Urovant Sciences Ltd.
Annual Report 2019

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 March 31, 2019OR☐☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROM TOCommission File Number 001-38667 Urovant Sciences Ltd.(Exact name of Registrant as specified in its Charter) Bermuda98-1463899(State or other jurisdiction ofincorporation or organization)(I.R.S. EmployerIdentification No.)Suite 1, 3rd Floor11-12 St. James’s SquareLondon SW1Y 4LB, United KingdomNot Applicable(Address of principal executive offices)(Zip Code)Registrant’s telephone number, including area code: +44 (0)207 400-3347 Securities registered pursuant to Section 12(b) of the Act:(Title of each class)(Trading Symbol)(Name of each exchange on which registered)Common Shares, $0.000037453 par valueUROVNasdaq Global Select MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒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 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☒ Smaller reporting company☒ Emerging growth company☒If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised 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 the voting common shares held by non-affiliates of the registrant as of the end of the registrant’s most recently completed second fiscal quarter endedSeptember 30, 2018 was approximately $91,431,000 based on the closing price of the registrant’s common shares as reported on the Nasdaq Global Select Market on September 28,2018 of $12.00 per share.As of June 13, 2019, there were 30,330,432 common shares issued and outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant’s definitive proxy statement for the 2019 Annual General Meeting of Shareholders, or the 2019 Proxy Statement, to be filed with the Securities and ExchangeCommission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K are incorporated by reference into Part IIIof this Annual Report on Form 10-K to the extent stated herein. With the exception of the portions of the 2019 Proxy Statement expressly incorporated into this Annual Report onForm 10-K by reference, such document shall not be deemed filed as part of this Annual Report on Form 10-K.  Table of Contents PagePART I Item 1.Business2Item 1A.Risk Factors35Item 1B.Unresolved Staff Comments85Item 2.Properties85Item 3.Legal Proceedings85Item 4.Mine Safety Disclosures85 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities86Item 6.Selected Financial Data86Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations87Item 7A.Quantitative and Qualitative Disclosures About Market Risk98Item 8.Financial Statements and Supplementary Data98Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure98Item 9A.Controls and Procedures98Item 9B.Other Information98 PART III Item 10.Directors, Executive Officers and Corporate Governance99Item 11.Executive Compensation99Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters99Item 13.Certain Relationships and Related Transactions, and Director Independence99Item 14.Principal Accountant Fees and Services99 PART IV Item 15.Exhibits and Financial Statement Schedules100Item 16Form 10-K Summary103 Signatures 104 iPART IIntroductionUnless the context requires otherwise, references in this Annual Report on Form 10-K to “Urovant,” the “Company,” “we,” “us,” and “our” refer to UrovantSciences Ltd. and its wholly owned subsidiaries.All brand names or trademarks appearing in this Annual Report on Form 10-K are the property of their respective owners. Solely for convenience, trademarksand trade names referred to in this Annual Report on Form 10-K may appear without the ® or ™ symbols. We do not intend our use or display of othercompanies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.We maintain our books and records in U.S. dollars, and prepare our consolidated financial statements in accordance with accounting principles generallyaccepted in the United States as issued by the Financial Accounting Standards Board. All references to “shares” in this Annual Report refer to common sharesof Urovant Sciences Ltd., par value $0.000037453 per share.Cautionary Note Regarding Forward-Looking StatementsThis Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, orthe Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The forward-looking statements involvesubstantial risks and uncertainties and are contained principally in the sections titled “Business,” “Risk Factors” and “Management’s Discussion andAnalysis of Financial Condition and Results of Operations” but are also contained elsewhere in this Annual Report on Form 10-K. In some cases, you canidentify forward-looking statements by the words “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,”“might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “to be,” “will” and “would,” or the negative or plural of these words orsimilar expressions or variations, although not all forward-looking statements contain these identifying words. These statements involve known andunknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially differentfrom the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Annual Report on Form 10-K, we caution you that these statements are based on a combination of facts and factorscurrently known by us and our expectations of the future, about which we cannot be certain.The forward-looking statements appearing in a number of places throughout this Annual Report on Form 10-K include, but are not limited to, statementsregarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things: •the progress, timing and costs associated with receiving the final results of our international Phase 3 EMPOWUR trial for vibegron in patientswith OAB; •the potential advantages and differentiated profile of vibegron compared to existing therapies for OAB; •the timing, costs and results of our Phase 3 clinical trial for vibegron for the treatment of OAB in men with BPH and our Phase 2a clinical trial forvibegron in patients with abdominal pain due to IBS; •the timing, costs and results of our proposed Phase 2a clinical trial for URO-902 for the treatment of OAB in patients who have not responded tooral pharmacological therapies; •anticipated future regulatory submissions and the timing of, and our ability to, obtain and maintain regulatory approvals for vibegron, URO-902and any future product candidates; •our ability to successfully commercialize our product candidates, if approved; •the rate and degree of market acceptance of our product candidates, if approved; •our ability to achieve success with our product candidates, if approved, comparable to other OAB products that have been previously launched; •our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for or ability to obtain additional financing;1 •our expectation that current cash on hand will be sufficient to enable us to complete the development program for vibegron in patients with OAB,as well as advance our other planned trials; •the anticipated receipt of the remaining funding available to us upon achievement of certain milestones under the Hercules Loan Agreement; •our ability to maintain intellectual property protection for our product candidates; •our ability to identify, acquire or in-license and develop new product candidates; •our ability to identify, recruit and retain key personnel; •our estimates regarding our results of operations, financial condition, liquidity, capital requirements, access to capital, prospects, growth andstrategies; and •developments and projections relating to our competitors or our industry.Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors known and unknown that could cause actual resultsand the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause orcontribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors” set forth inPart I. Item 1A. of this Annual Report on Form 10-K and in our other filings with the U.S. Securities Exchange Commission, or SEC. These risks are notexhaustive. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of allfactors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in anyforward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. Thesestatements are based upon information available to us as of the date of this Annual Report on Form 10-K, and while we believe such information forms areasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we haveconducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors arecautioned not to unduly rely upon these statements. Except as required by law, we undertake no obligation to update any forward-looking statements toreflect events or circumstances after the date of such statements.Item 1. Business.OverviewWe are a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for urologic conditions. Our leadproduct candidate, vibegron, is an oral, once-daily, small molecule that was observed to be highly selective for the human beta-3 adrenergic receptor in invitro assays. Vibegron is currently being developed for three potential indications: overactive bladder, or OAB, the treatment of OAB in men with benignprostatic hyperplasia, or BPH, and the treatment of abdominal pain due to irritable bowel syndrome, or IBS. Our second product candidate, URO-902, is anovel gene therapy that we are developing for patients with OAB who have failed oral pharmacological therapy.In March 2019, we reported positive top-line results from our international pivotal Phase 3 EMPOWUR trial evaluating vibegron for the treatment of OAB. Inthis pivotal Phase 3 clinical trial with over 1,500 patients, vibegron 75 mg met both co-primary efficacy endpoints and all seven key secondary endpoints.Onset of action for the co-primary endpoints was observed as early as week two, the first time point measured, and statistically significant efficacy wasmaintained at all timepoints measured through the end of the study. We plan to submit a new drug application, or NDA, to the U.S. Food and DrugAdministration, or FDA, by the first quarter of 2020. OAB is a highly prevalent condition, with more than 30 million Americans over the age of 40 sufferingfrom bothersome symptoms. In large, randomized, placebo-controlled, international Phase 2b and Japanese Phase 3 clinical trials in a total of over 2,600 OABpatients, vibegron 50 mg and 100 mg met all primary and secondary efficacy endpoints compared to placebo at week 8 and week 12, respectively. OurPhase 3 clinical trial had a design in line with these clinical trials. We believe vibegron, if approved by the FDA, may offer a differentiated profile comparedto current OAB therapies, including the potential for broader efficacy claims if the FDA approves the inclusion of urgency data, rapid onset of action data,and a single convenient once-daily dose in the label. Vibegron has been well tolerated in all clinical trials to date, has not been associated with clinicallyrelevant drug-drug interactions, such as the inhibition of CYP2D6, and has not demonstrated a QTc signal at any of the human doses tested.2In March 2019, we initiated the Phase 3 COURAGE randomized, double blind, placebo-controlled trial for OAB in men with BPH who are also taking BPHmedications but continue experiencing OAB symptoms in approximately 1,000 patients. The study is being conducted in two phases, with the first phasefocusing on safety and the second phase assessing efficacy and safety, and is testing vibegron 75 mg versus placebo, the same dose studied in our Phase 3EMPOWUR trial. The primary efficacy analysis for the co-primary efficacy endpoints will be measured at 12 weeks and include change from baseline in theaverage number of micturitions per 24 hours and change from baseline in the average number of urgency episodes per 24 hours. Secondary endpoints includechange from baseline in the average number of nocturia episodes per night, which is awakening at night to use the bathroom to urinate. The duration for thedouble-blind study is 24 weeks. In addition, a 28-week open-label extension study will evaluate the long-term safety and efficacy of vibegron in men withOAB symptoms and on another therapy for BPH.In December 2018, we enrolled our first patient in a 200 patient Phase 2a randomized, double blind, placebo-controlled trial with vibegron 75 mg forabdominal pain due to IBS. We expect to receive top-line data from the Phase 2a clinical trial in 2020. The primary endpoint will be a 30% reduction inabdominal pain intensity, while secondary endpoints will include Global Improvement Scale ratings, stool symptoms and safety.We received an exclusive license to develop, manufacture and commercialize vibegron worldwide, excluding Japan and certain other Asian territories,pursuant to our license agreement with Merck Sharp & Dohme Corp., or Merck, which we entered into in February 2017. We expect to maintain patentexclusivity for the licensed patents and applications, if approved, under this license agreement covering composition of matter and methods of use andmanufacture of vibegron until approximately 2034, including through grant of patent term extension. Vibegron is also being developed by KyorinPharmaceutical Co., Ltd., or Kyorin, for the treatment of OAB in Japan and certain other Asian territories. Kyorin received marketing approval from Japan’sMinistry of Health, Labour and Welfare for vibegron for the treatment of adults with OAB in September 2018.Our second product candidate, URO-902, is a novel gene therapy that we are developing for patients with OAB who have failed oral pharmacologicaltherapy. There are no currently available FDA-approved gene therapy treatments for OAB. We plan to initiate a placebo-controlled, randomized, multicenterproof-of-concept Phase 2a clinical trial in the fourth quarter of 2019 to evaluate the safety and efficacy of URO-902 in approximately 50 to 80 patients.We received an exclusive license to develop, manufacture and commercialize URO-902 worldwide, pursuant to our license agreement with Ion ChannelInnovations, LLC, or ICI, which we entered into in August 2018. Pursuant to this agreement, we are the exclusive licensee of a pending international patentapplication relating to URO-902 gene therapy, covering the use of URO-902 gene therapy to treat signs or symptoms of OAB or detrusor overactivity. Thispatent application, if issued, would naturally expire in 2038, subject to any adjustment or extension of patent term that may be available in a particularcountry. In addition, we expect that URO-902 would receive 12 years of marketing exclusivity if approved by the FDA given its status as a biologicalproduct.Our Development ProgramThe following chart sets forth our development programs and expected upcoming milestones: 3Our StrategyOur goal is to be a leading urology company by developing, commercializing and acquiring innovative therapies. The key elements of our strategy toachieve this goal include: •Complete the development and obtain FDA approval of vibegron for the treatment of OAB. In March 2019, we reported positive top-line resultsfrom our international pivotal Phase 3 EMPOWUR trial evaluating vibegron for the treatment of OAB. In this pivotal Phase 3 clinical trial,vibegron 75 mg met both co-primary efficacy endpoints and all seven key secondary endpoints. We plan to submit an NDA to the FDA by thefirst quarter of 2020. •Expand and complete the clinical development of vibegron for additional indications. In December 2018, we initiated a Phase 2a clinical trialof vibegron for abdominal pain due to IBS. We also initiated a Phase 3 clinical trial of vibegron for OAB in men with BPH in March 2019. Bothof these potential indications present significant additional commercial opportunities to treat millions of patients in the United States. There arecurrently no FDA-approved drugs specifically for either of these indications. •Maximize the commercial potential of vibegron. We intend to build an initial sales force of approximately 150 persons in the United States,targeting high-prescribing urologists and other specialists that treat high numbers of patients with urologic conditions. We believe thesephysicians have a significant number of OAB patients in their practice and often serve as the diagnosing and treating physicians for OAB. Weintend to scale the commercial presence to reach additional health care professionals as vibegron sales grow. We believe that our commercialleadership team, with experience launching over 20 prescription products, positions us well to efficiently pursue the significant marketopportunity for vibegron in the United States. We may opportunistically seek strategic collaborations to maximize the commercial opportunitiesfor vibegron inside and outside the United States. •Advance the clinical development of URO-902 as a novel treatment for OAB patients who have not responded to oral pharmacologicaltherapies. We intend to initiate a Phase 2a clinical trial of URO-902 for the treatment of OAB patients who have not responded to otherpharmacological therapies. With only two non-surgical therapies currently available for the treatment of OAB, BOTOX and neuromodulation, webelieve there is an opportunity to both capture market share and expand the OAB third-line therapy market. Approximately 14 million Americansseek treatment from their physician for OAB and, of these patients, only an estimated 3.3 million patients take prescription therapy and only300,000 patients utilize current third-line procedural therapies. We estimate that approximately 72% of treated OAB patients discontinue oraltherapy within one year. We estimate that third-line treatments generate aggregate annual sales in excess of $700 million in the U.S. market. Webelieve a third-line treatment option that is non-surgical and not a toxin, unlike BOTOX, would be appealing to physicians and patients,potentially meeting the unmet needs of this patient population. •Acquire or in-license additional clinical- or commercial-stage product candidates for the treatment of urologic conditions in a capital-efficientmanner. Through focused business development efforts, we intend to identify and acquire or in-license additional innovative therapies forurologic conditions. Our initial focus is on conditions that are predominantly treated by urologists. Our parent company, Roivant Sciences Ltd.,or RSL, and its subsidiaries have extensive experience in acquiring or in-licensing products in a range of therapeutic areas and will continue tosupport us in identifying and evaluating potential acquisition and in-licensing opportunities.4Vibegron for the Treatment of Overactive BladderOveractive Bladder OverviewOAB is a clinical condition characterized by the sudden urge to urinate that is difficult to control, referred to as urgency, with or without accidental urinaryleakage, and usually with increased frequency of urination. Accidental urinary leakage resulting from urgency is referred to as urge urinary incontinence, orUUI. Increases in age and body mass index, as well as diabetes and post-menopausal status, are known to increase the risk of developing OAB. Symptoms ofOAB can have a debilitating impact on psychosocial functioning and quality of life, profoundly impacting normal social and occupational activities andleading to depression, anxiety and decreased sexual function and marital satisfaction. UUI, in particular, may have severe psychological and socialconsequences, resulting in restricted activities and unwillingness to be exposed to environments where access to a bathroom may be difficult. In 2018, over18 million prescriptions were written for OAB medications in the United States. Current prescription pharmacological therapies for OAB consist ofanticholinergic drugs and a beta-3 agonist. The OAB patient experience is depicted below. OAB presents a significant burden on healthcare systems. A recent study found that healthcare costs among OAB patients in the United States were 1.4- to 2-times higher than individuals without OAB, and these costs may be substantially driven by managing complications such as falls, urinary tract infections,skin rash and depression or anxiety.5Current Treatment ParadigmMore than 30 million Americans over the age of 40 suffer from bothersome symptoms of OAB. Approximately 46% of this population, or 14 million people,talk to their physicians about their symptoms. Behavioral therapies such as bladder training, pelvic floor muscle training and fluid management arerecommended as first-line treatment for OAB. Second-line treatment consists of prescription pharmacological therapy with an anticholinergic or a beta-3agonist. In 2018, over 18 million prescriptions for oral OAB medications were written for an estimated 3.3 million patients in the United States. We estimatethat approximately 72% of treated OAB patients discontinue oral therapy within one year. Third-line treatment includes procedural therapy using eitherintradetrusor onabotulinumtoxinA (BOTOX) or neuromodulation. This treatment paradigm is depicted below. We estimate that each percentage point of the current U.S. OAB market is worth approximately $70 million per year in gross sales based on mirabegron’swholesale acquisition cost of $384.29 per month (Price Rx, January 2019) and the over 18 million oral OAB prescriptions in the United States in 2018. In2018, according to IQVIA NSP, the three branded oral OAB medications, Myrbetriq, Vesicare and Toviaz achieved $2.6 billion gross sales in the UnitedStates.Anticholinergic drugs have been the standard of pharmacologic care for OAB since the approval of flavoxate in 1970 and oxybutynin in 1975.Anticholinergics, however, are associated with poor tolerability and increasing safety concerns. According to an IQVIA custom longitudinal study of OABdiagnosed patients from March 2014 through September 2017, 86% of OAB patients treated with oral prescription therapy in the United States are initiallyprescribed anticholinergic drugs. Of these, 71% discontinue treatment within six months. Anticholinergic side effects include dry mouth, constipation andblurred vision. Further, there is a growing body of evidence associating anticholinergic use with cognitive impairment and dementia. Anticholinergics havealso been associated with the increased use of healthcare resources.In a 2015 study published in JAMA Internal Medicine, a journal of the American Medical Association, a prospective analysis of over 3,400 patients aged 65and older showed a 10-year cumulative anticholinergic dose-response relationship with increased risk of both dementia and Alzheimer’s disease. Inparticular, this study showed that a subject with a cumulative exposure to over 1,095 total standardized daily doses of an anticholinergic medication(calculated as cumulative medication dose divided by the minimum effective daily dose recommended for older patients) would have an adjusted hazardratio for the risk of incident dementia of 1.54 (95% confidence interval of 1.21 to 1.96). Adjusted hazard ratio represents relative risk of incident dementiacompared to a subject with no anticholinergic drug usage, adjusting for differences in 16 other characteristics that could confound the relationship betweenanticholinergic medicine use and dementia. Therefore, we estimate that exposure to over 1.5 years of 10 mg daily oxybutynin, the most commonly prescribedanticholinergic for OAB in the United States, would correspond to a 54% increase in the risk of dementia. The minimum effective daily dose for oxybutyninis 5 mg, but the most commonly prescribed daily dose is 10 mg. The observed relationship between cumulative anticholinergic use and incident dementia isshown in the following graph:6Association of Incident Dementia with 10-YearCumulative Anticholinergic Use1 Due to the potential medication-related cognitive risks, the study emphasized that it is important to minimize anticholinergic use over time. Over 30retrospective analyses, with a total of over 40,000 patients, have helped further establish a relationship between anticholinergic use and cognitiveimpairment. This risk of cognitive impairment in the elderly population is especially important given the well characterized age-dependent increasedprevalence of OAB symptoms.In a survey of 432 physicians that we commissioned, 35% of physicians acknowledged that anticholinergic use can cause significant cognitive impact onpatients and 30% of physicians acknowledged that anticholinergic use can significantly increase the risk for dementia. In contrast, approximately 30% ofphysicians indicated they did not believe anticholinergic use had a cognitive impact on patients and 28% of physicians indicated they did not believeanticholinergic use increased the risk for dementia. Based on these results, we believe there is low awareness among physicians around the significantcognitive risks associated with anticholinergic use.When physicians and OAB patients are made aware of these increased risks of dementia and Alzheimer’s disease associated with anticholinergic use, aversiontowards using these drugs increases. For example, the 2015 study published in JAMA Internal Medicine reported that over a mean follow-up period of 7.3years, 797 participants, or 23%, developed dementia. In a third-party market research study we commissioned, which surveyed 120 OAB patients and 150physicians, including urologists, primary care physicians and OB/GYNs, when presented with this figure, 44% of surveyed physicians and 75% of OABpatients had a negative response towards using anticholinergics.BOTOX, as a third-line treatment for OAB, is expensive and invasive. Administration involves 20 injections via cystoscopy into the detrusor muscle,approximately every 24 weeks. Unwanted side effects associated with the use of BOTOX for OAB include urinary tract infections and urinary retention. Inaddition, some patients need to self-catheterize post-treatment for several weeks due to urinary retention. Sacral neuromodulation and peripheral tibial nervestimulation, which are