected.We have filed for trademark registration of certain marks relating to our current branding. If our trademarks and trade names are not adequatelyprotected, we may not be able to build name recognition in our markets of interest and our business may be adversely affected. Our unregistered trademarks ortrade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We may not be able to protect ourrights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest. Attimes, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to marketconfusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarksthat incorporate variations of our unregistered trademarks or trade names. Over the long term, if we are unable to successfully register our trademarks andtrade names and establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business maybe adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or otherintellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely impact our financial condition orresults of operations.Risks Related to Our Reliance on Third PartiesWe rely, and expect to continue to rely, on third parties to conduct some aspects of our product formulation, research, preclinical, and clinical studies, andthose third parties may not perform satisfactorily, including by failing to meet deadlines for the completion of such formulation, research or testing.We do not independently conduct all aspects of our drug discovery activities, compound development or preclinical studies of product candidates.We currently rely, and expect to continue to rely, on third parties to conduct some aspects of our research and development and preclinical studies. Any ofthese third parties may terminate their engagements with us at any time. If we need to enter into alternative arrangements, it would delay our productdevelopment activities. Our reliance on these third parties for research and development activities reduces our control over these activities but does notrelieve us of our responsibilities. For example, for product candidates that we develop and commercialize on our own, we will remain responsible for ensuringthat each of our studies that support our clinical trial applications and our clinical trials are conducted in accordance with the study plan and protocols for thetrial. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our studies in accordance with regulatoryrequirements or our stated study plans and protocols, we will not be able to complete, or may be delayed in completing, the necessary preclinical studies toenable us or our strategic alliance partners to select viable product candidates for clinical trial application submissions and will not be able to, or may bedelayed in our efforts to, successfully develop and commercialize such product candidates.We rely on third-party supply and manufacturing partners for drug supplies for our late-stage clinical activities, and may do the same for any commercialsupplies of our product candidates.We rely on third-party supply and manufacturing partners to supply the materials and components to manufacture late-stage clinical trial drugsupplies. We have not yet manufactured or formulated any product candidate on a commercial scale and may not be able to do so for any of our productcandidates. We will work to develop and optimize our manufacturing process, and we cannot be sure that the process will result in therapies that are safe,potent or effective.There can be no assurance that our supply of research and development, preclinical and clinical development drugs and other materials will not belimited, interrupted, restricted in certain geographic regions or of satisfactory quality or continue to be available at acceptable prices. In particular, anyreplacement of any product formulation manufacturer we may engage could require significant effort and expertise because there may be a limited number ofqualified replacements.Synthetic Biotic medicines are complex and difficult to manufacture. We could experience production or technology transfer problems that result indelays in our development or commercialization schedules or otherwise adversely affect our business. Issues with the manufacturing process, even minordeviations from the normal process, could result in insufficient yield, product deficiencies or manufacturing failures that result in lot failures, insufficientinventory, and product recalls.Many factors common to the manufacturing of most biologics and drugs could also cause production interruptions, including raw materials shortages,raw material failures, growth media failures, equipment malfunctions, facility contamination, labor problems, natural disasters, disruption in utility services,terrorist activities, or acts of god beyond our control. We also may encounter problems in hiring and retaining the experienced specialized personnel neededto operate our manufacturing process, which could result in delays in our production or difficulties in maintaining compliance with applicable regulatoryrequirements.49 Any problems in our manufacturing processes or facilities could make us a less attractive collaborator for academic research institutions and otherparties, which could limit our access to additional attractive development programs, result in delays in our clinical development or marketing schedules andharm our business.The manufacturing process for a product candidate is subject to FDA and foreign regulatory authority review. Suppliers and manufacturers must meetapplicable manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply withregulatory standards, such as GMP regulations. Any of our suppliers or manufacturers could fail to comply with such requirements or to perform ourobligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials could become limited or interrupted for otherreasons. Under these circumstances, we may choose or be forced to manufacture the materials ourselves, for which we currently do not have the capabilities orresources, manufacture in collaboration with a third-party at their facilities, or enter into an agreement with another third-party, which we may not be able todo on reasonable terms, if at all. In some cases, the technical skills or technology required to manufacture our product candidates may be unique orproprietary to the original manufacturer and we may have difficulty, or there may be contractual restrictions prohibiting us from transferring such skills ortechnology to another third-party and a feasible alternative may not exist. These factors would increase our reliance on such manufacturer or require us toobtain a license from such manufacturer in order to have another third-party manufacture our product candidates. If we are required to change manufacturersfor any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with allapplicable regulations and guidelines. The delays associated with the verification of a new manufacturer could negatively affect our ability to developproduct candidates in a timely manner or within budget.We may rely on third-party manufacturers if we receive regulatory approval for any product candidate. To the extent that we have existing, or enterinto future, manufacturing arrangements with third parties, we will depend on these third parties to perform their obligations in a timely manner consistentwith contractual and regulatory requirements, including those related to quality control and assurance. If we are unable to obtain or maintain third-partymanufacturing for product candidates, or to do so on commercially reasonable terms, we may not be able to develop and commercialize our productcandidates successfully. Our or a third-party’s failure to execute on our manufacturing requirements could adversely affect our business in a number of ways,including: •an inability to initiate or continue clinical trials of product candidates under development, which may impact our potential economic benefits; •delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; •loss of the cooperation of a collaborator; •subjecting our product candidates to additional inspections by regulatory authorities; •requirements to cease distribution or to recall batches of our product candidates; and •in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.We enter into various contracts in the normal course of our business in which we indemnify the other party to the contract. In the event we have to performunder these indemnification provisions, it could have a material adverse effect on our business, financial condition and results of operations.In the normal course of business, we periodically enter into academic, commercial, service, collaboration, licensing, consulting and other agreementsthat contain indemnification provisions. With respect to our academic and other research agreements, we typically indemnify the institution and relatedparties from losses arising from claims relating to the products, processes or services made, used, sold or performed pursuant to the agreements for which wehave secured licenses, and from claims arising from our or our sublicensees’ exercise of rights under the agreement. With respect to our collaborationagreements, we indemnify our collaborators from any third-party product liability claims that could result from the production, use or consumption of theproduct, as well as for alleged infringements of any patent or other intellectual property right by a third-party. With respect to consulting agreements, weindemnify consultants from claims arising from the good faith performance of their services.Should our obligation under an indemnification provision exceed applicable insurance coverage or should we be denied insurance coverage, ourbusiness, financial condition and results of operations could be adversely affected. Similarly, if we are relying on a collaborator to indemnify us and thecollaborator is denied insurance coverage or the indemnification obligation exceeds the applicable insurance coverage, and if the collaborator does not haveother assets available to indemnify us, our business, financial condition and results of operations could be adversely affected.50 To the extent we are able to enter into collaborative arrangements or strategic alliances, we may be exposed to risks related to those collaborations andalliances.We are currently party to an agreement with AbbVie. Biotechnology companies sometimes become dependent upon collaborative arrangements orstrategic alliances to complete the development and commercialization of product candidates. If we elect to enter into collaborative arrangements or strategicalliances, these arrangements may place the development of our product candidates outside our control, may require us to relinquish important rights or mayotherwise be on terms unfavorable to us.Dependence on collaborative arrangements or strategic alliances would subject us to a number of risks, including the risk that: •we may not be able to control the amount and timing of resources that our collaborators may devote to the relevant product candidates; •our collaborators may experience financial difficulties; •we may be required to relinquish important rights, such as marketing and distribution rights; •business combinations or significant changes in a collaborator’s business strategy may also adversely affect a collaborator’s willingness orability to complete our obligations under any arrangement; •a collaborator could independently move forward with a competing drug candidate developed either independently or in collaboration withothers, including our competitors; and •collaborative arrangements are often terminated or allowed to expire, which would delay the development and may increase the cost ofdeveloping our drug candidates.We may attempt to form collaborations in the future with respect to our product candidates, but we may not be able to do so, which may cause us to alterour development and commercialization plans.We may attempt to form strategic collaborations, create joint ventures or enter into licensing arrangements with third parties with respect to ourprograms or platform that we believe will complement or augment our existing business. We may face significant competition in seeking appropriatestrategic collaborators, and the negotiation process to secure appropriate terms is time consuming and complex. We may not be successful in our efforts toestablish such a strategic collaboration for any product candidates and programs on terms that are acceptable to us, or at all. This may be because our productcandidates and programs may be deemed to be at too early of a stage of development for collaborative effort, our research and development pipeline may beviewed as insufficient, the competitive or intellectual property landscape may be viewed as too intense or risky, and/or third parties may not view our productcandidates and programs as having sufficient potential for commercialization, including the likelihood of an adequate safety and efficacy profile.Any delays in identifying suitable collaborators and entering into agreements to develop and/or commercialize our product candidates could delaythe development or commercialization of our product candidates, which may reduce their competitiveness even if they reach the market. Absent a strategiccollaborator, we would need to undertake development and/or commercialization activities at our own expense. If we elect to fund and undertakedevelopment and/or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be availableto us on acceptable terms or at all. If we are unable to do so, we may not be able to develop our product candidates or bring them to market and our businessmay be materially and adversely affected.Risks Related to Commercialization of Our Product CandidatesIf any of our product candidates is approved for marketing and commercialization and we are unable to develop sales, marketing and distributioncapabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we will be unable to successfullycommercialize any such future products.We currently have no sales, marketing or distribution capabilities or experience. If any of our product candidates is approved for marketing andcommercialization, we will need to develop internal sales, marketing and distribution capabilities to commercialize such products, which would beexpensive and time-consuming, or enter into collaborations with third parties to perform these services. If we decide to market our products directly, we willneed to commit significant financial and managerial resources to develop a marketing and sales force with technical expertise and supporting distribution,administration and compliance capabilities. If we rely on third parties with such capabilities to market our products or decide to co-promote products withcollaborators, we will need to establish and maintain marketing and distribution arrangements with third parties, and there can be no assurance that we will beable to enter into such arrangements on acceptable terms or at all. In entering into third-party marketing or distribution arrangements, any revenue we receivewill depend upon the efforts of third parties and there can be no assurance that such third parties will establish adequate sales and distribution capabilities orbe successful in gaining market acceptance of any approved product. If we are not successful in commercializing any product approved for marketing andcommercialization in the future, either on our own or through third parties, our business, financial condition, results of operations and prospects may beadversely affected.51 If the market opportunities for our product candidates are smaller than we believe they are, we may not meet our revenue expectations and, assumingapproval of a product candidate, our business may suffer. Because the patient populations in the market for our product candidates may be small, we mustbe able to successfully identify patients and acquire a significant market share to achieve profitability and growth.Given the small number of patients who have the diseases that we are targeting, our eligible patient population and pricing estimates may differsignificantly from the actual market addressable by our product candidates. Our projections of both the number of people who have applicable diseases, aswell as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, are based on our beliefs andestimates. These estimates have been derived from a variety of sources, including scientific literature, patient foundations, or market research, and may proveto be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases. The number of patients may turn out to be lowerthan expected. The potentially addressable patient population for each of our product candidates may be limited or may not be amenable to treatment withour product candidates, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect our business, financialcondition, results of operations and prospects.We face substantial competition and our competitors may discover, develop or commercialize products faster or more successfully than us.The development and commercialization of new products is highly competitive. We face competition from major pharmaceutical companies, specialtypharmaceutical companies, biotechnology companies, universities and other research institutions worldwide with respect to our product candidates that wemay seek to develop or commercialize in the future. For example, Acer Therapeutics, Inc., Aeglea BioTherapeutics, Inc., Arcturus Therapeutics Inc.,Ultragenyx Pharmaceutical Inc., Horizon Pharma plc, Kaleido Biosciences, Inc., Selecta Biosciences, Inc., Translate Bio, Inc. and Versantis AG havedeveloped or are developing product candidates for the treatment of UCD; Bausch Health Companies Inc., Kaleido Biosciences, Inc., Mallinckrodt plc,Rebiotix, Inc./Ferring, Umecrine Cognition AB, Versantis AG as well as other preclinical and discovery stage companies have developed or are eachdeveloping product candidates for the treatment of HE; and American Gene Technologies International Inc., BioMarin, Inc., Censa Pharmaceuticals, Inc.,Codexis, Inc., Homology Medicines, Inc., MipSalus ApS, Moderna Therapeutics, and Rubius Therapeutics, Inc. have developed or are developing productcandidates for the treatment of PKU. Our competitors may succeed in developing, acquiring or licensing technologies and products that are more effective orless costly than the product candidates that we are currently developing or that we may develop, which could render our product candidates obsolete andnoncompetitive. In addition to the competition we face from alternative therapies for the diseases we intend to target with our product candidates, we are alsoaware of several companies that are also working specifically to develop engineered bacteria as cellular drug therapies, such as Intrexon Corp. Further thereare several companies working to develop other similar products. Many of our competitors have substantially greater financial, technical and other resources,such as larger research and development staff and experienced marketing and manufacturing organizations. Third-party payors, including governmental andprivate insurers, may also encourage the use of generic products.If our competitors obtain marketing approval from the FDA or comparable foreign regulatory authorities for their product candidates more rapidly thanus, it could result in our competitors establishing a strong market position before we are able to enter the market.Many of our competitors have materially greater name recognition and financial, manufacturing, marketing, research and drug development resourcesthan we do. Additional mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated inour competitors. Large pharmaceutical companies in particular have extensive expertise in preclinical and clinical testing and in obtaining regulatoryapprovals for drugs. In addition, academic institutions, government agencies, and other public and private organizations conducting research may seekpatent protection with respect to potentially competitive products or technologies. These organizations may also establish exclusive collaborative orlicensing relationships with our competitors. Failure of our product candidates to effectively compete against established treatment options or in the futurewith new products currently in development would harm our business, financial condition, results of operations and prospects.52 The commercial success of any of our current or future product candidates will depend upon the degree of market acceptance by physicians, patients,third-party payors, and others in the medical community.Even with approvals from the FDA and comparable foreign regulatory authorities, the commercial success of our products will depend in part on thehealth care providers, patients, and third-party payors accepting our product candidates as medically useful, cost-effective, and safe. Any product that webring to the market may not gain market acceptance by physicians, patients and third-party payors. The degree of market acceptance of any of our productswill depend on a number of factors, including but not limited to: •the efficacy of the product as demonstrated in clinical trials and potential advantages over competing treatments; •the safety and side effect profile of the product as demonstrated in clinical trials and potential advantages over competing treatments; •the prevalence and severity of the disease targeted; •the clinical indications for which approval is granted, including any limitations or warnings contained in a product’s approved labeling; •the convenience and ease of administration; •the cost of treatment; •the willingness of the patients and physicians to accept products engineered from bacteria and these therapies; •the perceived ratio of risk and benefit of these therapies by physicians, patients, and payers, and the willingness of physicians to recommendthese therapies to patients based on such risks and benefits; •the marketing, sales and distribution support for the product; •the publicity concerning the products or competing products and treatments; and •the pricing and availability of third-party insurance coverage and reimbursement.Even if a product displays a favorable efficacy and safety profile upon approval, market acceptance of the product remains uncertain. Efforts toeducate the medical community and third-party payors on the benefits of the products may require significant investment and resources and may never besuccessful. If our products fail to achieve an adequate level of acceptance by physicians, patients, third-party payors, and other health care providers, we willnot be able to generate sufficient revenue to become or remain profitable.We may not be successful in any efforts to identify, license, discover, develop, or commercialize additional product candidates.Although a substantial amount of our effort will focus on the clinical testing, potential approval, and commercialization of our existing productcandidates, the success of our business is also expected to depend in part upon our ability to identify, license, discover, develop, or commercialize additionalproduct candidates. Research programs to identify new product candidates require substantial technical, financial, and human resources. We may focus ourefforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful. Our research programs or licensing efforts may failto yield additional product candidates for clinical development and commercialization for a number of reasons, including but not limited to the following: •our research or business development methodology or search criteria and process may be unsuccessful in identifying potential productcandidates; •we may not be able or willing to assemble sufficient resources to acquire or discover additional product candidates; •our product candidates may not succeed in preclinical or clinical testing; •our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the productsunmarketable or unlikely to receive marketing approval; •competitors may develop alternatives that render our product candidates obsolete or less attractive; •product candidates we develop may be covered by third parties’ patents or other exclusive rights; •the market for a product candidate may change during development or commercialization so that such a product may become unreasonable tocontinue to develop or commercialize; •a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and •a product candidate may not be accepted as safe and effective by patients, the medical community, or third-party payors.53 If any of these events occur, we may be forced to abandon our development efforts for one or more product candidates, or we may not be able toidentify, license, discover, develop, or commercialize additional product candidates, which would have a material adverse effect on our business, financialcondition or results of operations and could potentially cause us to cease operations.Failure to obtain or maintain adequate reimbursement or insurance coverage for products, if any, could limit our ability to market those products anddecrease our ability to generate revenue.The pricing, coverage, and reimbursement of our approved products, if any, must be sufficient to support our commercial efforts and otherdevelopment programs and the availability and adequacy of coverage and reimbursement by third-party payors, including governmental and private insurers,are essential for most patients to be able to afford expensive treatments. Sales of our approved products, if any, will depend substantially, both domesticallyand abroad, on the extent to which the costs of our approved products, if any, will be paid for or reimbursed by health maintenance, managed care, pharmacybenefit and similar healthcare management organizations, or government payors and private payors. If coverage and reimbursement are not available, or areavailable only in limited amounts, we may have to subsidize or provide products for free or we may not be able to successfully commercialize our products.In addition, there is significant uncertainty related to the insurance coverage and reimbursement for newly approved products. In the United States, theprincipal decisions about coverage and reimbursement for new drugs are typically made by the Centers for Medicare & Medicaid Services (CMS), an agencywithin the U.S. Department of Health and Human Services, as CMS decides whether and to what extent a new drug will be covered and reimbursed underMedicare. Private payors tend to follow the coverage reimbursement policies established by CMS to a substantial degree. It is difficult to predict what CMSwill decide with respect to reimbursement for novel product candidates such as ours and what reimbursement codes our product candidates may receive ifapproved.Outside the United States, international operations are generally subject to extensive governmental price controls and other price-restrictiveregulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, and other countries has and will continue to putpressure on the pricing and usage of products. In many countries, the prices of products are subject to varying price control mechanisms as part of nationalhealth systems. Price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our products, if any. Accordingly,in markets outside the United States, the potential revenue from the sale of our products may be insufficient to generate commercially reasonable revenue andprofits.Moreover, increasing efforts by governmental and private payors in the United States and abroad to limit or reduce healthcare costs may result inrestrictions on coverage and the level of reimbursement for new products and, as a result, they may not cover or provide adequate payment for our products.We expect to experience pricing pressures in connection with products due to the increasing trend toward managed healthcare, including the increasinginfluence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularlyprescription drugs has and is expected to continue to increase in the future. As a result, profitability of our products, if any, may be more difficult to achieveeven if they receive regulatory approval.Risks Related to Our Business Operations and EmployeesOur failure to attract and retain senior management and key scientific personnel may prevent us from successfully developing our product candidates orany future product candidate, conducting our clinical trials and commercializing any products.Our success depends in part on our continued ability to attract, retain and motivate highly qualified management, clinical and scientific personnel. Webelieve that our future success is highly dependent upon the contributions of our senior management, particularly our president, chief executive officer, andchief medical officer, chief financial officer, as well as our senior scientists and other members of our senior management team. The loss of services of any ofthese individuals could delay or prevent the successful development of our product pipeline, completion of our planned clinical trials or thecommercialization of the products we develop.Although we have not historically experienced significant difficulties attracting and retaining qualified employees, we could experience suchproblems in the future. For example, competition for qualified personnel in the biotechnology and pharmaceuticals field is intense due to the limited numberof individuals who possess the skills and experience required by our industry. We will need to hire additional personnel as we expand our clinicaldevelopment and commercial activities. We may not be able to attract and retain quality personnel on acceptable terms, or at all.54 Our employees, independent contractors, principal investigators, CROs, consultants and collaborators may engage in misconduct or other improperactivities, including noncompliance with regulatory standards and requirements and insider trading.We are exposed to the risk that our employees, independent contractors, consultants and collaborators may engage in fraudulent conduct or otherillegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or unauthorized activities that violate:(1) regulations of regulatory authorities in jurisdictions where we are performing activities in relation to our product candidates, including those lawsrequiring the reporting of true, complete and accurate information to such authorities; (2) manufacturing regulations and standards; (3) fraud and abuse andanti-corruption laws and regulations; or (4) laws that require the reporting of true and accurate financial information and data. In particular, sales, marketingand business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, bias, misconduct, kickbacks,self-dealing and other abusive practices, and these laws may differ substantially from country to country. These laws and regulations may restrict or prohibit awide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Theseactivities also include the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm toour reputation. It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect andprevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting ourselves from governmental investigationsor other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we arenot successful in defending itself or asserting our rights, those actions could have a significant impact on our business including the imposition of significantcivil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in subsidized healthcare programs in a givencountry, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adverselyaffect our ability to operate our business and our results of operations.Risks Related to Our Common StockOur principal stockholders and management own a significant percentage of our stock and are able to exert significant control over matters subject tostockholder approval.Based on the beneficial ownership of our common stock as of March 5, 2019, our executive officers and directors, together with holders of 5% or moreof our common stock outstanding and their respective affiliates, beneficially own approximately 55.9% of our common stock. Accordingly, thesestockholders have significant influence over the outcome of corporate actions requiring stockholder approval, including the election of directors,consolidation or sale of all or substantially all of our assets or any other significant corporate transaction. The interests of these stockholders may not be thesame as or may even conflict with your interests. For example, these stockholders could delay or prevent a change of control, even if such a change of controlwould benefit our other stockholders, which could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale ofthe company or our assets and might affect the prevailing market price of our common stock. The significant concentration of stock ownership may adverselyaffect the trading price of our common stock due to investors’ perception that conflicts of interest may exist or arise.We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies willmake our common stock less attractive to investors.We are an “emerging growth company,” as defined in the JOBS Act, and may take advantage of certain exemptions from various reportingrequirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with theauditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodicreports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholderapproval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because wemay rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our commonstock and our stock price may be more volatile.In addition, Section 102 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition periodprovided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An “emerging growth company” can thereforedelay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out”of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of suchstandards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition periodfor complying with new or revised accounting standards is irrevocable.55 Future sales of our common stock or securities convertible or exchangeable for our common stock may depress our stock price.If our existing stockholders or holders of our options sell, or indicate an intention to sell, substantial amounts of our common stock in the publicmarket, the trading price of our common stock could decline. The perception in the market that these sales may occur could also cause the trading price of ourcommon stock to decline. As of March 5, 2019 there were a total of 25,400,495 shares of our common stock outstanding.Our quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may causeour stock price to fluctuate or decline.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including: •variations in the level of our operating expenses; •receipt, modification or termination of government contracts or grants, and the timing of payments we receive under these arrangements; •Our execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make under these arrangements; and •any intellectual property infringement lawsuit or opposition, interference or cancellation proceeding in which we may become involved.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could declinesubstantially. Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of the company’s stock to fluctuate substantially.We believe that quarterly comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our futureperformance.Provisions of our charter documents or Delaware law could delay or prevent an acquisition of us, even if the acquisition would be beneficial to ourstockholders, and could make it more difficult for you to change management.Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws may discourage, delay or prevent a merger,acquisition or other change in control that our stockholders may consider favorable, including transactions in which our stockholders might otherwisereceive a premium for their shares. In addition, these provisions may frustrate or prevent any attempt by our stockholders to replace or remove our currentmanagement by making it more difficult to replace or remove our Board of Directors. These provisions include: •a classified board of directors so that not all directors are elected at one time; •a prohibition on stockholder action through written consent; •no cumulative voting in the election of directors; •the exclusive right of our Board of Directors to elect a director to fill a vacancy created by the expansion of our Board of Directors or theresignation, death or removal of a director; •a requirement that special meetings of our Stockholders be called only by our Board of Directors, the chairman of our Board of Directors, thechief executive officer or, in the absence of a chief executive officer, the president; •an advance notice requirement for stockholder proposals and nominations; •the authority of our Board of Directors to issue preferred stock with such terms as our Board of Directors may determine; and •a requirement of approval of not less than 66 2/3% of all outstanding shares of our capital stock entitled to vote to amend any bylaws bystockholder action, or to amend specific provisions of our certificate of incorporation.56 In addition, Delaware law prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder,generally a person who, together with its affiliates, owns or within the last three years has owned 15% or more of the company’s voting stock, for a period ofthree years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribedmanner. Accordingly, Delaware law may discourage, delay or prevent a change in control of the company. Furthermore, our amended and restated certificateof incorporation specifies that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for most legal actions involving actionsbrought against us by our stockholders. We believe this provision benefits the company by providing increased consistency in the application of Delawarelaw by chancellors particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to otherforums and protection against the burdens of multi-forum litigation. However, the provision may have the effect of discouraging lawsuits against ourdirectors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legalproceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions containedin our amended and restated certificate of incorporation to be inapplicable or unenforceable in such action.Provisions in our charter and other provisions of Delaware law could limit the price that investors are willing to pay in the future for shares of ourcommon stock.Our employment agreements with our executive officers may require us to pay severance benefits to any of those persons who are terminated in connectionwith a change of control, which could harm our business, financial condition or results of operations.Our executive officers are parties to employment agreements providing for aggregate cash payments of up to approximately $1.5 million at December31, 2018 for severance and other benefits in the event of a termination of employment in connection with a change of control. The payment of theseseverance benefits could harm our business, financial condition and results of operations. In addition, these potential severance payments may discourage orprevent third parties from seeking a business combination with Synlogic.We do not anticipate paying any cash dividends on our common stock in the foreseeable future; therefore, capital appreciation, if any, of our commonstock will be your sole source of gain for the foreseeable future.We have never declared or paid cash dividends on our common stock. We do not anticipate paying any cash dividends on our common stock in theforeseeable future. We currently intend to retain all available funds and any future earnings to fund our operations. In addition, the terms of any future debtfinancing arrangement may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. As a result,capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our stock price and tradingvolume could decline.The trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish about us or ourbusiness. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, ourstock price would likely decline. In addition, if our operating results fail to meet the forecast of analysts, our stock price would likely decline. If one or moreof these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our stockprice and trading volume to decline.Changes in, or interpretations of, accounting rules and regulations could result in unfavorable accounting charges or require us to change ourcompensation policies.Accounting methods and policies for biopharmaceutical companies, including policies governing revenue recognition, research and development andrelated expenses and accounting for stock-based compensation, are subject to further review, interpretation and guidance from relevant accountingauthorities, including the SEC. Changes to, or interpretations of, accounting methods or policies may require us to reclassify, restate or otherwise change orrevise our financial statements, including those contained in this periodic report.57 Item 1B. Unresolved Staff Comments.None.Item 2. Properties.Our corporate headquarters and operations are located in Cambridge, Massachusetts. We currently lease 41,346 square feet of laboratory and officespace at 301 Binney Street and until February 2018, we leased 14,390 square feet of laboratory and office space at 200 Sidney Street, both in Cambridge,Massachusetts. The agreement to terminate the lease for the 200 Sidney Street space occurred in July 2017 in conjunction with the execution of the lease forthe space in the 301 Binney Street facility. Our 301 Binney Street lease expires in 2028. We believe that our facilities are suitable and adequate for our needsfor the foreseeable future.Item 3. Legal Proceedings.From time to time, we are subject to various legal proceedings, claims and administrative proceedings that arise in the ordinary course of our businessactivities. Although the results of the litigation and claims cannot be predicated with certainty, as of the date of this report, we do not believe we are party toany claim, proceeding or litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected tohave a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlementcosts, diversion of management resources and other factors.Item 4. Mine Safety Disclosures.Not applicable.58 PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market InformationOur common stock has been traded on The Nasdaq Capital Market under the symbol “SYBX” since August 28, 2017, prior to which it was tradedunder the symbol “MIRN”. StockholdersAs of March 5, 2019, there were approximately 215 stockholders of record of our common stock. DividendsWe have never declared or paid any dividends to our stockholders since our inception and we do not plan to declare or pay cash dividends in theforeseeable future. We currently anticipate that we will retain any future earnings for the operation and expansion of our business.Unregistered Sales of SecuritiesNot applicable. Issuer Purchases of Equity SecuritiesNone. Item 6. Selected Financial Data.We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under thisitem. 59 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.Forward-Looking InformationThe Risk Factors in Part I, Item 1A of this Annual Report on Form 10-K, the audited financial statements and accompanying notes, included elsewhere inthis Annual Report on Form 10-K, and this Management's Discussion and Analysis of Financial Condition and Results of Operations should be readtogether. In addition to historical information, this discussion and analysis contains forward-looking statements within the meaning of Section 27A of theSecurities Act, and Section 21E of the Exchange Act. Operating results are not necessarily indicative of results that may occur for the full fiscal year or anyother future period. The term "Private Synlogic" refers to Synlogic, Inc. prior to the consummation of the Merger described herein. The term "Mirna" refersto Mirna Therapeutics, Inc. prior to the consummation of the Merger described herein. Unless otherwise indicated, references to the terms "Synlogic," “theCompany," "we," "our" and "us" refer to Private Synlogic prior to the consummation of the Merger described herein and Synlogic, Inc. (formerly known asMirna Therapeutics, Inc.) upon the consummation of the Merger described herein.OverviewRecent DevelopmentsRecent Offerings of Synlogic Common StockIn January 2018, we sold 5,899,500 shares of our common stock through a firm commitment, underwritten public offering at a price to the public of$9.75 per share. As a result of the offering, including the exercise of the overallotment option, we received aggregate net proceeds, after underwritingdiscounts and commissions and other estimated offering expenses, of approximately $53.8 million.In April 2018, we sold 3,280,000 shares of our common stock at a price of $9.15 per share in a registered direct offering. After fees and other offeringexpenses, we received approximately $28.9 million in net proceeds from the offering.Merger with MirnaIn August 2017, Synlogic, Inc., formerly known as Mirna Therapeutics, Inc. (NASDAQ: MIRN) (Mirna), completed its business combination withSynlogic, Inc. (Private Synlogic when referred to prior to the Merger) in accordance with the terms of the Agreement and Plan of Merger and Reorganization,dated as of May 15, 2017, by and among Mirna, Meerkat Merger Sub, Inc. (Merger Sub), and Private Synlogic (the Merger Agreement), pursuant to whichMerger Sub merged with and into Private Synlogic, with Private Synlogic surviving as a wholly owned subsidiary of Mirna (the Merger). As part of theMerger, Mirna was renamed Synlogic, Inc. (Public Synlogic) and Private Synlogic was renamed Synlogic Operating Company, Inc. Following completion ofthe Merger, Private Synlogic, now known as Synlogic Operating Company, Inc., is the surviving corporation of the Merger and a wholly-owned subsidiary ofPublic Synlogic. The Merger has been accounted for as a “reverse merger” under the acquisition method of accounting for business combinations withPrivate Synlogic treated as the accounting acquirer of Mirna. The historical financial statements of Private Synlogic have become the historical financialstatements of Public Synlogic, or the combined company, and are included in this Annual Report on Form 10K filing labeled Synlogic, Inc. As a result of theMerger, historical common stock, preferred stock, stock options and additional paid-in capital, including share and per share amounts, were retroactivelyadjusted to reflect the equity structure of Public Synlogic, including the effect of the Merger exchange ratio and the Public Synlogic common stock par valueof $0.001 per share. See “Merger with Mirna Therapeutics” within Note 3 of the notes to our audited consolidated financial statements for the year endedDecember 31, 2018 included in this Annual Report on Form 10-K for additional discussion of the Merger and the exchange ratio.Pursuant to the terms of the Merger Agreement and after giving effect to a reverse stock split, at the effective time of the Merger (the Effective Time),each outstanding share of Private Synlogic capital stock was converted into the right to receive approximately 0.5532 shares of Mirna common stock (theExchange Ratio). In addition, at the Effective Time, Mirna assumed all outstanding options to purchase shares of Private Synlogic common stock, which wereexchanged for options to purchase shares of Mirna common stock, in each case appropriately adjusted based on the Exchange Ratio. Mirna also assumed theSynlogic 2017 Stock Incentive Plan (the 2017 Plan). 60 BusinessWe are a clinical-stage biopharmaceutical company focused on advancing our proprietary drug discovery and development platform to createSynthetic Biotic™ medicines, which are designed using synthetic biology to genetically reprogram beneficial microbes to treat metabolic and inflammatorydiseases and cancer. Synthetic Biotic medicines are generated by applying the principles and tools of synthetic biology to engineer beneficial microbes toperform or deliver critical therapeutic functions. As living medicines, Synthetic Biotic medicines can be designed to sense a local disease context within apatient’s body and to respond by metabolizing a toxic substance, compensating for missing or damaged metabolic pathways in patients, or by deliveringcombinations of therapeutic factors. Our goal is to lead in the discovery and development of Synthetic Biotic therapies as living medicines capable of robustand precise pathway complementation and delivery of therapeutic benefit to patients. We believe that our Synthetic Biotic platform has potential to address both metabolic and immune-mediated diseases and we are evaluating thesemedicines at different sites of action via different routes of administration, either orally or via injection. While we have designed and created a number ofbacterial strains that could potentially be used therapeutically in a range of diseases, our initial focus is on metabolic diseases that could potentially betreated following oral delivery of a living medicine to the gut. This includes metabolic diseases, which include rare genetic diseases as well as metabolicdiseases caused by organ dysfunction. When delivered orally, Synthetic Biotic medicines are designed to act from the gut to compensate for a dysfunctionalmetabolic pathway that results in the toxic accumulation of a metabolite with the intended consequence of reducing the systemic levels of the metabolite.We believe that success in our lead programs in rare metabolic diseases will enable us to demonstrate the potential of our oral Synthetic Biotic medicines toaddress metabolic dysfunction while bringing meaningful change to the lives of patients suffering from these debilitating conditions.Our two lead therapeutic programs are being developed for the treatment of hyperammonemia and phenylketonuria (PKU). SYNB1020, our firsttherapeutic program to enter clinical trials, is an oral therapy intended for the treatment of hyperammonemia, which includes patients with liver disease suchas hepatic encephalopathy (HE) and patients with urea cycle disorders (UCD). In these conditions ammonia accumulates in the body and becomes toxic,leading to neurocognitive crisis and risk of long-term cognitive or behavioral impairment, coma or death. SYNB1020 has received both Fast TrackDesignation and orphan drug designation for UCD from the U.S. Food and Drug Administration (FDA). We initiated a Phase 1 clinical trial in June 2017 toevaluate the safety and tolerability of SYNB1020 in healthy volunteers. In November 2017, we announced top-line data from this study that demonstratedthat SYNB1020 was safe and well-tolerated and achieved proof-of-mechanism. In March 2018, we initiated a clinical trial in patients with cirrhosis andelevated blood ammonia to evaluate the safety and tolerability of SYNB1020 as well as the ability of this Synthetic Biotic medicine to lower systemic levelsof ammonia. We expect to have top-line data from this study in mid-2019. Upon receipt of satisfactory evidence of ammonia lowering in patients withcirrhosis, we will determine the clinical development path for SYNB1020 for the treatment of conditions resulting in hyperammonemia.SYNB1618, our second program to enter clinical trials, is an oral therapy intended for the treatment of PKU, a rare metabolic disease in which theamino acid phenylalanine (Phe) accumulates in the body as a result of genetic defects. Elevated levels of Phe are toxic to the brain and can lead toneurological dysfunction. SYNB1618 is designed to function in the gut of patients to reduce excess Phe, with the goal of lowering levels in the blood andother tissues. SYNB1618 has received both Fast Track designation and orphan drug designation for PKU from the FDA. We initiated a Phase 1 / 2a clinicaltrial for SYNB1618 in April 2018 and announced top-line data from this study in September 2018 that demonstrated that SYNB1618 was safe and well-tolerated and achieved proof-of-mechanism in healthy volunteers and we are currently evaluating SYNB1618 in patients with PKU. We expect to havepatient data from this study in mid-2019.We have developed a portfolio of immuno-oncology (IO) programs designed to deliver activities to modify the tumor microenvironment, activate theimmune system and result in tumor reduction, and we envision that multiple engineered functions could be combined in one Synthetic Biotic medicine.These products could also be used in combination with other cancer therapies such as check-point inhibitors. In November 2018, we announced the selectionof our first Synthetic Biotic clinical IO candidate, SYNB1891, and have advanced it into preclinical studies to enable filing of an Investigational New Drug(IND) application with the FDA in the second half of 2019. SYNB1891 is an intratumorally administered Synthetic Biotic medicine designed to act as a dualinnate activator of the immune system by stimulation via the E.coli Nissle chassis and production of cyclic di-AMP, an activator of the STING pathway.Our early-stage metabolic pipeline includes discovery-stage product candidates for rare metabolic diseases, GI and immune disorders with high unmetneeds. We are also leveraging our proprietary technology platform to develop Synthetic Biotic medicines to treat a broader range of human diseases,including metabolic diseases, inflammation and cancer. Synthetic Biotic medicines can be designed to locally deliver combinations of complementarytherapeutics to treat these complex disease states.61 To progress our pipeline, we collaborate with key disease experts who have developed robust models of relevant diseases to guide selection of ourdevelopment candidates and to inform our translational medicine strategy. We focus on indications with clear biomarkers associated with disease progressionthat enable straightforward, early and ongoing assessment of potential clinical benefit throughout the development process. Our collaboration andintellectual property strategies additionally focus on building or leveraging existing third-party expertise in therapeutic research, preclinical and clinicaldevelopment, manufacturing and commercialization, while also enhancing our industry-leading position in synthetic biology and metabolic engineering.We have a collaboration with AbbVie S.à.r.l. (AbbVie) to develop Synthetic Biotic medicines for the treatment of inflammatory bowel disease (IBD)such as Crohn’s disease and ulcerative colitis. We have also established a technology collaboration with Ginkgo Bioworks, a privately held high-throughputsynthetic biology company, to enable the discovery of new living medicines. We may enter into additional strategic partnerships in the future to maximizethe value of our programs and our Synthetic Biotic platform.We currently operate in one reportable business segment—the discovery and development of Synthetic Biotic medicines. To date, we have dedicatedsubstantially all of our activities to the research and development of our product candidates. As of March 2019, we have received approximately $240.4million in proceeds to date as we financed our operations through approximately $110.7 million in aggregate net proceeds from the sale of Private Synlogicpreferred stock and Synlogic, LLC preferred units, approximately $0.4 million in a convertible promissory note with one of our investors, which wasconverted into Private Synlogic preferred stock, approximately $6.0 million in payments received under the AbbVie Agreement, approximately $40.4million from our merger with Mirna, net of transaction costs, approximately $82.7 million in total net proceeds from the sale of our common stock in ourcommon stock offerings in January and April 2018 and $0.2 million from exercises of stock options.We have not generated any revenue to date from product sales and have incurred significant operating losses since our inception. We have incurrednet losses of approximately $48.4 million and $40.4 million for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018 and2017, we had an accumulated deficit of approximately $119.8 million and $71.7 million, respectively, and we expect to incur losses for the foreseeable futureas we develop our product candidates. We expect our expenses and capital requirements will increase substantially in connection with our ongoing activities,as we: •complete preclinical studies, initiate and complete clinical trials for product candidates; •contract to manufacture product candidates; •advance research and development related activities to expand our product pipeline; •seek regulatory approval for our product candidates; •maintain, expand and protect our intellectual property portfolio; •hire additional staff, including clinical, scientific, and management personnel; •expand our existing infrastructure and secure space in a facility to support continued growth in our research and development efforts; and •add operational and finance personnel to support product development efforts and to support operating as a public company.We do not expect to generate product revenue unless and until we successfully complete clinical development and obtain regulatory approvals for ourproduct candidates, either alone or in collaboration with third parties. Additionally, we expect to utilize third-party contract research organizations (CROs)and contract manufacturing organizations (CMOs) to carry out our clinical development and manufacturing activities, and we do not yet have a commercialorganization. If we obtain regulatory approval for any of our product candidates, we expect to incur significant expenses related to developing our internalcommercialization capability to support product sales, marketing and distribution. Accordingly, we anticipate that we will seek to fund our operationsthrough public or private equity or debt financings, collaborations or licenses, capital lease transactions or other available financing transactions. However,we may be unable to raise additional funds through these or other means when needed. Because of the numerous risks and uncertainties associated withproduct development, we are unable to predict the timing or amount of increased expenses or when or if it will be able to achieve or maintain profitability.Even if we are able to generate product revenue, we may not become profitable.62 Financial OverviewRevenueRevenue to date is generated from our collaboration agreement with AbbVie. The collaboration agreement contains multiple deliverables, whichinclude an exclusive option for AbbVie to acquire IBDCo and research and development milestones. See Note 14, “Significant Agreements” in the notes tothe consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K for a full discussion of this arrangement. We expect ourrevenue to fluctuate for the foreseeable future as it is principally based on the achievement of research and development milestones under our collaborationagreement with AbbVie.Research and Development ExpenseResearch and development expense consists of expenses incurred in connection with the discovery and development of our product candidates,including the conduct of preclinical and clinical studies and product development, which are expensed as they are incurred. These expenses consist primarilyof: •compensation, benefits and other employee related expenses; •supplies to support our internal research and development efforts; •research and development related facility and depreciation costs; and •third-party contract costs relating to research, process and formulation development, preclinical and clinical studies and regulatory operations.The lengthy process of securing regulatory approvals for new drugs requires the expenditure of substantial resources. Any delay or failure to obtainregulatory approvals would materially adversely affect our product candidate development efforts and our business overall. Given the inherent uncertaintiesof pharmaceutical product development, we cannot estimate with any degree of certainty the likelihood, timing or cost of obtaining regulatory approval andmarketing our product candidates and thus, when, if ever, our product candidates will generate revenues and cash flows.The successful development of our product candidates is highly uncertain and subject to a number of risks. Refer to the risk factors under the headingRisks Related to the Development of Our Product Candidates in Part II, Item 1A, found elsewhere in this Annual Report on Form 10-K.We invest carefully in our pipeline, and the commitment of funding for each subsequent stage of our development programs is dependent upon thereceipt of clear, supportive data. We anticipate that we will make determinations as to which additional programs to pursue and how much funding to directto each program on an ongoing basis in response to the scientific and clinical data of each product candidate, as well as the competitive landscape andongoing assessments of such product candidate’s commercial potential. We expect our research and development costs will be substantial for the foreseeablefuture. We expect costs associated with our SYNB1020 and SYNB1618 programs to increase as the programs progress through and into clinical trials.We track direct research and development expenses, consisting principally of external costs, such as costs associated with contract researchorganizations and manufacturing of preclinical and clinical drug product and other outsourced research and development expenses to specific productprograms. Costs related to specific product candidates are tracked upon the selection of a product candidate. We do not allocate employee and consulting-related costs, costs associated with our platform and facility expenses, including depreciation or other indirect costs, to specific product candidate programsbecause these costs are deployed across multiple product candidate programs under research and development and, as such, are separately classified. Thetable below summarizes our research and development expenses by categories of costs for the periods presented (in thousands): Year ended December 31, 2018 2017 SYNB1020 $2,924 $5,528 SYNB1618 6,245 3,564 External pre-development candidate expenses and unallocated expenses 5,728 8,615 Internal research and development expenses 23,137 12,634 $38,034 $30,341 63 General and Administrative ExpenseGeneral and administrative expense consists primarily of compensation, benefits and other employee-related expenses for personnel in ouradministrative, finance, legal, information technology, investor relations, business development and human resource functions. Other costs include the legalcosts of pursuing patent protection of our intellectual property, general and administrative related facility and information technology infrastructure costsand professional fees for accounting and legal services. We anticipate increases in expenses related to operating as a public company. These increases includelegal fees, accounting fees, costs for director and officer liability insurance, fees for investor relations services and costs associated with implementing andcomplying with corporate governance, internal controls and similar requirements applicable to public companies. We charge all general and administrativeexpenses to operations as incurred.Other Income (Expense)Interest and investment income consists primarily of income earned on investments. Interest expense consists of expense related to our capital leases.Other expense consists primarily of gains and losses on foreign currency invoices.Critical Accounting Policies and EstimatesOur discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements prepared inaccordance with generally accepted accounting principles in the U.S.(GAAP). The preparation of these financial statements requires us to make certainestimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reportedperiods and related disclosures. These estimates and assumptions, including those related to revenue recognition and research and development expenses aremonitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. These criticalestimates and assumptions are based on our historical experience, our observance of trends in the industry, and various other factors that are believed to bereasonable under the circumstances and form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparentfrom other sources. Actual results may differ from our estimates under different assumptions or conditions.We believe that the application of the following accounting policies, each of which require significant judgments and estimates on the part ofmanagement, are the most critical to aid in fully understanding and evaluating our reported financial results. Our significant accounting policies are morefully described in Note 2, “Summary of Significant Accounting Policies”, to our consolidated financial statements appearing elsewhere in this Annual Reporton Form 10-K.Revenue RecognitionEffective January 1, 2018, we adopted Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606)using the modified retrospective transition method. See Note 2 “Summary of Significant Accounting Policies”, to our consolidated financial statementsappearing elsewhere in this Annual Report on Form 10-K. Under this method, results for reporting periods beginning on and after January 1, 2018 arepresented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with ASC Topic 605, Revenue Recognition(ASC 605).We evaluate collaboration agreements with respect to FASB ASC Topic 808, Collaborative Arrangements, considering the nature and contractualterms of the arrangement and the nature of our business operations to determine the classification of the transactions. When we are an active participant in theactivity and exposed to significant risks and rewards dependent on the commercial success of the collaboration, we will record our transactions on a grossbasis in the consolidated financial statements and describe the rights and obligations under the collaborative arrangement in the notes to the consolidatedfinancial statements.Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects theconsideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entitydetermines are within the scope of ASC 606, the entity performs the following five-step analysis: (i) identify the contract(s) with a customer; (ii) identify theperformance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract;and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step analysis to contracts when it is probable thatwe will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, once the contractis determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performanceobligations and assesses whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocatedto the respective performance obligation when (or as) the performance obligation is satisfied.64 We may enter into collaboration agreements for research and development services, under which we may license certain rights to our productcandidates to third parties. The terms of these arrangements typically include payment to us of one or more of the following: non-refundable, upfront licensefees; reimbursement of certain costs; customer option exercise fees; development, regulatory and commercial milestone payments; and royalties on net salesof licensed products. Variable consideration is constrained until it is deemed not be at significant risk of reversal.In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under each of our agreements for which thecollaboration partner is also a customer, we perform the following steps: (i) identification of the promised goods or services in the contract; (ii) determinationof whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement ofthe transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v)recognition of revenue when (or as) we satisfy each performance obligation. As part of the accounting for these arrangements, we must use significantjudgment to determine: a) the number of performance obligations based on the determination under step (ii) above; b) the transaction price under step (iii)above; and c) the contract term and pattern of satisfaction of the performance obligations under step (v) above. We use significant judgment to determinewhether milestones or other variable consideration, except for royalties, should be included in the transaction price as described further below. Thetransaction price is allocated to the goods and services we expect to provide. We use estimates to determine the timing of satisfaction of performanceobligations, which may include the use of full time equivalent time as a measure of satisfaction of performance obligations.Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in our consolidated balance sheets. Amountsexpected to be recognized as revenue within the 12 months following the balance sheet date are classified as current deferred revenue. Amounts not expectedto be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion.Licenses of Intellectual PropertyIn assessing whether a promise or performance obligation is distinct from the other promises, we consider factors such as the research, manufacturingand commercialization capabilities of the customer and the availability of the associated expertise in the general marketplace. In addition, we considerwhether the customer can benefit from a promise for its intended purpose without the receipt of the remaining promises, whether the value of the promise isdependent on the unsatisfied promise, whether there are other vendors that could provide the remaining promise, and whether it is separately identifiablefrom the remaining promise. For licenses that are combined with other promises, we utilize judgment to assess the nature of the combined performanceobligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method ofmeasuring progress for purposes of recognizing revenue. We evaluate the measure of progress each reporting period and, if necessary, adjusts the measure ofperformance and related revenue recognition.Research and Development ServicesIf an arrangement is determined to contain a promise or obligation for us to perform research and development services, we must determine whetherthese services are distinct from the other promises in the arrangement. In assessing whether the services are distinct from the other promises, we consider thecapabilities of the customer to perform these same services. In addition, we consider whether the customer can benefit from a promise for its intended purposewithout the receipt of the remaining promise, whether the value of the promise is dependent on the unsatisfied promise, whether there are other vendors thatcould provide the remaining promise, and whether it is separately identifiable from the remaining promise. For research and development services that arecombined with other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combinedperformance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizingrevenue. We evaluate the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.Customer OptionsIf an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and servicesunderlying the customer options are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon optionexercise. We evaluate the customer options for material rights, that is, the option to acquire additional goods or services for free or at a discount. If thecustomer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of thearrangement. We allocate the transaction price to material rights based on an alternative approach when the goods or services are both (i) similar to theoriginal goods and services in the contract and (ii) provided in accordance with the terms of the original contract. Under this alternative, we allocate the totalamount of consideration expected to be received from the customer to the total goods or services expected to be provided to the customer. Amounts allocatedto a material right are not recognized as revenue until the option is exercised and the performance obligation is satisfied.65 Milestone PaymentsAt the inception of each arrangement that includes milestone payments, we evaluate whether a significant reversal of cumulative revenue provided inconjunction with achieving the milestones is probable and estimates the amount to be included in the transaction price using the most likely amount method.If it is probable that a significant reversal of cumulative revenue would not occur, the associated milestone value is included in the transaction price.Milestone payments that are not within our control or the licensee, such as regulatory approvals, are not considered probable of being achieved until thoseapprovals are received. For other milestones, we evaluate factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcometo achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that asignificant reversal of cumulative revenue would not occur. At the end of each subsequent reporting period, we reevaluate the probability of achievement ofall milestones subject to constraint and, if necessary, adjusts our estimate of the overall transaction price. Any such adjustments are recorded on a cumulativecatch-up basis, which would affect revenues and earnings in the period of adjustment.RoyaltiesFor arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be thepredominant item to which the royalties relate, we recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligationto which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, we have not recognized any royalty revenue resultingfrom any of our licensing arrangements.Contract CostsWe recognize as an asset the incremental costs of obtaining a contract with a customer if the costs are expected to be recovered. As a practicalexpedient, we recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwisewould have recognized is one year or less. To date, we have not incurred any incremental costs of obtaining a contract with a customer.Research and Development ExpenseAll research and development expenses are expensed as incurred. Research and development expenses comprise costs incurred in performing researchand development activities, including compensation, benefits and other employee costs; equity‑based compensation expense; laboratory and clinicalsupplies and other direct expenses; facilities expenses; overhead expenses; fees for contractual services, including preclinical studies, clinical trials, clinicalmanufacturing and raw materials; and other external expenses. Nonrefundable advance payments for research and development activities are capitalized andexpensed over the related service period or as goods are received. When third-party service providers’ billing terms do not coincide with our period-end, weare required to make estimates of our obligations to those third parties, including clinical trial costs, contractual service costs and costs for supply of our drugcandidates, incurred in a given accounting period and record accruals at the end of the period. We base our estimates on our knowledge of the research anddevelopment programs, services performed for the period and the expected duration of the third-party service contract, where applicable. 