highly invasive and used by a small fraction of the OAB patient population, are also available as third-line therapies.7Beta-3 AgonistsBeta-3 agonists constitute the newest class of oral prescription therapy for OAB. The beta-3 adrenergic receptor is the most prevalent beta-adrenergic receptorsubtype on the smooth muscle around the bladder. Bladder filling involves the relaxation of this muscle and the contraction of the urethral smooth muscle,while voiding involves contracting the bladder muscle and relaxation of the urethral muscle. Studies of isolated human bladder smooth muscle have shownthat selective activation of the beta-3 adrenergic receptor results in smooth muscle relaxation. Therefore, beta-3 stimulation can increase bladder capacity andreduce the symptoms of OAB.In 2012, mirabegron (Myrbetriq), a beta-3 agonist, became the first drug other than an anticholinergic approved by the FDA for the treatment of OAB.Mirabegron remains the sole beta-3 agonist on the market for OAB, and since its approval, it has continued to take U.S. OAB prescription share fromanticholinergics, primarily due to its safety and tolerability advantages. In 2018, according to IQVIA NPA, mirabegron’s market share grew by 17%, from15% in 2017 to 17.5% in 2018. Astellas reported net sales of mirabegron in the Americas of $773 million for the fiscal year ended March 31, 2019,representing growth of approximately 18% over the prior fiscal year. The graph below shows the number of oral OAB prescriptions in the United States forthe last two calendar years.U.S. Oral OAB Market: 2017-2018 Annual Prescriptions Despite its success, mirabegron requires dose titration that results in a slow onset of action and is associated with frequent drug-drug interactions and QTcprolongation. Mirabegron’s onset of action is eight weeks at the starting dose of 25 mg and within four weeks at a dose of 50 mg. Efficacy of both the startingdose and 50 mg doses of mirabegron was maintained through the 12-week treatment period. Further, mirabegron’s U.S. label has a note in the warnings andprecautions section about drug-drug interaction risk related to its known inhibition of the CYP2D6 enzyme, an important enzyme involved in themetabolism of numerous drugs. According to an IQVIA Longitudinal Study Among Diagnosed OAB patients (March 2014 to September 2017),approximately 37% of patients taking mirabegron are taking other drugs that are metabolized via the CYP2D6 pathway, presenting increased risk ofexacerbated adverse events in patients taking mirabegron with these drugs. In addition, in a thorough QTc study, mirabegron demonstrated QTc prolongationin women at a supratherapeutic dose, or a dose greater than the maximum approved dose (50 mg), as noted in the pharmacodynamic section of its U.S. label.8Our Solution: VibegronVibegron is an oral, once-daily, small molecule that was observed to be highly selective for the human beta-3 adrenergic receptor in in vitro assays. We aredeveloping vibegron for the treatment of OAB.We believe vibegron, if approved by the FDA, has the potential to address the limitations of both anticholinergics and mirabegron and become adifferentiated beta-3 agonist based on the following potential advantages: •Met both co-primary endpoints (statistically significant reduction in daily micturitions and daily UUI episodes) and all seven key secondaryendpoints in our international pivotal Phase 3 EMPOWUR trial. In this pivotal Phase 3 clinical trial, vibegron 75 mg met both co-primaryefficacy endpoints and all seven key secondary endpoints, including a clinically meaningful reduction in daily urgency episodes. In the primaryefficacy analysis, once-daily vibegron met the co-primary endpoints at week 12, achieving statistical significance over placebo on both reductionin daily UUI episodes (p<0.0001) and reduction in daily micturitions (p<0.001). The difference from placebo was statistically significant as earlyas week 2, which was the first timepoint measured, for both episodes and micturitions (p<0.0001 and p<0.001, respectively), and statisticallysignificant efficacy was maintained at all timepoints measured through the end of the study for both endpoints. Additionally, at all measuredtimepoints, vibegron achieved numerically better efficacy than tolterodine, the active control in this study, which is a currently available OABtreatment. All seven pre-specified key secondary endpoints were met, including a statistically significant reduction in daily urgency episodescompared to placebo (p=0.002). •Met primary and secondary efficacy endpoints and was well tolerated in large, randomized, placebo-controlled international Phase 2b andJapanese Phase 3 clinical trials. Vibegron has been evaluated in multiple clinical trials with a total of over 2,600 OAB patients. In large,randomized, placebo-controlled, international Phase 2b and Japanese Phase 3 clinical trials, vibegron 50 mg and 100 mg met all primary andsecondary efficacy endpoints compared to placebo at week 8 and week 12, respectively. These endpoints included reductions per day in numberof micturitions, urgency episodes, UUI episodes and total incontinence episodes. In addition, vibegron was well tolerated in these trials. •Observed to be highly selective for the human beta-3 adrenergic receptor in in vitro assays. In vitro studies conducted comparing theselectivity of vibegron with mirabegron have demonstrated that vibegron is highly selective relative to beta-1 and beta-2 agonism. •Rapid onset of action. In clinical trials, vibegron has demonstrated an onset of action in as early as two weeks. In our international pivotal Phase3 EMPOWUR trial vibegron achieved rapid onset by two weeks in both co-primary endpoints and reduction in daily urgency episodes, makingvibegron the only beta-3 agonist to demonstrate an onset of action by two weeks. •Potential for broader efficacy claims, including urgency data, based on successfully meeting the co-primary and all seven key secondaryefficacy endpoints in our pivotal Phase 3 EMPOWUR trial. Currently, no approved OAB therapies in the United States can promote efficacydata for the reduction of urgency episodes related to OAB symptoms. Based on our discussions with the FDA, we believe that the FDA willconsider inclusion of urgency data as the most important secondary endpoint, as well as additional data to support potentially broader efficacyclaims, in the vibegron label, if approved by the FDA. •No known dementia risk. There is a growing body of evidence that “anticholinergic load” may lead to an increased risk of dementia. Existingdata also suggest that use of anticholinergic agents may have an impact on cognition, especially in the elderly. This increased risk of dementiacombined with the poor side effect profile of the anticholinergic class, such as dry mouth, constipation and blurred vision, has led to significantU.S. oral OAB prescription share gains of the beta-3 agonist class. There is no evidence to date linking the use of beta-3 agonists with increasedrisk of dementia. •No CYP2D6 drug-drug interactions. CYP2D6 is one of the most important and common enzymes involved in the metabolism of drugs withapproximately 20% of all drugs being metabolized by CYP2D6. In addition, approximately 43% of patients taking any oral OAB medication,including 37% of mirabegron patients, are taking other drugs that are metabolized via the CYP2D6 pathway. Vibegron is not an inhibitor ofCYP2D6 and therefore has a reduced risk for potentially harmful drug-drug interactions.9 •No QTc signal. In a thorough QTc study designed to assess the potential for increased risk of ventricular arrhythmia and torsades de pointes,vibegron showed no QTc prolongation at therapeutic or supratherapeutic doses. If approved, vibegron would be the only beta-3 agonist withoutdemonstrated QTc prolongation in the product label. •Single, convenient dose. Our pivotal Phase 3 EMPOWUR trial studied a single, fixed dose of vibegron. If approved, vibegron will be the onlybeta-3 agonist available that does not require dose titration. •Crushable dose formulation. We intend to demonstrate that vibegron can be crushed and delivered to patients in food. If successful, vibegronwould be the only beta-3 agonist that can be crushed and delivered in food, an important option for elderly and other select patients.Based on a third-party market research study we commissioned, which surveyed 120 OAB patients and 150 physicians, including urologists, primary carephysicians and OB/GYNs, we believe each of the above factors could represent a meaningful advantage over mirabegron. Specifically, both patients andprescribers identified the potential for no CYP2D6 drug-drug interactions and no QTc signal, as well as the potential for rapid onset of action and single-crushable dose formulation, as highly motivating differentiators. Furthermore, based on vibegron’s potential product profile, approximately 50% of surveyedphysicians indicated that they would be attracted to, or willing to use, vibegron if approved with such a profile. Among OAB patients currently taking ananticholinergic, approximately 62% indicated that they would be attracted to, or willing to ask their physician to replace their current treatment with,vibegron based on its potential product profile. We believe there is a significant opportunity for a new OAB treatment as approximately 86% of OAB patientstreated with oral prescription therapy in the United States are initially prescribed anticholinergic drugs.Phase 3 EMPOWUR Trial for Overactive BladderIn March 2018, we enrolled the first patients in our international pivotal Phase 3 EMPOWUR trial of vibegron in adults with OAB. The EMPOWUR trial wasa randomized, double-blind, placebo- and active comparator-controlled clinical trial in men and women with OAB wet or dry. The trial had a design in linewith those of the Phase 2b and Japanese Phase 3 clinical trials. Enrollment of more than 1,500 patients into the EMPOWUR trial was completed in October2018.Enrolled patients were randomized across more than 200 sites into one of three groups for a 12-week treatment period: vibegron 75 mg administered orallyonce daily, placebo administered orally once daily, or extended release tolterodine, or tolterodine ER (a commonly prescribed anticholinergic for OAB), 4mg administered orally once daily. Additionally, more than 500 patients completing the initial 12-week blinded assessment have been enrolled in a 40-weekdouble-blind extension study to evaluate the safety and efficacy of longer-term treatment.In March 2019, we reported positive top-line results from our international pivotal Phase 3 EMPOWUR trial of vibegron in adults with OAB. Vibegron metco-primary endpoints demonstrating highly significant reduction in daily urge urinary incontinence episodes and micturitions. Vibegron also met all sevenkey secondary endpoints, including a clinically meaningful reduction in daily urgency episodes.To be eligible for the EMPOWUR trial, patients had to be at least 18 years old with a history of OAB (as diagnosed by a physician) for at least three months.During the screening period, patients were required to experience on average at least eight micturitions per day; either an average of at least three urgencyepisodes per day or at least one UUI episode per day; and total UUI episodes exceeding stress urinary incontinence episodes.The co-primary efficacy endpoints at week 12 of our Phase 3 EMPOWUR trial were: •change from baseline in the average number of micturitions per 24 hours in all patients; and •change from baseline in the average number of UUI episodes per 24 hours in patients with OAB wet.Secondary endpoints included, among others, changes in the frequency of urgency episodes and total incontinence episodes (which includes allincontinence episodes, whether UUI or stress-related), as well as self-reported quality of life scores. In addition, adverse events are being monitored duringboth the trial and the extension study. As of June 13, 2019, two patients, ages 63 and 75 and with multiple comorbidities, have died in our EMPOWURclinical program enrolling over 1,500 patients. In both cases, the investigators deemed the deaths not treatment-related. Separately, our independentassessment also deemed each death not treatment-related. The death in the 75 year old patient occurred in the tolterodine ER treatment group. The death ofthe 63 year old patient occurred in the EMPOWUR extension study, which is still blinded and we do not know which of the two treatment arms (vibegron ortolterodine ER) this patient was in.10In the primary efficacy analysis, once-daily vibegron met the co-primary endpoints at week 12, achieving statistical significance over placebo on bothreduction in daily UUI episodes (p<0.0001) and reduction in daily micturitions (p<0.001). The difference from placebo was statistically significant as early asweek 2, which was the first timepoint measured, for both UUI episodes and micturitions (p<0.0001 and p<0.001, respectively), and statistically significantefficacy was maintained at all timepoints measured through the end of the study for both endpoints. Additionally, at all measured timepoints, vibegronachieved numerically better efficacy than tolterodine, the active control in this study, which is a currently available OAB treatment.All seven pre-specified key secondary endpoints were met, including a statistically significant reduction in daily urgency episodes compared to placebo(p=0.002).p-value is a conventional statistical method for measuring the statistical significance of clinical results. A p-value of 0.05 or less represents statisticalsignificance, meaning there is a less than 1-in-20 likelihood that the observed results occurred by chance. The FDA utilizes statistical significance, asmeasured by p-value, as an evidentiary standard of efficacy and typically requires a p-value of 0.05 or less to demonstrate statistical significance. The resultsof the co-primary and key secondary endpoints used in our Phase 3 EMPOWUR trial at the end of the study are depicted below. The EMPOWUR Phase 3 clinical trial data showing reductions in daily UUI episodes over time are shown in the graphs below. The EMPOWUR Phase 3 clinical trial data showing reductions in daily UUI episodes at the end of the study for patients in the vibegron treatment group,compared to the tolterodine treatment group and placebo treatment group, are shown in the graphs below.11 Vibegron was well tolerated and the most common adverse events reported versus placebo (>2% in vibegron and greater than placebo) were headache (4.0%vs 2.4%), nasopharyngitis (2.8% vs 1.7%), diarrhea (2.2% vs 1.1%), and nausea (2.2% vs 1.1%). The frequency of serious adverse events was similar acrosstreatment arms (1.1% in placebo, 1.5% in vibegron, and 2.3% in tolterodine). The incidence of the reported adverse event of hypertension was equal toplacebo (1.7% in vibegron, 1.7% in placebo, and 2.6% in tolterodine).In the Phase 3 EMPOWUR trial there were two serious adverse events, or SAEs, reported in two patients in the vibegron treatment group considered to betreatment related by the investigator: (1) non-cardiac chest pain in one patient (with no evidence of an acute cardiac event) and (2) pneumonia in one patient.Our independent assessment did not consider these SAEs to be treatment related.We plan to submit an NDA to the FDA by the first quarter of 2020. The IND for vibegron for the indication of OAB was transferred to us by Merck in February2017.Current and Projected Reimbursement Landscape for Beta-3 Agonists in the United StatesAccess to oral OAB therapy is managed primarily by differential co-payments, or co-pays. Payors generally charge the lowest co-pays for generic drugs andhigher co-pays for branded agents such as Vesicare or Myrbetriq. As of May 2019, 90% of commercial plans and 100% of Medicare plans covered Myrbetriq,the only currently marketed beta-3 agonist. According to IMS PayerTrak, in 2018, the U.S. payor mix for the oral OAB prescription market was approximately52% Medicare Part D, 37% commercial or cash and 11% other payors. In addition, the long-term care channel accounted for approximately 18% of all oralOAB prescriptions in the United States. Based on a third-party database analysis of 4,477 commercial plans and 1,476 Medicare Part D plans, Myrbetriq hasapproximately 60% preferred access and 98% unrestricted access of Medicare Part D covered lives and approximately 62% preferred access and 70%unrestricted access of commercial lives.In May 2018, we commissioned a third-party market research study to assess how vibegron would be covered, if approved. The research firm interviewedrepresentatives of payors, who are involved with, but not solely responsible for, access and reimbursement decisions. Such interviewees represented payorscovering over 80 million U.S. commercial and Medicare Part D lives.Based on this study and our analysis of the current coverage of OAB therapies, we believe the OAB pharmacologic category is not highly managed bypayors. The payor representatives interviewed expect that vibegron would be managed at a preferred or non-preferred branded tier, without priorauthorization, allowing physicians and patients to make the choice of whether to pay a higher co-pay for a branded product or a lower co-pay for a generic. Inaddition, these payor representatives anticipate that vibegron’s coverage would not change following Myrbetriq’s loss of marketing exclusivity, which weexpect to occur in 2023 or 2024. Based on this study, we also believe that access to vibegron, if approved, will not be restricted to patients who first fail anyother oral therapies for OAB. As with all pharmacologic branded products, access decisions will require formulary review through the formulary reviewprocess. 12In June 2018, we commissioned a second market research study, conducted by a separate third-party market research firm, to further assess how vibegronwould be covered, if approved. The research firm interviewed representatives of payors who are involved with, but not solely responsible for, access andreimbursement decisions. Such interviewees represented payors covering over 160 million U.S. commercial and Medicare Part D lives.The results of this additional study reinforced the results of the May 2018 study with regard to vibegron’s potential coverage. In addition, the payorsinterviewed indicated that they believe the OAB pharmacologic category is not highly managed and is instead primarily controlled through differential co-pays for branded OAB drugs as compared to generic OAB drugs. They expect the OAB pharmacologic category will continue to be managed this way.Vibegron for the Treatment of Overactive Bladder in Men with Benign Prostatic HyperplasiaBPH is characterized by prostate enlargement, which can block the urethra and prevent normal urine flow, and is progressive with age. There areapproximately 40 million men between the ages of 50 and 80 in the United States with BPH, approximately 4.5 million of whom are treated for their BPHsymptoms. In addition, approximately 50% of BPH patients also suffer from OAB. Currently, there are no FDA-approved therapies specifically for OAB inmen with BPH.According to IQVIA NDTI, as of March 2018, BPH patients, similar to OAB patients, are generally treated by urologists and primary care physicians. Further,due to historical concerns with acute urinary retention, a potential side effect of anticholinergics, there has been hesitancy among doctors to prescribeanticholinergics for the treatment of OAB in men with BPH. As a result, a majority of men with BPH and OAB are not treated for their OAB symptoms, andthis remains an area of high unmet medical need.We believe that developing vibegron specifically for the treatment of OAB in men with BPH would be highly complementary to our overall OAB program.In March 2019, we initiated an approximately 1,000 patient Phase 3 COURAGE randomized, double blind, placebo-controlled trial for OAB in men withBPH who are also taking BPH medications but continue experiencing OAB symptoms. The study is being conducted in two phases, with the first phasefocusing on safety and the second phase assessing efficacy and safety, and is testing 75 mg of vibegron versus placebo, the same dose studied in our Phase 3EMPOWUR trial. The primary efficacy analysis for the co-primary efficacy endpoints will be measured at 12 weeks and include change from baseline in theaverage number of micturitions per 24 hours and change from baseline in the average number of urgency episodes per 24 hours. Secondary endpoints includechange from baseline in the average number of nocturia episodes per night, which is awakening at night to use the bathroom to urinate. The duration for thedouble-blind study is 24 weeks. In addition, a 28-week open-label extension study will evaluate the long-term safety and efficacy of vibegron in men withOAB symptoms and on another therapy for BPH.Vibegron for the Treatment of Abdominal Pain due to Irritable Bowel Syndrome IBS is characterized by recurrent abdominal pain associated with two or more of the following: defecation, a change in frequency of stool and a change inform or appearance of stool. Additionally, IBS presents a significant health care burden and can severely impair a patient’s quality of life. There is a large andgrowing market for IBS with constipation (IBS-C) and IBS with diarrhea (IBS-D) branded prescription sales, as shown in the graph below.13IBS Branded Sales (2018) The currently approved therapies for IBS-C include Linzess, marketed by Allergan and Ironwood Pharmaceuticals, Inc.; Amitiza, marketed by Mallinckrodtplc and Takeda Pharmaceutical Co. Ltd.; and Trulance, marketed by Synergy Pharmaceuticals Inc.; and the currently approved therapies for IBS-D includeXifaxan, marketed by Valeant Pharmaceuticals International, Inc., and Viberzi, marketed by Allergan. These drugs do not adequately address the painassociated with IBS, and there are no currently marketed drugs indicated specifically for IBS-associated pain. There are approximately 30 million to40 million Americans with IBS symptoms, 30% of whom consult with their physician. Approximately 80% of these patients identify pain as a symptomcontributing to the severity of their IBS. Based on this data, we estimate that there is an addressable market in the United States of approximately 7.2 to9.6 million patients who suffer from IBS-associated pain.The beta-3 adrenergic receptor is expressed in the neurons and the smooth muscle of the human colon. In vitro studies have shown that activation of the beta-3 adrenergic receptor in the colon causes the release of somatostatin from adipocytes, or fat cells, which causes pain relief. In a preclinical study,administration of a rat-selective beta-3 agonist caused a significant, dose-dependent decrease in abdominal arching (a sign of pain) in rats administeredmustard oil to cause visceral pain. This pain reduction was reversed by pre-treatment with a somatostatin receptor antagonist, confirming the role ofsomatostatin in the mechanism of action (treatment with the somatostatin receptor antagonist alone did not alter pain behavior).In Part 1 of a 26-week multicenter, randomized, placebo-controlled, two-period crossover Phase 2 clinical trial conducted by GlaxoSmithKline plc in 99 IBSpatients, treatment with solabegron, another clinical-stage beta-3 agonist, led to an increase of adequate relief of pain and discomfort associated with IBScompared to placebo at six weeks (15%, p=0.061 using last observation carried forward methodology; 22%, p=0.009 using observed cases). Significantlymore female patients on active treatment reported a >50% decrease on an 11-point pain score compared to placebo, odds ratio 4.77 (p<0.05); and an increaseof over one pain-free-day per week (33.5%) relative to placebo (16.8%) (p<0.05). Twenty-three percent more female patients treated with the beta-3 agonist(54%) achieved adequate relief relative to placebo (31%) (p=0.019). Twenty-five percent more patients with alternating bowel symptoms treated with thebeta-3 agonist (60%) achieved adequate relief of pain relative to placebo (35%) (p=0.013). The sponsor only performed efficacy analyses on the initial six-week treatment period. In October 2018, our investigational new drug application, or IND, for a Phase 2a clinical trial of vibegron for the treatment of abdominal pain due to IBSbecame effective. In December 2018, we enrolled our first patient in this trial. We expect to receive top-line data from the Phase 2a clinical trial in 2020. ThePhase 2a trial is a double-blind, placebo-controlled study in women with abdominal pain due to IBS with predominant diarrhea (IBS-D) or mixed episodes ofdiarrhea and constipation (IBS-M). The trial is expected to enroll approximately 200 patients in the United States, randomized to receive either 75 mg ofvibegron or placebo, administered orally once daily for a 12-week period. The primary endpoint will be a 30% reduction in abdominal pain intensity, whilesecondary endpoints will include Global Improvement Scale ratings, stool symptoms and safety.14Phase 1 Clinical Trials and Preclinical Studies of VibegronOur current development plan for vibegron includes multiple Phase 1 clinical trials to study the safety and pharmacokinetics of vibegron, including tworecently-completed drug-drug interaction trials (one with rifampin, an antibiotic, and a second with warfarin, an anticoagulant, and metoprolol, taken for highblood pressure), a Phase 1 ambulatory blood pressure study and a Phase 1 food effect and crushed tablet evaluation study.Prior to our license of vibegron, Merck conducted 16 Phase 1 clinical trials in which a total of 465 individuals received at least one dose of vibegron. ThePhase 1 program included trials evaluating the safety and pharmacokinetics of vibegron