66 Results of OperationsThe following discussion summarizes the key factors our management believes are necessary for an understanding of our consolidated financialresults. Year ended December 31, 2018 2017 (in thousands) Revenue $2,520 $2,444 Operating expenses: Research and development 38,034 30,341 General and administrative 15,716 12,927 Total operating expenses 53,750 43,268 Loss from operations (51,230) (40,824)Other income (expense): Interest and investment income 2,843 504 Interest expense (43) (57)Other expense (5) — Other income (expense), net 2,795 447 Net loss $(48,435) $(40,377) Year Ended December 31, 2018 Compared to Year Ended December 31, 2017Revenue Years Ended December 31, Change 2018 2017 $ % (dollars in thousands) Revenue $2,520 $2,444 $76 3% Revenue was $2.5 million for the year ended December 31, 2018 compared to $2.4 million for the year ended December 31, 2017. Revenue for theyears ended December 31, 2018 and 2017 was related to the recognition of deferred revenue from services performed and payments received under theAbbVie collaboration.Operating Expenses Years Ended December 31, Change 2018 2017 $ % (dollars in thousands) Operating expenses: Research and development $38,034 $30,341 $7,693 25%General and administrative 15,716 $12,927 2,789 22%Total operating expenses $53,750 $43,268 $10,482 24% Research and Development ExpenseResearch and development expense was $38.0 million for the year ended December 31, 2018 compared to $30.3 million for the year ended December31, 2017. The increase of $7.7 million was primarily due to an increase of $3.2 million in clinical development costs associated with our SYNB1618program, primarily due to our Phase 1 / 2a clinical trial, $4.7 million in compensation, benefits and other employee-related expenses associated withincreased headcount and equity-based compensation, $1.2 million in expenses associated with external preclinical studies and $3.7 million of research anddevelopment support costs. Research and development support costs include increased rent and depreciation from our 301 Binney Street facility inCambridge, Massachusetts which we occupied in January 2018. These increases were partially offset by decreases of $1.8 million in equity-based charges and$0.3 million in patent related charges both associated with the MIT-BU license signed in April 2017, as well as a decrease of $1.6 million in manufacturingand formulation costs associated with our SYNB1020 and SYNB1618 programs and a decrease of $1.4 million in clinical development costs primarily relatedto our SYNB1020 program.67 General and Administrative ExpenseGeneral and administrative expense was $15.7 million for the year ended December 31, 2018 compared to $12.9 million for the year ended December31, 2017. The increase of $2.8 million was due primarily to an increase of $4.1 million in compensation, benefits and other employee-related expensesassociated with increased headcount and equity-based compensation, inclusive of $1.7 million equity-based compensation charges and $0.8 million ofseverance payments primarily related to the departure of our former Chief Executive Officer, as well as an increase of $0.5 million related to insurance andtaxes and $0.1 million in corporate fees related to our investments in marketable securities and public company activities, including filing fees. The increaseswere partially offset by a decrease of $1.1 million in legal fees associated with both corporate and patent legal expenses and a decrease in audit fees of$0.8 million.Other Income (Expense) Years Ended December 31, Change 2018 2017 $ % (dollars in thousands) Other income (expense): Interest and investment income $2,843 $504 $2,339 464%Interest expense (43) (57) 14 (25)%Other expense (5) — (5) N/A Other income (expense), net $2,795 $447 $2,348 525% Other income (expense) for the year ended December 31, 2018 was $2.8 million compared to $0.5 million for the corresponding period in 2017. Theincrease of $2.3 million was related to an increase in interest and investment income resulting from higher cash balances and higher interest rates generatedby our investment account. Additionally, interest expense decreased during the year as the capital leases established during 2017 were paid down. The netincrease was partially offset by an increase in other expense associated with foreign currency invoices. Liquidity and Capital ResourcesWe have incurred losses since our inception on March 14, 2014 and, as of December 31, 2018, we had an accumulated deficit of approximately $119.8million. We have financed our operations to date primarily through the sale of preferred stock, common stock, preferred units, payments received under ourAbbVie collaboration agreement, interest earned on investments, and cash received in the Merger. At December 31, 2018, we had approximately $122.7million in cash, cash equivalents, and marketable securities. Our cash and cash equivalents include amounts held in money market funds and corporate debtsecurities, stated at cost plus accrued interest, which approximates fair market value. Our available-for-sale securities include amounts held in corporate debtsecurities. We invest cash in excess of immediate requirements in accordance with our investment policy, which limits the amounts we may invest in any onetype of investment and requires all investments held by us to maintain minimum ratings from Nationally Recognized Statistical Rating Organizations so as toprimarily achieve liquidity and capital preservation.During the year ended December 31, 2018 our cash, cash equivalents and marketable securities balance increased approximately $35.7 million. Theincrease was primarily due to the net proceeds of $53.8 million from the sale of our common stock through a firm commitment, underwritten public offeringin January 2018 and $28.9 million in net proceeds from the registered direct sale of our common shares in April 2018. These increases were partially offset bythe cash used to operate our business, including payments related to, among other things, research and development and general and administrative expensesas we continue to invest in our primary drug candidates and support the development of our proprietary platform. We also made capital purchases and madepayments on our capital leases, net of transaction costs, received in the Merger. The increase was partially offset by the cash used to operate our business,including payments related to, among other things, research and development and general and administrative expenses as we continued to invest in ourprimary drug candidates and support the development of our proprietary platform.68 The following table sets forth the major sources and uses of cash for each of the periods below: Years ended December 31, 2018 2017 (in thousands) Net cash, cash equivalents and restricted cash (used in) provided by Operating activities $(42,470) $(31,055)Investing activities (87,201) 9,278 Financing activities 82,483 66,678 Net (decrease) increase in cash, cash equivalents and restricted cash $(47,188) $44,901 Cash Flows from Operating ActivitiesNet cash, cash equivalents and restricted cash used in operating activities totaled approximately $42.5 million for the year ended December 31, 2018.The primary use of cash was our net loss of approximately $48.4 million and an increase in working capital of $0.6 million, primarily related to decreases inaccounts payable and accrued expenses and deferred revenue offset by an increase in deferred rent from our 301 Binney Street facility. Net loss was partiallyoffset by $5.3 million of non-cash items primarily including depreciation and equity-based compensation.Net cash, cash equivalents and restricted cash used in operating activities totaled approximately $31.1 million for the year ended December 31, 2017.The primary use of cash was our net loss of approximately $40.4 million. These uses of cash were partially offset by non-cash items of approximately $6.7million including equity-based compensation, depreciation and equity-based costs associated with the execution of a license agreement and approximately$2.6 million in working capital, primarily from increases in accounts payable and accrued expenses and decreases in deferred rent associated with theacceleration of recognition due to the 200 Sidney Street lease termination.Cash Flows from Investing ActivitiesNet cash, cash equivalents and restricted cash used in investing activities for the year ended December 31, 2018 totaled approximately $87.2 millionand resulted primarily from the purchases of securities of $172.9 million and the purchases of property and equipment of $5.7 million. These uses werepartially offset by proceeds from the maturity of marketable securities of $91.3 million.Net cash, cash equivalents and restricted cash provided by investing activities for the year ended December 31, 2017 totaled approximately $9.3million and resulted from the $40.4 million in net proceeds received in the Merger and the proceeds from the maturity of marketable securities of $22.9million. These proceeds were partially offset by uses of cash including the purchase of securities of $51.4 million and purchases of property and equipment of$2.6 million, including deposits related to the construction of leasehold improvements associated with the new facilities lease.Cash Flows from Financing ActivitiesNet cash, cash equivalents and restricted cash provided by financing activities for the year ended December 31, 2018 totaled approximately $82.5million and resulted primarily from $53.8 million in net proceeds from the sale of our common stock through a firm commitment, underwritten publicoffering in January 2018, $28.9 million in net proceeds from the sale of our common stock in April 2018 and proceeds from exercises of stock options of $0.2million, partially offset by $0.4 million in payments on our capital leases.Net cash, cash equivalents and restricted cash provided by financing activities for the year ended December 31, 2017 totaled approximately $66.7million and resulted primarily from the net proceeds from the sale of Class B preferred units in March 2017 of $26.6 million and $40.4 million in netproceeds from the sale of Series C preferred stock in May 2017. These sources of cash were partially offset by $0.4 million of payments on our capital leases.69 Funding RequirementsTo date, we have not commercialized any products and have not achieved profitability. We anticipate that we will continue to incur substantial netlosses for the next several years as we further develop our product candidates, invest in our proprietary platform technology and operate as a publicly tradedcompany.We have generated revenue from our AbbVie collaboration, but have not generated any product revenue since our inception and do not expect togenerate any product revenue unless we receive regulatory approval for our product candidates. We believe that our cash on hand as of December 31, 2018will be sufficient to meet our anticipated cash requirements for at least the next 12 months from the date of this filing. Our forecast of the period of timethrough which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, andactual results could vary materially and negatively as a result of a number of factors, including the factors discussed in the section entitled “Risk Factors” inthis Annual Report on Form 10-K. We have based our estimates on assumptions that may prove to be wrong, and we could utilize our available capitalresources sooner than we currently expect.Due to the numerous risks and uncertainties associated with the development of our product candidates, we are unable to estimate precisely theamounts of capital outlays and operating expenditures necessary to complete the development of, and to obtain regulatory approval for, our productcandidates. Our funding requirements will depend on many factors, including, but not limited to, the following: •the success of our research and development efforts; •the initiation, progress, timing, costs and results of clinical trials for our product candidates; •the time and costs involved in obtaining regulatory approvals for our product candidates; •the progress, timing and costs involved in developing manufacturing processes and agreements with third-party manufacturers; •the rate of progress and cost of our commercialization activities; •the expenses we incur in marketing and selling our product candidates; •the revenue generated by sales of our product candidates; •the emergence of competing or complementary technological developments; •the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; •the terms and timing of any additional collaborative, licensing or other arrangements that we may establish; •the acquisition of businesses, products and technologies; •our need to implement additional infrastructure and internal systems; and •our need to add personnel and financial and management information systems to support our product development and potential futurecommercialization efforts, and to enable us to operate as a public company.As an early-stage company, we are subject to a number of risks common to other life science companies, including, but not limited to, the ability toraise additional capital, development by our competitors of new technological innovations, risk of failure in preclinical studies, the safety and efficacy of ourproduct candidates in clinical trials, the regulatory approval process, the ability to efficiently manufacture our products, market acceptance of our productsonce approved, lack of marketing and sales history, dependence on key personnel and protection of proprietary technology. Our therapeutic programs arecurrently pre-commercial, spanning discovery through early development and will require significant additional research and development efforts, includingextensive preclinical and clinical testing and regulatory approval prior to commercialization of any product candidates. These efforts require significantamounts of additional capital, adequate personnel infrastructure and extensive compliance-reporting capabilities. There can be no assurance that our researchand development will be successfully completed, that adequate protection for our intellectual property will be obtained, that any products developed willobtain necessary regulatory approval or that any approved products will be commercially viable. Even if our product development efforts are successful, it isuncertain when, if ever, we will generate revenue from product sales. We may never achieve profitability, and unless and until we do, we will continue toneed to raise additional capital or obtain financing from other sources, such as strategic collaborations or partnerships. If we cannot expand our operations orotherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition and results of operations could bematerially adversely affected.70 Contractual Commitments and ObligationsOur commitments for operating leases relate to our lease of office and laboratory space at 301 Binney Street in Cambridge, Massachusetts. In July 2017, we entered into an agreement to lease approximately 41,346 square feet of laboratory and office space at 301 Binney Street inCambridge, Massachusetts. Annual rent is approximately $3.1 million. The ten-year lease commenced in January 2018 and contains provisions for a free-rentperiod, annual rent increases and an allowance for tenant improvements. Additionally, we have paid for a tenant improvement investment of approximately$1.6 million. In conjunction with the lease, we established a letter of credit of approximately $1.0 million.On December 7, 2018, Synlogic Operating Company, Inc., a wholly-owned subsidiary of Synlogic, Inc. (the “Company”), entered into a Statement ofWork (the “SOW”) with Azzur Group, LLC (“Azzur”) pursuant to a Master Contract Services Agreement (the “Master Services Agreement”), dated September8, 2018, between the Company and Azzur.Pursuant to the SOW, Azzur has agreed to provide the Company with access to, and the use of, an approximately 700 square foot cleanroom space tobe constructed in Waltham, Massachusetts (the “Azzur Suite”), for a period of 44 months, from May 1, 2019 to December 31, 2022 (the “Term”). Azzur hasalso agreed to provide the Company with storage space and personnel support at the Azzur Suite. The total estimated project cost during the Term for accessto, and use of, the cleanroom and storage space, and the personnel support and other services, is $4.8 million.The Company may terminate the SOW on four months’ prior written notice at any time during the Term. In addition, either party may terminate theMaster Services Agreement (including the SOW) due to a breach by the other party and failure to cure. If the Azzur Suite is not ready for use by the Companyas of May 1, 2019, the Company may (i) elect to terminate the SOW, (ii) wait for the Azzur Suite to become available, without incurring any costs (other thana deposit) relating to the Azzur Suite until it becomes available, or (iii) accept an alternate cleanroom space from Azzur on different terms.As we are a clinical stage company, having entered the clinic for our first Phase 1 clinical trial in June 2017, we expect our most significant clinicaltrial expenditures will be with CROs and CMOs. These contracts generally are cancellable, with notice, at our option and do not have cancellation penalties. Off-Balance Sheet ArrangementsWe do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance orspecial purpose entities, that would have been established for the purpose of facilitating off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) or other contractually narrow or limited purposes. As such, we are not exposed to any financing, liquidity, market or credit riskthat could arise if we had engaged in those types of relationships. We enter into guarantees in the ordinary course of business related to the guarantee of ourperformance and the performance of our subsidiaries.JOBS ActSection 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided inSection 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoptionof certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of thisextended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards isrequired for other companies.Recent Accounting PronouncementsPlease read Note 2, “Summary of Significant Accounting Policies” to the consolidated financial statements included elsewhere in this Annual Reporton Form 10-K.71 Item 7A. Quantitative and Qualitative Disclosures About Market Risk.Interest Rate RiskWe are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide this information required under thisitem.Item 8. Consolidated Financial Statements and Supplementary Data.Our consolidated financial statements, together with the independent registered public accounting firm report thereon, appear at pages F-1 through F-37, respectively, of this Annual Report on Form 10-K.Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.None.Item 9A. Controls and Procedures.Definition and limitations of disclosure controlsOur disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (theExchange Act) are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed under the ExchangeAct, such as this report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controlsand procedures are also designed to ensure that such information is accumulated and communicated to our management, including our principal executiveofficer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluates these controls andprocedures on an ongoing basis.There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. These limitations include the possibility ofhuman error, the circumvention or overriding of the controls and procedures and reasonable resource constraints. In addition, because we have designed oursystem of controls based on certain assumptions, which we believe are reasonable, about the likelihood of future events, our system of controls may notachieve its desired purpose under all possible future conditions. Accordingly, our disclosure controls and procedures provide reasonable assurance, but notabsolute assurance, of achieving their objectives.Evaluation of Disclosure Controls and ProceduresOur principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as definedin Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Form 10-K, have concluded that, based on such evaluation, ourdisclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under theExchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated andcommunicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriateto allow timely decisions regarding required disclosure.Changes in Internal ControlOther than discussed below, there have not been any changes in our internal controls over financial reporting identified in connection with theevaluation of such internal control that occurred during our fiscal quarter ended December 31, 2018 that have materially affected, or are reasonably likely tomaterially affect, our internal controls over financial reporting.72 Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and15d-15(f) under the Exchange Act, as amended. Because of its inherent limitations, internal control over financial reporting may not prevent or detectmisstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changesin conditions, or that the degree of compliance with the policies or procedures may deteriorate.Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2018. In making this assessment,management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-IntegratedFramework. Based on our assessment, management believes that, as of December 31, 2018, our internal control over financial reporting is effective based onthose criteria. Inherent Limitations on the Effectiveness of ControlsA control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the controlsare met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues ormisstatements, if any, within a company have been detected. Accordingly, our controls and procedures are designed to provide reasonable, not absolute,assurance that the objectives of our control system are met. Projections of any evaluation of effectiveness to future periods are subject to the risk that controlsmay become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.Item 9B. Other Information.None. 73 PART IIIItem 10. Directors, Executive Officers and Corporate Governance.The response to this item is incorporated by reference from the discussion responsive thereto under the captions “Management and CorporateGovernance Matters,” “Section 16(a) Beneficial Ownership Reporting Compliance,” and “Code of Conduct and Ethics” in the Company’s Proxy Statementfor the 2019 Annual Meeting of Stockholders.Item 11. Executive Compensation.The response to this item is incorporated by reference from the discussion responsive thereto under the caption “Executive Officer and DirectorCompensation” in the Company’s Proxy Statement for the 2019 Annual Meeting of Stockholders.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.The response to this item is incorporated by reference from the discussion responsive thereto under the caption “Security Ownership of CertainBeneficial Owners and Management” in the Company’s Proxy Statement for the 2019 Annual Meeting of Stockholders.Item 13. Certain Relationships and Related Transactions, and Director Independence.The response to this item is incorporated by reference from the discussion responsive thereto under the captions “Certain Relationships and RelatedPerson Transactions” and “Management and Corporate Governance” in the Company’s Proxy Statement for the 2019 Annual Meeting of Stockholders.Item 14. Principal Accounting Fees and Services.The response to this item is incorporated by reference from the discussion responsive thereto under the caption “Independent Registered PublicAccounting Firm” in the Company’s Proxy Statement for the 2019 Annual Meeting of Stockholders. 74 PART IVItem 15. Exhibits, Financial Statement Schedules.Item 15(a).The following documents are filed as part of this Annual Report on Form 10-K:Item 15(a)(1) and (2)See “Consolidated Financial Statements and Supplementary Data” at Item 8 to this Annual Report on Form 10-K. Otherfinancial statement schedules have not been included because they are not applicable, or the information is included in the financial statements or notesthereto. Item 15(a)(3)The following exhibits are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K.Exhibit Index ExhibitNumber Exhibit Description Filedwith thisReport Incorporated byReference hereinfrom Form orSchedule FilingDate SECFile/Reg.Number 2.1^ Agreement and Plan of Merger and Reorganization, dated as of May 15, 2017,by and among Mirna Therapeutics, Inc., Meerkat Merger Sub, Inc. andSynlogic, Inc. 8-K(Exhibit 2.1) 5/16/2017 001-37566 3.1 Amended and Restated Certificate of Incorporation 8-K(Exhibit 3.1) 10/6/2015 001-37566 3.2 Certificate of Amendment (Reverse Stock Split) to the Amended and RestatedCertificate of Incorporation, dated August 25, 2017 8-K(Exhibit 3.1) 8/28/2017 001-37566 3.3 Certificate of Amendment (Name Change) to the Amended and RestatedCertificate of Incorporation 8-K(Exhibit 3.2) 8/28/2017 001-37566 3.4 Amended and Restated Bylaws 8-K(Exhibit 3.2) 10/6/2015 001-37566 4.1 Form of Common Stock Certificate S-1/A(Exhibit 4.2) 9/18/2015 333-206544 10.1# 2015 Equity Incentive Award Plan 10-K(Exhibit 10.1) 3/20/2018 001-37566 10.2# Form of Stock Option Grant Notice and Stock Option Agreement under the2015 Equity Incentive Award Plan. S-1/A(Exhibit 10.9(B)) 9/11/2015 333-206544 10.3# Form of Restricted Stock Award Agreement and Restricted Stock Unit AwardGrant Notice under the 2015 Equity Incentive Award Plan. S-1/A(Exhibit 10.9(C)) 9/11/2015 333-206544 10.4# 2017 Stock Incentive Plan 10-K(Exhibit 10.4) 3/20/2018 001-37566 10.5# Form of Stock Option Grant Notice and Stock Option Agreement under 2017Stock Incentive Plan. 10-Q(Exhibit 10.17) 11/13/2017 00-37566 10.6# Non‑Employee Director Compensation Program. 10-K(Exhibit 10.6) 3/20/2018 001-37566 10.7# Form of Indemnification Agreement between the Company and each of itsdirectors and officers S-1/A(Exhibit 10.13) 9/11/2015 333-206544 10.8# Offer Letter by and between Synlogic and Jose Carlos Gutierrez-Ramos, Ph.D.,dated as of March 20, 2015 8-K(Exhibit 10.2) 8/28/2017 001-3756675 10.9# First Amendment to Offer Letter by and between Synlogic and Jose CarlosGutierrez-Ramos, Ph.D., dated as of May 8, 2017 8-K(Exhibit 10.3) 8/28/2017 001-37566 10.10# Letter Agreement dated as of May 9, 2018, between Synlogic, Inc. and Jose-Carlos Gutiérrez-Ramos 10-Q(Exhibit 10.2) 5/15/2018 001-37566 10.11# Amendment to Option Agreements dated as of June 5, 2018, betweenSynlogic, Inc. and Jose-Carlos Gutiérrez-Ramos 10-Q(Exhibit 10.2) 8/9/2018 001-37566 10.12# Offer Letter by and between Synlogic and Todd Shegog, dated as of June 17,2016 8-K(Exhibit 10.4) 8/28/2017 001-37566 10.13# First Amendment to Offer Letter by and between Synlogic and Todd Shegog,dated as of May 8, 2017 8-K(Exhibit 10.5) 8/28/2017 001-37566 10.14# Offer Letter by and between Synlogic and Aoife M. Brennan, MB, BCh, BAO,MMSc, dated as of June 22, 2016 8-K(Exhibit 10.6) 8/28/2017 001-37566 10.15# First Amendment to Offer Letter by and between Synlogic and Aoife M.Brennan, MB, BCh, BAO, MMSc, dated as of November 7, 2016 8-K(Exhibit 10.7) 8/28/2017 001-37566 10.16# Second Amendment to Offer Letter by and between Synlogic and Aoife M.Brennan, MB, BCh, BAO, MMSc, dated as of May 8, 2017 8-K(Exhibit 10.8) 8/28/2017 001-37566 10.17# Third Amendment to Offer Letter dated as of June 5, 2018, between Synlogic,Inc. and Aoife Brennan, MB, BCh, BAO, MMSc 10-Q(Exhibit 10.1) 8/9/2018 001-37566 10.18# Amended and Restated Letter Agreement by and between Synlogic, Inc. andAoife M. Brennan, MB, BCh, BAO, MMSc, dated as of October 1, 2018 10-Q(Exhibit 10.1) 11/13/2018 001-37566 10.19# Amended and Restated Letter Agreement by and between Paul Miller, Ph.D.,dated as of May 16, 2017 8-K(Exhibit 10.9) 8/28/2017 001-37566 10.20# Employment Agreement, dated as of September 4, 2017, by and between theCompany and Andrew W. Gengos. 8-K(Exhibit 10.1) 10/10/2017 001-37566 10.21# Separation Agreement by and between the Company and Paul Lammers, datedas of August 20, 2017. 8-K(Exhibit 10.10) 8/28/2017 001-37566 10.22# Separation Agreement by and between the Company and Alan Fuhrman, datedas of August 20, 2017. 8-K(Exhibit 10.11) 8/28/2017 001-37566 10.23†^ Agreement and Plan of Merger by and among AbbVie S.à.r.l., Suffolk MergerSub, Inc., Synlogic IBDCo, Inc., Synlogic, LLC, Synlogic, Inc. and thefounders named therein, dated as of July 16, 2015; as amended by a FirstAmendment to Agreement and Plan of Merger, dated as of December 14, 2015 8-K(Exhibit 10.12) 8/28/2017 001-37566 10.24†^ Second Amendment to Agreement and Plan of Merger by and among AbbVieS.à.r.l., Synlogic IBDCo, Inc. and Synlogic Operating Company, Inc., dated asof September 27, 2018 10-Q(Exhibit 10.2) 11/13/2018 001-37566 10.25†^ Third Amendment to Agreement and Plan of Merger and First Amendment toLicense Agreement by and among AbbVie S.à.r.l., Synlogic IBDCo, Inc. andSynlogic Operating Company, Inc., dated as of December 18, 2018 X 76 10.26† License Agreement by and between Synlogic, Inc. and Synlogic IBDCo, Inc.,dated as of July 16, 2015 8-K(Exhibit 10.13) 8/28/2017 001-37566 10.27 Sales Agreement, dated as of October 13, 2017 by and between the registrantand Cowen and Company, LLC 8-K(Exhibit 1.1) 10/16/2017 001-37566 10.28 Form of Subscription Agreement, dated as of April 6, 2018, by and amongSynlogic, Inc. and certain investors. 8-K(Exhibit 10.1) 4/6/2018 001-37566 10.29† Master Contract Services Agreement, dated as of September 8, 2018, betweenSynlogic, Inc. and Azzur Group (d/b/a Azzur of New England LLC). X 10.30† Statement of Work dated September 10, 2018 pursuant to Master ContractServices Agreement between Synlogic, Inc. and Azzur Group (d/b/a Azzur ofNew England LLC). X 10.31† Statement of Work dated December 7, 2018 pursuant to Master ContractServices Agreement between Synlogic, Inc. and Azzur Group (d/b/a Azzur ofNew England LLC). X 21.1 Subsidiaries of the registrant X 23.1 Consent of Independent Registered Accounting Firm X 24.1 Power of Attorney (included in the signature page hereto) X 31.1 Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule15d-14(a). X 31.2 Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule15d-14(a). X 32.1 Certification required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350). X 32.2 Certification required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350). X 101.INS XBRL Instance Document X 101.SCH XBRL Taxonomy Extension Schema Document X 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB XBRL Taxonomy Extension Label Linkbase Document X 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document X ^The schedules and exhibits to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/orexhibit will be furnished to the SEC upon request.#Management contract or compensatory plans or arrangements.†Confidential treatment has been requested or granted as to certain portions, which portions have been omitted and filed separately with the SEC.Item 16. Form 10-K Summary.None.77 SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed onits behalf by the undersigned, thereunto duly authorized. Synlogic, Inc. Date: March 12, 2019 By:/s/ Aoife Brennan Aoife Brennan President, Chief Executive Officer and Chief Medical Officer(Principal Executive Officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of AoifeBrennan and Todd Shegog his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any andall capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents inconnection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do andperform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could doin person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitutes or substitute, may lawfully do or cause to be doneby virtue hereof. IN WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney as of the date indicated opposite his name.Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of theregistrant in the capacities indicated below and on the dates indicated. Name Title Date /s/ Aoife Brennan President, Chief Executive Officer, Chief Medical Officer andDirector March 12, 2019Aoife Brennan (Principal Executive Officer) /s/ Todd Shegog Chief Financial Officer March 12, 2019Todd Shegog (Principal Financial Officer and Principal Accounting Officer) /s/ Peter Barrett Peter Barrett Chairman of the Board March 12, 2019 /s/ Patricia hurter Patricia Hurter Director March 12, 2019 /s/ Chau Khuong Chau Khuong Director March 12, 2019 /s/ Nick Leschly Nick Leschly Director March 12, 2019 /s/ Edward Mathers Edward Mathers Director March 12, 2019 /s/ Michael Powell Michael Powell Director March 12, 2019 /s/ Richard P. Shea Richard P. Shea Director March 12, 2019 78 Index to Consolidated Financial Statements of Synlogic, Inc. Report of Independent Registered Public Accounting FirmF-1Consolidated Balance SheetsF-2Consolidated Statements of Operations and Comprehensive LossF-3Consolidated Statements of Contingently Redeemable Preferred Equity and Stockholders’ EquityF-4Consolidated Statements of Cash FlowsF-7Notes to Consolidated Financial StatementsF-8  Report of Independent Registered Public Accounting FirmTo the Stockholders and Board of DirectorsSynlogic, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of Synlogic, Inc. and subsidiaries (the Company) as of December 31, 2018 and 2017, therelated consolidated statements of operations and comprehensive loss, contingently redeemable preferred equity and stockholders’ equity, and cash flows forthe years then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements presentfairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows forthe years then ended, in conformity with U.S. generally accepted accounting principles.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theseconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated 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 such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosuresin the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ KPMG LLP We have served as the Company’s auditor since 2015.Cambridge, MassachusettsMarch 12, 2019 F-1 SYNLOGIC, INC. AND SUBSIDIARIESConsolidated Balance Sheets(In thousands, except share amounts) December 31, December 31, 2018 2017 Assets Current assets: Cash and cash equivalents $11,252 $58,440 Short-term marketable securities 111,477 28,585 Prepaid expenses and other current assets 1,609 1,564 Total current assets 124,338 88,589 Property and equipment, net 14,841 9,783 Restricted cash 1,097 1,097 Other assets 64 230 Total assets $140,340 $99,699 Liabilities, Contingently Redeemable Preferred Equity and Stockholders' Equity Current liabilities: Accounts payable $2,380 $2,679 Accrued expenses 5,034 4,823 Deferred revenue 268 444 Deferred rent 393 656 Capital lease obligations 266 425 Total current liabilities 8,341 9,027 Long-term liabilities: Deferred revenue, net of current portion — 668 Deferred rent, net of current portion 7,691 4,500 Capital lease obligations, net of current portion 210 466 Total long-term liabilities 7,901 5,634 Commitments and contingencies (Note 18) Stockholders' Equity Preferred stock, $0.001 par value 5,000,000 shares authorized, none issued and outstanding as of December 31, 2018 and December31, 2017 — — Common stock, $0.001 par value 250,000,000 shares authorized as of December 31, 2018 and December 31, 2017. 25,401,479shares issued and outstanding as of December 31, 2018 and 16,272,617 shares issued andoutstanding as of December 31, 2017. 25 16 Additional paid-in capital 243,903 156,685 Accumulated other comprehensive loss (65) (9)Accumulated deficit (119,765) (71,654)Total stockholders' equity 124,098 85,038 Total liabilities and stockholders' equity $140,340 $99,699 See accompanying notes to the consolidated financial statements. F-2 SYNLOGIC, INC. AND SUBSIDIARIESConsolidated Statements of Operations and Comprehensive Loss(In thousands, except share and per share amounts) Years ended December 31, 2018 2017 Revenue $2,520 $2,444 Operating expenses: Research and development 38,034 30,341 General and administrative 15,716 12,927 Total operating expenses 53,750 43,268 Loss from operations (51,230) (40,824) Other income (expense): Interest and investment income 2,843 504 Interest expense (43) (57) Other expense (5) — Other income (expense), net 2,795 447 Net loss $(48,435) $(40,377) Net loss per share attributable to common shareholders - basic and diluted $(2.03) $(6.00) Weighted-average common shares used in computing net loss per share attributable to commonshareholders - basic and diluted 23,882,685 6,724,641 Comprehensive loss: Net loss $(48,435) $(40,377) Net unrealized losses on marketable securities (56) (9) Comprehensive loss $(48,491) $(40,386) See accompanying notes to the consolidated financial statements. F-3 SYNLOGIC, INC. AND SUBSIDIARIESConsolidated Statements of Contingently Redeemable Preferred Equity and Stockholders’ Equity(In thousands, except share and unit amounts) Contingently redeemable Contingently redeemable Class A Class B Class A preferred Series A preferred preferred preferred units stock units units Units Amount Shares Amount Units Amount Units Amount Balance at December 31, 2016 781,693 $5,000 — — 3,922,027 $25,548 1,029,850 $13,611 Sale of Class B preferred units, net ofissuance costs of $18 — — — — — — 1,971,717 26,648 Issuance of common stock for licenseagreement — — — — — — — — Repurchase of founders' units — — — — — — — — Exchange of preferred and common unitsinto preferred and common stock (781,693) (5,000) 781,693 5,000 (3,922,027) (25,548) (3,001,567) (40,259)Sale of Class C preferred stock, net ofissuance costs of $1,567 — — — — — — — — Convertible preferred stock andcontingently redeemable preferred stockexchanged for common stock — — (781,693) (5,000) — — — — Common stock ($.0001 par) exchanged forcommon stock ($.001 par) — — — — — — — — Issuance of common stock in the Merger — — — — — — — — Exercise of stock options — — — — — — — — Issuance of restricted stock — — — — — — — — Cancellation of restricted stock — — — — — — — — Equity-based compensation expense — — — — — — — — Effect of adoption of ASU 2016-09 — — — — — — — — Unrealized gain/(loss) on securities — — — — — — — — Net loss — — — — — — — — Balance at December 31, 2017 — $— — $— — $— — $— Effect of adoption of ASU 2014-09 (ASC606) — — — — — — — — Sale of common stock — — — — — — — — Exercise of options — — — — — — — — Cancellation of restricted stock — — — — — — — — Equity-based compensation expense — — — — — — — — Unrealized gain/(loss) on securities — — — — — — — — Net loss — — — — — — — — Balance at December 31, 2018 — $— — $— — $— — $— See accompanying notes to the consolidated financial statements.F-4 SYNLOGIC, INC. AND SUBSIDIARIESConsolidated Statements of Contingently Redeemable Preferred Equity and Stockholders’ Equity (continued)(In thousands, except share and unit amounts) Series A Series B Series C convertible preferred convertible preferred convertible preferred Common units stock stock stock Units Amount Shares Amount Shares Amount Shares Amount Balance at December 31, 2016 1,847,615 $592 — — — — — — Sale of Class B preferred units, net of issuancecosts of $18 — — — — — — — — Issuance of common stock for licenseagreement 179,996 1,750 — — — — — — Repurchase of founders' units (7,244) — — — — — — — Exchange of preferred and common units intopreferred and common stock (2,020,367) (2,342) 3,922,027 25,548 3,001,567 40,259 — — Sale of Class C preferred stock, net of issuancecosts of $1,567 — — — — — — 2,882,679 40,433 Convertible preferred stock and contingentlyredeemable preferred stock exchanged forcommon stock — — (3,922,027) (25,548) (3,001,567) (40,259) (2,882,679) (40,433)Common stock ($.0001 par) exchanged forcommon stock ($.001 par) — — — — — — — — Issuance of common stock in the Merger — — — — — — — — Exercise of stock options — — — — — — — — Issuance of restricted stock — — — — — — — — Cancellation of restricted stock — — — — — — — — Equity-based compensation expense — — — — — — — — Effect of adoption of ASU 2016-09 — — — — — — — — Unrealized gain/(loss) on securities — — — — — — — — Net loss — — — — — — — — Balance at December 31, 2017 — $— — $— — $— — $— Effect of adoption of ASU 2014-09 (ASC 606) — — — — — — — — Sale of common stock — — — — — — — — Exercise of options — — — — — — — — Cancellation of restricted stock — — — — — — — — Equity-based compensation expense — — — — — — — — Unrealized gain/(loss) on securities — — — — — — — — Net loss — — — — — — — — Balance at December 31, 2018 — $— — $— — $— — $— See accompanying notes to the consolidated financial statements.F-5 SYNLOGIC, INC. AND SUBSIDIARIESConsolidated Statements of Contingently Redeemable Preferred Equity and Stockholders’ Equity (continued)(In thousands, except share and unit amounts) Common stock Common stock Additional Unrealized $0.0001 par $0.001 par paid-in gain/(loss) Accumulated Total Shares Amount Shares Amount capital on securities deficit equity Balance at December 31, 2016 — — — — — — $(31,248) $8,503 Sale of Class B preferred units, net ofissuance costs of $18 — — — — — — — 26,648 Issuance of common stock for licenseagreement — — — — — — — 1,750 Repurchase of founders' units — — — — — — — — Exchange of preferred and common unitsinto preferred and common stock 2,020,367 — — — 2,342 — — — Sale of Class C preferred stock, net ofissuance costs of $1,567 — — — — — — — 40,433 Convertible preferred stock andcontingently redeemable preferred stockexchanged for common stock — — 10,587,966 10 111,230 — — 5,000 Common stock ($.0001 par) exchanged forcommon stock ($.001 par) (2,714,694) — 2,714,694 3 (3) — — — Issuance of common stock in the Merger — — 2,979,836 3 40,430 — — 40,433 Exercise of stock options — — 386 — 5 — — 5 Issuance of restricted stock 697,292 — 2,884 — — — — — Cancellation of restricted stock (2,965) — (13,149) — — — — — Equity-based compensation expense — — — — 2,652 — — 2,652 Effect of adoption of ASU 2016-09 — — — — 29 — (29) — Unrealized gain/(loss) on securities — — — — — (9) — (9)Net loss — — — — — — (40,377) (40,377)Balance at December 31, 2017 — $— 16,272,617 $16 $156,685 $(9) $(71,654) $85,038 Effect of adoption of ASU 2014-09 (ASC606) — — — — — — 324 324 Sale of common stock — — 9,179,500 9 82,657 — — 82,666 Exercise of options — — 19,830 — 244 — — 244 Cancellation of restricted stock — — (70,468) — — — — — Equity-based compensation expense — — — — 4,317 — — 4,317 Unrealized gain/(loss) on securities — — — — — (56) — (56)Net loss — — — — — — (48,435) (48,435)Balance at December 31, 2018 — $— 25,401,479 $25 $243,903 $(65) $(119,765) $124,098 See accompanying notes to the consolidated financial statements. F-6 SYNLOGIC, INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows(In thousands) Year EndedDecember 31, Year EndedDecember 31, 2018 2017 Cash flows from operating activities: Net loss $(48,435) $(40,377)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 2,421 2,310 Loss on disposal of property and equipment 8 5 Equity-based compensation expense 4,317 2,652 Common shares issued for license acquisition — 1,750 Accretion/amortization of investment securities (1,401) (6)Changes in operating assets and liabilities: Prepaid expenses and other current assets (45) (87)Accounts payable and accrued expenses (257) 4,071 Deferred revenue (520) (444)Deferred rent 1,274 (1,121)Other assets 168 192 Net cash, cash equivalents and restricted cash used in operating activities (42,470) (31,055)Cash flows from investing activities: Net assets acquired in reverse merger, net of transaction costs — 40,433 Purchases of marketable securities (172,887) (51,438)Proceeds from maturity of marketable securities 91,340 22,850 Proceeds from sale of property and equipment — 11 Purchases of property and equipment (5,654) (2,578)Net cash, cash equivalents and restricted cash (used in) provided by investing activities (87,201) 9,278 Cash flows from financing activities: Payments on capital lease obligations (427) (408)Proceeds from exercise of stock options 244 5 Proceeds from sale of common stock, net of issuance costs 82,666 — Proceeds from sale of convertible preferred stock, net of issuance costs — 40,433 Proceeds from sale of preferred units, net of issuance costs — 26,648 Net cash, cash equivalents and restricted cash provided by financing activities 82,483 66,678 Net (decrease) increase in cash, cash equivalents and restricted cash (47,188) 44,901 Cash, cash equivalents and restricted cash at beginning of period 59,537 14,636 Cash, cash equivalents and restricted cash at end of period $12,349 $59,537 Supplemental disclosure of non-cash investing activities: Landlord funded allowance for tenant improvements $1,654 $4,961 Property and equipment purchases included in accounts payable and accrued expenses $169 $147 Supplemental disclosure of non-cash financing activities: Cash paid for interest $43 $35 Purchase under capital lease $12 $918 Prior period adjustment related to the adoption of ASU 2016-09 $— $29 See accompanying notes to the consolidated financial statements. F-7 SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements(1)Nature of BusinessOrganizationSynlogic, Inc., together with its wholly owned and consolidated subsidiaries (“Synlogic” or the “Company”), is a clinical-stage biopharmaceuticalcompany focused on advancing its drug discovery and development platform for Synthetic Biotic™ medicines. Synthetic Biotic medicines are generatedfrom Synlogic’s proprietary drug discovery and development platform applying the principles and tools of synthetic biology to engineer beneficial microbesto perform or deliver critical therapeutic functions to treat metabolic and inflammatory diseases and cancer. As living medicines, Synthetic Biotic medicinescan be designed to sense a local disease context within a patient’s body and to respond by metabolizing a toxic substance, compensating for missing ordamaged metabolic pathways in patients, or by delivering combinations of therapeutic factors. Synlogic’s goal is to lead in the discovery and developmentof Synthetic Biotic therapies as living medicines capable of robust and precise pathway complementation and delivery of therapeutic benefit. Sinceincorporation, the Company has devoted substantially all of its efforts to the research and development of its product candidates.Synlogic, Inc. (“Private Synlogic” when referred to prior to the Merger (as defined below)) was founded and began operations on March 14, 2014, asTMC Therapeutics, Inc., located in Cambridge, Massachusetts. On July 15, 2014, TMC Therapeutics, Inc. changed its name to Synlogic, Inc. On July 2, 2015,the common and preferred stockholders of Private Synlogic executed the Synlogic, LLC Contribution Agreement (the “Contribution Agreement”), pursuantto which such common and preferred stockholders contributed such stockholders’ equity interests in Private Synlogic in exchange for common and preferredunits in a newly formed parent company named Synlogic, LLC. In addition, Synlogic IBDCo, Inc. (“IBDCo”) was formed as a subsidiary of Synlogic, LLC(the “2015 Reorganization”). In conjunction with the 2015 Reorganization, Private Synlogic entered into a license, option and merger agreement withAbbVie S.à.r.l. (“AbbVie”), for the development of treatments for inflammatory bowel disease (“IBD”).In May 2017, Private Synlogic completed a reorganization (“2017 Reorganization”) pursuant to which Synlogic, LLC merged with and into PrivateSynlogic, with Private Synlogic continuing as the surviving corporation. Pursuant to the 2017 Reorganization, the common units and preferred units ofSynlogic, LLC, together consisting of Class A preferred units, contingently redeemable Class A preferred units and Class B preferred units, were exchangedfor common stock and preferred stock of Private Synlogic, respectively. Additionally, Private Synlogic issued equity awards under the Synlogic 2017 StockIncentive Plan (“2017 Plan”) to replace the canceled incentive units pursuant to the termination of the Synlogic, LLC 2015 Equity Incentive Plan (“2015LLC Plan”).On August 28, 2017, Synlogic, Inc., formerly known as Mirna Therapeutics, Inc. (NASDAQ: MIRN) (“Mirna”), completed its business combinationwith Private Synlogic pursuant to the Agreement and Plan of Merger and Reorganization, dated as of May 15, 2017, by and among Mirna, Meerkat MergerSub, Inc. (“Merger Sub”), and Private Synlogic (the “Merger Agreement”), pursuant to which Merger Sub merged with and into Private Synlogic, with PrivateSynlogic surviving as a wholly owned subsidiary of Mirna (the “Merger”). Immediately after completion of the Merger, Mirna changed its name to“Synlogic, Inc.” (NASDAQ: SYBX).Risks and UncertaintiesAt December 31, 2018, the Company had approximately $122.7 million in cash, cash equivalents, and marketable securities, approximately $1.1million of restricted cash, and an accumulated deficit of approximately $119.8 million. Since its inception through December 31, 2018, the Company hasprimarily financed its operations through the issuance of preferred stock and units, the sale of its common stock, the AbbVie collaboration, and cash receivedin the Merger. In the absence of positive cash flows from operations, the Company is highly dependent on its ability to find additional sources of funding inthe form of debt or equity financing. In January 2018, the Company sold shares of its common stock in a firm commitment, underwritten public offering andreceived $53.8 million in net proceeds from this offering, after underwriting discounts and commissions and other offering expenses. In April 2018, theCompany sold shares of its common stock in a registered direct offering and received $28.9 million in net proceeds from this offering, after fees and otherexpenses. Management believes that the Company has sufficient cash to fund its operations through at least twelve months from the issuance of thesefinancial statements.F-8SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) As an early-stage company, the Company is subject to a number of risks common to other life science companies, including, but not limited to, raisingadditional capital, development by its competitors of new technological innovations, risk of failure in preclinical and clinical studies, safety and efficacy ofits product candidates in clinical trials, the risk of relying on external parties such as contract research organizations (“CROs”) and contract manufacturingorganizations (“CMOs”), the regulatory approval process, market acceptance of the Company’s products once approved, lack of marketing and sales history,dependence on key personnel and protection of proprietary technology. The Company’s therapeutic programs are currently pre-commercial, spanningdiscovery through early development and will require significant additional research and development efforts, including extensive preclinical and clinicaltesting and regulatory approval, prior to commercialization of any product candidates. These efforts require significant amounts of additional capital,adequate personnel, infrastructure, and extensive compliance-reporting capabilities. There can be no assurance that the Company’s research anddevelopment will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developedwill obtain necessary regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development effortsare successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company may never achieve profitability, and unlessand until it does, it will continue to need to raise additional capital or obtain financing from other sources, such as strategic collaborations or partnerships.(2)Summary of Significant Accounting PoliciesBasis of PresentationThe accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the UnitedStates (“U.S.”) (“U.S. GAAP” or “GAAP”).Principles of ConsolidationThe accompanying consolidated financial statements include the accounts of Synlogic and its wholly owned subsidiaries. All intercompany accountsand transactions have been eliminated in consolidation.Use of EstimatesThe preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reportedamounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the consolidated financialstatements and the reported amounts of expenses during the reporting period. On an on-going basis, the Company’s management evaluates its estimates,including those related to revenue recognition, income taxes including the valuation allowance for deferred tax assets, research and development accruals,accrued expenses, contingencies and equity-based compensation. The Company bases its estimates on historical experience and on various otherassumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known.Cash EquivalentsThe Company considers all highly liquid investment instruments with a remaining maturity when purchased of three months or less to be cashequivalents. Investments qualifying as cash equivalents primarily consist of money market funds and corporate debt securities. Cash equivalents are stated atcost plus accrued interest, which approximates fair value. The amount of cash equivalents included in cash and cash equivalents was approximately $0.3million and $32.7 million at December 31, 2018 and 2017, respectively.Concentration of Credit RiskFinancial instruments that potentially subject the Company to concentrations of credit risk include amounts held as cash, cash equivalents,marketable securities and restricted cash. The Company uses high quality, accredited financial institutions to maintain its balances, and accordingly, suchfunds are subject to minimal credit risk. The Company has not experienced any losses in such accounts and management believes that the Company is notexposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company has no financialinstruments with off-balance sheet risk of loss.F-9SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Restricted CashThe Company held cash of approximately $1.0 million at December 31, 2018 in a letter of credit to secure its lease at the 301 Binney Streetfacility. In addition, the Company held cash of $50,000 at December 31, 2018 and 2017 in a separate restricted bank account as collateral for the Company’scredit cards. The Company has classified these deposits as long-term restricted cash on its balance sheet.The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sumto the total of the same such amounts shown in the statement of cash flows (in thousands). December 31, December 31, 2018 2017 Cash and cash equivalents $11,252 $58,440 Restricted cash included in other long-term assets 1,097 1,097 Total cash, cash equivalents, and restricted cash shownin the consolidated statement of cash flows $12,349 $59,537 Fair ValueThe Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used indetermining the reported fair values. Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, establishes a fairvalue hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and theCompany’s own assumptions (unobservable inputs). The hierarchy consists of three levels: •Level 1 – Utilize observable inputs such as quoted prices in active markets for identical assets or liabilities; •Level 2 – Utilize data points that are either directly or indirectly observable, such as quoted prices, interest rates and yield curves; •Level 3 – Utilize unobservable data points in which there is little or no market data, which require the Company to develop its ownassumptions for the asset or liability.The Company evaluates transfers between levels at the end of each reporting period. There were no transfers of assets or liabilities between Level 1,Level 2 or Level 3 during the years ended December 31, 2018 and 2017.Available-for-Sale SecuritiesThe Company classifies all short-term investments with an original maturity when purchased of greater than three months as available-for-sale.Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in other comprehensive income (loss). The amortized costof debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in interestand investment income. Realized gains and losses, and declines in value judged to be other than temporary on available-for-sale securities, are included ininterest and investment income.The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale areincluded in interest and investment income. To determine whether an other-than-temporary impairment exists, the Company considers whether it has theability and intent to hold the investment until a market price recovery, and whether evidence indicating the recoverability of the cost of the investmentoutweighs evidence to the contrary.Property and EquipmentProperty and equipment, including leasehold improvements, are recorded at cost and depreciated over their estimated useful lives using thestraight‑line method. Repairs and maintenance costs are expensed as incurred, whereas major improvements are capitalized as additions to property andequipment.F-10SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Depreciation begins at the time the asset is placed in service. Depreciation is provided over the following estimated useful lives: Asset classification Useful lifeComputer and office equipment 3 yearsFurniture and fixtures 5 yearsLaboratory equipment 5 yearsLeasehold improvements Lesser of useful life or remaining lease term Impairment of Long‑Lived AssetsLong‑lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not berecoverable. When such events occur, the Company compares the carrying amounts of the assets to their undiscounted expected future cash flows. If thiscomparison indicates that there is impairment, the amount of impairment is calculated as the difference between the carrying value and fair value of the asset.To date, no such impairments have been recognized.Rent ExpenseThe Company’s leases for both the 301 Binney Street facility and the 200 Sidney Street facility in Cambridge, Massachusetts provide for a rent-freeperiod as well as fixed increases in minimum annual rental payments. The total amount of rental payments due over the lease term is being charged to rentexpense on a straight-line basis over the term of the lease. Tenant improvement allowances and other incentives are recorded as deferred rent and amortized asa reduction of periodic rent expense, over the term of the lease. Deferred rent consists of the difference between cash payments and the recognition of rentexpense on a straight-line basis for the Company’s facilities. The Company began to accelerate the recognition of deferred rent on its 200 Sidney Streetfacility when it agreed to terminate the lease in July 2017.Research and Development CostsCosts incurred in the research and development of the Company’s product candidates are expensed as incurred. The Company defers and capitalizesnonrefundable advance payments made by the Company for research and development activities until the related goods are received or the related servicesare performed.Research and development expenses are comprised of costs incurred in performing research and development activities, including salary and benefits,equity-based compensation expense, laboratory supplies and other direct expenses, facilities expenses, overhead expenses, contractual services and otheroutside expenses.When third-party service providers’ billing terms do not coincide with the Company’s period-end, the Company is required to make estimates of itsobligations to those third parties, including clinical trial costs, contractual services costs and costs for supply of its drug candidates, incurred in a givenaccounting period and record accruals at the end of the period. The Company bases its estimates on its knowledge of the research and development programs,services performed for the period and the expected duration of the third-party service contract, where applicable.Revenue recognitionThe Company generates revenue through a collaboration and license arrangement with a strategic partner for the development and commercializationof product candidates.Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) using the modifiedretrospective transition method. Refer to the Recently Adopted Accounting Pronouncements section below for additional information on the new standardand the impact to our results of operations. Under this method, results for reporting periods beginning after January 1, 2018 are presented under ASC 606,while prior period amounts are not adjusted and continue to be reported in accordance with ASC Topic 605, Revenue Recognition (“ASC 605”).F-11SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) The Company evaluates collaboration agreements with respect to FASB ASC Topic 808, Collaborative Arrangements, considering the nature andcontractual terms of the arrangement and the nature of its business operations to determine the classification of the transactions. When the Company is anactive participant in the activity and exposed to significant risks and rewards dependent on the commercial success of the collaboration, it will record itstransactions on a gross basis in the consolidated financial statements and describe the rights and obligations under the collaborative arrangement in the notesto the consolidated financial statements.Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects theconsideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entitydetermines are within the scope of ASC 606, the entity performs the following five-step analysis: (i) identify the contract(s) with a customer; (ii) identify theperformance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract;and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step analysis to contracts when it isprobable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception,once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determinesthose that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amountof the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.The Company may enter into collaboration agreements for research and development services, under which the Company may license certain rights toits product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, upfront license fees; reimbursement of certain costs; customer option exercise fees; development, regulatory and commercial milestone payments;and royalties on net sales of licensed products. Variable consideration is constrained until it is deemed not be at significant risk of reversal.In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements for which thecollaboration partner is also a customer, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii)determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii)measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performanceobligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements,the Company must use significant judgment to determine: a) the number of performance obligations based on the determination under step (ii) above; b) thetransaction price under step (iii) above; and c) the contract term and pattern of satisfaction of the performance obligations under step (v) above. The Companyuses significant judgment to determine whether milestones or other variable consideration, except for royalties, should be included in the transaction price asdescribed further below. The transaction price is allocated to the goods and services the Company expects to provide. The Company uses estimates todetermine the timing of satisfaction of performance obligations, which may include the use of full time equivalent time as a measure of satisfaction ofperformance obligations.Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the Company’s consolidated balance sheets.Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current deferred revenue. Amounts notexpected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion.Licenses of Intellectual PropertyIn assessing whether a promise or performance obligation is distinct from the other promises, the Company considers factors such as the research,manufacturing and commercialization capabilities of the customer and the availability of the associated expertise in the general marketplace. In addition, theCompany considers whether the customer can benefit from a promise for its intended purpose without the receipt of the remaining promises, whether thevalue of the promise is dependent on the unsatisfied promise, whether there are other vendors that could provide the remaining promise, and whether it isseparately identifiable from the remaining promise. For licenses that are combined with other promises, the Company utilizes judgment to assess the nature ofthe combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time,the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting periodand, if necessary, adjusts the measure of performance and related revenue recognition.F-12SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Research and Development ServicesIf an arrangement is determined to contain a promise or obligation for the Company to perform research and development services, the Company mustdetermine whether these services are distinct from the other promises in the arrangement. In assessing whether the services are distinct from the otherpromises, the Company considers the capabilities of the customer to perform these same services. In addition, the Company considers whether the customercan benefit from a promise for its intended purpose without the receipt of the remaining promise, whether the value of the promise is dependent on theunsatisfied promise, whether there are other vendors that could provide the remaining promise, and whether it is separately identifiable from the remainingpromise. For research and development services that are combined with other promises, the Company utilizes judgment to assess the nature of the combinedperformance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, theappropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, ifnecessary, adjusts the measure of performance and related revenue recognition.Customer OptionsIf an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and servicesunderlying the customer options are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon optionexercise. The Company evaluates the customer options for material rights, that is, the option to acquire additional goods or services for free or at a discount. Ifthe customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of thearrangement. The Company allocates the transaction price to material rights based on an alternative approach when the goods or services are both (i) similarto the original goods and services in the contract and (ii) provided in accordance with the terms of the original contract. Under this alternative, the Companyallocates the total amount of consideration expected to be received from the customer to the total goods or services expected to be provided to the customer.Amounts allocated to a material right are not recognized as revenue until the option is exercised and the performance obligation is satisfied.Milestone PaymentsAt the inception of each arrangement that includes milestone payments, the Company evaluates whether a significant reversal of cumulative revenueprovided in conjunction with achieving the milestones is probable and estimates the amount to be included in the transaction price using the most likelyamount method. If it is probable that a significant reversal of cumulative revenue would not occur, the associated milestone value is included in thetransaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not consideredprobable of being achieved until those approvals are received. For other milestones, the Company evaluates factors such as the scientific, clinical, regulatory,commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved indetermining whether it is probable that a significant reversal of cumulative revenue would not occur. At the end of each subsequent reporting period, theCompany reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transactionprice. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.RoyaltiesFor arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be thepredominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performanceobligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized anyroyalty revenue resulting from any of its licensing arrangements.Contract CostsThe Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the costs are expected to be recovered. As apractical expedient, the Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the assetthat we otherwise would have recognized is one year or less. To date, the Company has not incurred any incremental costs of obtaining a contract with acustomer.F-13SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Equity‑Based CompensationThe Company measures equity-based compensation to employees and directors based on the grant date fair value of the awards and recognizes theassociated expense in the financial statements over the requisite service period of the award, which is generally the vesting period.Equity‑based compensation costs for nonemployee awards are recognized as services are provided, which is generally the vesting period, on astraight‑line basis. The measurement date for nonemployee awards is generally the date the performance of services required from the nonemployee iscomplete. The Company believes that the fair value of the equity is more reliably measurable than the fair value of the services rendered. The fair value of theaward granted to a nonemployee is remeasured at each reporting date until performance is completed with any increase or decrease in fair value recorded asequity‑based compensation expense.Prior to the Merger in August 2017, the Company’s Board of Directors determined the estimated per share fair market value of the common stock andcommon units at various dates considering contemporaneous valuations performed in accordance with the guidance outlined in the American Institute ofCertified Public Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, or the Practice Aid. The fairmarket value of the common stock and common units was determined by the Board of Directors at each award grant date based on assumptions, each of whichare subjective and generally require judgement and estimation by management, including results obtained from independent third‑party valuations, theCompany’s financial position and historical financial performance, the status of technological developments within the Company’s product candidates, thecomposition and ability of the research and management team, an evaluation or benchmark of the Company’s competition, the business climate in themarketplace, the illiquid nature of the common stock and common units, arm’s length sales of the Company’s capital stock (including convertible preferredstock), the effect of the rights and preferences of the preferred stock, and the prospects of a liquidity event.The fair value of each option was estimated on the date of grant or remeasurement using the Black‑Scholes option‑pricing model. Expected volatilityfor the Company’s common stock was determined based on an average of the historical volatility of a peer‑group of similar public companies. The expectedterm of options granted for employees was calculated using the simplified method, which represented the average of the contractual term of the option andthe weighted-average vesting period of the option. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in theforeseeable future. The risk‑free interest rate is based upon the U.S. Treasury yield curve commensurate with the expected term at the time of grant orremeasurement. Forfeitures are recognized as they occur as allowed under ASU 2016-09.The Company’s Board of Directors estimated the threshold price for each incentive unit issued by Synlogic, LLC, which is the price at which anincentive unit would have had a liquidation value of zero, considering the fair value of the Company’s assets at the date of grant and performed an analysis todetermine the per unit amount that a holder would have received upon a distribution event. In determining the fair value of its assets, the Company relied onindependent third-party valuations, which take into account a variety of factors, including the Company’s financial position and historical financialperformance, the status of technological developments within the Company’s products, the composition and ability of the research and management team, anevaluation or benchmark of the Company’s competition, the business climate in the marketplace, the illiquid nature of the common units and incentive units,arm’s-length sales of the Company’s equity, the effect of the rights and preferences of the preferred unit holders, and the prospects of a liquidity event, amongothers.The fair value of each incentive unit award was estimated on the date of grant or remeasurement using the Black‑Scholes with barrier option‑pricingmodel. Assumptions utilized in the model for valuing the incentive units including expected volatility, dividend yield and risk-free interest rate were arrivedat in the same manner as those utilized for the stock option model described above. Forfeitures are treated in the manner described above. Incentive units didnot have an expiration date, thus, the expected term of incentive units granted was determined based on the probability‑weighted estimated term to aliquidity event.The Company records the expense for equity grants subject to performance-based milestone vesting over the remaining service period whenmanagement determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone isprobable based on the relative satisfaction of the performance conditions as of the reporting date.The Company classifies equity-based compensation expense in its consolidated statements of operations and comprehensive loss in the same mannerin which the award recipient’s payroll costs are classified or in which the award recipients’ service payments are classified.F-14SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Income TaxesThe Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities forthe expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred taxes aredetermined based on the difference between the financial reporting and tax basis of assets and liabilities using enacted tax rates in effect in the years in whichthe differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses thelikelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes based upon the weight of available evidence,that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to incometax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasibletax planning strategies.Uncertain tax positions represent tax positions for which reserves have been established. The Company accounts for uncertainty in income taxesrecognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the taxposition must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position isdeemed more likely than not to be sustained, the tax position is then assessed to determine the amount of benefit to be recognized in the financial statements.The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as therelated net interest and penalties.Net Loss Per ShareBasic net loss per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net loss pershare is computed using the sum of the weighted-average number of shares of common stock outstanding during the period and if dilutive, the weighted-average number of potential shares of common stock, including unvested restricted common stock and outstanding stock options.The Company computed basic and diluted net loss per shares using the two-class method, which gives effect to the impact of the outstandingparticipating securities. As the years ended December 31, 2018 and 2017 resulted in net losses attributable to common stockholders, there is no incomeallocation required under the two-class method or dilution attributed to weighted-average shares outstanding in the calculation of diluted net loss per sharebecause the preferred stockholders do not participate in losses of the Company. Accordingly, for periods in which the Company reports a net loss attributableto common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to commonstockholders, since dilutive common stock are not assumed to have been issued if their effect is anti-dilutive.As the 2017 Reorganization resulted in a one for one conversion of preferred units for preferred stock and common units for common stock, theconversion was not substantive for the purposes of this calculation and the weighted average was calculated as if outstanding equity was outstanding fromthe beginning of the period presented. Additionally, at the Effective Time of the Merger, the Company issued shares of its common stock to Private Synlogic stockholders, at the ExchangeRatio of 0.5532 shares of common stock, after taking into account the Reverse Stock Split, in exchange for each share of Private Synlogic preferred andcommon stock outstanding immediately prior to the Merger. The Exchange Ratio was calculated by a formula pursuant to the Merger Agreement. For thepurposes of calculating net loss per share, the Exchange Ratio was applied retroactively to all periods presented.Segment InformationOperating segments are defined as components of an enterprise about which separate discrete financial information is available for evaluation by thechief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company operatesin one operating segment: discovery and development of synthetic biology therapeutics for the treatment of rare, infectious and other diseases. TheCompany’s chief executive officer, as chief operating decision maker, manages and allocates resources to the operations of the Company on a total companybasis. All of the Company’s equipment, leasehold improvements and other fixed assets are physically located within the United States, and all agreementswith its partners are denominated in U.S. dollars, except where noted.F-15SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Recently Adopted Accounting PronouncementsRevenue RecognitionIn May 2014, the FASB, issued Accounting Standards Update, (ASU), No. 2014-09, which amends the guidance for accounting for revenue fromcontracts with customers. This ASU supersedes the revenue recognition requirements in ASC 605 and creates ASC 606. In 2015 and 2017, the FASB issuedadditional ASUs related to ASC 606 that delayed the effective date of the guidance and clarified various aspects of the new revenue guidance, includingprincipal versus agent considerations, identifying performance obligations, and licensing, and they include other improvements and practical expedients.Effective January 1, 2018, the Company adopted ASC 606 using the modified retrospective transition method. Under this method, results for reportingperiods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordancewith ASC 605. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insuranceand financial instruments. As a result of adopting ASC 606 on January 1, 2018, the Company recorded a cumulative-effect decrease to opening accumulateddeficit of $0.3 million as of January 1, 2018 and a corresponding decrease to deferred revenue. Total revenue recorded in the twelve months ended December31, 2018 under ASC 606 was $2.5 million, as compared to $2.4 million that would have been recorded under ASC 605. Deferred revenue as of December 31,2018 was $0.3 million under ASC 606, as compared to a balance of $0.7 million which would have resulted under ASC 605.The most significant changes relate to the Company’s revenue recognition pattern for the AbbVie collaboration and the accounting for milestonepayments. Under ASC 605, the Company was recognizing the revenue allocated to each unit of accounting on a straight line basis over the period theCompany is expected to complete its obligations. Under ASC 606, the Company is recognizing the revenue allocated to each performance obligationmeasuring progress using an input method over the period the Company is expected to complete each performance obligation. Under ASC 605, the Companyrecognized revenue related to milestone payments as the milestone was achieved, using the milestone method. Under ASC 606, the Company determined thatthe milestones at the beginning of certain research and development phases represent a 90-day contract with daily customer renewal options for theCompany’s continued research and development services. As a result, revenue from these milestones is recognized over a performance obligation consistingof the next phase of research and development services.Income TaxesIn March 2018, the FASB issued Accounting Standards Update No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant toSEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). The standard amends ASC 740, Income Taxes (“ASC 740”), to provide guidance on accounting forthe tax effects of the Tax Act pursuant to Staff Accounting Bulletin No. 118, effective immediately. The ASU permits companies to use provisional amountsfor certain income tax effects of the Tax Act during a one-year measurement period. The provisional reporting period ended on December 22, 2018 and nofurther adjustment was required for the year ended December 31, 2018.Stock CompensationIn May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. The newstandard is intended to reduce the diversity in practice, cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditionsof a share-based payment award. The new standard will be effective for annual reporting periods and interim periods within those annual periods, beginningafter December 15, 2018. The amendments in this update will be applied prospectively to an award modified on or after the adoption date. The Companyadopted this standard as of January 1, 2018 and it did not have a material impact on the Company’s financial position or results of operations. F-16SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Recently Issued Accounting PronouncementsIn February 2016, the FASB issued ASU 2016-02 – Leases (Topic 842), which replaces the existing accounting guidance for leases. This standardrequires entities that lease assets to recognize the assets and liabilities for the rights and obligations created by those leases on the balance sheet. Thestandard is effective for fiscal years and the interim periods within those fiscal years beginning after December 15, 2018. The guidance is required to beapplied by the modified retrospective transition approach and early adoption is permitted. In July 2018, the FASB issued ASU 2018-11 Leases – TargetedImprovements, intended to ease the implementation of the new lease standard for financial statement preparers by, among other things, allowing for anadditional transition method. In lieu of presenting transition requirements to comparative periods, as previously required, an entity may now elect to show acumulative effect adjustment on the date of adoption without the requirement to recast prior period financial statements or disclosures presented inaccordance with ASU 2016-02. We expect to adopt the new standard and elect to use the cumulative effect adjustment transition option effective January 1,2019, which will be the initial date of application per ASU 2018-11.The Company expects to elect the available package of practical expedients which allows us to not reassess previous accounting conclusions aroundwhether arrangements are or contain leases, the classification of our leases, and the treatment of initial direct costs. The Company also expects it will make anaccounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. The Company is continuing to evaluatedevelopments within the new lease guidance and is finalizing its evaluation of its existing population of contracts to ensure all contracts that meet thedefinition of a lease contract under the new standard are identified. The Company has assessed the impact that the adoption of this guidance will have on itsfinancial statements and footnote disclosures. The standard will have a material impact on the consolidated balance sheet related to the recognition of right-of-use assets and lease liabilities for operating leases. The standard will not have a material impact on the consolidated statement of operations. TheCompany has designed and implemented changes to related processes, controls and disclosures.In February 2018, the FASB issued ASU 2018-02 – Income Statement – Reporting Comprehensive Income (Topic 220), which provides amendedguidance on income tax accounting. The amended guidance permits the reclassification of the income tax effect on amounts recorded within othercomprehensive income impacted by the Tax Cuts and Jobs Act into retained earnings. The amended guidance is effective for periods beginning afterDecember 15, 2018 and applies only to those amounts remaining in Other Comprehensive Income at the date of enactment of the Act. The amended guidancemay be adopted on either a retrospective basis or at the beginning of the period of adoption. The Company is assessing the potential impact of the amendedstandard but does not expect it to have a material impact on its consolidated financial statements.In June 2018, the FASB issued ASU 2018-07 – Compensation –Stock Compensation (Topic 718): Improvements to Nonemployee Share-BasedPayment Accounting. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Earlyadoption is permitted, but no earlier than an entity’s adoption date of ASC 606. The standard expands the scope of ASC 718 to include all share-basedpayment arrangements related to the acquisition of goods and services from both nonemployees and employees. Under the amended guidance, equity-classified share-based payment awards issued to nonemployees will be measured at grant date fair value. Upon transition, the entity is required to remeasurethese nonemployee awards at fair value as of the adoption date. The Company is currently evaluating the new guidance but does not expect it to have amaterial impact on its consolidated financial statements.In August 2018, the FASB issued ASU 2018-13 - Fair Value Measurement - Disclosure Framework (Topic 820). The standard modifies the disclosurerequirements for fair value measurements. The standard is effective for public companies for annual and interim periods beginning after December 15, 2019.Early adoption is permitted for any removed or modified disclosures. Management is currently assessing the impact adoption will have on the Company, butit is not expected to have a material impact on the Company’s financial statement disclosures.In August 2018, the FASB issued ASU 2018-15 - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement thatis a Service Contract. The standard requires implementation costs incurred by customers in cloud computing arrangements to be deferred over thenoncancelable term of the cloud computing arrangements plus any optional renewal periods (1) that are reasonably certain to be exercised by the customer or(2) for which exercise of the renewal option is controlled by the cloud service provider. The effective date of this pronouncement is for fiscal years beginningafter December 15, 2019, and interim periods within those fiscal years, and early adoption is permitted. The standard can be adopted either using theprospective or retrospective transition approach. The Company is currently evaluating the impact of this pronouncement on the Company's consolidatedfinancial statements and disclosures.F-17SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) In November 2018, the FASB issued ASU 2018-18 - Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 andTopic 606, which, among other things, provides guidance on how to assess whether certain collaborative arrangement transactions should be accounted forunder Topic 606. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019,with early adoption permitted. The Company is in the process of evaluating the impact the standard will have on its financial statements.(3)Merger with Mirna TherapeuticsOn August 28, 2017, Private Synlogic completed the Merger with Mirna as discussed in Note 1. For accounting purposes, Private Synlogic isconsidered to have acquired Mirna in the Merger. Private Synlogic was determined to be the accounting acquirer based upon the terms of the Merger andother factors including: (i) Private Synlogic stockholders owned approximately 83% of the combined company immediately following the closing of theMerger, (ii) Private Synlogic directors held five of the seven board seats in the combined company, and (iii) Private Synlogic management held all keypositions in the management of the combined company. The Merger was accounted for as an asset acquisition rather than a business combination because theassets acquired and liabilities assumed by the Company do not meet the definition of a business as defined by ASC Topic 805, Business Combinations. Thenet assets acquired in connection with this transaction were recorded at their estimated acquisition date fair values as of August 28, 2017, the date the Mergerwas completed (the “Merger Closing Date”).Under the terms of the Merger Agreement, Mirna issued shares of its common stock to Private Synlogic’s stockholders, at an exchange ratio of 0.5532shares of Mirna’s common stock, after taking into account the Reverse Stock Split, for each share of Private Synlogic common stock and preferred stockoutstanding immediately prior to the Merger. Mirna assumed all of the stock options outstanding under the 2017 Plan, with such stock options henceforthrepresenting the right to purchase a number of shares of Mirna’s common stock equal to the Exchange Ratio multiplied by the number of shares of PrivateSynlogic common stock previously represented by such options. Mirna also assumed the 2017 Plan. The consolidated financial statements give retroactiveeffect to the Exchange Ratio for all periods presented.On the Merger Closing Date, Mirna had approximately 20.9 million shares of common stock outstanding and a market capitalization of approximately$35.0 million. The estimated fair value of the net assets of Mirna on August 28, 2017 was approximately $42.6 million. The fair value of the Mirna commonstock on the Merger Closing Date was below the fair value of Mirna’s net assets. As Mirna’s net assets were predominantly comprised of cash, cashequivalents and marketable securities, partially offset by current liabilities, the fair value of Mirna’s net assets as of the Merger Closing Date is considered tobe the best indicator of the fair value and, therefore, the estimated preliminary purchase consideration.All of Mirna’s assets and liabilities were reflected at their fair value on the Merger Closing Date. No goodwill or intangible assets were recognized.Consistent with accounting for an asset acquisition, the Company capitalized the costs associated with the Merger. Transaction costs primarily includedbank fees and professional fees associated with legal counsel, auditors and printers. The following table shows the net assets acquired in the Merger (inthousands): August 28, 2017 Cash and cash equivalents $14,882 Marketable securities 27,600 Interest receivable 126 Prepaid assets 112 Unrealized loss on marketable securities 5 Accounts payable and accrued expenses (105)Total net assets acquired 42,620 Less: Transaction costs (2,187)Total net assets acquired less transaction costs $40,433 F-18SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) (4)Fair Value of Financial InstrumentsThe tables below present information about the Company’s assets that are measured at fair value on a recurring basis as of December 31, 2018 and2017 and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value, as described under Note 2,Summary of Significant Accounting Policies. The Company’s investment portfolio includes many fixed income securities that do not always trade on a daily basis. As a result, the pricing servicesused by the Company applied other available information as applicable through processes such as benchmark yields, benchmarking of like securities, sectorgroupings and matrix pricing to prepare evaluations. In addition, model processes were used to assess interest rate impact and develop prepaymentscenarios. These models take into consideration relevant credit information, perceived market movements, sector news and economic events. The inputs intothese models may include benchmark yields, reported trades, broker-dealer quotes, issuer spreads and other relevant data.At December 31, 2018 and 2017, the Company has classified assets measured at fair value on a recurring basis as follows (in thousands): Fair Value Measurements at Reporting Date Using December 31, Quoted Prices in ActiveMarkets for IdenticalAssets Significant OtherObservable Inputs SignificantUnobservable Inputs Description 2018 (Level 1) (Level 2) (Level 3) Money market funds (included in cashand cash equivalents) $265 $265 $— $— Corporate debt securities (included inshort-term investments) 107,505 — 107,505 — U.S. government agency securities andtreasuries (included in short-terminvestments) 3,972 1,987 1,985 — Total $111,742 $2,252 $109,490 $— Fair Value Measurements at Reporting Date Using December 31, Quoted Prices in ActiveMarkets for IdenticalAssets Significant OtherObservable Inputs SignificantUnobservable Inputs Description 2017 (Level 1) (Level 2) (Level 3) Money market funds (included in cashand cash equivalents) $21,301 $21,301 $— $— Corporate debt securities (included incash and cash equivalents) 11,405 — 11,405 — Corporate debt securities (included inshort-term investments) 28,585 — 28,585 — Total $61,291 $21,301 $39,990 $— Cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses at December 31, 2018 and December 31, 2017 arecarried at amounts that approximate fair value due to their short-term maturities. Capital lease obligations at December 31, 2018 and December 31, 2017approximate fair value as they bear interest at a rate approximating a market interest rate.F-19SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) (5)Available-for-Sale InvestmentsThe following tables summarize the available-for-sale securities held at December 31, 2018 and 2017 (in thousands): December 31, 2018 Amortized cost Gross unrealizedgains Gross unrealizedlosses Fair Value Corporate debt securities $107,571 $4 $(70) $107,505 U.S. government agencysecurities $3,971 $1 $— $3,972 Total $111,542 $5 $(70) $111,477 December 31, 2017 Amortized cost Gross unrealizedgains Gross unrealizedlosses Fair Value Corporate debt securities $28,593 $1 $(9) $28,585 Total $28,593 $1 $(9) $28,585 The contractual maturity of all securities held at December 31, 2018 was one year or less. There were 37 investments in an unrealized loss position atDecember 31, 2018, none of which had been in an unrealized loss position for more than twelve months. The aggregate fair value of the securities in anunrealized loss position at December 31, 2018 and 2017 was $96.5 million and $19.3 million, respectively. The Company reviews its investments for other-than-temporary impairment whenever the fair value of an investment is less than amortized cost and evidence indicates that an investment’s carrying amountis not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers whether it hasthe ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment isrecoverable outweighs evidence to the contrary. The Company did not hold any securities with an other-than-temporary impairment at December 31, 2018.Gross realized gains and losses on the sales of investments have not been material to the Company’s consolidated statement of operations.(6)Prepaid Expenses and Other Current AssetsPrepaid expenses and other current assets consists of the following (in thousands): December 31, December 31, 2018 2017 Prepaid insurance $502 $437 Prepaid research and development 122 508 Other prepaid 597 321 Other current assets 388 298 $1,609 $1,564 F-20SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) (7)Property and Equipment, netProperty and equipment, net consists of the following (in thousands): December 31, December 31, 2018 2017 Laboratory equipment $7,111 $2,999 Computer and office equipment 781 354 Furniture and fixtures 413 220 Leasehold improvements 9,484 2,308 Construction in progress 39 7,017 17,828 12,898 Less accumulated depreciation (2,987) (3,115) $14,841 $9,783 At December 31, 2018 and 2017, leasehold improvements include approximately $6.6 million and $1.3 million, respectively, of lessor-paid tenantimprovements for which the Company was deemed to be the accounting owner of the tenant improvements primarily because it was responsible for projectcost overruns. Also, at December 31, 2017, construction in progress contained approximately $5.0 million of lessor-paid tenant improvements placed inservice in 2018, for which the Company was deemed to be the accounting owner primarily because it was responsible for project cost overruns. In both 2018 and 2017, the Company entered into leases for certain laboratory equipment which were capital leases. The leases had either a presentvalue of expected payments in excess of 90% of the fair value of the equipment or a bargain purchase option at the end of the lease. As such, as of December31, 2018 and 2017, the Company had approximately $1.3 million and $1.4 million, respectively, of assets under a capital lease having accumulateddepreciation of approximately $0.9 million and $0.2 million, respectively.(8)Accrued ExpensesAccrued expenses consists of the following (in thousands): December 31, December 31, 2018 2017 Payroll related $2,906 $1,721 Professional fees 306 805 Research and development 1,585 2,027 Other 237 270 $5,034 $4,823 (9)Common StockThe Company’s common stock has the following characteristics: •The holders of shares of common stock are entitled to one vote for each share of common stock held at all meetings of stockholders. •The holders of shares of common stock are entitled to receive dividends, if and when, declared by the Company’s board of directors. Sinceinception, no cash dividends have been declared.The Company holds forfeiture rights relating to 118,679 shares of common stock. The forfeiture right lapses over time and is triggered when a holderceases providing services to the Company. As of December 31, 2018, 86,581 shares of common stock have been forfeited back to the Company.The Company holds repurchase rights which are at a price equal to the initial purchase price by the founders of Private Synlogic, adjusted by theMerger Exchange Ratio. The repurchase right lapses over time and is exercisable should the founders cease providing services to the Company prior to theend of a four-year period which began in April or May 2014, as the case may be. All repurchaseF-21SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) rights terminated during 2018. As of December 31, 2018, the Company has exercised its repurchase right on 41,819 shares of common stock. In January 2018, the Company sold 5,899,500 shares of its common stock through a firm commitment, underwritten public offering at a price to thepublic of $9.75 per share. As a result of the offering, including the exercise of the overallotment option, the Company received aggregate net proceeds, afterunderwriting discounts and commissions and other estimated offering expenses, of approximately $53.8 million.In April 2018, the Company sold 3,280,000 shares of its common stock at a price of $9.15 per share in a registered direct offering. After fees and otheroffering expenses, the Company received approximately $28.9 million in net proceeds from the offering.(10)Preferred StockPreferred Stock of Synlogic, Inc.The Company’s preferred stock may be issued from time to time in one or more series, with each such series to consist of such number of shares and tohave such terms as adopted by the board of directors. Authority is given to the board of directors to determine and fix such voting powers, full or limited, orno voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitation or restrictionsthereof, including without limitation, dividend rights, conversion rights, redemption privileges and liquidation preferences.Preferred Stock of Private SynlogicPrior to the Merger, Private Synlogic had contingently redeemable preferred stock and three series of convertible preferred stock. On the MergerClosing Date, Mirna issued shares of its common stock to holders of these shares, at an exchange rate of 0.5532 shares of common stock, after taking intoaccount the Reverse Stock Split, in exchange for each share of preferred stock outstanding immediately prior to the Merger.Pursuant to, and at the time of, the 2017 Reorganization, preferred stock was granted to all holders of preferred units. The Synlogic preferred stock hadsubstantially similar rights and preferences as the preferred units, except that the preferred stock was convertible into common stock at the option of theholder, on a one-for-one basis, subject to an antidilution adjustment. Conversion of the preferred stock would have been automatically triggered upon a firm-commitment underwritten public offering or upon a supermajority preferred interest vote (see (a)(v) below).After the 2017 Reorganization, in May 2017, the Company sold and issued 2,882,679 shares of Series C preferred stock at $8.06 per share to investorsfor total consideration of approximately $40.4 million, net of offering costs of approximately $1.6 million. The Series C preferred stock was issued with thesame terms as the then-existing preferred stock.Rights and PreferencesPreferred stock had the following rights and preferences: (i)VotingThe holders of the preferred stock were entitled to vote, together with the holders of common stock, on all matters submitted to stockholders fora vote, except with respect to matters on which Delaware General Corporation Law required that a vote would be by a separate class, in whichcase the holders of the preferred stock would have voted separately as a class. Each holder of preferred stock was entitled to the number of votesequal to the number of shares of common stock into which each share of preferred stock was convertible at the time of such vote. (ii)DividendsIn the event that a dividend was declared for the holders of common stock, the holders of the preferred stock would have been entitled to theamount of dividends on an as-converted basis. Through December 31, 2018 and December 31, 2017, no dividends were declared or paid.F-22SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) (iii)Liquidation PreferenceIn the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of preferred stockthen outstanding would have been entitled to be paid, on a pari passu basis, out of the assets of the Company available for distribution to itsstockholders before any payment was made to the holders of common stock by reason of their ownership thereof, with respect to each series ofpreferred stock, an amount per share equal to the greater of (i) the applicable original issue price, plus any dividends declared but unpaidthereon, or (ii) such amount per share as would have been payable had all shares been converted into common stock immediately prior to suchliquidation, dissolution or winding up of the Company.If upon any such liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to itsstockholders were insufficient to pay the holders of shares of preferred stock the full amount to which they should have been entitled, theholders of shares of preferred stock would share ratably in any distribution of the assets available for distribution in proportion to the respectiveamounts that would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respectto such shares were paid in full. (iv)Par ValuePar value was assigned as $0.0001. (v)ConversionEach share of preferred stock, at the option of the holder, was convertible into that number of fully paid shares of common stock as determinedby dividing the sum of the original issue price, plus any declared but unpaid dividends, by the conversion price in effect at the time ofconversion. The initial conversion price for each share of preferred stock would have been the original issue price, subject to adjustment inaccordance with antidilution provisions. Each share of preferred stock would have been automatically converted upon (i) the closing of a firmcommitment underwritten public offering in which the public offering price exceeded $12.09 (adjusted to reflect subsequent stock dividends,stock splits or recapitalization) and the aggregate proceeds raised were not less than $50,000,000, or (ii) upon the vote or written consent of asupermajority preferred interest (or a majority preferred interest in the event of a public offering that did not result in the offering price oraggregate proceeds amount set forth in clause (i) above). (vi)RedemptionThe preferred stock was not redeemable except upon a deemed liquidation event. Deemed liquidation events included a merger or acquisitionin which the majority of the stock of the pre-merger corporation was not owned by the majority of the stockholders of the post-merger entity orthe sale of all or substantially all of the Company’s assets. All holders of equally and more subordinated equity instruments of the Companywould have been entitled to receive the same form of consideration upon the occurrence of a deemed liquidation event, consequently, thepreferred stock was classified as permanent equity.In September 2014, the Company entered into a letter agreement with the Bill & Melinda Gates Foundation (“the Gates Foundation”) withrespect to the Gates Foundation purchase of 781,693 shares of the Company’s Series A Preferred Stock. The Gates Foundation investment wasmade in three tranches of 201,163 shares in September 2014, 218,646 shares in May 2015 and 361,884 shares in February 2016. Under theletter agreement, the Company was required to spend the approximately $5.0 million invested by the Gates Foundation for research on aparticular disease, further develop the Company’s proprietary technology platform and provide assistance with access to use of suchtechnology in developing countries. If the Company failed to spend the amount appropriately, or defaulted under certain other commitments inthe agreement and the Company did not cure such default within 90 days of notice, if requested by the Gates Foundation, the Company wouldhave been obligated to redeem the shares of Series A Preferred Stock or shares of common stock into which they had converted then held by theGates Foundation or find a third-party to purchase such shares at a price equal to the greater of the initial purchase price and the then currentfair value of such shares. In either case, if the Company, over the 6 months following such redemption, had sold substantially all of its equity orassets or completed an initial public offering at a value greater than 200% of the price paid upon redemption, then the Company would havehad to reimburse the Gates Foundation for the difference. As of December 31, 2017, all obligations with respect to the Gates Foundationinvestment have been satisfied.F-23SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Participation Rights in Future Equity IssuancesFor series of preferred stock that were issued in multiple tranches, all holders of preferred stock had a pro rata right and obligation, based ontheir percentage equity ownership within the series, to participate in subsequent issuances within the same series of equity securities of theCompany approved by 70% vote of holders of preferred stock. Should any such holder have chosen not to purchase its full pro rata share, theywould have been deemed a defaulting purchaser and all preferred stock held by a defaulting purchaser would have been automaticallyconverted into common stock of the Company.(11)Preferred UnitsPrior to the 2017 Reorganization, the Company had one class of contingently redeemable preferred units and two classes of convertible preferredunits. Pursuant to the 2015 Reorganization, each share of the Company’s Series A Preferred Stock and Series A Contingently Redeemable Preferred Stock wasexchanged for a like type and number of the Company’s Class A Preferred Units and Contingently Redeemable Class A Preferred Units, respectively.In February 2016, Synlogic issued and sold 2,005,348 units of Class A-3 Preferred Units and 361,884 units of Contingently Redeemable Class A-3Preferred Stock at $7.23 per unit to investors for net proceeds of approximately $17.1 million. There were no issuance costs related to these transactions.In February 2016, Synlogic also issued and sold 1,029,850 units of Class B Preferred Units at $13.53 per unit to investors for net proceeds ofapproximately $13.6 million. Issuance costs related to this transaction of approximately $0.3 million were recorded as a reduction of proceeds within Class BPreferred Units (together with the Class A Preferred Units, Contingently Redeemable Class A Preferred Units, Class A-2 Preferred Units, Class A-2Contingently Redeemable Preferred Units, Class A-3 Preferred Units and Contingently Redeemable Class A-3 Preferred Units, the “Preferred Units”).Rights and PreferencesThe Preferred Units had substantially similar rights and preferences as were conferred upon the preferred stock as follows: (i)VotingThe holders of the Preferred Units were entitled to vote, together with the holders of the Company’s common units as a single class, on all matterssubmitted to unit holders for a vote. In addition, holders of at least a majority of the outstanding Preferred Units and common units voting as a single classwere entitled to take any action required or permitted to be taken at any meeting of the members, unless a different vote is required by the Delaware LimitedLiability Company Act or the Company’s operating agreement. (ii)DistributionsDistributions were governed by the Company’s operating agreement (Note 13). No distributions were made in either of the years ended December 31,2018 or December 31,2017. (iii)Liquidation PreferenceIn the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the assets of the Company would have beendistributed, after the payout or provision for payment of all creditors of the Company, in accordance with the same order of priority as distributions (Note 13). (iv)Par ValueThe Preferred Units did not have a par value.F-24SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) (v)RedemptionThe Preferred Units were not redeemable except upon a deemed liquidation event. Deemed liquidation events included the merger, acquisition or saleof all or substantially all of the Company’s assets. All holders of equally and more subordinated equity instruments of the Company would have been entitledto receive the same form of consideration upon the occurrence of a deemed liquidation event, consequently, the Preferred Units were classified as permanentequity.In September 2014, the Company entered into a letter agreement with the Bill & Melinda Gates Foundation (“the Gates Foundation”) (Note 10) withrespect to the Gates Foundation purchase of 781,693 shares of the Company’s Series A Preferred Stock. The Gates Foundation investment was made in threetranches of 201,163 shares in September 2014, 218,646 shares in May 2015 and 361,884 units in February 2016. The first two tranches, totaling 419,809shares were exchanged for Class A Preferred Units pursuant to the 2015 Reorganization in July 2015. As a result, 781,693 units of Class A Preferred Unitswith a cost of approximately $5.0 million were classified as Contingently Redeemable Preferred Units in mezzanine equity, as of December 31, 2016. (vi)Participation RightsHolders of Class A Preferred Units had the right and obligation to participate in additional closings of Class A Preferred Units upon the achievement ofcertain milestones by the Company. If any holder of Class A Preferred Units did not purchase the number of Class A Preferred Units required to be purchasedby it at any such additional closing, then each Class A Preferred Unit held by such member would have automatically been converted into common units atthe applicable adjustment ratio in effect with respect to such units immediately prior to such closing. All holders of Class A Preferred Units participated inadditional closings at the required levels. Holders of Class B Preferred Units had the right and obligation to participate in additional closings of Class BPreferred Units upon the achievement of certain milestones by the Company. If any holder of Class B Preferred Units did not purchase the number of Class BPreferred Units required to be purchased by it at any such additional closing, then each Class B Preferred Unit held by such member would haveautomatically been converted into common units at the applicable adjustment ratio in effect with respect to such units immediately prior to such closing. (vii)Initial Public OfferingIn connection with preparation for an initial public offering, upon request of holder of at least 70% of the Preferred Units, all unit holders would havebeen required to have taken appropriate steps to implement a reorganization of the Company that may have included, for example, contribution of their unitsto a newly formed corporation.(12)Equity‑based Compensation and Equity Incentive Plans Equity PlansThe Company has a number of equity plans, two of which are currently active.The 2015 Equity Incentive Award Plan (“2015 Plan”) was adopted by Mirna in 2015 and remains active after the Merger, now functioning as theprimary equity plan for the Company. Following the Merger, there were 647,893 shares authorized under the 2015 Plan. The 2015 Plan includes an“evergreen provision” that allows for an annual increase in the number of shares of common stock available for issuance under the 2015 Plan, which annualincrease will be added on the first day of each fiscal year from 2016 through 2025, inclusive, and will be equal to the lesser of (i) five percent of the sharesoutstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares as determined by the Board of Directors. The 2015Plan provides for the granting of a variety of stock‑based compensation awards, including stock options, stock appreciation rights, restricted stock awards,restricted stock unit awards, deferred stock awards, dividend equivalent awards, stock payment awards, performance awards and other stock‑based awards.The 2017 Stock Incentive Plan was adopted by Private Synlogic in 2017 at the time of the 2017 Reorganization and provides for the grant ofincentive stock options, non-qualified stock options, restricted and unrestricted stock awards and other stock-based awards. Under the 2017 Plan, 1,753,061shares were initially authorized and reserved for issuance. Pursuant to the 2017 Reorganization, Private Synlogic issued restricted common stock awardsunder the 2017 Plan to replace the canceled incentive units pursuant to the termination of the 2015 LLC Plan (“2015 LLC Plan”). In addition, PrivateSynlogic also issued stock options to certain employees prior to the Merger. Pursuant to the Merger Agreement, each restricted common stock award ofPrivate Synlogic under the 2017 Plan that was outstanding immediately prior to the Merger and each option to purchase common stock of Private Synlogicunder the 2017 Plan that was outstanding and unexercised immediately prior to the Merger was converted into and became restrictedF-25SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) common stock and options to purchase shares of the Company’s common stock, respectively, based on the Exchange Ratio of 0.5532 and the Companyassumed the 2017 Plan.The 2015 Employee Stock Purchase Plan (“ESPP”) was adopted by Mirna in 2015 and allows eligible employees to purchase shares of the Company’scommon stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The ESPP generallyprovides for set offering periods, and at the end of each offering period, employees are able to purchase shares at 85% of the lower of the fair market value ofthe Company’s common stock on the first trading day of the offering period or on the last trading day of the offering period. The Company suspended theESPP in 2017.The 2008 Long Term Incentive Plan (“2008 Plan”) was adopted by Mirna in 2008 and allowed for the grant of incentive stock options to employeesand nonqualified stock options and other equity awards to employees and nonemployees. The 2015 Plan is the successor to the 2008 Plan and at the time ofthe Merger, the remaining awards outstanding thereunder were cancelled and the number of shares with respect to those awards were transferred to the 2015Plan. As of the Merger, the 2008 Plan was retired.The 2015 LLC Plan was adopted by Private Synlogic at the time of the 2015 Reorganization, which provided for the grant of equity incentive units toemployees, officers, directors or consultants. The 2015 LLC Plan was cancelled pursuant to the 2017 Reorganization as described above.As of December 31, 2018, there were 477,414 shares available for future grant under the Company’s two active equity incentive plans, the 2017 Planand the 2015 Plan.The Company is displaying all equity in its post-Merger amounts, as impacted by the Exchange Ratio. Stock OptionsThe weighted average assumptions used in the Black-Scholes option-pricing model for stock options issued to employees under its two active equityplans, the 2015 Plan and the 2017 Plan, during the years ended December 31, 2018 and 2017 and to nonemployees during the year ended December 31, 2017were: Year ended December 31, Employees: 2018 2017 Expected term 6.2 years 6.2 years Weighted-average, risk-free interest rate 2.8% 2.1% Expected volatility 70.8% 70.4% Dividend yield — — The following table summarizes stock option activity, as adjusted for the Exchange Ratio under the 2015 and 2017 Plans. Stock options outstanding Weighted average Weighted remaining Aggregate average contractual intrinsic Number of exercise term value (a) options price (in years) (in thousands) Outstanding at December 31, 2017 1,267,221 $13.62 9.6 $— Granted 919,496 9.71 Exercised (19,830) 12.28 Forfeited (394,136) 12.09 Expired (32,867) 13.53 Outstanding at December 31, 2018 1,739,884 11.92 9.0 $— Vested or expected to vest at December 31, 2018 1,739,884 11.92 9.0 $— Exercisable at December 31, 2018 489,236 13.20 8.4 $— F-26SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) (a)The aggregate intrinsic value is calculated as the difference between the exercise price of the options and the fair market value of the underlying common stock for the options thatwere in the money at December 31, 2018 . No options were in the money at December 31, 2018 . During the years ended December 31, 2018 and 2017, 919,496 and 1,281,647 stock options were granted to employees and nonemployees,respectively. Approximately $3.2 million and $2.0 million in equity compensation was recognized related to stock options granted to employees and nonemployees for the years ended December 31, 2018 and 2017, respectively.The weighted average grant date fair value per share of options granted to employees during the year ended December 31, 2018 was approximately$6.35. The total fair value of awards that vested during the year ended December 31, 2018 was $3.3 million.As of December 31, 2018, there was approximately $8.4 million of unrecognized share-based compensation related to employees for unvested stockoption grants which is expected to be recognized over a weighted average period of 2.6 years. The total unrecognized share-based compensation cost will beadjusted for actual forfeitures as they occur. In addition, there was approximately $53,000 of unrecognized share-based compensation, related to unvestedstock option grants to nonemployees which is expected to be recognized over a weighted average period of 2.4 years. The amount of equity-basedcompensation expense related to nonemployees that will ultimately be recorded will depend on the remeasurement of the outstanding awards through theirvesting date.Restricted Common StockDuring the year ended December 31, 2018, no shares of restricted common stock were granted. During the year ended December 31, 2017, 1,062,794shares of restricted common stock were granted, including 1,059,912 shares of restricted common stock (adjusted for the Exchange Ratio) granted inexchange for the restricted common units and incentive units that were cancelled as part of the 2017 Reorganization. These shares retained the same vestingschedule as the cancelled restricted common units and incentive units. Private Synlogic treated these as modifications to the original grants of incentive unitsbecause the cancellation and reissuance was deemed to be concurrent. The calculation of the incremental compensation expense was based on the excess ofthe fair value of the award measured immediately before and after the modification. As a result of the modification, Private Synlogic recognizedapproximately $26,000 in equity-based compensation. The following table shows restricted common stock activity: Restricted stock awards Weightedaveragegrant date Number of fair value shares (per share) Unvested at December 31, 2016 — $— Awards exchanged upon 2017 Reorganization 1,059,912 13.53 Granted 2,884 19.01 Vested (671,204) 13.54 Forfeited (16,113) 13.53 Unvested at December 31, 2017 375,479 $13.55 Granted — — Vested (186,332) 13.54 Forfeited (70,468) 13.61 Unvested at December 31, 2018 118,679 $13.54 During the years ended December 31, 2018 and 2017, 186,332 and 671,204 shares of restricted common stock vested and approximately $1.0 and$0.5 million in equity compensation was recognized, respectively. As of December 31, 2018, there was approximately $0.2 million of unrecognized share-based compensation related to restricted stock awards grantedto employees, which is expected to be recognized over a weighted average period of 1.6 years. The total unrecognized share-based compensation cost will beadjusted for actual forfeitures as they occur. There was no unrecognized share-based compensation related to unvested restricted stock awards granted tononemployees at December 31, 2018.F-27SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Incentive Units Incentive units issued by Synlogic, LLC under the 2015 LLC Plan generally vested 25% after one year and ratably monthly thereafter over the next 36months. Certain awards provided for accelerated vesting upon a change in control, as defined in the 2015 LLC Plan. Incentive units did not expire. Holders ofincentive units had no voting rights in connection with such incentive units. Each incentive unit was intended to be a profits interest within the meaning ofIRS regulations promulgated under the Internal Revenue Code. Each incentive unit had a threshold price, which was the price above which an incentive unitwould participate in distributions. In this way, an incentive unit was designed to participate in the future profits and appreciation of Synlogic, LLC. Holdersof incentive units would have been entitled to receive profits when and if distributions were in excess of the threshold price of the award set by the Board ofDirectors on the date of grant. Synlogic, LLC measured and recorded the value of incentive units granted to nonemployees over the period of time that services were provided and,as such, unvested portions were subject to remeasurement at subsequent reporting periods.No incentive units were issued during the years ended December 31, 2018 and 2017. In May 2017, all incentive units were cancelled pursuant to the2017 Reorganization and reissued as restricted common stock. As a result, there was no incentive unit activity during the year ended December 31, 2018 orunrecognized compensation expense related to incentive units as of December 31, 2018The following table represents a summary of incentive unit activity, as adjusted for the Merger, under the 2015 LLC Plan: Incentive units Weighted- Weighted- Weighted- average average average Number of strike threshold grant date units price price fair value Non-vested units at December 31, 2016 971,906 $5.22 $5.93 $1.01 Granted — — — — Vested (73,719) 4.01 5.53 0.87 Forfeited (260,145) 4.19 5.57 1.05 Non-vested units cancelled upon 2017Reorganization (638,042) 5.78 6.15 1.05 Non-vested units at December 31, 2017 — $— $— $— Vested or expected to vest at December 31, 2017 — $— $— $— Restricted Common UnitsIn May 2017, all restricted common unit awards were cancelled pursuant to the 2017 Reorganization and reissued as restricted common stock. As aresult, there was no unrecognized compensation expense related to unvested restricted common units as of December 31, 2018.The following table shows the restricted common unit activity for the year ended December 31, 2017, prior to the 2017 Reorganization, as adjusted forthe Merger: Restricted common units Grant date Number of fair value units (per unit) Unvested at December 31, 2016 219,087 $1.48 Granted — — Vested (37,770) 1.48 Forfeited — — Exchanged as part of 2017 Reorganization (181,317) 1.48 Unvested at December 31, 2017 — $—F-28SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Equity CompensationThe Company has recorded total equity‑based compensation expense of approximately $4.3 million and $2.7 million, during the years endedDecember 31, 2018 and 2017, respectively. Equity compensation during the years ended December 31, 2018 and 2017 is derived from stock options andrestricted stock awards. Equity-based compensation during the year ended December 31, 2018 also includes $0.7 million related to modifications in equityawards in connection with the separation of the Company’s former Chief Executive Officer. Equity compensation during the year ended December 31, 2017additionally includes equity compensation derived from incentive units and restricted common units granted prior to the 2017 Reorganization.In July 2015, in connection with the 2015 Reorganization, all outstanding stock options and awards were canceled and reissued as incentive units andrestricted common units. As such, equity compensation prior to the Merger was derived from incentive units and from a grant of restricted common units.In May 2017, in connection with the 2017 Reorganization, the incentive units and restricted common units were cancelled and exchanged forrestricted stock awards and stock options. Equity compensation after May 2017, was derived from stock options and restricted stock awards.The following table summarizes equity‑based compensation expense within the Company’s consolidated statements of operations and comprehensiveloss for the years ended December 31, 2018 and 2017 (in thousands): Years ended December 31, 2018 2017 Research and development $1,333 $1,410 General and administrative 2,984 1,242 $4,317 $2,652 The following table summarizes equity‑based compensation expense by type of award for the years ended December 31, 2018 and 2017 (inthousands): Years ended December 31, 2018 2017 Stock options $3,361 $1,956 Restricted stock awards 956 508 Incentive units — 132 Restricted common units — 56 $4,317 $2,652 (13)DistributionsThe Board of Directors of Synlogic, LLC had the authority to determine the amount, if any, of proceeds available for distribution to unit holders. Inthe event that a distribution of proceeds was declared by the Board of Directors, such proceeds would have been distributed in accordance with the followingorder of priority: •first, to holders of Class B Preferred Units, pro rata in proportion to their unpaid contributed capital, until such holder had received an amountequal to its capital contribution; •second, to holders of Class A Preferred Units and Class A Contingently Redeemable Preferred Units, pro rata in proportion to their unpaidcontributed capital, until such holder had received an amount equal to its capital contribution; •third, to all holders of preferred units, common units and incentive units, pro rata in proportion to the remaining amount to be distributed, untilan aggregate amount had been distributed in respect of each preferred unit, common unit and incentive unit equal to the greatest aggregateamount per unit distributed in respect of any preferred unit under the first and second priority described above; provided, that no holder of anincentive unit shall participate in any distributions until a total amount equal to the threshold price with respect to such incentive unit hasbeen distributed in respect of any common unit outstanding on the date of issuance of such incentive unit subsequent to the issuance of suchincentive unit;F-29SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) •fourth, to each holder of certain incentive units for which the Board of Directors had established a strike price, pro rata in proportion to theremaining amount to be distributed, an amount equal to the difference between the strike price for such incentive unit, and the threshold pricefor such incentive unit; and •thereafter, to all holders of preferred units, common units and incentive units, pro rata in proportion to their percentage interest.No distributions were made to unit holders prior to the 2017 Reorganization.