in healthy young-adult, middle-aged and elderly patients. The Phase1 program included single doses up to 600 mg (eight times our proposed therapeutic dose), multiple doses up to 400 mg daily for 14 days and 150 mg dailyfor 28 days.Vibegron was well tolerated throughout the Phase 1 program, including in subjects with mild, moderate and severe renal impairment and moderate hepaticimpairment. There were no SAEs reported. In addition, in a thorough QTc study, vibegron showed no QTc prolongation at therapeutic or supratherapeuticdoses.Merck also conducted drug-drug interaction studies with various drugs, including tolterodine ER (anticholinergic for OAB), metoprolol and amlodipine(antihypertensive agents), diltiazem and digoxin (used for treating various heart conditions), ketoconazole (anti-fungal medication), and ethinyl estradioland levonorgestrel (oral contraceptives). Co-administration of vibegron, which is metabolized by the CYP3A4 enzyme, with any of these drugs did notappear to result in a clinically meaningful drug-drug interaction. While CYP3A4 is likely the predominant CYP responsible for in vitro metabolism,metabolism appears to only play a minor role in the elimination of vibegron. In addition, vibegron did not appear to have a clinically meaningful impact onthe pharmacokinetics of oral contraceptives or digoxin. Based on in vitro studies, vibegron is not an inhibitor of any major enzymes produced from thecytochrome P450 genes, including CYP2D6 and CYP3A4. Vibegron did not impact the pharmacokinetics of tolterodine ER (a CYP2D6 substrate) in aclinical drug-drug interaction trial, confirming that vibegron is not a CYP2D6 inhibitor. CYP2D6 and CYP3A4 are important enzymes involved in themetabolism of numerous drugs, the inhibition of which can present drug-drug interaction risk. Drug-drug interactions can lead to clinically significantincreased plasma levels of interacting drugs, which may become a safety risk for patients.In vitro assays comparing the potency and selectivity of vibegron with mirabegron found that vibegron was the more potent beta-3 agonist and highlyselective relative to beta-1 and beta-2 agonism receptor. The half maximal effective concentration, or EC 50, of vibegron is 2.1 nanomolar at the beta-3adrenergic receptor. EC50 is a commonly used measure of a drug’s potency, representing the concentration of a drug that induces a response halfway betweenbaseline and maximum after a specified exposure time. Further, vibegron does not appear to bind to either beta-1 or beta-2 adrenergic receptors in bindingcompetition assays, confirming that the compound is neither an agonist nor an antagonist at beta-1 or beta-2 adrenergic receptors. In animal studies, vibegronwas observed to induce relaxation in isolated rat urinary smooth bladder muscle, decrease micturition pressure in a rat bladder hyperactivity model in a dose-dependent manner, and increase bladder capacity in rhesus monkeys. Additionally, Merck completed long-term animal toxicity and carcinogenicity studiesof vibegron, which are studies required by the FDA prior to approval.URO-902 for the Treatment of Overactive BladderURO-902 (formerly known as hMaxi-K) is a novel gene therapy product candidate that we are developing for patients with OAB who have failed oralpharmacological therapy. URO-902 is under development as a potential injectable treatment option for smooth muscle-based disorders such as OAB. URO-902 is a plasmid vector containing a human cDNA encoding the pore-forming component of the Maxi-K ion channel. Expression of the Maxi-K protein inmuscle cells increases potassium ion flow across the cell membrane, reducing excitability of smooth muscle cells. We believe this mechanism couldnormalize the heightened detrusor smooth muscle tone in OAB, thereby reducing the symptoms of OAB. We plan to pursue URO-902 as a repeatadministration that can be administered under local anesthesia to the bladder wall as an outpatient procedure in a urologist’s office under cystoscopy.15There are no currently available FDA-approved gene therapy treatments for OAB. With only two non-surgical therapies currently available for treatment ofOAB, BOTOX and neuromodulation, we believe there is an opportunity to both capture market share and expand the OAB third-line therapy market. Weestimate that only 300,000 patients utilize current third-line procedural therapies that generate aggregate annual sales in excess of $700 million in the U.S.market. We believe a third-line treatment option that is non-surgical and not a toxin, unlike BOTOX, would be appealing to physicians and patients,potentially meeting the unmet needs of this patient population.We intend to initiate a placebo-controlled, randomized, multicenter proof-of-concept Phase 2a clinical trial in the fourth quarter of 2019 to evaluate thesafety and efficacy of URO-902 for the treatment of OAB in patients who have not responded to oral pharmacological therapies. The proposed key efficacyendpoints for this Phase 2a clinical trial include reductions per day in micturitions, urgency episodes and UUI episodes. In addition, our design of the Phase2a clinical trial will consider the safety data and preliminary efficacy data available from the two Phase 1b clinical trials in OAB conducted by ICI. TheBiologics License Application for URO-902 will rely primarily on data from our planned Phase 2 and 3 clinical trials of URO-902.Clinical Data for URO-902Development of URO-902 was initiated by ICI and has been studied in four clinical trials to date, one Phase 1 clinical trial and one Phase 1b clinical trial inOAB, as well as one Phase 1 clinical trial and one Phase 2a clinical trial in erectile dysfunction. In these trials, URO-902 was studied in a total of 22 womenfor OAB and 38 men for erectile dysfunction in doses up to 24,000 µg of URO-902. There were no gene transfer-related adverse events or other serious safetyissues observed in these trials. There were five SAEs reported across all clinical trials of URO-902 conducted to date, all of which were determined to beunrelated to treatment. Two SAEs occurred at the lowest dose group (500 µg) in the Phase 1 clinical trial in erectile dysfunction (atrial flutter and urinary tractinfection). Additionally, one SAE occurred in the 8,000 µg dose group and one SAE occurred in the placebo group in the Phase 2a clinical trial in erectiledysfunction and one SAE occurred in the 16,000 µg dose group in a Phase 1b clinical trial in OAB, each as further described below. In 2017, ICI completed a multicenter, double-blind, imbalanced placebo-controlled Phase 1b clinical trial evaluating the potential activity and safety ofURO-902 gene transfer by multiple direct injections in women with OAB and detrusor overactivity. The Phase 1b clinical trial, which began in 2014, had twosequential active treatment groups. URO-902 was delivered into the bladder wall by direct injection in a total of 13 female OAB patients at two escalatingdose levels of 16,000 µg (n=6) and 24,000 µg (n=3). hMaxi K was observed to be generally well tolerated in this trial. There was one SAE reported in this trialin the 16,000 µg dose group (exacerbation of pre-existing asthma), which was determined to be unrelated to treatment and completely resolved. No otherSAEs were reported in this trial.Efficacy results of the trial, which included a limited number of patients (n=13), showed dose-dependent improvements in reductions per day in number ofmicturitions, urgency episodes and UUI episodes in both URO-902 treatment groups (16,000 µg and 24,000 µg), achieving statistical significance (p<0.05) inthe high dose cohort (24,000 µg). Reductions of the measured endpoints in number of micturitions, urgency episodes, UUI episodes and improvements in themeasured endpoint of quality of life (as measured by the King’s Health Questionnaire, a commonly used questionnaire designed to evaluate the impact ofOAB on quality of life) lasted through the 24-week length of the trial. The improvements for the active treatment groups, in particular the 24,000 µg group,on the King’s Health questionnaire included improvements on the domains of impact on life, physical limitations, social limitations and sleep/energy.In the double-blind placebo-controlled Phase 1 clinical trial conducted by ICI in 2007, potential activity and safety of one-time bladder instillation of URO-902 gene transfer in women with OAB and detrusor overactivity was evaluated. The patients were observed for 24 weeks. URO-902 in this trial was instilledinto the bladder by catheter in female OAB patients at dose-escalating levels of 5,000 µg and 10,000 µg. Efficacy endpoints included reductions per day innumber of micturitions and UUI episodes. No clinically significant changes for the mean number of micturitions or UUI episodes were observed compared toplacebo. There were no SAEs reported in this trial.16In the double-blind, placebo-controlled, parallel design, randomized Phase 2a clinical trial conducted by ICI in 2017, potential activity and safety of URO-902 gene transfer in men with erectile dysfunction was evaluated. URO-902 was observed to be generally well tolerated in this trial. There were two SAEsreported in this trial (eye surgery for lens replacement and acute Charcot’s osteoarthropathy, in the 8,000 µg group and placebo group, respectively), both ofwhich were not treatment related.Our Key AgreementsLicense Agreement with MerckIn February 2017, we entered into a license agreement with Merck, as amended in April 2017, or the Merck Agreement, pursuant to which Merck granted usan exclusive, royalty-bearing, sublicenseable license under certain patents, know-how and other intellectual property controlled by Merck, to develop,manufacture and commercialize the compound that we refer to as vibegron and any and all products containing this compound for use in any human diseaseor condition. The exclusive license under the Merck Agreement extends to all countries and territories worldwide, except for Japan, Brunei, Cambodia, HongKong, Indonesia, Korea, Laos, Malaysia, Myanmar, Philippines, Singapore, Taiwan, Thailand and Vietnam, which we refer to collectively as the ExcludedAsian Territories. Merck also granted us a non-exclusive license to develop and manufacture the licensed products in the Excluded Asian Territories solelyfor further development and/or commercialization outside of such Excluded Asian Territories. Pursuant to the Merck Agreement, we made an upfront payment of $25.0 million to Merck. Additionally, we agreed to pay Merck up to an aggregate of$44.0 million upon the achievement of certain regulatory milestone events and up to an aggregate of $80.0 million upon the achievement of certain salesmilestone events. Further, we agreed to pay Merck tiered royalties in the sub-teen double-digits on net sales of licensed products made by us, our affiliates orour sublicensees, subject to standard offsets and reductions as set forth in the Merck Agreement. Our royalty obligations apply on a product-by-product andcountry-by-country basis and end upon the latest of the date on which the last valid claim of the licensed patents expire, the date which the data or marketexclusivity expires and 15 years after the first commercial sale of the licensed product, in each case, with respect to a given product in a given country.We are obligated to use commercially reasonable efforts to develop and commercialize a licensed product in certain urologic indications in the United Statesand the European Union by certain dates, subject to requisite governmental authorizations. Additionally, after obtaining regulatory approval of a licensedproduct in a given country, we are obligated to use commercially reasonable efforts to commercialize and maximize the value of such licensed product insuch country.Under the Merck Agreement, we control prosecution, defense and enforcement of the licensed patents, and Merck has backup rights to prosecution, defenseand enforcement with respect to any licensed patents for which we elect not to exercise such rights.The Merck Agreement will expire on a product-by-product and country-by-country basis on the expiration of the royalty term with respect to a givenlicensed product in a given country, unless earlier terminated. We may terminate the Merck Agreement in its entirety, or on a country-by-country basis, forany reason, with or without cause, upon 90 days’ written notice. Merck may terminate the Merck Agreement if we or our affiliates challenge the validity ofany of the licensed patents or for a change of control event that involves a competing product in the United States or at least three countries within theEuropean Union that is not divested within a specified time frame thereafter. Either party may terminate the Merck Agreement with 90 days’ written notice foruncured material breach (or 30 days in the case of our non-payment), or immediately upon written notice in the event the other party files a voluntarypetition, is subject to a substantiated involuntary petition or is otherwise declared insolvent.In June 2017, we entered into an intellectual property purchase agreement with Roivant Sciences GmbH, or RSG, a wholly owned subsidiary of our parentcompany, RSL, as amended on May 22, 2018, pursuant to which we assigned all of our rights, titles, claims and interests in and to all intellectual propertyrights under the Merck Agreement, solely as it relates to any of our rights or obligations in China, to RSG.17Collaboration Agreement with KyorinIn August 2017, we entered into a collaboration agreement with Kyorin, or the Kyorin Collaboration Agreement, to exchange information relating to non-clinical studies and clinical trials involving vibegron conducted by each party. Pursuant to the Kyorin Collaboration Agreement, Kyorin granted us accessand a right of reference to their regulatory materials (and all clinical data contained therein) to develop and commercialize vibegron worldwide (other thanthe Excluded Asian Territories), and we granted Kyorin access and a right of reference to our regulatory materials (and all clinical data contained therein) todevelop and commercialize vibegron in the Excluded Asian Territories, including, in each case, the right to use such materials for any meeting with, orsubmission to, each party’s relevant government authority for the purpose of obtaining any regulatory approval for vibegron. Further, we granted Kyorin aright of first review and negotiation to obtain a license under the Japanese rights to any urology assets that we acquire during the 10-year period starting fromthe effective date of the Kyorin Collaboration Agreement.Pursuant to the Kyorin Collaboration Agreement, our maximum obligation to Kyorin is $11.5 million, of which $1.0 million was paid during the year endedMarch 31, 2018. The remaining obligations under this agreement will be due upon the achievement of certain regulatory milestones by Kyorin in Japan andus in the United States, subject to certain conditions.The term of the Kyorin Collaboration Agreement continues as long as both parties are developing or commercializing vibegron, unless otherwise terminatedor extended. Either party may terminate the Kyorin Collaboration Agreement on 60 days’ written notice for uncured and undisputed material breach, or forthe change of control of the other party.Enzyme Supply Agreement with CodexisIn September 2017, we entered into an enzyme supply agreement with Codexis, Inc., or Codexis, pursuant to which Codexis agreed to supply its proprietaryenzyme, currently used in the production of vibegron, to us on a non-exclusive basis, or the Codexis Agreement. Pursuant to the Codexis Agreement, weagreed to purchase from Codexis all of our requirements for such enzyme (with a minimum purchase commitment totaling $3.75 million) for use in theclinical and commercial production of vibegron worldwide (other than the Excluded Asian Territories) for the first six years after the first approved product inany of the United States, Europe or Canada. Under the Codexis Agreement, Codexis granted us a non-exclusive, non-transferrable, non-sublicenseableworldwide license to use and import its proprietary enzyme to make, have made, use, import, sell and have sold vibegron worldwide (other than the ExcludedAsian Territories). In consideration for these license rights, we also agreed to make a one-time $0.5 million payment upon our achievement of a regulatorymilestone in any of the United States, Europe or Canada.The term of the Codexis Agreement continues for six years after the first regulatory approval of vibegron in either the United States, Europe or Canada. Wemay terminate the Codexis Agreement for any reason, with or without cause, following a written notice to Codexis prior to the first approved product in anyof the United States, Europe or Canada. After such time, we may terminate this agreement for any reason, with or without cause, following a written notice toCodexis, but will be obligated to have met our minimum purchase obligations for that year. Either party can terminate the Codexis Agreement with 60 days’notice for uncured material breach, or with 30 days’ written notice in the event the other party files a voluntary petition, suffers or permits the appointment ofa receiver for its business or assets, or is otherwise declared insolvent.License Agreement with Ion Channel InnovationsIn August 2018, we entered into a license agreement with ICI, or the ICI Agreement, pursuant to which ICI granted us an exclusive, royalty-bearing,sublicenseable license under certain patent rights and know-how controlled by ICI, to develop, manufacture and commercialize the gene therapy that we referto as URO-902 (formerly known as hMaxi-K) and any and all products containing this gene therapy for use in any human or animal disease or condition. Theexclusive license under the ICI Agreement extends to all countries and territories worldwide.18Pursuant to the ICI Agreement, we made an upfront payment of $0.25 million to ICI. Additionally, we agreed to pay ICI up to an aggregate of $35.0 millionupon the achievement of certain development and regulatory milestone events and up to an aggregate of $60.0 million upon the achievement of certain salesmilestone events. Further, we agreed to pay ICI tiered royalties in the mid-to-high single digits on net sales of licensed products made by us, our affiliates orour sublicensees, subject to certain reductions as set forth in the ICI Agreement. Our royalty obligations apply on a product-by-product and country-by-country basis and end upon the date on which the last valid claim of the licensed patents expires with respect to a given product in a given country.We are obligated to use commercially reasonable efforts to develop and seek regulatory approval of at least one licensed product. Under the ICI Agreement,we control prosecution, defense and enforcement of the licensed patents, and ICI has backup rights to prosecution, defense and enforcement with respect toany licensed patents for which we elect not to exercise such rights.The ICI Agreement will expire on a product-by-product basis on the expiration of the royalty term with respect to a given licensed product, unless earlierterminated. We may terminate the ICI Agreement in its entirety, or on a product-by-product basis, for any reason, with or without cause, upon 90 days’ writtennotice or, if after regulatory approval of a licensed product, upon 180 days’ written notice. Either party may terminate the ICI Agreement with 90 days’written notice for uncured material breach, or immediately in the event the other party files a voluntary petition, is subject to an involuntary petition notdismissed within 90 days, or assigns a substantial portion of its assets for the benefit of creditors.Loan Agreement with Hercules Capital, Inc.On February 20, 2019, we and our subsidiaries, Urovant Holdings Limited (“UHL”), Urovant Sciences GmbH (“USG”) (collectively with us and UHL, the“Borrowers”) and Urovant Sciences, Inc. (“USI”) (collectively with the Borrowers, the “Loan Parties”) entered into a secured debt financing agreement (the“Loan Agreement”) with Hercules Capital, Inc. (“Hercules”), as agent and lender, in the amount of $100.0 million (the “Term Loans”). A first tranche of$15.0 million was funded upon execution of the Loan Agreement, and the remaining $85.0 million is available in three additional optional tranches throughJune 30, 2021, subject to certain terms and conditions, including the achievement of certain milestones.The Term Loans bear a variable interest rate equal to the greater of (i) 10.15% or (ii) the lesser of (x) the prime rate as reported in The Wall Street Journal plus4.65% and (y) 12.15%. We are obligated to make monthly payments of accrued interest for the first 12 months from closing, or the Interest-only Period,followed by monthly installments of principal and interest through the maturity date. The Interest-only Period may be extended up to an aggregate of24 months after closing if certain milestones are met. Our obligations under the Loan Agreement are fully and unconditionally guaranteed by the subsidiariesof the Borrowers, including USI. The Loan Parties’ obligations under the Loan Agreement are secured by a first priority security interest on substantially allof their personal property, other than intellectual property, and subject to certain other exceptions.The Term Loans mature 36 months from closing and include an option for the Loan Parties to extend the maturity date up to 18 months if certain milestonesare met. The Loan Parties have the option to prepay the Terms Loans and the prepayment of the Term Loans will be subject to, in some circumstances, aprepayment charge equal to 2% in the first 12 months from closing, 1% in the second 12 months, and 0% thereafter. Upon repayment of the Term Loans, theCompany will be obligated to pay an end of term charge in an amount equal to 4.25% of the amount of the Term Loans actually advanced.The Loan Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily requiredfor similar financings, including a covenant against the incurrence of a “change in control,” financial reporting obligations, and certain limitations onindebtedness, liens (including a negative pledge on intellectual property and other assets), investments, distributions (including dividends), collateral,investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes and deposit accounts. The Loan Agreement also contains a minimumcash covenant that requires the Loan Parties to hold certain minimum cash balances in the event that either certain milestones are not achieved or our marketcapitalization is below a certain threshold for certain periods of time. Such minimum cash covenant ceases to apply if we achieve certain clinicaldevelopment and financial milestones as set forth in the Loan Agreement. The Loan Agreement also contains customary events of default (subject, in certaininstances, to specified grace periods) including, but not limited to, the failure to make payments of interest or premium, if any, on, or principal under the TermLoans, the failure to comply with certain covenants and agreements specified in the Loan Agreement, the occurrence of certain events that could reasonablybe expected to have a “material adverse effect” as set forth in the Loan Agreement,19defaults in respect of certain other indebtedness, certain events relating to bankruptcy or insolvency and certain events relating to U.K. or Irish pension plans.If any event of default occurs, the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts under the TermLoans may become due and payable immediately. Upon the occurrence of an event of default, a default interest rate of an additional 5% may be applied tothe outstanding principal balance, and Hercules may declare all outstanding obligations immediately due and payable (subject, in certain instances, tospecified grace periods) and take such other actions as set forth in the Loan Agreement. Upon the occurrence of certain bankruptcy and insolvency events, theobligations under the Loan Agreement would automatically become due and payable. In connection with each funding of the Term Loans, we are required to issue to Hercules a warrant, or the Warrants, to purchase a number of our commonshares equal to 2% of the principal amount of the relevant Term Loan funded divided by the exercise price, which will be based on the closing price of ourcommon shares on the business day immediately prior to the relevant Term Loan funding (or for the first and second tranches only at the lower of (i) $9.02 pershare or (ii) the closing price of our common shares on the business day immediately prior to the relevant Term Loan funding). The Warrants may beexercised on a cashless basis, and are immediately exercisable through the seventh anniversary of the applicable funding date. The number of common sharesfor which each Warrant is exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in such Warrant. Inconnection with the first tranche of the Term Loans, we issued a Warrant to Hercules, exercisable for an aggregate of 33,259 of our common shares at anexercise price of $9.02 per share.Urovant is a Vant within the Roivant Family of CompaniesWe have benefited from our ability to leverage the Roivant model and the greater Roivant platform. The period of time between our formation and ouroperational maturation was shortened based on the support from centralized Roivant functions available to us since our creation. This includes operationalfunctions as well as access to Roivant’s proprietary technology and digital innovation platforms. Consistent with its model, Roivant has also provided uswith access to an embedded team of scientific experts, physicians and technologists to help optimize the clinical development and commercial strategies ofthe company. We intend to explore