(14)Significant AgreementsAbbVie Collaboration AgreementIn July 2015, the Company entered into the AbbVie Agreement under which the Company granted AbbVie an exclusive option to purchase IBDCoand, in exchange, agreed to collaborate in researching and developing an Investigational New Drug (“IND”) candidate for the treatment of IBD. The AbbVieAgreement sets forth the Company’s and AbbVie’s respective obligations for development and delivery of an IND candidate package using reasonablecommercial efforts. In exchange for the exclusive option to acquire IBDCo, initial research and development services for drug discovery and pre-clinical development,and participation on the joint research committee (“JRC”), AbbVie agreed to pay IBDCo an upfront, nonrefundable cash payment of $2.0 million, whichIBDCo received in December 2015. AbbVie also agreed to pay IBDCo up to $16.5 million in milestone payments associated with specified research and pre-clinical events, which were determined to represent customer options for accounting purposes, as well as an option exercise fee upon the execution of theiroption to buy IBDCo and other royalty and milestone payments. The upfront cash payment and any payments for option fees and royalties are non-refundable, non-creditable and not subject to set-off.The research and development will be performed by the Company over four phases of research defined in the research plan. The Company is eligibleto receive payments from AbbVie upon the election to continue the research and development at the achievement of certain milestone events. The JRC willmake a determination as to the continuation of the collaboration at the achievement of research and pre-clinical milestones, except for the final milestone,which AbbVie has the discretion to determine achievement without the approval of the JRC. If the parties make the determination to continue on with theAbbVie Agreement upon achievement of each milestone event, then AbbVie will pay the consideration associated with that milestone and the collaborationwill continue through the remaining term of the option to purchase IBDCo, which was initially considered to be approximately 54 months. However, AbbViehas the right to terminate the contract at any time with 90 days’ notice.The Company assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, AbbVie, is a customer. TheCompany identified the following material promises at the outset of the arrangement: (1) a non-exclusive royalty-free research and development license; (2)research and development services for pre-clinical activities under the research plan through to the first research and development phase (or an estimated 17months); (3) three option rights for AbbVie to continue the collaboration as related to three phases of research and development; (4) participation on the JRC;and (5) the transfer of ownership of IBDCo upon exercise of the option to buy IBDCo. The Company determined that the license and research anddevelopment activities were not distinct from one another. Participation on the JRC to oversee the research and development activities was determined to bequantitatively and qualitatively immaterial and therefore is excluded from performance obligations. As such, the Company determined that the license andresearch and development services should be combined into a single performance obligation.The Company evaluated the milestone payments, which represent customer options as described above, and the option to purchase IBDCo, todetermine whether they provide AbbVie with any material rights. The Company concluded that the options were not issued at a significant and incrementaldiscount, and therefore do not provide material rights. As such, they were excluded as performance obligations at the outset of the arrangement. If AbbVieelects to exercise the options, the additional consideration will be added to the transaction price and allocated to the resulting performance obligations.Based on these assessments, the Company identified one performance obligation at the outset of the AbbVie Agreement, which consists of: (1) thenon-exclusive license and (2) the research and development activities through the first research and development phase.At the outset of the arrangement, the transaction price included only the $2.0 million up-front consideration received which was allocated to thesingle performance obligation. The option exercise fees ($16.5 million for the milestones and the IBDCo purchase option exercise fee) that may be receivedare excluded from the transaction price until each customer option is exercised. TheF-30SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Company reevaluates the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur,and, if necessary, adjust its estimate of the transaction price.In May 2017, the Company completed the research and development services for the first phase of the research plan and was paid $2.0 million tocommence the second phase of the research plan. At this time, the $2.0 million was added to the transaction price and allocated to a new performanceobligation consisting of the underlying license and research and development services to be performed over the second phase of the research plan.On September 27, 2018, AbbVie and the Company signed an amendment (the “Amendment”) to the AbbVie Agreement. The Amendment clarified therequirements necessary to complete the second phase which resulted in additional time and effort in the second phase of the research plan. Additionally, theAmendment split the next milestone payment under the AbbVie Agreement into two payments: a milestone payment of $2.0 million earned by the Companyupon execution of the Amendment and the remaining milestone payment of the balance due upon the successful achievement of specified research and pre-clinical events and the advancement to the third phase of the research plan.The Company determined that the Amendment represented a modification to the AbbVie Agreement. The additional research and developmentservices are not distinct from the remaining research and development services under the second phase of the research plan of the AbbVie Agreement. TheAmendment was accounted for as part of the original AbbVie Agreement and the services form part of the single performance obligation that was partiallysatisfied as of the date of the contract modification. As a result, the transaction price for the current performance obligation associated with the second phaseof the research plan increased by $2.0 million. The impact of the contract modification on the transaction price and the measure of progress towardcompletion of the performance obligation was recognized as an adjustment to revenue upon execution of the Amendment on a cumulative catch-up basis.The cumulative catch-up adjustment to revenue, as a result of the contract modification, was $1.8 million recognized during September 2018. Additionally,deferred revenue increased by $0.3 million as a result of the contract modification.Revenue associated with performance obligations under the AbbVie Agreement are recognized as the research and development services are providedusing an input method, according to the full time equivalents incurred. The research and development activities are expected to be performed over a period ofapproximately 54 months. The transfer of control occurs over time and, in management’s judgment, is the best measure of progress towards satisfying theperformance obligation. The amounts received that have not yet been recognized as revenue are recorded in deferred revenue on the Company’s consolidatedbalance sheet.For the years ended December 31, 2018 and 2017, the Company had recognized $ 2.5 million and $2.4 million, respectively, as collaboration revenuein the Company’s consolidated statements of operations and comprehensive loss. Deferred revenue amounted to $0.3 million as of December 31, 2018, all ofwhich is included in current liabilities.License Agreement with the Massachusetts Institute of Technology and Boston UniversityIn April 2017, the Company exercised an option associated with the October 2014 agreement with Boston University and the Massachusetts Instituteof Technology to acquire a license for certain intellectual property in exchange for $50,000. The execution of this option triggered an equity award for theissuance of 325,377 common units, which were converted to 325,377 common shares upon the 2017 Reorganization and converted to 179,999 commonshares during the Merger. Based on the fair value of common units at the time of the execution of the license, the Company recognized license fees ofapproximately $1.8 million upon issuance of the common units associated with the equity award. Additionally, the Company was required to payapproximately $0.3 million for prior patent costs incurred in connection with the option agreement. The Company recorded these amounts, including the fairvalue of the common stock issued to the licensors as research and development expense in the 2017 consolidated statement of operations, as the licenses donot have future alternative use, in accordance with ASC Topic 730, Research and Development.The Company determined that its growing portfolio of internally generated intellectual property superseded the in-licensed intellectual property inthe BU license and the MIT license. Accordingly, on December 18, 2018, it provided notice to terminate the license agreements with MIT and BU/MIT. TheBU license will be terminated effective as of February 16, 2019 and the MIT license will be terminated effective as of June 19, 2019.Sales Agreement with Cowen and CompanyOn October 13, 2017 the Company entered into a sales agreement with Cowen and Company, LLC (“Cowen”) with respect to an at-the-market(“ATM”) offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock through Cowen asits sales agent. In an ATM offering, exchange-listed companies incrementally sellF-31SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) newly issued shares into the secondary trading market through a designated broker-dealer at prevailing market prices. No sales of common stock were madepursuant to the ATM during 2017 and 2018. (15)Net Loss per ShareThe following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except forshare and per share amounts): 2018 2017 Numerator: Net loss attributable to common stockholders $(48,435) $(40,377)Denominator: Weighted-average common shares outstanding - basic and diluted 23,882,685 6,724,641 Net loss per share attributable to common stockholders - basic and diluted $(2.03) $(6.00) The Company’s potentially dilutive shares, which include outstanding stock options and unvested restricted common stock, are considered to becommon share equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of thediluted net loss per share attributable to common stockholders for the period indicated because including them would have had an anti-dilutive effect. As of December 31, 2018 2017 Unvested restricted common stock awards 118,679 375,479 Outstanding options to purchase common stock 1,739,884 1,267,221 (16)Income Taxes The provision for income taxes consist of the following (in thousands): December 31, 2018 2017 Current Tax Expense: Federal $— $— State 33 — $33 $— F-32SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes.Deferred tax assets consist of the following (in thousands): December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $33,275 $21,248 Tax credit carryforwards 4,365 3,038 Accrued expenses 103 32 Property and equipment — 390 Deferred rent 2,209 53 Equity compensation 784 503 Amortizable intangibles 1,339 1,492 Other 78 — Gross deferred tax assets 42,153 26,756 Deferred tax liability: Other — (241)Property and equipment (1,863) — Valuation allowance (40,290) (26,515)Net deferred tax assets $— $— Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of the Company’s deferred tax assets,which are comprised principally of net operating loss carryforwards, and determined that it is more likely than not that the Company will not recognize thebenefits of the deferred tax assets. As a result, a full valuation allowance of approximately $40.3 million and $26.5 million was established at December 31,2018 and 2017, respectively.A reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate is as follows (dollars in thousands): Years ended December 31, 2018 2017 Tax Rate Tax Rate U.S. federal statutory rate 21% 34%State income taxes, net of federal benefit 6% 5%Other permanent differences (1)% (1)%Tax credits 3% 5%Other items (1)% — Change in rate due to Tax Reform — (27)%Mirna acquisition — 17%Net change in valuation allowance (28)% (33)%Effective income tax rate — — A roll-forward of the valuation allowance for the years ended December 31, 2018 and 2017 is as follows (in thousands): Years ended December 31, 2018 2017 Balance at beginning of year $(26,515) $(13,060)Increase in valuation allowance (13,775) (13,455)Balance at end of year $(40,290) $(26,515) F-33SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) As of December 31, 2018 and 2017, the Company had federal and state net operating loss carryforwards that may be available to reduce future taxableincome of approximately $125.5 million and $82.0 million, respectively, which begin to expire in 2034. In addition, at December 31, 2018, the Companyhad federal and state research and development tax credit carryforwards available to reduce future tax liabilities of approximately $2.8 million and $1.6million, respectively. These credits begin to expire in 2034 and 2029, respectively.Pursuant to Section 382 of the Internal Revenue Code of 1986 (“IRC”), certain substantial changes in the Company’s ownership may result in alimitation on the amount of net operating loss (“NOL”) carryforwards and research and development credit (“R&D credit”) carryforwards that may be used infuture years. Utilization of the NOL and R&D credit carryforwards may be subject to a substantial annual limitation under Section 382 of the IRC due toownership change limitations that have occurred previously or that could occur in the future. These ownership changes may limit the amount of NOL andR&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. The Company has not completed a study toassess whether an ownership change has occurred, or whether there have been multiple ownership changes since its formation, due to a significant complexityand related costs associated with such a study. There could be additional ownership changes in the future that may result in additional limitations on theutilization of NOL carryforwards and credits.The Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination, includingresolution of any related appeals of litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than notthreshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than fifty percent likelihood of beingrealized upon the ultimate settlement with the relevant taxing authority. The Company has not recognized any liability for unrecognized tax benefits as ofDecember 31, 2018.The Company files tax returns, on an entity-level basis, as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course ofbusiness, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. Taxyears from 2015 to the present are open to examination under the statute. The Company’s policy is to record interest and penalties related to income taxes aspart of the tax provision. There are no interest or penalties accrued at December 31, 2018 and 2017. Effects of the Tax Cuts and Jobs ActOn December 22, 2017, President Trump signed into U.S. law the Tax Cuts and Jobs Act of 2017 (“Tax Reform”). ASC Topic 740, Accounting forIncome Taxes, requires companies to recognize the effect of tax law changes in the period of enactment even though the effective date for most provisions isfor tax years beginning after December 31, 2017, or in the case of certain other provisions of the law, January 1, 2018. Given the significance of thelegislation, the U.S. Securities and Exchange Commission (the "SEC") staff issued Staff Accounting Bulletin ("SAB") No. 118 (“SAB 118”), which allowsregistrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. However,the measurement period is deemed to have ended earlier when the registrant has obtained, prepared, and analyzed the information necessary to finalize itsaccounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effectscan be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared, or analyzed.SAB 118 summarizes a three-step process to be applied at each reporting period to account for and qualitatively disclose: (1) the effects of the changein tax law for which accounting is complete; (2) provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accountingis not complete, but that a reasonable estimate has been determined; and (3) a reasonable estimate cannot yet be made and therefore taxes are reflected inaccordance with law prior to the enactment of the Tax Cuts and Jobs Act.However, several provisions of the Tax Reform have significant impact on the Company’s U.S. tax attributes, generally consisting of credits, losscarry-forwards, and amortizable intangibles. The provisional reporting period ended on December 22, 2018. The Company has reevaluated its assets andliabilities associated with such future tax benefits in the current year and determined that no further adjustment is necessary to its deferred tax asset andliabilities. This reduction in the deferred tax asset has been offset by a coinciding reduction in the associated valuation allowance, creating a zero net impactto the Company’s statement of operations. The Company’s tax attributes are generally subject to a full valuation allowance in the United States and thus, anyadjustments to the attributes will not impact the tax provision. Although the Company has made a reasonable estimate of the gross amounts of the attributesdisclosed, a final determination of the Tax Reform’s impact on the attributes and related valuation allowance requirements remain incomplete pending a fullanalysis of the provisions and their interpretations.F-34SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Other significant provisions that are not yet effective but may impact income taxes in future years include: a limitation on the current deductibility ofnet interest expense in excess of 30 percent of adjusted taxable income and a limitation of net operating losses generated after fiscal 2018 to 80 percent oftaxable income.(17)LeasesThe Company recorded rent expense of approximately $2.5 million for the year ended December 31, 2018. The Company recorded a rent credit ofapproximately $0.2 million for the year ended December 31, 2017 due to the accelerated amortization the deferred rent associated with the 200 Sidney Streetfacility. In July 2017, the Company agreed to terminate its lease and revised its estimate of the remaining amortization period from 63 months to sevenmonths.Operating LeasesIn July 2017, the Company entered into an agreement to lease approximately 41,346 square feet of laboratory and office space at 301 Binney Street inCambridge, Massachusetts. Annual rent is approximately $3.1 million. The ten-year lease commenced in January 2018 and contains provisions for a free-rent period, annual rent increases and an allowance for tenant improvements. The Company is responsible for real estate taxes, maintenance, and otheroperating expenses applicable to the leased premises. In addition to approximately $1.6 million the Company has committed to for tenant improvements, theoperating lease also provided for a tenant improvement allowance, at the cost of the lessor, not to exceed approximately $6.6 million. The Company wasdeemed to be the accounting owner of the tenant improvements primarily because it was responsible for project cost overruns. Therefore, the amounts will berecorded as a leasehold improvement and deferred rent and will be recorded as a reduction to rent expense ratably over the lease term. At December 31, 2018,the Company has capitalized approximately $5.0 million of the landlord-funded tenant improvements, representing the completed portion of the buildout. Inconjunction with the lease, the Company established a letter of credit of approximately $1.0 million secured by cash balances included in restricted cash.In July 2015, the Company entered into an operating lease for office and laboratory space at 200 Sidney Street in Cambridge, Massachusetts. Theoperating lease term commenced in February 2016 and expired in April 2021 with a one year renewal option to extend the lease. The Company agreed toterminate the lease in July 2017 at a date that was 30 days after the commencement of its new lease. No penalties were associated with the termination of thelease. Rent expense commenced on February 1, 2016 and was recognized on a straight‑line basis over the duration of the term. The operating lease providedfor annual rent of approximately $0.9 million, payable on a monthly basis, which increased at a rate of 3% annually, and included three months of rentabatement during the first year. The Company was responsible for real estate taxes, maintenance, and other operating expenses applicable to the leasedpremises. The Company was deemed to be the accounting owner of the tenant improvements primarily because it was responsible for project cost overruns.Therefore, the amounts were recorded as a leasehold improvement and deferred rent and were being recorded as a reduction to rent expense ratably over thelease term of 63 months. As a result of the agreement to terminate its lease, the Company revised its estimate of the remaining amortization period of thedeferred rent and its estimate of the remaining useful life of its leasehold improvements to seven months through January 2018.Capital LeasesIn June 2017, the Company entered two non-cancellable thirty-six month lease agreements for certain lab equipment of approximately $0.2 millionand $0.7 million, respectively. The lease term and payments for each agreement began upon delivery and installation of the equipment. Both leases areaccounted for as a capital lease as one has a bargain purchase option and in the other, the present value of the lease exceeds 90% of the fair market value. AtDecember 31, 2018, the interest rate on each capital lease obligation was approximately 1.1% and 7.3%, respectively.In October 2016, the Company entered into a twenty-four month, non-cancellable lease agreement for approximately $0.4 million for certain labequipment. Due to the existence of a bargain purchase option, the lease has been accounted for as a capital lease. At December 31, 2017, the interest rate onthe outstanding capital lease obligation was approximately 9.6%. The agreement terminated per the terms of the lease agreement in November 2018.F-35SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) Future minimum lease payments under the Company’s non-cancelable operating and capital leases as of December 31, 2018, are as follows (inthousands): Operating Capital leases leases Fiscal year: 2019 $3,175 $287 2020 3,270 214 2021 3,369 2 2022 3,470 — 2023 3,574 — Thereafter 18,067 — Total future minimum lease payments $34,925 $503 Less amounts representing interest 27 Capital lease obligations at December 31, 2018 476 Less current portion of capital lease obligations 266 Capital lease obligations, net of current portion $210 (18)Commitments and ContingenciesOn December 7, 2018, Synlogic Operating Company, Inc., a wholly-owned subsidiary of Synlogic, Inc. (the “Company”), entered into a Statement ofWork (the “SOW”) with Azzur Group, LLC (“Azzur”) pursuant to a Master Contract Services Agreement (the “Master Services Agreement”), dated September8, 2018, between the Company and Azzur.Pursuant to the SOW, Azzur has agreed to provide the Company with access to, and the use of, an approximately 700 square foot cleanroom space tobe constructed in Waltham, Massachusetts (the “Azzur Suite”), for a period of 44 months, from May 1, 2019 to December 31, 2022 (the “Term”). Azzur hasalso agreed to provide the Company with storage space and personnel support at the Azzur Suite. The total estimated project cost during the Term for accessto, and use of, the cleanroom and storage space, and the personnel support and other services, is $4.8 million.The Company may terminate the SOW on four months’ prior written notice at any time during the Term. In addition, either party may terminate theMaster Services Agreement (including the SOW) due to a breach by the other party and failure to cure. If the Azzur Suite is not ready for use by the Companyas of May 1, 2019, the Company may (i) elect to terminate the SOW, (ii) wait for the Azzur Suite to become available, without incurring any costs (other thana deposit) relating to the Azzur Suite until it becomes available, or (iii) accept an alternate cleanroom space from Azzur on different terms.In the ordinary course of business, the Company may be subject to legal proceedings, claims and litigation as the Company operates in an industrysusceptible to patent legal claims. The Company accounts for estimated losses with respect to legal proceedings and claims when such losses are probableand estimable. Legal costs associated with these matters are expensed when incurred. The Company is not currently a party to any material legal proceedings.(19)Employee BenefitsThe Company has a defined contribution 401(k) plan for eligible employees. Employees are eligible to participate in the plan beginning on their dateof hire. Under the terms of the plan, employees may make voluntary contributions as a percentage of compensation. The Company has not made anymatching contributions since the adoption of the 401(k) plan.(20)Related-Party TransactionsDuring the year ended December 31, 2018, there were no related-party transactions. During the year ended December 31, 2017, before the Companybecame a public company, the Company received repayment of the loan to its then-existing chief executive officer of approximately $0.2 million. The loanwas repaid in June 2017, including interest which accrued at a rate of 0.6%. F-36SYNLOGIC, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) (21)Selected Quarterly Data (Unaudited)The following tables contain quarterly financial information for 2018 and 2017 (in thousands). The Company believes that the following informationreflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarterare not necessarily indicative of results for any future period. 2018 Quarter Ended March 31 June 30 September 30 December 31 Revenue $354 $254 $1,801 $111 Operating expenses 11,990 15,606 13,335 $12,819 Loss from operations (11,636) (15,352) (11,534) $(12,708)Net loss (11,165) (14,591) (10,748) $(11,931)Net loss per share attributable to common stockholders -basic and diluted $(0.55) $(0.59) $(0.43) $(0.47) 2017 Quarter Ended March 31 June 30 September 30 December 31 Revenue $111 $2,111 $111 $111 Operating expenses 7,485 11,568 12,186 12,029 Loss from operations (7,374) (9,457) (12,075) (11,918)Net loss (7,368) (9,388) (11,924) (11,697)Net loss per share attributable to common stockholders -basic and diluted $— $(4.70) $(1.66) $(0.74)Net loss per unit attributable to common unit holders -basic and diluted $(4.49) $— $— $— (22)Subsequent EventsOn February 28, 2019, the Joint Research Committee related to the Company’s collaboration with AbbVie concluded that the remaining milestone of$2.5 million under the Second Amendment in the Company’s collaboration with AbbVie was achieved. Related revenue will be recognized as the researchand development services are provided using an input method, according to the full time equivalents incurred over the third phase of the research plan.F-37CONFIDENTIAL TREATMENT REQUESTEDExhibit 10.25 THIRD AMENDMENT TO AGREEMENT AND PLAN OF MERGERFIRST AMENDMENT TO LICENSE AGREEMENTThis THIRD AMENDMENT TO AGREEMENT AND PLAN OF MERGER and FIRST AMENDMENT TOLICENSE AGREEMENT (this “Third Amendment”), is entered into as of December [ 18 ], 2018 (the “Third AmendmentEffective Date”), by and among AbbVie S.A.r.l., a corporation organized under the laws of Luxembourg (“Buyer”), SynlogicIBDCo, Inc., a Delaware corporation (the “Company”) and Synlogic Operating Company, Inc., a Delaware corporation formerlyknown as, and as successor to, Synlogic, LLC (the “Parent”).RECITALSWHEREAS, Buyer, Company, Parent, Suffolk Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Synlogic, Inc.,a wholly-owned subsidiary of the Parent (“Synlogic”), and certain individuals (the “Founders”) (each of the Founders, Buyer, MergerSub, Company, Parent and Synlogic are sometimes referred to herein individually as a “Party,” and collectively as the “Parties”),entered into an Agreement and Plan of Merger, dated as of July 16, 2015 (as amended, the “Merger Agreement”; capitalized termsnot otherwise defined herein shall the respective meanings assigned to such terms in the Merger Agreement);WHEREAS, Parent and Company entered into a License Agreement dated as of July 16, 2015 (as amended, the “LicenseAgreement”);WHEREAS, Buyer, Parent and the Company first amended the Merger Agreement pursuant to that certain FirstAmendment to Agreement and Plan of Merger dated as of December 14, 2015;WHEREAS, Buyer, Parent and the Company also amended the Merger Agreement pursuant to that certain SecondAmendment to Agreement and Plan of Merger dated as of September 27, 2018;WHEREAS, pursuant to Section 12.6(c) of the Merger Agreement, the Merger Agreement may be amended by Buyer,Parent and the Company;WHEREAS, pursuant to Section 9.9 of the License Agreement, the License Agreement may be amended by Buyer, Parentand the Company; andWHEREAS, Buyer has provided its written consent to Parent’s termination of the University Licenses and, in connectiontherewith, the Parties desire to further amend the Merger Agreement and to amend the License Agreement as set forth herein.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and conditions contained inthis Third Amendment, the Parties agree as follows:Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED1.Amendments to ARTICLE I of the Merger Agreement a.The definition of “[***]” set forth in Section 1.13 of the Merger Agreement is hereby deleted in its entirety andreplaced with “1.13 [Intentionally Omitted]”. b.The definition of “[***]” set forth in Section 1.139 of the Merger Agreement is hereby deleted in its entirety andreplaced with “1.139 [Intentionally Omitted]”. c.The definition of “University Licenses” set forth in Section 1.214 of the Merger Agreement is hereby deleted in itsentirety and replaced with the following new Sections and definitions in the appropriate alphabetical order:“Section 1.214“University Party” means either [***], their respective Affiliates or anycombination thereof.Section 1.214A“University Patent Right” means any Patent Right that (i) was, or absenttermination would have been, the subject of the [***] among [***] or (ii) was, or absent termination would havebeen, the subject of the [***] between [***].”2.Amendment to Section 2.10(c)(ii) of the Merger Agreement.Section 2.10(c)(ii) of the Merger Agreement is hereby amended by inserting the following sentence at the endthereof:“Notwithstanding the foregoing and the last sentence of Section 2.10(c)(iii), in the event that, after the ClosingDate, Buyer determines that it is necessary to enter into an agreement negotiated on arms’ length terms with [***] in order toobtain a license under any [***] owned or controlled by [***] in a particular country or other jurisdiction which, but forsuch license, would be infringed by the manufacture, use or sale of such Product in such country or other jurisdiction, Buyershall be entitled to deduct [***] actually paid to [***] from [***] that would otherwise be owed under this Section 2.10(c)with respect to [***] in the applicable country or other jurisdiction.”3.Amendments to ARTICLE I of the License Agreement a.The definition of “[***]” set forth in Section 1.7 of the License Agreement is hereby deleted in its entirety andreplaced with “1.7 [Intentionally Omitted]”. b.The definition of “[***]” set forth in Section 1.36 of the License Agreement is hereby deleted in its entirety andreplaced with “1.36 [Intentionally Omitted]”.Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED4.General Amendment to Merger Agreement. a.The Merger Agreement is further amended by deleting all references to the “University Licenses”, the “[***]” andthe “[***]”, including any and all terms and conditions in the Merger Agreement pertaining to the such references(including without limitation such references to the University Licenses, [***] and/or [***], as the case may be, inSections 4.2(h), 5.13(q), 5.13(r), 7.1(b)(xiv) and 7.15 of the Merger Agreement. b.For avoidance of doubt, the terms and conditions of the Merger Agreement shall, unless the context expresslyrequires otherwise, shall be interpreted to account for the termination of the University Licenses.5.General Amendment to License Agreement. a.The License Agreement is further amended by deleting all references to the “[***]” and the “[***]”, includingany and all terms and conditions in the License Agreement pertaining to such references (including withoutlimitation Sections 2.5, 2.6 and 6.2 of the License Agreement). b.For avoidance of doubt, the terms and conditions of the License Agreement shall, unless the context expresslyrequires otherwise, shall be interpreted to account for the termination of the [***] and the [***].5.Jurisdiction. This Third Amendment was prepared in the English language, which language shall govern the interpretationof, and any dispute regarding, the terms of this Third Amendment. This Third Amendment and all disputes arising out of orrelated to this Third Amendment or any breach hereof shall be governed by and construed under the laws of the State ofDelaware, USA, without giving effect to any choice of law principles that would require the application of the laws of adifferent jurisdiction.6.Certain Conflicts. Where there is any conflict between the terms of this Third Amendment and the terms of the MergerAgreement, the License Agreement or any other agreement between the Parties (or their respective Affiliates), the terms ofthis Third Amendment shall prevail.7.Effect of Amendment. Except as expressly set forth in this Third Amendment, all other terms of the Merger Agreement andthe License Agreement shall apply and remain in full force and effect.8.Counterparts. This Third Amendment may be executed in one (1) or more counterparts, by original, facsimile or PDFsignature, each of which shall be deemed an original, but all of which together shall constitute one and the sameinstrument. Signatures to this Third Amendment transmitted by facsimile, by email in “portable document format” (“.pdf”),or by any other electronic means intended to preserve the original graphic and pictorial appearance of this Agreement shallhave the same effect as physical delivery of the paper document bearing original signature.[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTEDIN WITNESS WHEREOF, the Parties have executed this Third Amendment by their duly authorized officers as of theThird Amendment Effective Date. ABBVIE S.