collaborations with other Vants within the Roivant family of companies, including Alyvant, to optimize the launch ofvibegron. Additionally, in the future, we may have the ability to benefit from Roivant’s economies of scale and scope, including but not limited to theopportunity to: •leverage Roivant’s business development engine and vast network of industry relationships for the identification of, and access to, new assets andsynergistic partnerships; •enter channel partnerships with other Vants in the Roivant family of companies (including but not limited to technology-focused Vants built byRoivant, such as Alyvant), with the goal of delivering efficiencies in the development and commercialization process; •access Roivant’s human capital engine to recruit new employees from within and beyond the biopharmaceutical industry; •enable our employees to participate in Roivant’s career development program which facilitates employee mobility across Vants in the Roivantfamily of companies; •benefit from shared learnings, best practices, and external industry relationships across the Roivant family of companies; and •derive certain benefits of scale upon becoming a commercial-stage company.Sales and DistributionWe do not currently have our own sales or distribution capabilities. In order to commercialize vibegron, if approved for commercial sale, we must develop asales infrastructure. We intend to build an initial sales force of approximately 150 persons in the United States, targeting urologists and other specialists thattreat a high number of patients with urologic conditions. We believe these physicians have a significant number of OAB patients in their practice and oftenserve as the diagnosing and treating physicians for OAB. We intend to scale the commercial presence to reach additional health care professionals asvibegron sales grow. We believe that our commercial leadership team, with experience launching over 20 prescription products, positions us well toefficiently pursue the significant market opportunity for vibegron in the United States. We may opportunistically seek strategic collaborations to maximizethe commercial opportunities for vibegron inside and outside the United States.20ManufacturingWe do not have the capabilities to conduct drug formulation or manufacturing and do not own or operate, and we do not expect to own or operate, facilitiesfor product manufacturing, storage and distribution, or testing. While vibegron and URO-902 were being developed by Merck and ICI, respectively, it wasalso being manufactured by Merck and through contract manufacturing organizations by ICI.We expect that the vibegron drug substance transferred to us under the Merck Agreement and drug substance manufactured at our planned commercialsupplier will be sufficient for us to complete our currently planned clinical trials for the treatment of OAB in men with BPH and abdominal pain due to IBS.We have also contracted with a third party to fill, finish, supply, store and distribute the vibegron drug product for such purpose. If vibegron is approved bythe FDA for commercial use, we will rely on third-party manufacturers to supply us with sufficient quantities of vibegron to be used for the commercializationof vibegron. If we are unable to initiate or continue our relationships with one or more other third-party manufacturers, we could experience delays in ourcommercialization efforts as we locate and qualify new manufacturers.Vibegron is a small molecule that can be manufactured using commercially available technologies. We acquired data from Merck related to the chemicalsynthesis and manufacturing of vibegron, and we have contracted with third-party manufacturers for commercial supplies of vibegron ingredients on a cost-efficient basis based on our understanding of the structure and synthesis of the compound. We currently rely on a single supplier, Codexis, for its proprietaryenzyme, which we use in the production of vibegron, and we have agreed to purchase from Codexis all of our requirements for such enzyme for use in ourclinical and commercial production of vibegron for the first six years after the first approval of vibegron in any of the United States, Europe or Canada. Weare currently exploring alternative options for the synthesis of vibegron to enable us to identify and utilize a second source supplier. While we continue toexplore these alternatives, we plan to build and maintain two years of inventory of vibegron using the Codexis enzyme prior to any regulatory approval. URO-902 is a naked DNA plasmid vector containing a cDNA encoding the pore-forming component of the human smooth muscle Maxi-K ion channel. Weexpect the manufacturing process for URO-902 to be typical for that of biologics. Prior to our acquisition of URO-902, it was developed and manufactured inacademic and manufacturing facilities suitable to support manufacturing of early clinical development. We expect our existing supply of URO-902, whichwas transferred to us under the ICI license agreement, to be sufficient for us to complete our planned Phase 2a study if materials continue to meet allspecifications. We have recently contracted with a third-party vendor for the manufacturing of URO-902 for future preclinical studies and clinical trials, butthe vendor has not yet manufactured any URO-902. We intend to contract with third-party vendors for commercialization if and when URO-902 receivesmarketing approval. We have not determined at this time whether to develop our own technology and process or to use third-party patented or proprietaryDNA delivery-related technology for the manufacture and commercialization of URO-902. If we are unable to initiate or continue our relationships with oneor more third-party manufacturers for the development and manufacture of URO-902, we could experience delays in our development efforts, and subsequentcommercialization if approved.Manufacturing of any product candidate is subject to extensive regulations that impose various procedural and documentation requirements, which governrecordkeeping, manufacturing processes and controls, personnel, quality control and quality assurance, among others. We expect that all of our contractmanufacturing organizations will manufacture our product candidates under current Good Manufacturing Practice, or cGMP, conditions. cGMP is aregulatory standard for the production of pharmaceuticals to be used in humans.CompetitionWe expect mirabegron (Myrbetriq, marketed by Astellas) to be our primary competitor for the treatment of OAB. Mirabegron, a beta-3 agonist, is marketed forthe treatment of OAB with symptoms of urge urinary incontinence, urgency and urinary frequency.In addition to vibegron, solabegron is the only other beta-3 agonist that is in clinical development. GlaxoSmithKline plc conducted a Phase 2 clinical trial inwhich solabegron, dosed twice daily, demonstrated efficacy in OAB. Velicept Therapeutics, Inc., which has acquired the rights to solabegron, has developeda once-daily formulation and is advancing both its twice-daily and once-daily formulations into Phase 2b clinical trials.21Additionally, there are several other product candidates under development for the treatment of OAB. Taiho Pharmaceutical Co., Ltd. is developing TAC-302, a novel neurite outgrowth enhancer, currently in Phase 2 clinical trials in Japan. Dong-A ST Co., Ltd. is developing DA-8010, a novel anticholinergic,currently in a Phase 1 clinical trial. Taris Biomedical LLC is developing TAR-302, an intravesical drug-delivery system for trospium, an anticholinergic drug,currently in Phase 1b clinical trials. Outpost Medicine, LLC’s IND for OP-687 for OAB was accepted by the FDA in late 2017. In addition, a number ofcompanies are developing injectable neurotoxins (biosimilar onabotulinumtoxinA, abobotulinumtoxinA, and nivobotulinumtoxinA) for OAB, and Allerganhas advanced a BOTOX-based sustained release gel (RTGel) for the treatment of OAB into Phase 2 clinical development.We also face significant competition from traditional anticholinergic drugs, which have been the standard of pharmacologic care for OAB since the approvalof flavoxate in 1970 and oxybutynin in 1975. Anticholinergics continue to account for the largest share of prescriptions written for the treatment of OAB inthe United States. There are a number of widely prescribed anticholinergics approved for sale in the United States, including solifenacin, tolterodine andoxybutynin. In addition, procedural therapies, such as BOTOX (marketed by Allergan) and neuromodulation are available as third-line treatments for OAB.Drug development is highly competitive and subject to rapid and significant technological advancements. Our ability to compete will significantly dependupon our ability to complete necessary clinical trials and regulatory approval processes, and effectively market any drug that we may successfully develop.Our current and potential future competitors include pharmaceutical and biotechnology companies, academic institutions and government agencies. Theprimary competitive factors that will affect the commercial success of any product candidate for which we may receive marketing approval include efficacy,safety and tolerability profile, dosing convenience, price, coverage, reimbursement and public opinion. Many of our existing or potential competitors havesubstantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of productcandidates, as well as in obtaining regulatory approvals of those product candidates in the United States and in foreign countries. Additionally, we expect ourgene therapy product candidate, URO-902, to face significant competition from our competitors focused on more traditional therapies for OAB due toperceived risks and public perception associated with gene therapies. Our current and potential future competitors also have significantly more experience commercializing drugs that have been approved for marketing. Mergersand acquisitions in the pharmaceutical, biotechnology and gene therapy industries could result in even more resources being concentrated among a smallnumber of our competitors.Accordingly, our competitors may be more successful than us in obtaining regulatory approval for therapies and in achieving widespread market acceptanceof their drugs. It is also possible that the development of a cure or more effective treatment method for any of our indications by a competitor could render ourproduct candidates non-competitive or obsolete, or reduce the demand for our product candidates before we can recover our development andcommercialization expenses.Intellectual PropertyOur commercial success depends in part on our ability to obtain and maintain proprietary protection for vibegron and any of our future product candidates,novel discoveries, product development technologies and know-how; to operate without infringing on the proprietary rights of others; and to prevent othersfrom infringing our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing or in-licensing U.S. andforeign patents and patent applications related to our proprietary technology, inventions and improvements that are important to the development andimplementation of our business. We also rely on trademarks, trade secrets, know-how, continuing technological innovation and potential in-licensingopportunities to develop and maintain our proprietary position.While we seek broad coverage under our existing patent applications, there is always a risk that an alteration to the products or processes may providesufficient basis for a competitor to avoid infringing our patent claims. In addition, patents, if granted, expire and we cannot provide any assurance that anypatents will be issued from our pending or any future applications or that any potentially issued patents will adequately protect our products or productcandidates.22Following our execution of the Merck Agreement, as of February 3, 2017, by virtue of the license of patent rights under the Merck Agreement, we are theexclusive licensee of multiple granted U.S. patents and pending patent applications, as well as patents and patent applications in numerous foreignjurisdictions (including the United Kingdom, France, Germany, and Canada, but excluding China and the Excluded Asian Territories) relating to beta-3agonists, including vibegron. As they relate to vibegron, these patents and patent applications cover the vibegron molecule and salts and stereoisomersthereof as a composition of matter, the use of vibegron to treat overactive bladder, urinary incontinence, UUI and urinary urgency, as well as methods ofmanufacturing. The patent family directed to the vibegron composition of matter and methods of use naturally expires in 2029 in the United States and inforeign jurisdictions, subject to any adjustment or extension of patent term that may be available in a particular jurisdiction. The U.S. Patent and TrademarkOffice, or the USPTO, has determined that one such patent within the composition of matter and methods of use patent family is entitled to 608 days of patentterm adjustment. The patents and patent applications (if issued) directed to methods of manufacturing beta-3 agonists (including vibegron) and relatedsynthetic intermediates would naturally expire between 2032 and 2034, subject to any adjustment or extension of patent term that may be available in aparticular country. For example, the term of certain of the composition of matter patents for vibegron in the United States may be extended up to about fiveyears under the patent term extension provisions of the Hatch-Waxman Act. In addition to the patent rights licensed from Merck, we also have twointernational patent applications directed to use of vibegron at certain dosages to treat overactive bladder. Following our execution of the ICI Agreement, as of August 24, 2018, by virtue of the license of patent rights under the ICI Agreement, we are the exclusivelicensee of a pending international patent application relating to URO-902 gene therapy. This patent application covers the use of URO-902 gene therapy totreat signs or symptoms of overactive bladder or detrusor overactivity. Any patents issuing from this application would naturally expire in 2038, subject toany adjustment or extension of patent term that may be available in a particular country.Individual patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal term ofpatents in the countries in which they are obtained. Generally, patents issued for regularly filed applications in the United States are granted a term of 20years from the earliest effective non-provisional filing date. In addition, in certain instances, a patent term can be extended to recapture a period due to delayby the USPTO in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period. However, as to the FDAcomponent, 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 foreign patents varies in accordance with provisions of applicable local law, but typically is also 20 years from theearliest effective non-provisional filing date. However, the actual protection afforded by a patent varies on a product-by-product basis, from country tocountry, and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, theavailability of legal remedies in a particular country and the validity and enforceability of the patent.We have a trademark registration in the United States for UROVANT, as well as pending trademark applications in the United States for UROVANTSCIENCES. Under the Merck Agreement, we have the right to market vibegron worldwide (other than the Excluded Asian Territories) under the trademark(s)of our choice, subject to regulatory approval.Furthermore, we rely upon trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position. We seekto protect our proprietary information, in part, using confidentiality and invention assignment agreements with our commercial partners, collaborators,employees and consultants. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, togrant us ownership of technologies that are developed through a relationship with a third party. These agreements may be breached, and we may not haveadequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extentthat our commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as tothe rights in related or resulting know-how and inventions.Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties. It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies for our products or processes, or to obtain licenses or cease certain activities.Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop or commercialize our future productsmay have an adverse impact on us. If third parties prepare and file patent applications in the United States that also claim technology to which we have rights,we may have to participate in interference or derivation proceedings in the USPTO to determine priority of invention. 23Government RegulationFDA Drug Approval ProcessIn the United States, pharmaceutical and biological products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act, thePublic Health Service Act and other federal and state statutes and regulations, govern, among other things, the research, development, testing, quality control,manufacture, storage, recordkeeping, safety, effectiveness, approval, labeling, promotion and marketing, distribution, post-approval monitoring andreporting, sampling, and import and export of pharmaceutical products. Failure to comply with applicable U.S. requirements may subject a company to avariety of administrative or judicial sanctions, such as FDA refusal to approve pending NDAs or biologics license applications, or BLAs, warning or untitledletters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution.We cannot market a drug or biological product candidate in the United States until the product candidate has received FDA approval. The steps requiredbefore a product may be marketed in the United States generally include the following: •completion of extensive nonclinical laboratory tests, animal studies, and formulation studies in accordance with the FDA’s Good LaboratoryPractice, or GLP, regulations; •submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin; •approval by an institutional review board, or IRB, at each clinical site before each trial may be initiated; •performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practice, or GCP, requirements to establishthe safety and efficacy of the drug for each proposed indication; •submission to the FDA of an NDA or BLA, in the case of biological product candidates, including gene therapy product candidates, aftercompletion of all pivotal clinical trials; •satisfactory completion of an FDA advisory committee review, if applicable; •satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceuticalingredient and finished drug or biological product are produced and tested to assess compliance with cGMP requirements; and •FDA review and approval of the NDA or BLA prior to any commercial marketing or sale of the drug in the United States.Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type,complexity, and novelty of the product or disease.Nonclinical tests include laboratory evaluation of product chemistry, formulation, and toxicity, as well as animal trials to assess the characteristics andpotential safety and efficacy of the product. The conduct of the nonclinical tests must comply with federal regulations and requirements, including GLPregulations. The results of nonclinical testing are submitted to the FDA as part of an IND along with other information, including information about productchemistry, manufacturing and controls, and a proposed clinical trial protocol. Long-term nonclinical tests, such as animal tests of reproductive toxicity andcarcinogenicity, may continue after the IND is submitted. A 30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has neithercommented on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin. If the FDA raises concerns or questionsabout the conduct of the trial, such as whether human research subjects will be exposed to an unreasonable health risk, the FDA will place the IND on clinicalhold and the IND sponsor and the FDA must resolve any outstanding FDA concerns or questions before clinical trials can proceed.Clinical trials involve the administration of the investigational new drug to healthy volunteers or patients under the supervision of a qualified investigator.Clinical trials must be conducted in compliance with federal regulations, including GCP requirements, as well as under protocols detailing the objectives ofthe trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. Each protocol and subsequent protocol amendmentsmust be submitted to the FDA as part of the IND.24The FDA may order the temporary or permanent discontinuation of a clinical trial at any time or impose a clinical hold or other sanctions if it believes thatthe clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial patients. The trialprotocol and informed consent information for patients in clinical trials must also be submitted to an IRB for approval at each site at which the clinical trialwill be conducted. An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB’srequirements, or may impose other conditions.U.S. Pharmaceutical and Biological Products Development ProcessClinical trials to support NDAs or BLAs for marketing approval of pharmaceutical product candidates are typically conducted in three sequential phases, butthe phases may overlap or be combined. In Phase 1, the initial introduction of the drug into healthy human subjects or patients, the drug is tested to assesspharmacological actions, side effects associated with increasing doses, and, if possible, early evidence on effectiveness. Phase 2 usually involves trials in alimited patient population to determine metabolism, pharmacokinetics, the effectiveness of the drug or biologic product candidate for a particular indication,dosage tolerance, and optimum dosage, and to identify common adverse effects and safety risks. If a compound demonstrates evidence of effectiveness and anacceptable safety profile in Phase 2 evaluations, Phase 3 clinical trials, also called pivotal or registration trials, are undertaken to obtain the additionalinformation about clinical efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permit the FDA toevaluate the overall benefit-risk relationship of the drug or biologic product candidate and to provide adequate information for the labeling of the drug orbiologic. In most cases, the FDA requires two adequate and well controlled Phase 3 clinical trials to demonstrate the efficacy of the drug or biologic productcandidate. A single Phase 3 clinical trial with other confirmatory evidence may be sufficient in rare instances where the trial is a large multicenter trialdemonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity, orprevention of a disease with a potentially serious outcome and where confirmation of the result in a second trial would be practically or ethically impossible.After completion of the required clinical testing, an NDA or BLA is prepared and submitted to the FDA. FDA approval of the NDA or BLA is required beforemarketing of the product may begin in the United States. The NDA or BLA must include the results of all nonclinical, clinical, and other testing, and acompilation of data relating to the product candidate’s pharmacology, chemistry, manufacture and controls. The cost of preparing and submitting an NDA orBLA is substantial. The submission of most NDAs and BLAs is additionally subject to a substantial application user fee, and the manufacturer and/or sponsorunder an approved NDA and BLA are also subject to annual program user fees. These fees are typically increased annually. The FDA has 60 days from its receipt of an application to determine whether the application will be accepted for filing based on the agency’s thresholddetermination that it is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review. TheFDA has agreed to certain performance goals in the review of application. Most such applications for standard review drug products are reviewed within 10 to12 months; most applications for priority review drugs are reviewed in six to eight months. Priority review can be applied to drugs to treat serious conditionsthat the FDA determines offer significant improvement in safety or effectiveness. The review process for both standard and priority review may be extendedby the FDA for three additional months to consider certain late-submitted information, or information intended to clarify information already provided in thesubmission.The FDA may also refer applications for novel drug products, or drug products that present difficult questions of safety or efficacy, to an advisory committee—typically a panel that includes clinicians and other experts—for review, evaluation and a recommendation as to whether the application should beapproved. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving anNDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP requirements. Additionally, the FDA will inspect thefacility or the facilities at which the drug or biologic product candidate is manufactured. The FDA will not approve the product unless compliance withcGMP requirements is satisfactory and the NDA or BLA contains data that provide substantial evidence that the product is safe and effective in the indicationstudied.25After the FDA evaluates the NDA or BLA and the manufacturing facilities, it issues either an approval letter or a complete response letter. A completeresponse letter generally outlines the deficiencies in the submission and may require substantial additional testing, or information, in order for the FDA toreconsider the application. If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA or BLA, the FDA willissue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included.An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. As a condition of approval,the FDA may require a Risk Evaluation and Mitigation Strategy, or REMS, to ensure that the benefits of the product outweigh the potential risks.Even if the FDA approves a product, depending on the specific risk(s) to be addressed, it may limit the approved indications for use of the product, requirethat contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, beconducted to further assess a product’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, orimpose other conditions, including distribution and use restrictions or other risk management mechanisms under a risk evaluation and mitigation strategy, orREMS. A REMS can include a medication guide, a communication plan for healthcare professionals, and elements to assure safe use, such as special trainingand certification requirements for individuals who prescribe or dispense the drug, requirements that patients enroll in a registry, and other measures that theFDA deems necessary to assure the safe use of the drug. The requirement for a REMS can adversely affect the potential market and profitability of theproduct. Moreover, product approval may require substantial post-approval testing and surveillance to monitor the product’s safety or efficacy. Once granted,product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing. TheFDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs.Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes orfacilities, require submission and FDA approval of a new application or application supplement before the change can be implemented. An applicationsupplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actionsin reviewing application supplements as it does in reviewing applications. Such supplements are typically reviewed within 10 months of receipt. In addition, under the Pediatric Research Equity Act of 2003, as amended and reauthorized, certain applications or application supplements must containdata that are adequate to assess the safety and effectiveness of the product candidates for the claimed indications in all relevant pediatric subpopulations, andto support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at therequest of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partialwaivers from the pediatric data requirements.Once an application is approved, a product is subject to pervasive and ongoing post-approval regulatory requirements. For instance, the FDA closelyregulates the post-approval marketing and promotion of drugs and biologics, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities, product sampling and distribution, reporting of adverse events, and promotionalactivities involving the internet and social media. Drugs and biologics may be marketed only for the approved indications and in accordance with theprovisions of the approved labeling.26Adverse event reporting and submission of periodic reports is required following FDA approval. The FDA also may require post-marketing testing, known asPhase 4 testing, REMS, or surveillance to monitor the effects of an approved product, or restrictions on the distribution or use of the product. In addition,quality-control, manufacturing, packaging, and labeling procedures must continue to conform to cGMP requirements after approval. Manufacturers andcertain of their subcontractors are required to register their establishments with the FDA and certain state agencies. Registration with the FDA subjects entitiesto periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMP requirements.Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality-control to maintain compliance withcGMP requirements. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, orfailure to comply with regulatory requirements, may result in, among other things: •restrictions on the marketing or manufacture of the product, complete withdrawal of the product from the market, or product recalls; •fines, warning letters, or holds on post-approval clinical trials; •refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals; •product seizure or detention, or refusal to permit the import or export of products; •injunctions or the imposition of civil or criminal penalties; •consent decrees, corporate integrity agreements, debarment, or exclusion from federal healthcare programs; •mandated modification of promotional materials and labeling and the issuance of corrective information; and •the issuance of safety alerts, “Dear Healthcare Provider” letters, press releases, or other communications containing warnings or other safetyinformation about the product.The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for theapproved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulationsprohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. Additional Requirements for U.S. Biological Products Development ProcessOur gene therapy product candidate will be regulated by FDA as a biologic, which, in addition to the pharmaceutical development pathway described above,requires compliance with certain product-specific regulations.Compliance with the NIH Guidelines for Research Involving Recombinant DNA Molecules, or NIH Guidelines, is mandatory for investigators at institutionsreceiving NIH funds for research involving recombinant DNA; however, many companies and other institutions not otherwise subject to the NIH Guidelinesvoluntarily follow them. Under these guidelines, supervision of human gene transfer trials includes evaluation and assessment by an institutional biosafetycommittee, or IBC, a local institutional committee that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at thatinstitution. The IBC assesses the safety of the research and identifies any potential risk to public health or the environment, and such review may result insome delay before initiation of a clinical trial.27Prior to August 2018, the NIH guidelines also required human gene transfer protocols to be submitted for review by the NIH Office of BiotechnologyActivities’ Recombinant DNA Advisory Committee, or RAC, a federal advisory committee, where (1) an oversight body such as an IBC or an IRB determinedthat the protocol would significantly benefit from RAC review, and (2) the protocol (a) used a new vector, genetic material, or delivery methodology thatrepresents a first-in-human experience and thus presents an unknown risk, and/or (b) relied on preclinical safety data that were obtained using a newpreclinical model system of unknown and unconfirmed value, and/or (c) involved a proposed vector, gene construct, or method of delivery associated withpossible toxicities that are not widely known and that may render it difficult for oversight bodies to evaluate the protocol rigorously. On August 17, 2018,the NIH issued a notice in the Federal Register and issued a public statement proposing changes to the oversight framework for gene therapy trials, includingchanges to the applicable NIH guidelines to modify the roles and responsibilities of the RAC with respect to human clinical trials of gene therapy products,and requesting public comment. During the public comment period, which closed October 16, 2018, the NIH has announced that it will no longer accept newhuman gene transfer protocols or convene the RAC to review individual clinical protocols. These trials will remain subject to the FDA’s oversight and otherclinical trial regulations, and the roles and responsibilities of the IBC at the local level will continue as described in the NIH Guidelines.The FDA recommends that sponsors observe subjects for potential gene therapy-related delayed adverse events for a 15-year period, including a minimum offive years of annual examinations followed by ten years of annual queries, either in person or by questionnaire, of trial subjects.The NIH and the FDA have a publicly accessible database, the Genetic Modification Clinical Research Information System, which includes information ongene transfer studies and serves as an electronic tool to facilitate the reporting and analysis of adverse events on these studies.After a BLA is approved, the product also may be subject to official lot release. As part of the manufacturing process, the manufacturer is required to performcertain tests on each lot of the product before it is released for distribution. If the product is subject to official release by the FDA, the manufacturer submitssamples of each lot of product to the FDA together with a release protocol showing a summary of the history of manufacture of the lot and the results of all ofthe manufacturer’s tests performed on the lot. The FDA also may perform certain confirmatory tests on lots of some products, such as viral vaccines, beforereleasing the lots for distribution by the manufacturer. Systems need to be put in place to record and evaluate adverse events reported by health care providersand patients and to assess product complaints. Market and Data Exclusivity for Biological ProductsThe Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, collectively referred to asthe PPACA, included a subtitle called the Biologics Price Competition and Innovation Act of 2009, or BPCIA. The BPCIA established a regulatory schemeauthorizing the FDA to approve biosimilars and interchangeable biosimilars. The FDA has issued several guidance documents outlining an approach toreview and approval of biosimilars. Additional guidance is expected to be finalized by FDA in the near term.Under the BPCIA, a manufacturer may submit an application for licensure of a biologic product that is “biosimilar to” or “interchangeable with” a licensedbiological product or “reference product.” In order for the FDA to approve a biosimilar product, it must find that there are no clinically meaningfuldifferences between the reference product and proposed biosimilar product in terms of safety, purity and potency. For the FDA to approve a biosimilarproduct as interchangeable with a reference product, the FDA must find that the biosimilar product can be expected to produce the same clinical results as thereference product and (for products administered multiple times) that the biologic and the reference biologic may be switched after one has been previouslyadministered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date of licensure of the referenceproduct. The FDA may not approve a biosimilar product until 12 years from the date on which the reference product was first licensed by FDA. The BPCIAalso requires a 180-day notice of commercial marketing of a biosimilar to the reference product manufacturer. Even if a product is considered to be a referenceproduct eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such productcontaining the sponsor’s own nonclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency oftheir product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products.28Foreign RegulationIn order to market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countriesand jurisdictions regarding quality, safety, and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales, anddistribution of our products. Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by the comparableforeign regulatory authorities before we can commence clinical trials or marketing of the product in foreign countries and jurisdictions. Although many of theissues discussed above with respect to the United States apply similarly in the context of the European Union, the approval process varies between countriesand jurisdictions and can involve additional product testing and additional administrative review periods. The time required to obtain approval in othercountries and jurisdictions might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdictiondoes not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impactthe regulatory process in others.Other Healthcare LawsAlthough we currently do not have any products on the market, our business operations and current and future arrangements with investigators, healthcareprofessionals, consultants, third-party payors and customers may be subject to additional healthcare laws, regulations and enforcement by the federalgovernment and by authorities in the states and foreign jurisdictions in which we conduct our business. Such laws include, without limitation, state andfederal anti-kickback, fraud and abuse, false claims, privacy and security, price reporting, and physician sunshine laws. Some of our pre-commercial activitiesare subject to some of these laws. The federal Anti-Kickback Statute makes it illegal for any person or entity, including a prescription drug manufacturer or a party acting on its behalf, toknowingly and willfully solicit, receive, offer, or pay any remuneration that is intended to induce the referral of business, including the purchase, order, orlease of any good, facility, item, or service for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. The term“remuneration” has been broadly interpreted to include anything of value. The Anti-Kickback Statute has been interpreted to apply to arrangements betweenpharmaceutical manufacturers on one hand and prescribers, purchasers, formulary managers, and beneficiaries on the other. Although there are a number ofstatutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly.Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases, referrals or recommendations may be subject toscrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception orregulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated ona case-by-case basis based on a cumulative review of all its facts and circumstances. Several courts have interpreted the statute’s intent requirement to meanthat if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the Anti-Kickback Statute hasbeen violated. Additionally, the intent standard under the Anti-Kickback Statute was amended by the PPACA to a stricter standard such that a person orentity no longer needs to have actual knowledge of the Anti-Kickback Statute or specific intent to violate it in order to have committed a violation. Inaddition, PPACA codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a falseor fraudulent claim for purposes of the federal civil False Claims Act. Violations of the federal Anti-Kickback Statute may result in civil monetary penalties,plus up to three times the remuneration involved for each violation. Civil penalties and treble damages also can be assessed under the federal False ClaimsAct for violations of the federal Anti-Kickback Statute. In addition, violations can result in exclusion from participation in government healthcare programs,including Medicare and Medicaid.29The federal civil and criminal false claims laws, including the federal civil False Claims Act prohibit, among other things, any person or entity fromknowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare and Medicaid, claims for items orservices, including drugs, that are false or fraudulent or not provided as claimed. Persons and entities can be held liable under these laws if they are deemed to“cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a productoff-label. In addition, certain of our future activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of pricesused to calculate Medicaid rebate information, and other information affecting federal, state, and third-party reimbursement for our products, and the sale andmarketing of our products, are subject to scrutiny under this law. Penalties for federal civil False Claims Act violations may include up to three times theactual damages sustained by the government, plus mandatory civil penalties of between $11,181 and $22,363 for each separate false claim, the potential forexclusion from participation in federal healthcare programs. Although the federal False Claims Act is a civil statute, violations of the false claims laws alsomay implicate various federal criminal statutes.The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit among otheractions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-partypayors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcareoffense, and knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious, or fraudulent statementin connection with the delivery of or payment for healthcare benefits, items, or services. As it did for the federal Anti-Kickback Statute, PPACA amended theintent standard for certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute orspecific intent to violate it in order to have committed a violation. The civil monetary penalties statute imposes penalties against any person or entity that, among other things, is determined to have presented or caused to bepresented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false orfraudulent.HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, mandates,among other things, the adoption of uniform standards for the electronic exchange of information in common healthcare transactions, as well as standardsrelating to the privacy and security of individually identifiable health information, which require the adoption of administrative, physical, and technicalsafeguards to protect such information. Among other things, HITECH makes HIPAA’s security standards directly applicable to business associates, defined asa person or entity that performs certain functions or activities that involve the use or disclosure of protected health information on behalf of, or providesservices to, a covered entity. At present, it is unclear if we would be considered a business associate subject to HIPAA based on our business activities andservice offerings upon the commercialization of a product. HITECH also increased the civil and criminal penalties that may be imposed against coveredentities and business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce thefederal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions. In addition, certain state laws govern the privacy andsecurity of health information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significantways and may not have the same effect, thus complicating compliance efforts. Failure to comply with these laws, where applicable, can result in theimposition of significant civil and/or criminal penalties.The federal Physician Payments Sunshine Act, created under PPACA and its implementing regulations, requires certain manufacturers of drugs, devices,biologicals and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to annually reportinformation related to certain payments or other transfers of value provided to physicians and teaching hospitals, or to entities or individuals at the request of,or designated on behalf of, the physicians and teaching hospitals, and to report annually certain ownership and investment interests held by physicians andtheir immediate family members. Failure to submit timely, accurately and completely the required information for all payments, transfers of value andownership or investment interests may result in civil monetary penalties. Covered manufacturers are required to submit reports on aggregate payment data tothe Secretary of the U.S. Department of Health and Human Services on an annual basis.30Many states have similar statutes or regulations to the above federal laws that may be broader in scope and may apply regardless of payor. We may also besubject to state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevantcompliance guidance promulgated by the federal government, and/or state laws that require drug manufacturers to report information related to payments andother transfers of value to physicians and other healthcare providers, or information related to drug pricing or marketing expenditures. These laws may differfrom each other in significant ways and may not have the same effect, further complicating compliance efforts. Additionally, to the extent that we havebusiness operations in foreign countries or sell any of our products in foreign countries and jurisdictions, including Canada or the European Union, we maybe subject to additional regulation.Because we intend to commercialize products that could be reimbursed under a federal healthcare program and other governmental healthcare programs, weintend to develop a comprehensive compliance program that establishes internal controls to facilitate adherence to the rules and program requirements towhich we will or may become subject. Although the development and implementation of compliance programs designed to establish internal control andfacilitate compliance can mitigate the risk of violating these laws, and the subsequent investigation, prosecution, and penalties assessed for violations ofthese laws, the risks cannot be entirely eliminated. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to penalties,including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminishedprofits and future earnings, additional reporting requirements, and oversight if we become subject to a corporate integrity agreement or similar agreement, thecurtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs, and individual imprisonment, any ofwhich could adversely affect our ability to operate our business and our financial results.Foreign Corrupt Practices ActWe and our subsidiaries are subject to the Foreign Corrupt Practices Act of 1977, as amended, or FCPA. The FCPA prohibits U.S. companies and theirrepresentatives from processing, offering, or making payments of money or anything of value to foreign officials with the intent to obtain or retain business orseek a business advantage. In certain countries, the health care professionals we regularly interact with may meet the definition of a foreign governmentofficial for the purposes of the FCPA. Our international activities create the risk of unauthorized payments or offers of payments by our employees,consultants and agents, even though they may not always be subject to our control. We discourage these practices by our employees, consultants, and agents.However, our existing safeguards may prove to be less than effective, and our employees, consultants, and agents may engage in conduct for which we mightbe held responsible. Recently, there has been a substantial increase in anti-bribery law enforcement activity by U.S. regulators, with more frequent andaggressive investigations and enforcement activity by both the Department of Justice and the SEC. A determination that our operations or activities are not,or were not, in compliance with U.S. or foreign laws or regulations could result in the imposition of substantial fines, interruptions of business, loss ofsuppliers, vendor or other third-party relationships, termination of necessary licenses or permits, and legal or equitable sanctions. Other internal orgovernmental investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as a consequence.Other Applicable LawsWe are subject to a variety of financial disclosure and securities trading regulations, both in the United States and in other jurisdictions in which we operate,as a public company in the U.S., including laws relating to the oversight activities of the SEC and the regulations of the Nasdaq Global Select Market, onwhich our common shares are traded.We are also subject to various other federal, state, and local laws and regulations, including those related to safe working conditions, and the storage,transportation, or discharge of items that may be considered hazardous substances, hazardous waste, or environmental contaminants.31In addition to the foregoing, state and federal laws regarding environmental protection and hazardous substances, including the Occupational Safety andHealth Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business. These and other laws govern our use,handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, our operations. If our operations result incontamination of the environment or expose individuals to hazardous substances, we could be liable for damages and governmental fines. We believe that weare in material compliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on ourbusiness. We cannot predict, however, how changes in these laws may affect our future operations.We are also subject to or affected by federal, state and foreign privacy, security and data protection laws, regulations, standards and regulatory guidance thatgovern the collection, use, disclosure, retention, security and transfer of personal data. Our operations extend to countries around the world, and many ofthese jurisdictions have established privacy legal frameworks with which we, our customers or our vendors must comply.Health ReformIn the United States and foreign jurisdictions, there have been a number of legislative and regulatory changes to healthcare systems that could affect ourfuture results of operations. There have been and continue to be a number of initiatives at the United States federal and state levels that seek to reducehealthcare costs.In particular, PPACA has had, and is expected to continue to have, a significant impact on the healthcare industry. This law was designed to expand coveragefor the uninsured while at the same time containing overall healthcare costs. With regard to pharmaceutical products, among other things, PPACA revises thedefinition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and imposes asignificant annual fee on companies that manufacture or import certain branded prescription drug products. In January 2016, the Centers for Medicare andMedicaid Services, or CMS, issued a final rule regarding the Medicaid Drug Rebate Program, effective April 1, 2016, that, among other things, revises themanner in which the AMP is to be calculated by manufacturers participating in the program and implements certain amendments to the Medicaid rebatestatute created under PPACA. Substantial new provisions affecting compliance have also been enacted, which may require us to modify our businesspractices with healthcare providers and entities, and other provisions are not yet, or have only recently become, effective.We cannot predict the full impact of PPACA on pharmaceutical companies, as many of the reforms require the promulgation of detailed regulationsimplementing the statutory provisions, some of which have not yet fully occurred.Further, there have been judicial and Congressional challenges to certain aspects of PPACA. As a result, there have been delays in the implementation of, andaction taken to repeal or replace, certain aspects of PPACA. Since January 2017, the President of the United States has signed two executive orders and otherdirectives designed to delay, circumvent, or loosen certain requirements mandated by PPACA. Concurrently, Congress has considered legislation that wouldrepeal or repeal and replace all or part of PPACA. While Congress has not passed repeal legislation, the Tax Cuts and Jobs Act of 2017 includes a provisionrepealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by PPACA on certain individuals who fail to maintain qualifyinghealth coverage for all or part of a year that is commonly referred to as the “individual mandate.” Additionally, on January 22, 2018, the President of theUnited States signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain PPACA-mandated fees,including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providersbased on market share, and the medical device excise tax on non-exempt medical devices. Congress may consider other legislation to repeal or replaceelements of PPACA. Further, on December 14, 2018, a U.S. District Court Judge in the Northern District of Texas, or the Texas District Court Judge, ruled that the individualmandate is a critical and non-severable feature of PPACA, and therefore, because it was repealed as part of the Tax Cuts and Jobs Act of 2017, the remainingprovisions of PPACA are invalid as well. The Trump Administration and CMS have both stated that the ruling will have no immediate effect, and onDecember 30, 2018 the Texas District Court Judge issued an order staying the judgment pending appeal. Although we cannot predict the ultimate content,timing or effect of any changes to PPACA or other federal and state reform efforts, we continue to evaluate the effect that PPACA, as amended or replaced,will have on our business. In the coming years, additional legislative and regulatory changes could be made to governmental health programs that couldsignificantly impact pharmaceutical companies and the success of our product candidate.32Other legislative changes have been proposed and adopted since PPACA was enacted. In August 2011, the President of the United States signed into law theBudget Control Act of 2011, which, among other things, included reductions to Medicare payments to providers of 2% per fiscal year, which went into effecton April 1, 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2025 unless additional Congressional action istaken. Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicarepayments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to fiveyears. Further, there have been several recent U.S. Congressional inquiries and proposed federal and proposed and enacted state legislation designed to,among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the out-of-pocket cost of prescription drugs, and reform government program reimbursement methodologies for drugs.Moreover, the Drug Supply Chain Security Act imposes obligations on manufacturers of pharmaceutical products, among others, related to product trackingand tracing, which is being phased in over several years beginning in 2015. Among the requirements of this legislation, manufacturers will be required toprovide certain information regarding the drug product to individuals and entities to which product ownership is transferred, label drug product with aproduct identifier, and keep certain records regarding the drug product. The transfer of information to subsequent product owners by manufacturers willeventually be required to be done electronically. Manufacturers will also be required to verify that purchasers of the manufacturers’ products areappropriately licensed. Further, under this legislation, manufacturers will have drug product investigation, quarantine, disposition, and notificationresponsibilities related to counterfeit, diverted, stolen, and intentionally adulterated products, as well as products that are the subject of fraudulenttransactions or which are otherwise unfit for distribution such that they would be reasonably likely to result in serious health consequences or death.Coverage and ReimbursementSignificant uncertainty exists as to the coverage and reimbursement status of any of our products, if and when approved. Sales in the United States willdepend in part on the availability of sufficient coverage and adequate reimbursement from third-party payors, which include government health programssuch as Medicare, Medicaid, TRICARE and the Veterans Administration, as well as managed care organizations and private health insurers. Prices at whichwe or our customers seek reimbursement for our therapeutic product candidates can be subject to challenge, reduction or denial by payors.The process for determining whether a payor will provide coverage for a product is typically separate from the process for setting the reimbursement rate thatthe payor will pay for the product. A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be available.Additionally, in the United States there is no uniform policy among payors for coverage or reimbursement. Third-party payors often rely upon Medicarecoverage policy and payment limitations in setting their own coverage and reimbursement policies, but also have their own methods and approval processes.Therefore, coverage and reimbursement for products can differ significantly from payor to payor. One third-party payor’s decision to cover a particularmedical product or service does not ensure that other payors will also provide coverage for the medical product or service, or will provide coverage at anadequate reimbursement rate. As a result, the coverage determination process will require us to provide scientific and clinical support for the use of ourproducts to each payor separately and will likely be a time-consuming process If coverage and adequate reimbursement are not available, or are availableonly at limited levels, successful commercialization of, and obtaining a satisfactory financial return on, any product we develop may not be possible.Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, inaddition to their safety and efficacy. In order to obtain coverage and reimbursement for any product that might be approved for marketing, we may need toconduct expensive studies in order to demonstrate the medical necessity and cost-effectiveness of any products, which would be in addition to the costsexpended to obtain regulatory approvals. Third-party payors may not consider our product candidates to be medically necessary or cost-effective comparedto other available therapies, or the rebate percentages required to secure favorable coverage may not yield an adequate margin over cost or may not enable usto maintain price levels sufficient to realize an appropriate return on our investment in drug development.33Additionally, the containment of healthcare costs (including drug prices) has become a priority of federal and state governments. The U.S. government, statelegislatures, and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions onreimbursement, and requirements for substitution by generic products. Adoption of price controls and cost-containment measures, and adoption of morerestrictive policies in jurisdictions with existing controls and measures, could limit our net revenue and results. If these third-party payors do not consider ourproducts to be cost-effective compared to other therapies, they may not cover our products once approved as a benefit under their plans or, if they do, thelevel of reimbursement may not be sufficient to allow us to sell our products on a profitable basis. Decreases in third-party reimbursement for our productsonce approved or a decision by a third-party payor to not cover our products could reduce or eliminate utilization of our products and have an adverse effecton our sales, results of operations, and financial condition. In addition, state and federal healthcare reform measures have been and will be adopted in thefuture, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduceddemand for our products once approved or additional pricing pressures.Brexit and the Regulatory Framework in the United KingdomIn June 2016, the United Kingdom, or UK, held a referendum in which voters approved an exit from the European Union, or EU, commonly referred to as“Brexit.” This referendum has created political and economic uncertainty, particularly in the UK and the EU, and this uncertainty may persist for years. Sincethe regulatory framework for pharmaceutical products in the UK covering quality, safety and efficacy of pharmaceutical products, clinical trials, marketingauthorization, commercial sales and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit could materially impact thefuture regulatory regime which applies to products and the approval of product candidates in the United Kingdom. In addition, withdrawal could, amongother outcomes, disrupt the free movement of goods, services and people between the UK and the EU, and result in increased legal and regulatorycomplexities, as well as potential higher costs of conducting business in Europe. This is particularly the case if the UK and the EU do not reach agreement onhow the UK will exit the EU, commonly referred to as “hard Brexit.” The UK’s vote to exit the EU could also result in similar referendums or votes in otherEuropean countries in which we do business. Given the lack of comparable precedent, it is unclear what financial, trade and legal implications the withdrawalof the UK from the EU would have and how such withdrawal would affect us.Financial HistoryWe have never been profitable, have incurred significant losses since our inception and we expect to continue to incur significant operating losses andnegative cash flows for the foreseeable future. We have not generated any revenue from product sales to date, and may never generate any revenue fromproduct sales.On February 20, 2019, we and our subsidiaries, entered into the Loan Agreement, a secured debt financing agreement, with Hercules, as agent and lender, inthe amount of $100.0 million. As of March 31, 2019, a total of $85.0 million remained available to us under the Loan Agreement. We have funded ouroperations primarily from the issuance and sale of our common shares in our initial public offering, capital contributions from our parent company, RSL, andthe financing commitment from Hercules. Additional information regarding this financing commitment is included in Note 5, “Long-term debt,” to ouraudited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.The majority of our operating expense is related to research and development activities. Our research and development activities primarily include activitiesrelated to the Phase 3 development of our lead product candidate, vibegron, for the treatment of OAB, as well as for the treatment of OAB in men with BPHand our Phase 2a clinical trial for the treatment of abdominal pain due to IBS. Our research and development expenses totaled $92.2 million and $32.4million for the years ended March 31, 2019 and 2018, respectively. We expect our net losses, negative cash flows, and operating expenses to increase as wecontinue the development of, and seek regulatory approval for, our product candidates, and grow our company.As of March 31, 2019, we had approximately $85.4 million of cash and cash equivalents and $85.0 million of financing commitments available to us underthe Hercules Loan Agreement.We manage our operations and allocate resources as a single operating and reporting segment. Additional financial information regarding our operations,assets and liabilities, including our net loss for the years ended March 31, 2019 and 2018 and our total assets as of March 31, 2019 and 2018, is included inour consolidated financial statements in Part II. Item 8. of this Annual Report on Form 10-K.34EmployeesAs of March 31, 2019, we had no employees, and our wholly owned subsidiary, USI, had 39 employees, of which all were full-time employees. Of the 39employees, 19 are engaged in research and development activities. The employees of USI provide services to us and our subsidiaries pursuant to anintercompany services agreement by and among us, USI and our wholly owned subsidiary, USG.Corporate InformationWe are an exempted limited company incorporated under the laws of Bermuda on January 27, 2016 under the name Roivant PPS Holdings Ltd. We changedour name to Thalavant Sciences Ltd. on November 14, 2016 and to Urovant Sciences Ltd. on January 13, 2017, when we commenced operations. Ourprincipal office is located at Suite 1, 3rd Floor, 11-12 St. James’s Square, London SW1Y 4LB, United Kingdom, and our registered office is located inBermuda at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda. We also have business operations at 5281 California Avenue, Suite 100, Irvine,California 92617 and 324 Blackwell Street Bay 11, Suite 1104, Durham, North Carolina 27701. We are an “emerging growth company” under the JumpstartOur Business Startups Act of 2012, and therefore we are subject to reduced public company reporting requirements. Our common shares are currently listedon The Nasdaq Global Select Market under the symbol “UROV.”Available InformationOur website is www.urovant.com. The contents of our website are not part of this Annual Report on Form 10-K, and our website address is included in thisdocument as an inactive textual reference only. We make our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form10-Q, Current Reports on Form 8-K and all amendments to those reports available free of charge on our website as soon as reasonably practicable after we filesuch reports with, or furnish such reports to, the SEC. We also show detail about stock trading by corporate insiders by providing access to SEC Forms 3, 4and 5. The SEC maintains an internet site that contains reports, proxy and information statements, and other information. The address of the SEC’s website iswww.sec.gov.Item 1A. Risk Factors.You should carefully consider the following risk factors, in addition to the other information contained in this Annual Report on Form 10-K, including thesection of this Annual Report on Form 10-K titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and ouraudited consolidated financial statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks anduncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. Ifany of the events described in the following risk factors and the risks described elsewhere in this Annual Report on Form 10-K occurs, our business,operating results, and financial condition could be seriously harmed and the trading price of our common shares could decline and you could lose all orpart of your investment in our common shares. This Annual Report on Form 10-K also contains forward-looking statements that involve risks anduncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are describedbelow and elsewhere in this Annual Report on Form 10-K. See the section of this Annual Report on Form 10-K titled “Cautionary Note Regarding Forward-Looking Statements.”Risks Related to Our Business, Financial Position and Capital RequirementsWe have a limited operating history and have never generated any product revenue.We are a clinical-stage biopharmaceutical company with a limited operating history. We were incorporated in January 2016, and our operations to date haveprimarily been developing vibegron for the treatment of OAB, organizing and staffing our company, and acquiring rights to vibegron and URO-902. We havenot yet demonstrated an ability to successfully obtain marketing approval, manufacture a commercial scale product, or arrange for a third party to do so onour behalf, or conduct sales and marketing activities necessary for successful product commercialization. Consequently, we have no meaningful operationsupon which to evaluate our business and predictions about our future success or viability may not be as accurate as they could be if we had a longeroperating history or a history of successfully developing and commercializing pharmaceutical products.35Our ability to generate product revenue and become profitable depends upon our ability to successfully complete the development of, and obtain thenecessary regulatory approvals for, vibegron for the treatment of OAB or our other targeted indications, OAB in men with BPH and abdominal pain due toIBS, as well as URO-902 for the treatment of OAB. We have never been profitable, have no products approved for commercial sale, and have not generatedany product revenue.Even if we receive regulatory approval for one of our product candidates, we do not know when or if it will generate product revenue. Our ability to generateproduct revenue depends on a number of factors, including, but not limited to, our ability to: •successfully complete clinical trials and obtain regulatory approval for the marketing of our product candidates; •add operational, financial and management information systems personnel, including personnel to support our clinical, manufacturing andplanned future commercialization efforts; •initiate and continue relationships with third-party manufacturers and have commercial quantities of our product candidates manufactured atacceptable cost and quality levels and in compliance with FDA and other regulatory requirements; •attract and retain experienced management and advisory teams; •raise additional funds when needed and on terms acceptable to us; •launch commercial sales of our products, whether alone or in collaboration with others, including establishing sales, marketing and distributionsystems for our product candidates; •set an acceptable price for our product candidates and obtain coverage and adequate reimbursement from third-party payors; •achieve broad market acceptance of our products in the medical community and with third-party payors and consumers; and •maintain, expand and protect our intellectual property portfolio.Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses,or when or if, we will be able to achieve or maintain profitability. Our expenses could increase beyond expectations if we are required by the FDA orcomparable non-U.S. regulatory authorities to perform studies or clinical trials in addition to those that we currently anticipate. Even if one of our productcandidates is approved for commercial sale, we anticipate incurring significant costs associated with its commercial launch. If we cannot successfully executeany one of the foregoing, our business may not succeed.We expect to incur significant losses for the foreseeable future and may never achieve or maintain profitability.Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant riskthat a product candidate will fail to gain regulatory approval or fail to become commercially viable. We have never generated any product revenue, and wecannot estimate with precision the extent of our future losses. We do not currently have any products that are available for commercial sale and we may nevergenerate product revenue or achieve profitability. Our net loss was $111.3 million and $37.1 million for the years ended March 31, 2019 and 2018,respectively. As of March 31, 2019, we had an accumulated deficit of $175.5 million.We expect to continue to incur substantial and increasing losses through the commercialization of our product candidates, if approved. Our productcandidates have not been approved for marketing anywhere in the world, and they may never receive such approval. As a result, we are uncertain when or ifwe will achieve profitability and, if so, whether we will be able to sustain it. Our ability to generate product revenue and achieve profitability is dependent onour ability to complete the development of, obtain necessary regulatory approvals for, and manufacture and successfully market our product candidates aloneor in collaboration with others. We cannot assure you that we will be profitable even if we successfully commercialize our product candidates. If we dosuccessfully obtain regulatory approval to market our product candidates, our revenue will be dependent upon, in part and among other things, the size of themarkets in the territories for which we gain regulatory approval, the number of competitors in such markets, the accepted price for our product candidates andwhether we own the commercial rights for those territories. If the indication approved by regulatory authorities is narrower than we expect, or the36treatment population is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of ourproduct candidates, even if approved. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annualbasis. Failure to become and remain profitable may adversely affect the market price of our common shares and our ability to raise capital and continueoperations.We expect our research and development expenses in connection with our development programs for our product candidates to continue to be significant. Inaddition, as we prepare for and if we obtain regulatory approval for our product candidates, we expect to incur increased sales, marketing and manufacturingexpenses. As a result, we expect to continue to incur significant and increasing operating losses and negative cash flows for the foreseeable future. Theselosses had, and will continue to have, an adverse effect on our results of operations, financial position and working capital.We are heavily dependent on the success of our lead product candidate, vibegron, and if vibegron does not successfully complete clinical development orreceive regulatory approval, or is not successfully commercialized, our business may be harmed.We currently have no products that are approved for commercial sale and may never be able to develop marketable products. We expect that a substantialportion of our efforts and expenditures over the next few years will be devoted to the advancement of vibegron, through clinical trials and the regulatoryapproval process, as well as the commercialization of vibegron following regulatory approval, if received. Accordingly, our business currently dependsheavily on the successful development, regulatory approval, and commercialization of vibegron.We cannot be certain that vibegron will receive regulatory approval, or be successfully commercialized even if we receive regulatory approval. The research,testing, manufacturing, labeling, approval, sale, marketing and distribution of products are, and will remain, subject to extensive regulation by the FDA andother regulatory authorities in the United States and other countries that each have differing regulations. We are not permitted to market vibegron in theUnited States until we receive approval of an NDA, or in any foreign country until we receive the requisite approvals from the appropriate authorities in suchcountries for marketing authorization.The top-line results from our Phase 3 EMPOWUR trial demonstrated a statistically significant difference for the active vibegron 75 mg dose compared toplacebo for the co-primary endpoints, which are reductions in daily UUI episodes and reduction in daily micturitions, in the primary efficacy analysis. Inaddition, we reported a statistically significant reduction in daily urgency episodes compared to placebo (p=0.002), which is the first of the seven pre-specified key secondary endpoints. All seven pre-specified secondary endpoints achieved statistical significance over placebo for vibegron. As such, even ifwe were able to obtain approval for vibegron, these secondary endpoints may not be mentioned in the U.S. label, which could potentially adversely affectproduct differentiation.We have not submitted an NDA for vibegron, a Biologics License Application, or BLA, for URO-902, or any other marketing authorizing application for anyother product candidates to the FDA or any comparable application to any other regulatory authority. Obtaining approval of an NDA, BLA or similarregulatory approval is an extensive, lengthy, expensive and inherently uncertain process, and the FDA or other foreign regulatory authorities may delay, limitor deny approval of any of our current or future product candidates for many reasons, including: •we may not be able to demonstrate that our product candidates are effective as treatments for any of our targeted indications to the satisfaction ofthe FDA or other relevant regulatory authorities; •the relevant regulatory authorities may require additional pre-approval studies or clinical trials, which would increase our costs and prolong ourdevelopment timelines; •the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA or other relevant regulatoryauthorities for marketing approval; •the FDA or other relevant regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical trials; •the contract research organizations, or CROs, that we retain to conduct clinical trials may take actions outside of our control, or otherwise commiterrors or breaches of protocols, that materially adversely impact our clinical trials and ability to obtain market approvals;37 •the FDA or other relevant regulatory authorities may not find the data from nonclinical studies or clinical trials sufficient to demonstrate that theclinical and other benefits of these products outweigh their safety risks; •the FDA or other relevant regulatory authorities may