Ȧ.R.L.SYNLOGIC OPERATING COMPANY, INC. By:/s/ Sophie Morlet By:/s/ Aoife BrennanName:Sophie Morlet Name:Aoife BrennanTitle:Category A Manager Title:President and CEO SYNLOGIC IBDCo, INC. By:/s/ Aoife Brennan Name:Aoife Brennan Title:President and CEO Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTEDExhibit 10.29MASTER CONTRACT SERVICES AGREEMENTTHIS MASTER CONTRACT SERVICES AGREEMENT (together with Appendix A and any Statement(s) of Work (as definedin Section 1), the “Agreement”) is made on 08 September, 2018 (the “Effective Date”) by and between Synlogic OperatingCompany, Inc., having offices at 301 Binney Street, Suite 402, Cambridge, MA 02142 (“Synlogic”) and Azzur Group (d/b/a Azzur ofNew England LLC), a Pennsylvania Limited Liability Company with an office at 411 Waverley Oaks Rd., #126, Waltham MA 02452(“Service Provider”).1.Agreement Structure. From time to time, Synlogic may want Service Provider to provide certain services(“Services”). This Agreement contains general terms and conditions under which Synlogic would engage Service Provider and underwhich Service Provider would provide Services. Synlogic and Service Provider must complete and execute a work order, projectorder or statement of work referencing this Agreement (each, a “Statement of Work”) before any Services are provided. EachStatement of Work will include, at a minimum, the information relating to the specific Services outlined in the sample Statement ofWork attached as Appendix A. Neither Synlogic nor Service Provider is obligated to execute any Statement of Work. Once executed,each Statement of Work becomes part of this Agreement, although the terms in a Statement of Work will apply only to Servicesdescribed in that Statement of Work. A Statement of Work may not change any term in this Agreement.2.About Services.2.1Provision of Services. Service Provider agrees to provide all Services identified in any Statement of Work: (a)within the time period specified in the relevant Statement of Work; and (b) in accordance with the highest prevailing industry standardsand practices for the performance of similar services. For each Statement of Work, Service Provider will designate a “ProjectLeader” who will be available for frequent communications with Synlogic regarding Services provided under that Statement of Work,as well as contacts for administrative and payment matters for those Services. Synlogic will designate a “Synlogic Representative”who will be the point of contact for the Project Leader.2.2Change Orders. If either party identifies a need to modify a Statement of Work, the identifying party will notifythe other party in writing as soon as reasonably possible. Service Provider will use reasonable efforts to provide to Synlogic within[***] after receiving or providing the notice described above a written change order containing a description of the requiredmodifications and their effect on the scope, fees and timelines specified in the Statement of Work (each, a “Change Order”). NoChange Order will be effective unless and until it has been signed by an authorized representative of each party. If Synlogic does notapprove a Change Order and has not terminated the Statement of Work, but still desires that the Statement of Work be modified, thenthe parties will use reasonable good faith efforts to agree on a Change Order that is mutually acceptable. Service Provider willcontinue to work under the existing Statement of Work during any such negotiations, to the extent such efforts are practicable andwould facilitate the completion of the work envisioned in the Statement of Work, but will not commence work in accordance with theChange Order until it is authorized in writing by Synlogic.CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED 2.3Subcontracting. With Synlogic’s prior written consent, Service Provider may subcontract the performance ofspecific obligations of Service Provider under a Statement of Work to an Affiliate (as defined below in this Section 2.3) of ServiceProvider or to a qualified non-Affiliate third party including consultants; provided, that (a) such Affiliate or third party performs thoseServices in a manner consistent with the terms and conditions of this Agreement; and (b) Service Provider remains liable for theperformance of such Affiliate or third party. “Affiliate” means, with respect to either Synlogic or Service Provider, any corporation,company, partnership, joint venture and/or firm which controls, is controlled by or is under common control with Synlogic or ServiceProvider, as applicable. As used in this Section 2.3, “control” means (i) in the case of corporate entities, direct or indirect ownershipof more than fifty percent (50%) of the stock or shares having the right to vote for the election of directors (or such lesser percentagethat is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction); and (ii) in the case of non-corporateentities, the direct or indirect power to manage, direct or cause the direction of the management and policies of the non-corporate entityor the power to elect more than fifty percent (50%) of the members of the governing body of such non-corporate entity.2.4Regulatory Contacts. Synlogic will be solely responsible for all contacts and communications (includingsubmissions of information) with any regulatory authorities with respect to matters relating to Services. Unless required by applicablelaw, Service Provider will have no contact or communication with any regulatory authority regarding Services without the prior writtenconsent of Synlogic, which consent will not be unreasonably withheld. Service Provider will notify Synlogic promptly, and in noevent later than one (1) business day, after Service Provider receives any contact or communication from any regulatory authorityrelating in any way to Services and will provide Synlogic with a summary of such contact and copies of any such communicationwithin one (1) business day after Service Provider’s receipt of such contact or communication. Unless prohibited by applicable law,Service Provider will consult with Synlogic regarding the response to any inquiry or observation from any regulatory authority relatingin any way to Services and will allow Synlogic at its discretion to control and/or participate in any further contacts or communicationsrelating to Services. Service Provider will comply with all reasonable requests and comments by Synlogic with respect to all contactsand communications with any regulatory authority relating in any way to Services.2.5Key Service Provider Personnel. All Service Provider Personnel (as defined in Section 3.4) identified in aStatement of Work as “Key Service Provider Personnel” will remain assigned to perform Services covered by the applicableStatement of Work as long as such individuals remain employed by or under contract with Service Provider, unless (a) an individual isunavailable for reasons of disability, illness or promotion; or (b) Synlogic has requested the replacement of any individual who is notperforming to Synlogic’s reasonable satisfaction. Service Provider will cooperate with Synlogic in periodically reviewing theperformance of the Key Service Provider Personnel and will promptly remedy any concerns to Synlogic’s reasonablesatisfaction. Service Provider will promptly select a qualified replacement should any Key Service Provider Personnel resign orbecome otherwise unavailable as specified above or if Synlogic requests the replacement of any such Key Service ProviderPersonnel. Synlogic will have the right to approve any such replacement, which approval will not be unreasonably withheld.2CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED 3.Representations and Warranties of Service Provider. Service Provider represents and warrants as follows:3.1Organization of Service Provider. Service Provider is and will remain a corporation or company duly organized,validly existing and in good standing under the laws of its jurisdiction of organization.3.2Enforceability of this Agreement. The execution and delivery of this Agreement by Service Provider has beenauthorized by all requisite corporate or company action. This Agreement is and will remain a valid and binding obligation of ServiceProvider, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and therelief of debtors.3.3Absence of Other Contractual Restrictions. Service Provider is under no contractual or other obligation orrestriction that is inconsistent with Service Provider’s execution or performance of this Agreement. Service Provider will not enter intoany agreement, either written or oral, that would conflict with Service Provider’s responsibilities under this Agreement.3.4Qualifications of Service Provider Personnel. Service Provider has engaged, will engage and will cause itsAffiliates involved in rendering Services to engage, employees and permitted subcontractors including consultants (collectively,“Service Provider Personnel”) with the proper skill, training, availability and experience to provide Services. Before providingServices, all Service Provider Personnel must be subject to binding written agreements with Service Provider under which they (a)have confidentiality obligations with regard to Synlogic’s Confidential Information (as defined in Section 6) that are consistent with theterms of this Agreement; and (b) assign and effectively vest in Service Provider any and all rights that such personnel might have in theresults of their work without any obligation of Synlogic to pay any royalties or other consideration to such Service Provider Personnel.3.5Compliance. Service Provider will perform all Services with requisite care, skill and diligence, in accordancewith all applicable laws, rules, regulations, orders and industry standards. Without limiting Service Provider’s obligation to complywith all applicable laws and regulations in providing Services, Service Provider agrees to comply with the United States ForeignCorrupt Practices Act, as amended from time to time, and the OECD Anti-Bribery Convention with regard to Services including notoffering or giving anything of value to a foreign public official in connection with the performance of the official’s duties or inducingan official to use their position to influence any acts or decisions of any foreign, state or public international organization. If specifiedin a Statement of Work, Services will be rendered in accordance with applicable Good Laboratory Practices (GLP). If Services undera Statement of Work involve animal research, no animals used by Service Provider in any tests will be used for food purposes and allanimals will be disposed of in accordance with applicable laws and regulations. In addition, Service Provider will comply with allSynlogic policies and procedures that have been communicated to Service Provider regarding access to and permitted conduct atSynlogic’s or its Affiliate’s premises.3CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED 3.6Conflicts with Rights of Third Parties. The conduct and provision of Services will not violate any patent, tradesecret or other proprietary or intellectual property right of any third party.3.7Absence of Debarment. Service Provider, its Affiliates, Service Provider Personnel and each of their respectiveofficers and directors, as applicable: (a) have not been debarred and are not subject to a pending debarment, and will not use in anycapacity in connection with Services any person who has been debarred or is subject to a pending debarment, pursuant to section 306of the United States Food, Drug and Cosmetic Act, 21 U.S.C. § 335a; (b) are not ineligible to participate in any federal and/or statehealthcare programs or federal procurement or non-procurement programs (as that term is defined in 42 U.S.C. § 1320a-7b(f)); (c) arenot disqualified by any government or regulatory authorities from performing specific services, and are not subject to a pendingdisqualification proceeding; and (d) have not been convicted of a criminal offense related to the provision of healthcare items orservices and are not subject to any such pending action. Service Provider will notify Synlogic immediately if Service Provider, itsAffiliates, any Service Provider Personnel, or any of their respective officers or directors, as applicable, is subject to the foregoing, or ifany action, suit, claim, investigation, or proceeding relating to the foregoing is pending, or to the best of Service Provider’s knowledge,is threatened.4.Compensation. As full consideration for Services, Synlogic will pay Service Provider the amounts set forth in the applicableStatement of Work in accordance with the payment schedule set forth in such Statement of Work. Synlogic will have no obligation topay for any Services (including expenses) that are not set forth in a signed Statement of Work, as amended by any Change Order thatis signed or approved (as set forth in Section 2.2). Service Provider will invoice Synlogic for all amounts due in United StatesDollars. All undisputed payments will be made by Synlogic within [***] after its receipt of an invoice and reasonable supportingdocumentation for such invoice.5.Proprietary Rights.5.1Materials. All documentation, information, and biological, chemical or other materials controlled by Synlogic andfurnished to Service Provider by or on behalf of Synlogic (collectively, with all associated intellectual property rights, the “Materials”)will remain the exclusive property of Synlogic. Service Provider will use Materials only as necessary to perform Services. ServiceProvider will not analyze Materials except as necessary to perform Services and will not transfer or make the Materials available tothird parties without the prior written consent of Synlogic.5.2Deliverables.(a)Ownership. Synlogic will own all rights throughout the world to all inventions, discoveries,improvements, ideas, processes, formulations, products, computer programs, works of authorship, databases, trade secrets,know-how, information, data, documentation, reports, research, creations and all other products and/or materials arising4CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED from or made in the performance of Services (whether or not patentable or subject to copyright or trade secret protection)(collectively, with all associated intellectual property rights, the “Deliverables”). Service Provider will assign and doesassign to Synlogic all right, title and interest in and to all Deliverables and will promptly disclose to Synlogic allDeliverables. For purposes of the copyright laws of the United States, Deliverables constitute “works made for hire,” exceptto the extent such Deliverables cannot by law be “works made for hire”.(b)Cooperation. During and after the term, Service Provider will, and will cause its Affiliates and ServiceProvider Personnel to, (i) cooperate fully in obtaining patent and other proprietary protection for any patentable orprotectable Deliverables, all in the name of Synlogic and at Synlogic’s cost and expense; and (ii) execute and deliver allrequested applications, assignments and other documents, and take such other measures as Synlogic reasonably requests, inorder to perfect and enforce Synlogic’s rights in the Deliverables. Service Provider appoints Synlogic its attorney to executeand deliver any such documents on behalf of Service Provider, its Affiliates, and Service Provider Personnel in the eventService Provider, its Affiliates, or Service Provider Personnel fail to do so.(c)Service Provider Property. Notwithstanding the foregoing, Service Provider will retain full ownershiprights in and to all templates, programs, methodologies, processes, technologies and other materials developed or licensed byService Provider and its Affiliates prior to or apart from performing its obligations under this Agreement (collectively, withall associated intellectual property rights, the “Service Provider Property”), regardless of whether such Service ProviderProperty is used in connection with Service Provider’s performance of its obligations under this Agreement. ServiceProvider will grant and does grant to Synlogic and its Affiliates a perpetual, non-exclusive, fully paid-up worldwide,sublicensable license to use Service Provider Property as required for Synlogic and its Affiliates to use the Deliverables.5.3Work at Third Party Facilities. Service Provider agrees not to accept or use any funds, space, personnel, facilities,equipment or other resources of a third party in performing Services or take any other action that could result in a third party owning orhaving a right in any Deliverables.5.4Records; Records Storage. Service Provider will maintain all materials, data and documentation obtained orgenerated by Service Provider in the course of preparing for and providing Services, including computerized records and files(collectively, the “Records”) in a secure area reasonably protected from fire, theft and destruction. All Records, other than financialrecords of Service Provider, will be the property of Synlogic. Service Provider will not transfer, deliver or otherwise provide anyRecords to any party other than Synlogic or its Affiliates, without the prior written approval of Synlogic.5CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED 5.5Record Retention. All Records will be retained by Service Provider for a minimum period of three (3) yearsfollowing completion of the applicable Statement of Work, or longer if required by applicable law or regulation. Service Provider will,at the direction and written request of Synlogic, promptly deliver Records to Synlogic or its designee, or dispose of the Records, unlessthe Records are required to be retained by Service Provider by applicable law or regulation or for insurance purposes. In no event willService Provider dispose of any Records without first giving Synlogic sixty (60) days’ prior written notice of its intent to do so.5.6Restrictions on Use.(a)The following definitions apply for the purposes of this Section 5.6:(i)“Original Material” means all [***] or other chemical or biological material supplied bySynlogic to Service Provider to perform the Services.(ii)“Modifications” means any substances created by Service Provider, which alter the OriginalMaterial in any way, produce alternative forms of the Original Material, or contain or incorporate any form of theOriginal Material (including Original Material, Progeny or Unmodified Derivatives).(iii)“Progeny” means unmodified descendant from the Original Material (for example, virusfrom virus, cell from cell, or mouse from mouse).(iv)“Unmodified Derivatives” means substances created by Service Provider, which constitutean unmodified functional subunit or product expressed by the Original Material (for example, [***]).(b)Without limiting the generality of Section 5.1 and except to the extent required to perform the Services,Service Provider will not:(i)make any derivative, Unmodified Derivatives, or Modifications of the Original Material orProgeny, without the express written consent of Synlogic;(ii)modify, analyze or reverse engineer, or attempt to discover the composition or othercharacteristics of, the Original Material or Progeny, including without limitation, performing tests or experimentswith a view towards generating information based on which a determination of composition or othercharacteristics could be made, conduct genetic analysis or make genetic manipulation or other alterations on theOriginal Material or Progeny, chemically or genetically modify the Original Material or Progeny, or otherwisealter or modify its composition;(iii)perform any experiments with any Original Material.6CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED (iv)use the Original Material, Modifications or Confidential Information for any commercialpurposes;(v)use the Original Material, Progeny or Modifications in human subjects, whether in clinicaltrials or otherwise and whether for therapeutic, preventive, diagnostic or other purposes;(vi)use the Original Material, Progeny, Modifications or Confidential Information in researchprojects that grant or may grant a sublicense, ownership or other proprietary rights in the Original Material,Progeny, Modifications or Confidential Information to a third party; or(vii)provide or make available to anyone outside of Service Provider’s direct supervision, or toany third party for any purpose whatsoever the Original Material, Progeny, Confidential Information orModifications without the prior written consent of Service Provider whose consent may be withheld at its solediscretion.6.Confidentiality.6.1Definition. “Confidential Information” means any and all non-public scientific, technical, financial, regulatoryor business information, or data or trade secrets in whatever form (written, oral or visual) that is (a) furnished or made available by oron behalf of one party (the “Discloser”) to the other (the “Recipient”) or developed by Service Provider in connection with Services;and (b) if Service Provider is the Discloser, such information (i) if in tangible form, is labeled in writing as proprietary or confidential;or (ii) if in oral or visual form, is identified as proprietary or confidential at the time of disclosure or within fifteen (15) days after suchdisclosure. Confidential Information of Synlogic includes (x) Materials, Deliverables and Records; (y) development and marketingplans, regulatory and business strategies, financial information, and forecasts of Synlogic; and (z) all information of third parties thatSynlogic has an obligation to keep confidential, whether or not, in each case, such materials or information are marked or identified asconfidential.6.2Obligations. During the term of this Agreement and for a period of five (5) years thereafter (and in the case oftrade secrets, until such time as Discloser no longer treats such information as a trade secret), Recipient agrees to (a) hold in confidenceall Discloser’s Confidential Information, and not disclose Discloser’s Confidential Information except as expressly provided in Section6.3, without the prior written consent of Discloser; (b) use Discloser’s Confidential Information solely to carry out Recipient’s rights orobligations under this Agreement; (c) treat Discloser’s Confidential Information with the same degree of care Recipient uses to protectRecipient’s own confidential information but in no event with less than a reasonable degree of care; (d) reproduce Discloser’sConfidential Information solely to the extent necessary to carry out Recipient’s rights or obligations under this Agreement, with allsuch reproductions being considered Discloser’s Confidential Information; and (e) notify Discloser of any unauthorized disclosure ofDiscloser’s Confidential Information, promptly upon becoming aware of such disclosure.7CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED 6.3Permitted Disclosures. Recipient may provide Discloser’s Confidential Information to its Affiliates, and to its andtheir directors, employees, consultants, contractors and agents (but if Recipient is Service Provider, then solely to Service ProviderPersonnel who are in compliance with Section 3.4) on a need to know basis and solely as necessary to carry out Recipient’s rights orobligations under this Agreement; provided, that (a) Recipient remains liable for the compliance of such Affiliates, directors,employees, consultants, contractors and agents with the terms of this Agreement and (b) in the case of Service Provider, suchdisclosure is only to the extent necessary for Service Provider to carry out its obligations under this Agreement. Recipient may alsodisclose Discloser’s Confidential Information to third parties only to the extent such disclosure is required to (i) to comply with (x)applicable law, (y) regulation or (z) the rules of any stock exchange or listing entity; (ii) to defend or prosecute litigation; or (iii) by agovernmental authority or by order of a court of competent jurisdiction; provided, that Recipient provides prior written notice of suchdisclosure to Discloser, takes all reasonable and lawful actions to avoid or minimize the degree of such disclosure, and cooperatesreasonably with Discloser in any efforts to seek a protective order. Furthermore, Synlogic may disclose Confidential Information ofService Provider relating to Services to entities with whom Synlogic has (or may have) a strategic product marketing and/ordevelopment collaboration or to bona fide actual or prospective underwriters, investors, lenders or other financing sources or topotential acquirers of the business to which this Agreement relates, and who in each case have a specific need to know suchConfidential Information and who are bound by a like obligation of confidentiality and restrictions on use.6.4Exceptions. Recipient’s obligations of non-disclosure and non-use under this Agreement will not apply to anyportion of Discloser’s Confidential Information that Recipient can demonstrate, by competent proof:(a)is generally known to the public at the time of disclosure or becomes generally known through nowrongful act on the part of Recipient;(b)is in Recipient’s possession at the time of disclosure other than as a result of Recipient’s breach of anylegal obligation;(c)becomes known to Recipient on a non-confidential basis through disclosure by sources other thanDiscloser having the legal right to disclose such Confidential Information; or(d)is independently developed by Recipient without reference to or reliance upon Discloser’s ConfidentialInformation.6.5Personal Identifiable Information. Notwithstanding anything to the contrary in this Section 6, (a) Service Providerwill not disclose to any third party nor use any protected health information, personal data or biological samples of subjects enrolled inclinical studies that are the subject of Services (collectively, “Personal Identifiable Information”) except as expressly required in theapplicable Statement of Work and as long as such disclosure and use is in8CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED compliance with applicable law; and (b) such restrictions on the disclosure and use of Personal Identifiable Information will remain inplace for as long as such restrictions are required under applicable law. Synlogic’s use and disclosure of Personal IdentifiableInformation will be in accordance with applicable laws and regulations and the relevant consent documents.7.Indemnification; Insurance; Remedies.7.1Indemnification by Service Provider. Service Provider will indemnify, defend and hold harmless Synlogic, itsAffiliates, and its and their respective officers, directors, employees and agents (collectively, the “Synlogic Indemnitees”) [***], to theextent such claims arise out of or relate to (a) [***] (as defined in Section 7.2) [***]7.2Indemnification by Synlogic. Synlogic will indemnify, defend and hold harmless Service Provider, its Affiliates,and its and their respective officers, directors, employees and agents (collectively, the “Service Provider Indemnitees”) [***], to theextent such claims arise out of or relate to (a) [***]7.3Indemnification Procedures. Each party must notify the other party within [***] after receipt of any claims madefor which the other party might be liable under Section 7.1 or 7.2, as applicable. The indemnifying party will have the sole right todefend, negotiate, and settle such claims. The indemnified party will be entitled to participate in the defense of such matter and toemploy counsel at its expense to assist in such defense; provided, however, that the indemnifying party will have final decision-makingauthority regarding all aspects of the defense of the claim. The indemnified party will provide the indemnifying party with suchinformation and assistance as the indemnifying party may reasonably request, at the expense of the indemnifying party. Neither partywill be responsible nor bound by any settlement of any claim or suit made without its prior written consent; provided, however, that theindemnified party will not unreasonably withhold or delay such consent.7.4Insurance. During the term of this Agreement and for a period of at least two (2) years after termination orexpiration of this Agreement, Service Provider will maintain the following minimum insurance coverage with financially sound andnationally reputable insurers: Workers Compensation (applicable statutory limits); Commercial General Liability including contractualliability ($1,000,000 per occurrence/$2,000,000 aggregate); Comprehensive Automobile Liability ($1,000,000); ProfessionalLiability/Errors and Omissions ($1,000,000 per occurrence); and Umbrella liability coverage ($5,000,000 per occurrence/$5,000,000aggregate). Service Provider will name Synlogic as an additional insured (except on policies for Workers’ Compensation) and willprovide Synlogic with a Certificate of Insurance evidencing such coverages naming Synlogic as an additional insured and providingthat thirty (30) days’ advance written notice will be given to Synlogic of any material change or cancellation in coverage or limits.9CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED 7.5Remedies. In the event that any Services do not meet the specifications or other performance criteria agreed to byService Provider and Synlogic in writing, then Service Provider will, at Synlogic’s option, promptly (a) re-perform such Services atService Provider’s cost; or (b) refund to Synlogic all amounts paid by Synlogic to Service Provider in connection with suchServices. Further, Service Provider agrees that (i) Synlogic may be irreparably injured by a breach of this Agreement; (ii) moneydamages would not be an adequate remedy for any such breach; and (iii) Synlogic will be entitled to seek equitable relief, includinginjunctive relief and specific performance, without having to post a bond, as a remedy for any such breach. The provisions of thisSection 7.5 are not exclusive, and Synlogic may seek any other right or remedy that it may have under this Agreement or otherwise.8.Expiration; Termination.8.1Expiration. This Agreement will expire on the later of (a) three (3) years from the Effective Date or (b) thecompletion of all Services under all Statement(s) of Work executed by the parties prior to the third anniversary of the EffectiveDate. This Agreement may be extended by mutual agreement of the parties or earlier terminated in accordance with Section 8.2 or 8.3.8.2Termination by Synlogic. In the event of a breach of this Agreement by Service Provider which cannot be cured(e.g., breach of confidentiality obligations under Section 6), Synlogic may terminate this Agreement or any Statement of Work withimmediate effect, at any time upon written notice to Service Provider. Further, Synlogic may terminate this Agreement or a Statementof Work at any time upon [***] prior written notice to Service Provider.8.3Termination by Service Provider. Service Provider may terminate this Agreement or any Statement of Work ifSynlogic fails to cure a material breach of this Agreement or of a Statement of Work within [***] after receiving written notice fromService Provider of such breach.8.4Effect of Termination or Expiration. Upon termination or expiration of this Agreement, neither Service Providernor Synlogic will have any further obligations under this Agreement, or in the case of termination or expiration of a Statement ofWork, under that Statement of Work, except that:(a)Service Provider will terminate all affected Services in progress in an orderly manner as soon aspractical and in accordance with a schedule agreed to by Synlogic and, if requested, will work with Synlogic to transition therelevant Services to Synlogic or its designee, unless Synlogic specifies in the notice of termination that Services in progressshould be completed;(b)Service Provider will deliver to Synlogic all Deliverables developed through termination or expirationand will deliver to Synlogic, or at Synlogic’s option, dispose of, any Materials in its possession or control;10CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED (c)Synlogic will pay Service Provider any monies due and owing Service Provider, up to the time oftermination or expiration, for Services properly performed and all authorized expenses actually incurred (as specified in theapplicable Statement of Work);(d)Service Provider will promptly refund any monies paid in advance by Synlogic for Services notrendered;(e)each Recipient will promptly return to the Discloser all of Discloser’s Confidential Information(including all copies) provided to Recipient under this Agreement or under any Statement of Work which has beenterminated or has expired, except for one (1) copy which Recipient may retain solely to monitor Recipient’s survivingobligations of confidentiality and non-use, and in the case of Synlogic, to exercise all surviving rights of Synlogic under thisAgreement; and(f)the terms and conditions under Sections 2.3(b), 2.4, 3, 5, 5.6, 6, 7, 8.4 and 9 will survive any suchtermination or expiration.9.Miscellaneous.9.1Independent Contractor. Service Provider is an independent contractor and not an agent or employee ofSynlogic. Service Provider will not in any way represent itself to be an agent, employee, partner or joint venturer of or with Synlogic,and Service Provider has no authority to obligate or bind Synlogic by contract or otherwise. Service Provider has full power andauthority to determine the means, manner and method of performance of Services. Service Provider is responsible for, and willwithhold and/or pay, any and all applicable federal, state or local taxes, payroll taxes, workers’ compensation contributions,unemployment insurance contributions, or other payroll deductions from the compensation of Service Provider’s employees and otherService Provider Personnel and no such employees or other Service Provider Personnel will be entitled to any benefits applicable to oravailable to employees of Synlogic. Service Provider understands and agrees that it is solely responsible for such matters and that itwill indemnify Synlogic and hold Synlogic harmless from all claims and demands in connection with such matters.9.2Publicity. Except to the extent required by applicable law or regulation or the rules of any stock exchange orlisting agency, Service Provider will not make any public statement or release concerning this Agreement or the transactionscontemplated by this Agreement or use Synlogic’s name or the name of any Affiliate of Synlogic in any form of advertising, promotionor publicity, without obtaining the prior written consent of Synlogic.9.3Certain Disclosures and Transparency. Service Provider acknowledges that Synlogic and its Affiliates arerequired to abide by federal and state disclosure laws and certain transparency policies governing their activities including providingreports to the government and to the public concerning financial or other relationships with healthcare providers. Service11CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED Provider agrees that Synlogic and its Affiliates may, in their sole discretion, disclose information about this Agreement and aboutService Provider’s Services including those relating to healthcare providers and any compensation paid to healthcare providerspursuant to this Agreement. Service Provider agrees to promptly supply information reasonably requested by Synlogic for disclosurepurposes. To the extent that Service Provider is independently obligated to disclose specific information concerning Services relatingto healthcare providers and compensation paid to healthcare providers pursuant to this Agreement, Service Provider will make timelyand accurate required disclosures.9.4Notices. All notices must be in writing and sent to the address for the recipient set forth in this Agreement or atsuch other address as the recipient may specify in writing under this procedure. Communications and notices to Synlogic will bemarked “Attention: Legal Department” with a copy to Naimesh Kotadia, Manufacturing Lead. Communications and notices toService Provider will be marked “Attention: Ravi Samavedam, General Manager”. All notices must be given (a) by personal delivery,with receipt acknowledged; or (b) by prepaid certified or registered mail, return receipt requested; or (c) by prepaid recognized expressdelivery service. Notices will be effective upon receipt or at a later date stated in the notice.9.5Assignment. Except as expressly provided in Section 2.3, Service Provider may not assign, delegate or transferits obligations under this Agreement, in whole or in part, without the prior written consent of Synlogic, and any attempted assignment,delegation or transfer by Service Provider without such consent will be void. Synlogic may assign, delegate or transfer this Agreementin whole or in part without consent of Service Provider. No assignment, delegation or transfer will relieve either party of theperformance of any accrued obligation that such party may then have under this Agreement.9.6Entire Agreement. This Agreement, together with the attached Appendix A and any fully-signed Statements ofWork, each of which are incorporated into this Agreement, constitute the entire agreement between the parties with respect to thespecific subject matter of this Agreement and all prior agreements, oral or written, with respect to such subject matter aresuperseded. Each party confirms that it is not relying on any representations or warranties of the other party except as specifically setforth in this Agreement. If there is any conflict, discrepancy or inconsistency between the terms of this Agreement and any Statementof Work, purchase order or other form used by the parties, the terms of this Agreement will control.9.7No Modification. This Agreement (including Statement(s) of Work) may be changed only by a writing signed byauthorized representatives of each party.9.8Severability; Reformation. Each provision in this Agreement is independent and severable from the others, andno provision will be rendered unenforceable because any other provision is found by a proper authority to be invalid or unenforceablein whole or in part. If any provision of this Agreement is found by such an authority to be invalid or unenforceable in whole or in part,such provision will be changed and interpreted so as to best accomplish the objectives of such unenforceable or invalid provision andthe intent of the parties, within the limits of applicable law.12CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED 9.9Governing Law. This Agreement and any disputes arising out of or relating to this Agreement will be governedby, construed and interpreted in accordance with the internal laws of the Commonwealth of Massachusetts, without regard to anychoice of law principle that would require the application of the law of another jurisdiction. The parties expressly reject anyapplication to this Agreement of (a) the United Nations Convention on Contracts for the International Sale of Goods; and (3) the 1974Convention on the Limitation Period in the International Sale of Goods, as amended by that certain Protocol, done at Vienna on April11, 1980.9.10Jurisdiction; Venue. Any legal action or proceeding concerning the validity, interpretation and enforcement ofthis Agreement, matters arising out of or related to this Agreement or its making, performance or breach, or related matters will bebrought exclusively in the courts of the Commonwealth of Massachusetts. All parties consent to the exclusive jurisdiction of thosecourts and waive any objection to the propriety or convenience of such venues.9.11Waivers. Any delay in enforcing a party’s rights under this Agreement, or any waiver as to a particular defaultor other matter, will not constitute a waiver of such party’s rights to the future enforcement of its rights under this Agreement, exceptwith respect to an express written waiver relating to a particular matter for a particular period of time signed by an authorizedrepresentative of the waiving party, as applicable.9.12No Strict Construction; Headings; Interpretation. This Agreement has been prepared jointly and will not bestrictly construed against either party. The section headings are included solely for convenience of reference and will not control oraffect the meaning or interpretation of any of the provisions of this Agreement. The words “include,” “includes” and “including”when used in this Agreement (and any Statement(s) of Work) are deemed to be followed by the phrase “but not limited to”.9.13Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemedto be an original and all of which together will constitute one and the same instrument. A facsimile or portable document format(“.pdf’) copy of this Agreement, including the signature pages, will be deemed an original.