disagree with our interpretation of data or significance of results from the nonclinical studiesand clinical trials of our product candidates, or may require that we conduct additional studies; •the FDA or other relevant regulatory authorities may not accept data generated from our clinical trial sites; •if our NDA or other foreign application is reviewed by an advisory committee, the FDA or other relevant regulatory authority, as the case may be,may have difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee may recommend against approvalof our application or may recommend that the FDA or other relevant regulatory authority, as the case may be, require, as a condition of approval,additional nonclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions; •the FDA or other relevant regulatory authorities may require development of a risk evaluation and mitigation strategy, or REMS, or itsequivalent, as a condition of approval; •the FDA or other relevant regulatory authorities may require additional post-marketing studies, which would be costly; •the FDA or other relevant regulatory authorities may find the chemistry, manufacturing and controls data insufficient to support the quality of ourproduct candidates; •the FDA or other relevant regulatory authorities may identify deficiencies in the manufacturing processes or facilities of our third-partymanufacturers and third-party manufacturers may not pass the pre-approval inspections by regulatory authorities; or •the FDA or other relevant regulatory authorities may change their approval policies or adopt new regulations.We will require additional capital to fund our operations, and if we fail to obtain necessary financing, we may not be able to complete the developmentand commercialization of vibegron.We expect to spend substantial capital to complete the development of, seek regulatory approvals for and commercialize our product candidates. Theseexpenditures will include costs associated with our license agreements with Merck and ICI pursuant to which we are obligated to cover the development andcommercialization costs of vibegron and URO-902, respectively, make payments in connection with the achievement of certain regulatory milestones priorto generating any product sales, make further payments upon the achievement of certain sales milestones and make tiered royalty payments in connectionwith the sale of approved products, if any.We will require additional capital to complete the development and potential commercialization of our product candidates. Because the length of time andactivities associated with successful development of our product candidates are highly uncertain, we are unable to estimate with certainty the actual funds wewill require for development and any approved marketing and commercialization activities. Our future funding requirements, both near and long-term, willdepend on many factors, including, but not limited to: •the timing, costs and results of our Phase 3 COURAGE clinical trial of vibegron for the treatment of OAB in men with BPH and our Phase 2aclinical trial of vibegron for the treatment of abdominal pain due to IBS; •the timing, costs and results of our proposed Phase 2a clinical trial for URO-902 for the treatment of OAB in patients who have not responded tooral pharmacological therapies; •the costs of completing the EMPOWUR clinical extension study and the ongoing and planned Phase 1 clinical trials for vibegron, including thefiling of the NDA for vibegron in adults with OAB; •the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities;38 •the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; •the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or any ofour current or future product candidates; •the effect of competing technological and market developments; •the cost and timing of completion of commercial-scale manufacturing activities; •the cost of establishing sales, marketing and distribution capabilities for our products in regions where we choose to commercialize our productson our own; and •the initiation, progress, timing and results of our commercialization of our product candidates, if approved for commercial sale.We currently believe that our existing cash and cash equivalents, together with the $30.0 million tranche under the Hercules Loan Agreement, which isavailable through September 30, 2019, will be sufficient to fund our committed operating expenses and capital expenditure requirements for at least the next12 months from the filing date of this Annual Report on Form 10-K. The availability of the $30.0 million tranche was subject to achievement of a clinicalmilestone, which was achieved with the positive top-line results from the Phase 3 EMPOWUR trial, among other conditions that were also met. This estimateis based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. We cannot be certainthat additional capital will be available on acceptable terms, or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptableto us, we may have to significantly delay, scale back or discontinue the development or commercialization of our current and any future product candidates,or potentially discontinue operations altogether. In addition, attempting to secure additional capital may divert the time and attention of our managementfrom day-to-day activities and harm our product candidate development efforts. Because of the numerous risks and uncertainties associated with thedevelopment and potential commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays, operatingexpenditures and capital requirements associated with our current product development programs.Our Loan and Security Agreement with Hercules, or the Loan Agreement, contains certain covenants that could adversely affect our operations and, if anevent of default were to occur, we could be forced to repay the outstanding indebtedness sooner than planned and possibly at a time when we do not havesufficient capital to meet this obligation. The occurrence of any of these events could cause a significant adverse impact on our business, prospects andshare price.Pursuant to our Loan Agreement with Hercules, we have pledged all of our assets, other than our patents and other intellectual property rights, and haveagreed that we may not sell or assign rights to our patents and other intellectual property without the prior consent of Hercules. The Loan Agreement alsorequires us to maintain minimum cash balances in the event that either certain milestones are not achieved or the market capitalization of the Company isbelow $500 million for certain periods of time. Additionally, the Loan Agreement contains affirmative and negative covenants that, among other things,restrict our ability to: •incur additional indebtedness; •incur liens; •make investments; •make distributions, including dividends; •consolidate or merge; and •alter the business of the Company.These terms of the Loan Agreement could prevent us from taking certain actions without the consent of our lenders, which may limit our flexibility inoperating our business and our ability to take actions that might be advantageous to us and our shareholders, placing us at a competitive disadvantagecompared to our competitors who have less leverage and who therefore may be able to take advantage of opportunities that our leverage prevents us fromexploiting.39The Loan Agreement also includes events of default, including, among other things, payment defaults; breaches of certain covenants or agreements; certainbankruptcy events; the occurrence of certain events that could reasonably be expected to have a “material adverse effect”; defaults in respect of certain otherindebtedness; and certain events relating to U.K. or Irish pension plans.Upon the occurrence of an event of default and following any cure periods (if applicable), a default interest rate of an additional 5.0% per annum may beapplied to the outstanding loan balances, and the lenders may declare all outstanding obligations immediately due and payable and take such other actionsas set forth in the Loan Agreement.If an event of default under the Loan Agreement should occur, we could be required to immediately repay the outstanding indebtedness. If we are unable torepay this debt, the lenders would be able to foreclose on the secured collateral, including our cash accounts, and take other remedies permitted under theLoan Agreement. Even if we are able to repay the indebtedness on an event of default, the repayment of these sums may significantly reduce our workingcapital and impair our ability to operate as planned. The occurrence of any of these events could cause a significant adverse impact on our business, prospectsand share price.Raising additional funds by issuing securities may cause dilution to existing shareholders, raising additional funds through debt financings may involverestrictive covenants, and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietaryrights. We expect that significant additional capital will be needed in the future to continue our planned operations. Until such time, if ever, that we can generatesubstantial product revenue, we expect to finance our cash needs through a combination of equity offerings, the Loan Agreement, additional debt financings,strategic alliances and license and development agreements or other collaborations. To the extent that we raise additional capital by issuing equity securities,our existing shareholders’ ownership may experience substantial dilution, and the terms of these securities may include liquidation or other preferences thatcould adversely affect the rights of a common shareholder. Additionally, any agreements for future debt or preferred equity financings, if available, mayinvolve additional covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures ordeclaring dividends.If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have torelinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not befavorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development orfuture commercialization efforts, or grant rights to develop and market product candidates that we would otherwise develop and market ourselves.We rely on our license agreements with Merck and ICI to provide rights to the core intellectual property relating to vibegron and URO-902, respectively.Any termination or loss of significant rights under either agreement, would adversely affect our development or commercialization of these productcandidates.We have licensed our core intellectual property relating to vibegron and URO-902 from Merck and ICI, respectively. If, for any reason, our license agreementwith Merck or ICI is terminated or we otherwise lose those rights, it would adversely affect our business. Our license agreements impose on us obligationsrelating to exclusivity, territorial rights, development, commercialization, funding, payment, diligence, sublicensing, insurance, intellectual propertyprotection and other matters. If we breach any material obligations, or use the intellectual property licensed to us in an unauthorized manner, we may berequired to pay damages to Merck or ICI, and Merck or ICI may have the right to terminate our license, which would result in us being unable to develop,manufacture and sell our product candidates.Pursuant to our license agreement with Merck, Merck agreed to provide a supply of the vibegron compound to support the development of vibegron. Underthis agreement, we may only use such material in preclinical and clinical work. The agreement also provides for Merck to reasonably assist us during aspecified period of time with a technical transfer of the manufacturing process from Merck to us or our designee for production of vibegron. Although Merckhas already transferred the manufacturing process for vibegron to us, we may still need additional assistance if we experience any setbacks with themanufacturing at a larger scale. If Merck fails to fulfill its continuing obligations under this agreement, if needed, or if we require additional assistance aftertheir obligation to assist us expires, our development of vibegron could be significantly delayed or otherwise adversely affected.40Under our license agreement with ICI, ICI agreed to reasonably assist us during a specified period of time with a technical transfer of the manufacturingprocess from ICI to us or our designee for production of URO-902. If ICI fails to fulfill its obligations under this agreement, or if we require additionalassistance after their obligation to assist us expires, our manufacture and development of URO-902 could be significantly delayed or otherwise adverselyaffected.We may be required to make significant payments to third parties under our licensing and collaboration agreements for our current product candidates. Under our agreements with Merck, Kyorin and ICI, we are subject to significant obligations, including payment obligations upon the achievement ofspecified milestones and payments based on product sales, as well as other material obligations. Certain of the milestone payments payable by us under theseagreements are due upon events that will occur prior to our planned commercialization of our product candidates. Accordingly, we will be required to makesuch payments prior to the time at which we are able to generate any revenue, if any, from sales of our product candidates. There can be no assurance that wewill have the funds necessary to make such payments, or be able to raise such funds when needed, on terms acceptable to us, or at all. Furthermore, if we areforced to raise additional funds, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts, or grantrights to develop and market product candidates that we would otherwise develop and market ourselves.We may not be able to manage our business effectively if we are unable to attract and retain key personnel.We may not be able to attract or retain qualified management and commercial, scientific and clinical personnel due to the intense competition for qualifiedpersonnel among biotechnology, pharmaceutical and other businesses. If we are not able to attract and retain necessary personnel to accomplish our businessobjectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additionalcapital and our ability to implement our business strategies.We are highly dependent on the skills and leadership of our senior management team and key employees. Our senior management and key employees mayterminate their positions with us at any time. If we lose one or more members of our senior management team or key employees, our ability to successfullyimplement our business strategies could be adversely affected. Replacing these individuals may be difficult, cause disruption and may take an extendedperiod of time due to the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain regulatoryapproval of and commercialize products successfully. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain ormotivate additional key personnel. We do not maintain “key person” insurance for any members of our senior management team or other employees.We will need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations.We expect to hire, either directly, or through any current or future subsidiaries of ours, additional employees throughout the organization. We may havedifficulties identifying, hiring and integrating new personnel. Future growth would impose significant additional responsibilities on our management,including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors. Also, our management may needto divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growthactivities. We may not be able to effectively manage the expansion of our operations across our entities, which may result in weaknesses in our infrastructure,give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expectedgrowth could require significant capital expenditures and may divert financial resources from other projects, such as the development of vibegron, URO-902and any future product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our abilityto generate or grow revenue could be reduced, and we may not be able to implement our business strategy. Our future financial performance and our ability tocommercialize our current or future product candidates and compete effectively will partly depend on our ability to effectively manage any future growth.41Many of the other pharmaceutical companies we compete against for qualified personnel and consultants have greater financial and other resources, differentrisk profiles and a longer operating history in the industry than we do. They also may provide more diverse opportunities and better chances for careeradvancement. Some of these opportunities may be more appealing to high-quality candidates and consultants than what we have to offer. If we are unable tocontinue to attract and retain high-quality personnel and consultants, the rate and success at which we can develop product candidates and our business willbe harmed.Our or our affiliates’ employees, independent contractors, principal investigators, consultants, commercial collaborators, service providers and othervendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could havean adverse effect on our results of operations.We are exposed to the risk that our or our affiliates’ employees and contractors, including principal investigators, CROs, consultants, commercialcollaborators, service providers and other vendors may engage in misconduct or other illegal activity. Misconduct by these parties could include intentional,reckless or negligent conduct or other unauthorized activities that violate the laws and regulations of the FDA or other similar regulatory bodies, includingthose laws that require the reporting of true, complete and accurate information to such regulatory bodies; manufacturing and the FDA’s Good ClinicalPractice, or GCP, or current Good Manufacturing Practice, or cGMP, standards; federal, state and foreign healthcare fraud and abuse laws and data privacy; orlaws that require the true, complete and accurate reporting of financial information or data. In particular, sales, marketing and other business arrangements inthe healthcare industry are subject to extensive laws intended to prevent fraud, kickbacks, self-dealing, bribery, corruption, antitrust violations and otherabusive practices. These laws may restrict or prohibit a wide range of business activities, including research, manufacturing, distribution, pricing,discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Activities subject to these laws alsoinvolve the improper use or misrepresentation of information obtained in the course of clinical trials, creating fraudulent data in our nonclinical studies orclinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions and serious harm to our reputation. It is not alwayspossible to identify and deter employee or third-party misconduct, and the precautions we take to detect and prevent this activity may not be effective incontrolling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failureto comply with such laws or regulations. Additionally, we are subject to the risk that a person, including any person who may have engaged in any fraud ormisconduct, or government agency could allege such fraud or other misconduct, even if none occurred. Furthermore, we rely on our CROs and clinical trialsites to adequately report data from our ongoing clinical trials. For example, any failure by such parties to adequately report safety signals to us in a timelymanner from any such trials may also affect the approvability of our product candidates or cause delays and disruptions for the approval of our productcandidates, if any. If our or our affiliates’ employees, independent contractors, principal investigators, consultants, commercial collaborators, serviceproviders or other vendors are alleged or found to be in violation of any such regulatory standards or requirements, or become subject to a corporate integrityagreement or similar agreement to resolve allegations of non-compliance with these laws and curtailment of our operations, it could have a significant impacton our business and financial results, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines,suspension or delay in our clinical trials, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, FDA debarment,contractual damages, reputational harm, diminished profits and future earnings, and additional reporting requirements and oversight, any of which couldadversely affect our ability to operate our business and our results of operations.We may not be successful in our efforts to identify and acquire or in-license additional product candidates, or to enter into collaborations or strategicalliances for the development and commercialization of any such future product candidates.Part of our strategy involves identifying and acquiring or in-licensing novel product candidates. The process by which we identify product candidates mayfail to yield product candidates for clinical development for a number of reasons, including those discussed in these risk factors and also: •the process by which we identify and decide to acquire product candidates may not be successful; •potential product candidates may, upon further study, be shown to have harmful side effects or other characteristics that indicate that they areunlikely to be products that will receive marketing approval and achieve market acceptance;42 •potential product candidates may not be effective in treating their targeted diseases; or •the acquisition or in-licensing transactions can entail numerous operational and functional risks, including exposure to unknown liabilities,disruption of our business, or incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs,higher than expected acquisition or integration costs.We may choose to focus our efforts and resources on a potential product candidate that ultimately proves to be unsuccessful. We also cannot be certain that,following an acquisition or in-licensing transaction, we will achieve the revenue or specific net income that justifies such transaction. Further, time andresources spent identifying, acquiring and developing potential product candidates may distract management’s attention from our primary business or otherdevelopment programs. If we are unable to identify and acquire suitable product candidates for clinical development, this would adversely impact ourbusiness strategy, our financial position and share price.In the future, we may also decide to collaborate with other pharmaceutical companies for the development and potential commercialization of our productcandidates in the United States or other countries or territories of the world. We will face significant competition in seeking appropriate collaborators. Wemay not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may bedeemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisitepotential to demonstrate safety and efficacy. If and when we collaborate with a third party for development and commercialization of a product candidate, wecan expect to relinquish some or all of the control over the future success of that product candidate to the third party. Our ability to reach a definitiveagreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions ofthe proposed collaboration and the proposed collaborator’s evaluation of a number of factors.International expansion of our business exposes us to business, legal, regulatory, political, operational, financial and economic risks associated withconducting business outside of the United States.Part of our business strategy involves international expansion, including establishing and maintaining operations outside of the United States andestablishing and maintaining relationships with health care providers, payors, government officials, distributors and manufacturers globally. Conductingbusiness internationally involves a number of risks, including: •multiple conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, anti-bribery and anti-corruption laws, regulatory requirements and other governmental approvals, permits and licenses; •failure by us or our distributors to obtain appropriate licenses or regulatory approvals for the sale or use of our product candidates, if approved, invarious countries; •difficulties in managing foreign operations; •complexities associated with managing multiple payor-reimbursement regimes or self-pay systems; •financial risks, such as longer payment cycles, difficulty enforcing contracts and collecting accounts receivable and exposure to foreign currencyexchange rate fluctuations; •reduced protection for intellectual property rights; •natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment oftrade and other business restrictions; and •failure to comply with the United States Foreign Corrupt Practices Act, or FCPA, including its books and records provisions and its anti-briberyprovisions, the United Kingdom Bribery Act 2010, or UK Bribery Act, and similar antibribery and anticorruption laws in other jurisdictions, forexample by failing to maintain accurate information and control over sales or distributors’ activities.Any of these risks, if encountered, could significantly harm our future international expansion and operations and, consequently, negatively impact ourfinancial condition, results of operations and cash flows.43Legal, political, and economic uncertainty surrounding the planned exit of the United Kingdom from the European Union are a source of instability anduncertainty.The United Kingdom held a referendum on June 23, 2016 to determine whether the United Kingdom should leave the European Union, or remain as amember state, the outcome of which was in favor of leaving the European Union, which is commonly referred to as Brexit. Under Article 50 of the 2009Lisbon Treaty, the United