[Remainder of page left blank intentionally]13CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED IN WITNESS WHEREOF, each party has caused this Agreement to be executed by its duly authorized representative as of theEffective Date.SYNLOGIC OPERATING COMPANY, INC. AZZUR GROUP, D/BA AZZUR OF NEW ENGLANDLLCBy:/s/ Todd Shegog By:/s/ Ravi SamavedamPrint Name:Todd Shegog Print Name:RAVI SAMAVEDAMTitle:CFO Title:GENERAL MANAGER 14CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED APPENDIX ASAMPLE STATEMENT OF WORKTHIS STATEMENT OF WORK (the “Statement of Work”) by and between Synlogic Operating Company, Inc. (“Synlogic”)and Azzur Group (d/b/a Azzur of New England LLC) (“Service Provider”), will be effective as of the last date of signaturebelow, and upon execution will be incorporated into the Master Contract Services Agreement between Synlogic and Service Providerdated 08 September 2018 (the “Agreement”). Capitalized terms used in this Statement of Work will have the same meaning as setforth in the Agreement.Synlogic hereby engages Service Provider to provide Services, as follows:1.Services. Service Provider will provide the following Services to Synlogic:Describe specific Services to be provided including all Deliverables. Also include, as applicable, format of dataDeliverables, procedures for verification of accuracy of data, and whether Services must be performed in accordance withGLP, etc.2.Materials. Synlogic will provide to Service Provider the following Materials for Services:Describe specific materials being provided by Synlogic.3.Completion. Services will be completed [within [TIME PERIOD].] or [in accordance with the following schedule:[INSERT SCHEDULE]]4.Service Provider Contacts.Project Leader: [NAME AND TITLE]Administration Contact: [NAME AND TITLE]Payment Contact: [NAME AND TITLE]5.Key Service Provider Personnel.Identify all Key Service Provider Personnel, if any (see Section 2.5 (Key Service Provider Personnel) of the Agreement). Ifnone, so state.6.Synlogic Representative. [NAME AND TITLE]7.Compensation. The total compensation due Service Provider for Services under this Statement of Work will not exceed[WRITTEN AMOUNT (numerical amount)]. All amounts due under this Statement of Work will be invoiced in UnitedStates Dollars to the attention of [NAME AND TITLE] as follows: [INVOICE SCHEDULE]. All pass through costs mustbe approved in advance in writing by Synlogic and will not include any15CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED administrative or other additional charges. Amounts due for pass through costs will be invoiced in the billing cycle firstfollowing the date they are incurred and invoices will indicate which costs are pass through costs. Payment will be made inaccordance with Section 4 (Compensation) of the Agreement. Service Provider agrees that the amounts payable orotherwise provided by Synlogic under this Agreement represent the fair market value of the Services and have not beendetermined in a manner that takes into account the volume or value of any referrals or business.All terms and conditions of the Agreement will apply to this Statement of Work. In the event of any conflict between this Statement ofWork and the terms of the Agreement, the terms of the Agreement will control. A facsimile or portable document format (“.pdf) copyof this Statement of Work, including the signature pages, will be deemed an original.[Remainder of page left blank intentionally]16CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED STATEMENT OF WORK AGREED TO AND ACCEPTED BY:SYNLOGIC OPERATING COMPANY, INC. AZZUR GROUP, D/BA AZZUR OF NEW ENGLANDLLCBy: By: Print Name: Print Name: Title: Title: Date: Date: 17CONFIDENTIALPortions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALExhibit 10.30 Proposal P-6454 (SOW No. 1) ForStatement of Work for Suite 1 Rental THIS STATEMENT OF WORK (the “Statement of Work”) by and between Synlogic Operating Company, Inc. (“Synlogic”) andAzzur Group (d/b/a Azzur of New England LLC) (“Service Provider”), will be effective as of the last date of signature below, andupon execution will be incorporated into the Master Contract Services Agreement between Synlogic and Service Provider dated 08September 2018 (the “Agreement”). Capitalized terms used in this Statement of Work will have the same meaning as set forth in theAgreement.Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALTable of Contents Section 1 – Background/Scope3Section 2 – Technical Requirements3Section 3 – Detailed Estimate4Section 5 – Timeline12Section 7 – Change History12Exhibit A – Cleanroom Layout12 Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALProposal for Facility Use and Professional Services (SOW No. 1)Section 1 – Background/ScopeUpon execution of this Statement of Work No. 1 and initiation of a purchase order, Azzur will commence performing this Services setforth in this Statement of Work No. 1. The existence and terms of this agreement shall be considered Confidential Information (as thatterm is used in the Agreement). Azzur will not subcontract use of the cleanroom or the performance of any Services under thisStatement of Work No. 1 to a 3rd party without Synlogic’s written approval. This Statement of Work No. 1 is for the use of Azzur ofNew England LLC’s Waltham facility, including the cleanroom, warehouse and raw materials laboratory services as well asprofessional services such as equipment calibration/qualification, quality support and material handling. This Statement of Work No. 1includes the following Services and associated costs: a)Cleanroom Use and Associated Costs b)Warehousing Use and Associated Costs: [***] c)Warehousing Use and Associated Costs: Use of process gases, [***] and shipping d)Performance of calibration/qualification of equipment planned for use in early phase clinical manufacturing e)Personnel SupportThe scope of this Statement of Work No. 1 does not include procurement/purchase of equipment, raw materials, consumablesetc. on behalf of Synlogic. Any such items will be invoiced to Synlogic at cost plus a processing/handling/storage fee of [***].Several assumptions have been made to develop Section 3 of this Statement of Work No. 1, which contains the breakdown of hoursand costs for each Service described in this Statement of Work No. 1. Changes to the Services can be addressed via an amendment tothis Statement of Work No. 1 or via a change order, in each case executed an authorized representative of each party; provided thatAzzur will not incur any additional costs that are not set forth in this Statement of Work No. 1 until an amendment or change orderspecifying such additional costs is executed by each party.Section 2 – Technical RequirementsAZZUR personnel will be experienced with FDA facility compliance expectations. AZZUR has based this Statement of Work No. 1upon the following documents. •Code of Federal Regulations Title 21 Part 210 – Current Good Manufacturing Practice in the Manufacturing,Processing, Packing, or Holding of Drugs; General •Code of Federal Regulations Title 21 Part 211 – Current Good Manufacturing Practice for FinishedPharmaceutical3Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALProposal for Facility Use and Professional Services (SOW No. 1) •ASTM E-2500 – 07 – Standard Guide for Specification, Design, and Verification of Pharmaceutical andBiopharmaceutical Manufacturing Systems and Equipment •ISPE Good Practice Guide – Applied Risk Management for Commissioning and Qualification •ISPE Good Practice Guide – Science and Risk-Based Approach for the Delivery of Facility Systems andEquipment •ISPE Good Practice Guide – Good Engineering Practices •PDA Technical Report 56 – Application of Phase Appropriate Quality System and cGMP to the Development ofTherapeutic Protein Drug SubstanceSection 3 – Detailed Estimatea)Cleanroom Use CostsThe proposed cleanroom (Suite 1) for use by Synlogic includes [***].A copy of the layout diagram of Suite 1 is attached as Exhibit A.The following items are included in the cost of the cleanroom use: •Access to qualified/maintained core and gowning areas – Qualified to ISO standards oAll entry/exit door to classified spaces will be interlocked oRoom differential pressures will be monitored on a routine basis (at least every 24 hours) •Cleanroom cleaning oWeekly – Horizontal and vertical surfaces including wiped using IPA, floors vacuumed and moppedusing the latest version of the following approved cleaning solution [***]. oMonthly – Same as weekly cleaning followed by second cleaning using approved cleaning solution onall surfaces [***]. oQuarterly (once every 3 months) – Same as monthly cleaning [***] oTriple clean – Quarterly cleaning performed 3 times. Performed on an as needed basis betweencampaigns or at Synlogic’s request.4Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALProposal for Facility Use and Professional Services (SOW No. 1) •Security and badge access control. Facility access to Suite 1 is not restricted, on the basis that Azzur safety policiesare met. Personnel may not work as a lone worker outside of regular business hours (Monday – Friday, 0700-1800). •Back-up power (backup generator in place) •Routine Environmental Monitoring oWeekly TAP, Viable Air and Surface Monitoring – Additional environmental monitoring may becompleted upon request as time & materials. •Utilities oPower, water (hand washing sink) •Pest Control •Waste Disposal (Biological, Hazardous, Non-Hazardous) •[***] certification/maintenance for existing [***]. •Any other repair or maintenance on all aspects of the classified space (e.g. HVAC maintenance, routine repairs)The table below includes the all-inclusive cost of all items listed above. Equipment rental of an additional [***] is also available.Table 1: Cleanroom Use CostsItem DescriptionPer MonthEstimatedTotal Cost*Cleanroom Use Costs (Fixed Price)[***][***]Equipment Rental – additional BSC[***][***]Total Cost[***] *Based on discussions with Synlogic the cleanroom will be used for a duration of 6 months starting November 2018.Synlogic’s personnel using the classified areas are to be trained on Azzur SOPs on gowning, personnel movement, material controletc., costs for such training will be covered under quality personnel costs (Time and Materials).Any gowns, gloves, wipes and similar disposables supplied by Azzur for Synlogic’s use will be invoiced at cost [***] for stocking,storage and handling.5Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALProposal for Facility Use and Professional Services (SOW No. 1)b)Warehousing Use Costs: Ambient and Cold StorageThe Azzur warehouse is approximately [***], including the receiving/loading dock.The following items are included in the cost of the warehouse use: •Escorted access to secure, qualified and monitored warehouse – Qualified/monitored for temp/humidity control,security cameras and badge access is in place. •[***] storage space – 1 pallet total required. •[***] storage space – Based on discussions with Synlogic, it is estimated that a total of [***]. All CTUs will bemonitored for temperature and trends of such monitoring provided to Synlogic upon request. •Warehouse cleaning and maintenance – The warehouse will be cleaned on a regular basis and maintained byAzzur. Routine revalidations will be performed per Azzur requirements. •Back-up power (backup generator in place) •Utilities oPower, water •Pest ControlThe table below includes the all-inclusive cost of all items listed above.Table 2: [***]Item DescriptionUnit Cost Per MonthEstimated Total Cost*[***][***][***][***][***][***][***][***][***][***][***][***]Warehouse Use Total Estimated Cost[***] * Storage will be used by Synlogic for 7 months starting October 2018.All storage costs will be invoiced from October 2018 to April 2019, irrespective of use.6Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALProposal for Facility Use and Professional Services (SOW No. 1)c)Warehousing Costs: Use of process gases, [***] and shippingThis section provides the standard costs for use of process gases, [***] and shipping to and from the Azzur site in Waltham.The following items are included in these costs: •Access to process gases [***]. Azzur will house and maintain gas cylinders for Synlogic use. Process gases willbe piped into the cleanroom for use. •[***] during processing for freezing step. •Shipping of materials to and from the Azzur site using an Azzur vanThe table below includes the costs of all items listed above for the duration of the project.Table 3: [***]Item DescriptionUnit CostEstimatedTotal Cost**[***][***][***][***][***][***][***][***][***]Warehouse Use Total Estimated Cost[***] ** A total duration of 6 months was used for this estimate (November 2018 to April 2019) A total of [***] per month for the durationof 6 months was used for shipping costs. A total of [***] batches was used for this estimate. Invoices will be based on actual usage.A total of [***] gas cylinders is estimated for the duration of the campaign; only actual use will be billed, on a full cylinder basis.d)Calibration/Qualification of equipment planned for use in early phase clinical manufacturingAzzur is capable of providing calibration services using in-house standards and the Azzur Quality Management System. In addition,Azzur has experienced personnel to perform qualification of equipment and related systems in a compliance manner. The followingtable is an estimate of the costs related to equipment calibration and qualification of equipment that is not owned by Azzur. Equipmentthat are Azzur-owned and will be used by Synlogic are not included in the list. Any costs related to calibration and qualification ofAzzur-owned equipment will not be charged to Synlogic.7Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALProposal for Facility Use and Professional Services (SOW No. 1)Calibration and qualification costs are based on time and materials and will be invoiced based on actual hours spent of such activities.An average hourly rate of [***] has been used for the estimate of calibration and qualification costs.Table 4: Equipment Calibration/Qualification Costs[***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***]Total Cost[***] e)Testing DescriptionAzzur is capable of receiving, sampling, testing and releasing raw materials and consumables (referred together as materials) for use inearly phase GMP activities, which, for the avoidance of doubt, will be considered Company Materials. Each material/consumable willhave a specification in place for establishing release requirements.Azzur will be able to perform testing as listed in Table 5. All testing will be billed as time & materials as the QC resource providessupport (included in Table 6). The estimated materials are listed, and will be billed within the consumables line item. Consumables arebilled at list price [***] for handling fee.Table 5. Testing Supported at Azzur WalthamAssayEstimated Materials[***][***][***][***] Any tests required to be outsourced to external labs will be invoiced at cost plus [***] for processing, handling etc. All such testingwill be reviewed/approved by Azzur quality prior to release of materials. Invoices for testing will be generated based on actualsampling/testing performed on a biweekly basis.8Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALProposal for Facility Use and Professional Services (SOW No. 1)f)Personnel CostsBased on the scope of work, it is estimated that Azzur personnel will be required for the duration of the project (7 months total). Theresponsibilities of these resources are listed below:Responsibilities of the Project Manager include: •Primary point of contact with Synlogic for coordination of activities in and out of the suite •Maintaining schedule for calibration/qualification of equipmentResponsibilities of the Material Handler include: •Receipt, inspection, labeling, handling and shipping of Synlogic materials and equipment •Generation and maintenance of specifications for Synlogic materials •Point of contact for kitting of materials for Synlogic use •Track and maintain inventories related to SynlogicResponsibilities of the Quality resource include: •Quality oversight of all Azzur/Synlogic activities related to Synlogic materials, equipment and related entities •Synlogic point of contact for any and all quality related items, including review/approval of all deviations, changecontrols, specifications, labels, forms and other documents related to Synlogic operations •Execution of Quality Control-related items such as material specification generation, raw material testing, and finalproduct testing where applicable. •Execute aseptic technique training for personnel (may be a different resource than the primary QC/QA resource).9Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALProposal for Facility Use and Professional Services (SOW No. 1)The below table provides the estimated total costs for personnel based on 7 months of total project duration.Table 6. Personnel CostsRoleHrs/WeekDuration (Weeks)Hourly RateCost[***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***] g)[***]Following manufacture of drug product, [***] will be generated by Azzur personnel. The final drug product will be stored on-site atAzzur for [***]. The product will be aliquoted at intervals described within the [***], for a total duration of [***]. Project managementof the study is also available. Costs associated with the [***] are listed below in Table 7.Table 7. [***]Deliverable/ItemCostNotes[***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***]Total Cost[***] Note: Rates are subject to change each calendar year due to market conditions. Notification will be provided prior to any rate increase.10Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALProposal for Facility Use and Professional Services (SOW No. 1)Section 4 – Overall Project CostThe following table shows the total costs based on the Services set forth in this Statement of Work No. 1, which are estimated costswhere indicated. Azzur will begin performing the Services described in this Statement of Work No. 1 after the Effective Date. Changesto this Statement of Work No. 1 can be made via an amendment to this Statement of Work No. 1 or via a change order at any pointduring the term of this Statement of Work No. 1, in each case executed by an authorized representative or each party.Table 8: Overall Project Cost EstimateCategorySourceUnit CostTotal CostsNotes/Assumptions[***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***]GRAND TOTAL$548,495 All invoices for time and materials-based costs will be based on actual usage or hours spent. Time and expense will be invoiced everymonth against the approved purchase order and will be based on timesheets, which will be provided to Client upon request.Cleanroom rent, warehouse space, and CTU rentals will be invoiced on the first of the month.Consumables will be invoiced every month. An updated consumable list will be provided to Azzur prior to storage and will be updatedas appropriate.An initial invoice following acceptance of this proposal will be generated for a deposit of [***] (Table 8) within [***]. The depositwill be applied to the final invoice against the purchase order.11Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALProposal for Facility Use and Professional Services (SOW No. 1)Section 5 – TimelineThe term of this Statement of Work (the “Term”) shall commence on the date indicated on the first page of this Agreement (the“Effective Date”), and shall remain in full force and effect until the final completion of the Services as set out in this Statement ofWork. For the time-based elements of this Statement of Work (cleanroom use and warehouse use), the Parties shall, five months afterthe Effective Date, discuss whether to extend the time-based elements and, if so, shall agree on further terms regarding any suchextension.Section 6 – ExhibitsExhibit A: Cleanroom LayoutSection 7 – Change HistoryDateReason for Change13Aug2018Initial Submission29Aug2018Revised Submission10Sep2018Revised Submission SOW 1 Generated by (Azzur):/s/ Nicole LabrecqueDate – 10Sep2018Name: Nicole LabrecqueTitle: Tech Transfer Manager, Azzur GroupAddress: 411 Waverley Oaks Rd., #126Waltham, MA 02452Phone: [***]Cell: [***]Email: [***][***]SOW 1 Accepted by (Synlogic):/s/ Todd ShegogDate – 9/10/2018Name: Todd ShegogTitle: CFOAddress:Phone:Cell:Email:12Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIALProposal for Facility Use and Professional Services (SOW No. 1) [***]85130695v.1 13Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED P-6671 SOW 2 Rev l for Facility Use (Suite 3 May 2019 to Dec 2022)CONFIDENTIALExhibit 10.31 Proposal P-6671 (SOW 2 Revision 1) For Statement of Work for Azzur of New England Facility Use(Suite 3 – May 1, 2019 to December 31, 2022) 1Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED P-6671 SOW 2 Rev l for Facility Use (Suite 3 May 2019 to Dec 2022)CONFIDENTIALTHIS STATEMENT OF WORK #2 Rev 1 (the “Statement of Work”) by and between Synlogic Operating Company, Inc.(“Synlogic”) and Azzur Group (d/b/a Azzur of New England LLC) (“Service Provider”), will be effective as of the last date ofsignature below, and upon execution will be incorporated into the Master Contract Services Agreement between Synlogic and ServiceProvider dated 08 September 2018 (the “Agreement”). Capitalized terms used in this Statement of Work will have the same meaningas set forth in the Agreement. Table of ContentsSection 1 – Background/Scope3Section 2 – Technical Requirements3Section 3 – Detailed Estimate4Section 4 – Change History9Proposed Suite 3 Layout102Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED P-6671 SOW 2 Rev l for Facility Use (Suite 3 May 2019 to Dec 2022)CONFIDENTIALSection 1 – Background/ScopeUpon execution of this Statement of Work and initiation of a purchase order, Azzur will commence performing this Services set forthin this Statement of Work. This Statement of Work is for the use of Azzur of New England LLC’s Waltham cleanroom suite 3 that isplanned to be built in the existing space located at 411 Waverley Oaks Rd., #126, Waltham, MA 02452 (see Layout DiagramAttached). The proposed clean room 3 is to be appropriately designed to allow for future expansion to include a [***]. Azzur will notsubcontract use of cleanroom 3 or the performance of any Services under this Statement of Work to a 3rd party without Synlogic’swritten approval.Section 2 – Technical RequirementsAZZUR personnel will be experienced with FDA facility compliance expectations. AZZUR has based this Statement of Work uponthe following documents. •Code of Federal Regulations Title 21 Part 210 – Current Good Manufacturing Practice in the Manufacturing,Processing, Packing, or Holding of Drugs; General •Code of Federal Regulations Title 21 Part 211 – Current Good Manufacturing Practice for FinishedPharmaceutical •ASTM E-2500 – 07 – Standard Guide for Specification, Design, and Verification of Pharmaceutical andBiopharmaceutical Manufacturing Systems and Equipment •ISPE Good Practice Guide – Applied Risk Management for Commissioning and Qualification •ISPE Good Practice Guide – Science and Risk-Based Approach for the Delivery of Facility Systems andEquipment •ISPE Good Practice Guide – Good Engineering Practices •PDA Technical Report 56 – Application of Phase Appropriate Quality System and cGMP to the Development ofTherapeutic Protein Drug SubstanceSynlogic’s personnel using the classified areas are to be trained on Azzur SOPs on gowning, personnel movement, material control etc.3Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED P-6671 SOW 2 Rev l for Facility Use (Suite 3 May 2019 to Dec 2022)CONFIDENTIALSection 3 – Detailed Estimatea)Fixed Priced Costs – Cleanroom UseThe proposed cleanroom (Suite 3) for use by Synlogic includes a total of approximately 700 sq ft with [***]. The location of thisproposed new cleanroom suite 3 is an expansion into the existing warehouse space located at 411 Waverley Oaks Rd., #126, Waltham,MA 02452.The following items are included in the cost of the cleanroom use: •Access to qualified/maintained core and gowning areas – Qualified to ISO standards oAll entry/exit door to classified spaces will be interlocked oRoom differential pressures which will meet [***] classification oTemperature specification range of [***] with operation specification control of [***] oHumidity specification range of [***] with operational control at [***] oDifferential pressure, temperature and humidity will be continually monitored using a validatedcontrolled environmental monitoring system (CEMS) on a routine basis •Cleanroom cleaning oWeekly – Horizontal and vertical surfaces including wiped using IPA, floors vacuumed and moppedusing the latest version of the following approved cleaning solution [***] oMonthly – Same as weekly cleaning followed by second cleaning using approved cleaning solution onall surfaces [***] oQuarterly (once every 3 months) – Same as monthly cleaning [***] oTriple clean – Quarterly cleaning performed 3 times. Performed on an as needed basis betweencampaigns or at Synlogic’s request. •Security and badge access control •Back-up power •Routine Environmental Monitoring4Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED P-6671 SOW 2 Rev l for Facility Use (Suite 3 May 2019 to Dec 2022)CONFIDENTIAL oWeekly TAP, Viable Air and Surface Monitoring – Additional environmental monitoring may becompleted upon request as time & materials. •Utilities oPower, water (hand washing sink) •Pest Control •Waste Disposal (Biological, Hazardous, Non-Hazardous) •BSC certification/maintenance •Any other repair or maintenance on all aspects of the classified space (e.g. HVAC maintenance, routine repairs).Such events will require downtime in terms of operations and will be scheduled based on Synlogic’s needs.b)Fixed Priced Costs – StorageStorage space is available on a monthly basis and includes the following: •Dedicated storage location ([***]) •Temperature and humidity will be continually monitored using a validated controlled environmental monitoringsystem (CEMS) on a routine basis •Any other repair or maintenance on the [***] storage units will require downtime in terms of operations and willbe scheduled based on Synlogic’s needs.The table below includes the all-inclusive fixed costs for cleanroom use and storage costs for each year. [***] Storage costs are basedon the requirements provided by Synlogic. All costs listed in the table below are fixed costs that will be invoiced to Synlogic, at thebeginning of each month irrespective of actual usage during the given month. Overages in storage space use compared to belowamounts per month will be invoiced at the end of each month. The overage costs are the same as the unit costs quoted below. ThisSOW has been drafted for a total use duration of 44 months starting May 1st, 2019 to December 31st, 2022. The costs quoted includea price increase of [***] year over year to cover for increase in personnel, utilities and other costs.Table 1: Fixed Costs (Cleanroom Use and Storage)TypeUnit Cost/mo (2019)2019 Cost2020 Cost2021 Cost2022 CostTotals[***][***][***][***][***][***][***][***][***][***][***][***][***][***]5Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED P-6671 SOW 2 Rev l for Facility Use (Suite 3 May 2019 to Dec 2022)CONFIDENTIAL[***][***][***][***][***][***][***][***][***][***][***][***][***][***]Totals[***][***][***][***][***] c)Variable Costs – Personnel SupportAzzur personnel at various levels will support activities including project management, sampling, material receipt/release, inventorycontrol, training and general consulting for the duration of Synlogic’s use of cleanroom 3 and associate storage and other use. Thesecosts are variable and will be invoiced every two weeks based on actual time spent on various Synlogic related activities during thatperiod. Timesheets will be provided with all invoices related to personnel costs. Off-hours support will be provided, as needed withadvance notice and the costs are the same as detailed below. The costs quoted include a price increase of [***] year over year due toincrease in salaries, benefits costs, raises etc. The table below summarized the estimated variable costs for the duration of 44 months.Table 2: Variable Costs (Personnel Support)TypeUnit Cost/hr(2019)EstimatedHrs/mo2019 Cost2020 Cost2021 Cost2022 CostTotals[***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***]Totals[***][***][***][***][***] d)Variable Costs – Process Gases, Shipping, Consumables, Liquid NitrogenThis section provides the standard costs for use of process gases, shipping, consumables and liquid nitrogen at the Azzur site inWaltham.The following items are included in these costs: •Access to process gases ([***]). Azzur will house and maintain gas cylinders for Synlogic use. Process gases willbe piped into the cleanroom for use. •[***] during processing for freezing steps. •Shipping of materials to and from the Azzur site using an Azzur van.The table below includes the costs of all items listed above for the duration of the project. These costs are variable and will be invoicedat the end of every month based on actual usage during that period. The costs quoted include a price increase of [***] year over yeardue to increase in6Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED P-6671 SOW 2 Rev l for Facility Use (Suite 3 May 2019 to Dec 2022)CONFIDENTIALrent, personnel costs, utilities etc. The table below summarized the estimated variable costs for the duration of 44 months.Table 3: Variable Costs [***]TypeUnit Cost/Mo(2019)Estimated Units orevents/mo2019 Cost2020 Cost2021 Cost2022 CostTotals[***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***]Totals[***][***][***][***][***] *Consumables will be invoiced based on [***] for storage, handling and related costs. Estimated unit cost is an average amount permonth.The below table shows the total estimated project costs based on the fixed and estimated variable costs shown in tables above.Table 4: Overall Project Cost Estimate for 44 MonthsCategorySourceType and InvoicingTotal CostsNotes/Assumptions[***][***][***][***][***][***][***][***][***][***][***][***][***][***][***]GRAND TOTAL$4,785,040 Right of First RefusalSynlogic has the first right of refusal to rent Cleanroom Suite 3 following December 31st, 2022. Each time that Azzur intends to rentCleanroom Suite 3 to an alternate client party during the 6-month period after December 31, 2022, Azzur will first promptly notifySynlogic and offer the opportunity to rent Cleanroom Suite 3 on substantially similar terms as Azzur offered to the third party. Synlogicwill notify Azzur of its decision to rent Cleanroom Suite 3 on substantially similar terms as Azzur offered to the third party within 15days after receiving Azzur’s notice. If Synlogic does not give written notice to Azzur of its intent to rent Cleanroom Suite 3 withinsuch 15-day period, Azzur will be free to rent Cleanroom Suite 3 to such alternate client without further obligation to Synlogic.Option to ExtendSynlogic has the option to extend beyond the current end date of this SOW (Dec 2022) provided a letter of intent to extend for aminimum of 3 months at least 6 month before the end date and a new SOW for the extension signed at least 3 months prior to the enddate.7Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED P-6671 SOW 2 Rev l for Facility Use (Suite 3 May 2019 to Dec 2022)CONFIDENTIALEarly Termination of ContractAt any time during the duration of Cleanroom Suite 3 rental (May 1st, 2019 to December 31st, 2022), if Synlogic anticipates having toterminate this contract for the rental duration early, it will provide a written notice to Azzur at least 4 months in advance of the effectivedate of the termination.Option to Sub-lease CleanroomAt any time during the duration of Cleanroom 3 rental, if Synlogic anticipates not using the Cleanroom 3, a written notice will beprovided at least 3 months in advance to the non-occupancy start date, to Azzur. In such an instance, Azzur will make efforts to find analternate client to occupy the space for the duration that Cleanroom 3 remains unoccupied. Provided an alternate client is available andwilling to occupy the space, Azzur will not charge Synlogic for the duration the alternate client is occupying Cleanroom 3. If Azzur isunable to find an alternate client to occupy Cleanroom 3, Azzur will continue to invoice Synlogic based on the terms of this SOW.Option to use Alternate Cleanroom, Termination in Event Cleanroom Suite 3 is not AvailableAzzur shall inform Synlogic within 2 business days of the delivery of the prefabricated cleanroom suite 3 and related equipment forhumidity control to Azzur’s facility located at 411 Waverley Oaks Rd., #126, Waltham, MA 02452. In the event that the newcleanroom suite 3 is anticipated to not be ready prior to the start date of use (May 1st, 2019), the existing Cleanroom Suite 1 will beoffered to Synlogic, at its election, as a back-up option starting July 1st, 2019, on the terms set out in Proposal P-6454 (SOW No. 1).This determination will be made on the later of March 31st, 2019 or 5 business days after notification by Azzur to Synlogic of thedelivery of the prefabricated suite 3 and related equipment for humidity control, as set out above. In the event that cleanroom suite 3 isnot available to Synlogic on May 1st, 2019, Synlogic shall have the option to terminate this SOW upon notice to Azzur and anydeposit paid by Synlogic shall be returned to Synlogic in full within 30 days of such termination. If Synlogic does not exercise itsoption to terminate the SOW in the event of a delay, the parties agree that any costs relating to cleanroom suite 3 (other than thedeposit) shall not be incurred until such time as the cleanroom suite 3 becomes available to Synlogic. The rates of Cleanroom Suite 1rental will be subject to the terms and conditions outlined in SOW P-6464.InvoicingAll invoices related to the fixed costs identified in table 1 will be generated at the start of any given month. Any overages in items listedin table 1 will be invoiced at the end of any given month. All invoices related to the variable costs identified in table 2 will be generatedonce every two weeks based on actual time spent during that period (with timesheets). All invoices related to the variable costsidentified in table 3 will be generated every month based on actual usage for any given month. An initial invoice following acceptanceof this proposal will be generated for a8Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED P-6671 SOW 2 Rev l for Facility Use (Suite 3 May 2019 to Dec 2022)CONFIDENTIALdeposit of [***] of the first twelve months of fixed costs [***] within [***] of acceptance by Synlogic of this SOW. The deposit willbe applied to the three invoices relating to fixed costs for February, March and April 2020. In order for Azzur to invoice the depositamount, an initial PO for the first twelve months of fixed and variable costs listed in this SOW will be required. This initial PO will forthe twelve months spanning May 2019 through April 20120 and amounts to [***]. Additional POs will need to be generated for thesubsequent durations listed in this SOW on a twelve months basis, except for the last PO will be for a duration of 8 months in 2022.The below table shows the PO schedule for the entire duration of 44 months from May 2019 to Dec 2022Table 5: PO Amounts and SchedulesPO DurationAmountNeed by DateMay 2019 to April 2020[***]Upon signing of the SOWMay 2020 to April 2021[***]March 31st 2020May 2021 to April 2022[***]March 31st 2021May 2022 to Dec 2022[***]March 31st 2022Total Amount$4,785,040 Section 4 – Change HistoryDateReason for Change22Oct2018Initial Submission30Nov2018Revision 1 SOW Generated by (Azzur):/s/ Ravi SamavedamDate – 30Nov2018Name: Ravi SamavedamTitle: General Manager, Azzur GroupAddress: 411 Waverley Oaks Rd. #126Waltham, MA 02452Phone: [***]Cell: [***]Email: [***]9Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED P-6671 SOW 2 Rev l for Facility Use (Suite 3 May 2019 to Dec 2022)CONFIDENTIALSOW Accepted by (Synlogic):/s/ Todd ShegogDate – 12/7/2018Name: Todd ShegogTitle: CFOAddress: 301 Binney Street Suite 402 Cambridge, MA 02142Phone:Cell: [***]Email: [***]10Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.CONFIDENTIAL TREATMENT REQUESTED P-6671 SOW 2 Rev l for Facility Use (Suite 3 May 2019 to Dec 2022)CONFIDENTIAL[***]Cleanroom Suite 3 Proposed Expansion is into existing warehouse space of the Azzur site in Waltham. 11Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have been filed separately with the Secretary of the Commission pursuant to theRegistrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Exhibit 21.1SUBSIDIARIES OF SYNLOGIC, INC. SubsidiaryJurisdiction Synlogic IBDCo, Inc.DelawareSynlogic Operating Company, Inc.DelawareSynlogic Securities CorporationMassachusetts  Exhibit 23.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsSynlogic, Inc.We consent to the incorporation by reference in the registration statements (Nos. 333-220841, 333-223798, 333-210466 and 333-207299) on Form S-8 and (Nos. 333-226730 and 333-220948) on Form S-3 of Synlogic, Inc., of our report dated March 12, 2019,with respect to the consolidated balance sheets of Synlogic, Inc. as of December 31, 2018 and 2017, and the related consolidatedstatements of operations and comprehensive loss, contingently redeemable preferred equity and stockholders’ equity, and cash flowsfor the years then ended, and the related notes (collectively, the consolidated financial statements), which report appears in theDecember 31, 2018 annual report on Form 10-K of Synlogic, Inc./s/ KPMG LLPCambridge, MassachusettsMarch 12, 2019  Exhibit 31.1CERTIFICATIONS UNDER SECTION 302I, Aoife Brennan, certify that:1. I have reviewed this annual report on Form 10-K of Synlogic, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as definedin Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) forthe registrant and have:a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles;c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recentfiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant's internal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: March 12, 2019By:/s/ Aoife brennan Aoife Brennan President, Chief Executive Officer and Chief Medical Officer(Principal Executive Officer)  Exhibit 31.2CERTIFICATIONS UNDER SECTION 302I, Todd Shegog, certify that:1. I have reviewed this annual report on Form 10-K of Synlogic, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as definedin Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) forthe registrant and have:a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles;c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recentfiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant's internal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: March 12, 2019By:/s/ Todd Shegog Todd Shegog Chief Financial Officer(Principal Financial Officer and Principal Accounting Officer)  Exhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Synlogic, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2018 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Aoife Brennan, President and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that: (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of theCompany. Date: March 12, 2019 By:/s/ Aoife Brennan Aoife Brennan President, Chief Executive Officer and Chief Medical Officer(Principal Executive Officer) A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished tothe Securities and Exchange Commission or its staff upon request.  Exhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Synlogic, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2018 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Todd Shegog, Chief Financial Officer, certify, pursuant to 18 U.S.C. § 1350, asadopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that: (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of theCompany. Date: March 12, 2019 By:/s/ Todd Shegog Todd Shegog Chief Financial Officer(Principal Financial Officer and Principal Accounting Officer) A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished tothe Securities and Exchange Commission or its staff upon request. 

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