Kingdom will cease to be a member state when a withdrawal agreement is entered into (such agreement will also requireparliamentary approval) or, failing that, two years following the notification of an intention to leave under Article 50, unless the European Council (togetherwith the United Kingdom) unanimously decides to extend this period. On March 29, 2017, the United Kingdom formally notified the European Council of itsintention to leave the European Union. In April 2019, the European Council and the United Kingdom agreed to extend the deadline by which they mustagree to a withdrawal agreement to October 31, 2019. It is unclear whether they will successfully reach an agreement prior to that date, and it currentlyappears likely that Brexit will continue to involve a process of lengthy negotiations between the United Kingdom and EU member states to determine thefuture terms of the United Kingdom’s relationship with the European Union.Lack of clarity about future U.K. laws and regulations as the United Kingdom determines which EU rules and regulations to replace or replicate in the eventof a withdrawal, including financial laws and regulations, tax and free trade agreements, intellectual property rights, supply chain logistics, environmental,health and safety laws and regulations, immigration laws and employment laws, could decrease foreign direct investment in the United Kingdom, increasecosts, depress economic activity and restrict access to capital. In addition, if the United Kingdom and the European Union are unable to negotiate acceptablewithdrawal terms or if other EU Member States pursue withdrawal, barrier-free access between the United Kingdom and other EU Member States or among theEuropean Economic Area overall could be diminished or eliminated. The long-term effects of Brexit will depend on any agreements (or lack thereof) betweenthe United Kingdom and the European Union and, in particular, any arrangements for the United Kingdom to retain access to European Union markets eitherduring a transitional period or more permanently.Such a withdrawal from the European Union is unprecedented, and it is unclear how the United Kingdom’s access to the European single market for goods,capital, services and labor within the European Union, or the European single market, and the wider commercial, legal and regulatory environment, willimpact our U.K. operations. We may also face new regulatory costs and challenges that could have an adverse effect on our operations and developmentprograms. Even prior to any change to the United Kingdom’s relationship with the European Union, the announcement of Brexit has created economicuncertainty surrounding the terms of Brexit, and its consequences could negatively impact our financial condition, results of operations and cash flows.Our business and operations would suffer in the event of system failures, cyber-attacks or a deficiency in our cyber-security.Our computer systems, as well as those of various third parties on which we rely, or may rely on in the future, including RSL and its affiliates, our CROs andother contractors, consultants and law and accounting firms, may sustain damage from computer viruses, unauthorized access, data breaches, phishingattacks, cybercriminals, natural disasters (including hurricanes and earthquakes), terrorism, war and telecommunication and electrical failures. We rely on ourthird-party providers to implement effective security measures and identify and correct for any such failures, deficiencies or breaches. The risk of a securitybreach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, hasgenerally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an eventwere to occur and cause interruptions in our operations, it could result in a material disruption of our drug development programs. For example, the loss ofnonclinical or clinical trial data from completed, ongoing or planned trials could result in delays in our regulatory approval efforts and significantly increaseour costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications,or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and the further development of our current or futureproduct candidates could be delayed.44If we fail to comply with applicable U.S. and foreign privacy and data protection laws and regulations, we may be subject to liabilities that adversely affectour business, operations and financial performance.We are subject to federal and state laws and regulations requiring that we take measures to protect the privacy and security of certain information we gatherand use in our business. For example, federal and state security breach notification laws, state health information privacy laws and federal and state consumerprotection laws impose requirements regarding the collection, use, disclosure and storage of personal information. In addition, in June 2018, Californiaenacted the California Consumer Privacy Act, or CCPA, which takes effect on January 1, 2020. The CCPA gives California residents expanded rights toaccess and require deletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how theirpersonal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that may increase databreach litigation. Although the CCPA includes exemptions for certain clinical trials data, and HIPAA protected health information, the law may increase ourcompliance costs and potential liability with respect to other personal information we collect about California residents. The CCPA has prompted a numberof proposals for new federal and state privacy legislation that, if passed, could increase our potential liability, increase our compliance costs and adverselyaffect our business.We may also be subject to or affected by foreign laws and regulations, including regulatory guidance, governing the collection, use, disclosure, security,transfer and storage of personal data, such as information that we collect about patients and healthcare providers in connection with clinical trials and ourother operations in the U.S. and abroad. The global legislative and regulatory landscape for privacy and data protection continues to evolve, andimplementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. This evolution may create uncertainty in ourbusiness, result in liability or impose additional costs on us. The cost of compliance with these laws, regulations and standards is high and is likely toincrease in the future. For example, the EU has adopted the GDPR, which introduces strict requirements for processing personal data. The GDPR increases ourcompliance burden with respect to data protection, including by mandating potentially burdensome documentation requirements and granting certain rightsto individuals to control how we collect, use, disclose, retain and leverage information about them. The processing of sensitive personal data, such asinformation about health conditions, entails heightened compliance burdens under the GDPR and is a topic of active interest among foreign regulators. Inaddition, the GDPR provides for breach reporting requirements, more robust regulatory enforcement and fines of up to the greater of 20 million euros or 4% ofannual global revenue. While companies are afforded some flexibility in determining how to comply with the GDPR’s various requirements, significant effortand expense are required to ensure continuing compliance with the GDPR. Moreover, the requirements under the GDPR and guidance issued by different EUmember states may change periodically or may be modified, and such changes or modifications could have an adverse effect on our business operations ifcompliance becomes substantially costlier than under current requirements. It is also possible that each of these privacy laws may be interpreted and appliedin a manner that is inconsistent with our practices. Further, Brexit has created uncertainty with regard to data protection regulation in the UK. In particular, itis unclear whether, post Brexit, the UK will enact data protection legislation equivalent to the GDPR and how data transfers to and from the United Kingdomwill be regulated. Any failure or perceived failure by us to comply with federal, state, or foreign laws or self-regulatory standards could result in negativepublicity, diversion of management time and effort and proceedings against us by governmental entities or others. In many jurisdictions, enforcement actionsand consequences for noncompliance are rising. As we continue to expand into other foreign countries and jurisdictions, we may be subject to additionallaws and regulations that may affect how we conduct business.Changes in 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 from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal functionson 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, abilityto hire and retain key personnel and accept payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency havefluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely,including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.45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, including beginning on December 22, 2018 and ending onJanuary 25, 2019, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furloughcritical FDA, SEC and other government employees and stop critical activities. If repeated or prolonged government shutdowns occur, it could significantlyimpact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further,future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continueour operations.Potential product liability lawsuits against us could cause us to incur substantial liabilities and limit commercialization of any products that we maydevelop.The use of our product candidates in clinical trials and the sale of any products for which we obtain marketing approval exposes us to the risk of productliability claims. Product liability claims might be brought against us by consumers, health care providers, other pharmaceutical companies or others taking orotherwise coming into contact with our products. On occasion, large monetary judgments have been awarded in class action lawsuits where drugs have hadunanticipated adverse effects. If we cannot successfully defend against product liability claims, we could incur substantial liability and costs. In addition,regardless of merit or eventual outcome, product liability claims may result in: •impairment of our business reputation and significant negative media attention; •withdrawal of participants from our clinical trials; •significant costs to defend related litigation; •distraction of management’s attention from our primary business; •substantial monetary awards to patients or other claimants; •inability to commercialize our current or future product candidates, if approved; •product recalls, withdrawals or labeling, marketing or promotional restrictions; •decreased demand for our current or future product candidates, if approved; and •loss of revenue.The product liability insurance we currently carry, and any additional product liability insurance coverage we acquire in the future, may not be sufficient toreimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive and in the future we may not beable to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. If we obtain marketing approvalfor our product candidates, we intend to acquire insurance coverage to include the sale of commercial products; however, we may be unable to obtain productliability insurance on commercially reasonable terms or in adequate amounts. A successful product liability claim or series of claims brought against us couldcause our share price to decline and, if judgments exceed our insurance coverage, could adversely affect our results of operations and business, includingpreventing or limiting the commercialization of our current or future product candidates, if approved.Risks Related to Development, Regulatory Approval and CommercializationClinical trials are very expensive, time-consuming, difficult to design and implement, and involve uncertain outcomes.Our product candidates are still in development and will require extensive clinical testing before we are prepared to submit an NDA, BLA or other similarapplication for regulatory approval. We cannot provide you any assurance that we will submit an NDA for regulatory approval for our product candidateswithin our projected timeframes or whether any such applications will be approved by the relevant regulatory authorities. Clinical trials are very expensiveand difficult to design and implement, in part because they are subject to rigorous regulatory requirements. For instance, the FDA or other regulatoryauthorities may not agree with our proposed analysis plans for any clinical trials of our product candidates, and during any such review, may identifyunexpected efficacy or46safety concerns, which may delay the approval of an NDA or similar application. The FDA may also find that the benefits of our product candidates do notoutweigh their risks in a manner sufficient to grant regulatory approval. The clinical trial process is also time-consuming and costly and relies on thecollaboration with many CROs and clinical trial sites.Failures can occur at any stage of clinical trials, and we could encounter problems that cause us to abandon or repeat clinical trials. In addition, results fromclinical trials may require further evaluation, delaying the next stage of clinical development or submission of an NDA. Further, product candidates in laterstages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through nonclinical studies and initial clinical trials,and such product candidates may exhibit safety signals in later stage clinical trials that they did not exhibit in preclinical or earlier-stage clinical trials. Anumber of companies in the biopharmaceutical industry have suffered significant setbacks in or the discontinuation of advanced clinical trials due to lack ofefficacy or adverse safety profiles, notwithstanding promising results in earlier trials. Likewise, the results of nonclinical testing or early clinical trials maynot be predictive of the results of our planned development programs, and there can be no assurance that the results of studies conducted by collaborators orother third parties will be viewed favorably or are indicative of our own future trial results. In particular, our gene therapy product candidate, URO-902, is inearly stages of development. The outcome of nonclinical testing and early clinical trials may not be predictive of the success of later stage clinical trials. ThePhase 1b clinical trial conducted by ICI for URO-902 for the treatment of OAB and detrusor overactivity in women studied a small patient population, whichmakes it difficult to predict whether the favorable results observed in such clinical trial will be repeated in larger and more advanced clinical trials. The commencement and completion of clinical trials may be delayed by several factors, including: •failure to obtain regulatory approval to commence a trial; •unforeseen safety issues; •occurrence of serious adverse events in trials of the same class of agents conducted by other sponsors; •lack of effectiveness during clinical trials; •determination of dosing issues; •inability to reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensivenegotiation and may vary significantly among different CROs and trial sites; •slower than expected rates of patient recruitment or failure to recruit suitable patients to participate in a trial; •failure to add a sufficient number of clinical trial sites; •unanticipated impact from changes in or modifications to protocols or clinical trial design; •inability or unwillingness of clinical investigators or trial participants to follow our clinical and other applicable protocols or applicableregulatory requirements; •an institutional review board, or IRB, refusing to approve, suspending, or terminating the trial at an investigational site, precluding enrollment ofadditional subjects, or withdrawing their approval of the trial; •premature discontinuation of trial participants from clinical trials or missing data; •failure to manufacture or release sufficient quantities of a product candidate or placebo, or failure to obtain sufficient quantities of activecomparator medications for our clinical trials, if applicable, that in each case meet our quality standards, for use in clinical trials; •inability to monitor patients adequately during or after treatment; or •inappropriate unblinding of trial results.47Further, we, the FDA or other regulatory authority may suspend our clinical trials in an entire country at any time, or an IRB may suspend its clinical trialsites within any country, if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, including cGMPregulations, that we are exposing participants to unacceptable health risks, or if the FDA or other regulatory authority, as the case may be, finds deficienciesin our IND or equivalent applications for other countries or the manner in which the clinical trials are conducted. Therefore, we cannot predict with anycertainty the schedule for commencement and completion of future clinical trials. If we experience delays in the commencement or completion of our clinicaltrials, or if we terminate a clinical trial prior to completion, the commercial prospects of our product candidates could be harmed, and our ability to generateproduct revenue may be delayed. In addition, any delays in our clinical trials could increase our costs, cause a decline in our share price, slow down theapproval process, and jeopardize our ability to commence product sales and generate revenue. Any of these occurrences may harm our business, financialcondition and results of operations. In addition, many of the factors that cause or lead to a delay in the commencement or completion of clinical trials mayalso ultimately lead to the denial of regulatory approval of our product candidates. Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation inconnection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA or other regulatoryauthorities. The FDA or other regulatory authorities may conclude that a financial relationship between us and a principal investigator has created a conflictof interest or otherwise affected the integrity of the study. The FDA or other regulatory authority may therefore question the integrity of the data generated atthe applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of ourmarketing applications by the FDA or other regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of one ormore of our product candidates.In addition, prior to our acquisition of the rights to vibegron and URO-902, we had no involvement with or control over the nonclinical or clinicaldevelopment of these product candidates. Additionally, pursuant to our collaboration agreement with Kyorin, who retains exclusive rights from Merck todevelop and commercialize vibegron in Japan and certain other Asian territories, we may rely on data generated by Kyorin in connection with seekingregulatory approval of vibegron in the territories in which we have rights to develop and commercialize vibegron. We are dependent on Merck, Kyorin andICI having conducted such research and development in accordance with the applicable protocols and legal, regulatory and scientific standards, havingaccurately reported the results of all clinical trials and other research they conducted prior to our acquisition of the rights to our current product candidates,having correctly collected and interpreted the data from these trials and other research, and having supplied us with complete information, data sets andreports required to adequately demonstrate the results reported through the date of our acquisition of these assets. Problems related to predecessors couldresult in increased costs and delays in the development of our product candidates, which could adversely affect our ability to generate any future revenuefrom sales of our product candidates, if approved.Our gene therapy product candidate, URO-902, is based on a novel technology and the regulatory landscape that governs gene therapy products isuncertain and may change, which makes it difficult to predict the time and cost of development and of subsequently obtaining regulatory approval.The use of gene therapy in the treatment of OAB is novel. There can be no assurance that we will not experience problems or delays with the assessment ofthe current drug supply and in the future with developing our product candidate and that such problems or delays will not cause unanticipated costs, or thatany such development problems can be solved. We may also experience delays in developing a sustainable, reproducible and scalable manufacturingprocess, which may prevent us from completing our clinical studies or commercializing URO-902 on a timely or profitable basis, if at all. We expect that thesupply of URO-902 that was transferred to us under the ICI license agreement will only be sufficient for us to complete our planned Phase 2a study. Anyissues we experience in the future with respect to the manufacturing or availability of URO-902 could significantly delay our URO-902 developmentprogram and harm our business prospects.48In addition, the clinical trial requirements and the criteria used by the FDA and other foreign regulatory authorities to determine the safety and efficacy of aproduct candidate vary substantially according to the type, complexity, novelty and intended use and market of such product candidate. The regulatoryapproval process for novel product candidates such as URO-902 can be more expensive and take longer than for other, better known or more extensivelystudied product candidates. To date, only a limited number of gene therapies have received marketing authorization from the FDA or foreign regulatoryauthorities. Until August 2017, the FDA had never approved a gene therapy product. Since that time, the FDA has only approved a small number of genetherapy product candidates, including Kymriah by Novartis International AG, for pediatric and young adult patients with a form of acute lymphoblasticleukemia, Yescarta by Kite Pharma, Inc., for adult patients with certain forms of non-Hodgkin lymphoma, and Luxturna by Spark Therapeutics, Inc. forpatients with an inherited form of vision loss. It is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals forURO-902 in either the United States, or other major markets or how long it will take to commercialize URO-902, if approved. Approvals by foreign regulatoryauthorities may not be indicative of what the FDA may require for approval, and vice versa. The FDA recently released a series of draft guidance documents regarding certain gene therapy product candidates, including gene therapies for rare diseases,and other clinical and manufacturing issues related to gene therapy product candidates. We cannot be certain when additional guidance will be released thatcould be relevant to, or have an impact on, our gene therapy product candidate or the duration or expense of any applicable regulatory review processes.Regulatory requirements governing gene and cell therapy products have changed frequently and may continue to change in the future. The FDA hasestablished the Office of Tissues and Advanced Therapies within its Center for Biologics Evaluation and Research, or CBER, to consolidate the review ofgene therapy and related products, and has established the Cellular, Tissue and Gene Therapies Advisory Committee to advise the CBER in its review. Inaddition to the submission of an IND to the FDA before initiation of a clinical trial in the United States, certain human clinical trials for cell therapy productsand gene therapy had historically been subject to review by the Recombinant DNA Advisory Committee, or the RAC, of the National Institutes of Health, orNIH, Office of Biotechnology Activities, or OBA, pursuant to the NIH Guidelines for Research Involving Recombinant DNA Molecules, or NIH Guidelines.On August 17, 2018, the NIH issued a notice in the Federal Register and issued a public statement proposing changes to the oversight framework for genetherapy trials, including changes to the applicable NIH Guidelines to modify the roles and responsibilities of the RAC with respect to human clinical trials ofgene therapy products, and requesting public comment on its proposed modifications. During the public comment period, which closed October 16, 2018,the NIH has announced that it will no longer accept new human gene transfer protocols for review as a part of the protocol registration process or convene theRAC to review individual clinical protocols. These trials will remain subject to the FDA’s oversight and other clinical trial regulations, and oversight at thelocal level will continue as set forth in the NIH Guidelines. Specifically, under the NIH Guidelines, supervision of human gene transfer trials includesevaluation and assessment by an institutional biosafety committee, or IBC, a local institutional committee that reviews and oversees research utilizingrecombinant or synthetic nucleic acid molecules at that institution. The IBC assesses the safety of the research and identifies any potential risk to publichealth or the environment, and such review may result in some delay before initiation of a clinical trial. While the NIH Guidelines are not mandatory unlessthe research in question is being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic nucleic acid molecule research,many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them. Even though we may not be required to submit aprotocol for our gene therapy product candidates through the NIH for RAC review, we will still be subject to significant regulatory oversight by the FDA, andin addition to the government regulators, the applicable IBC and institutional review board, or IRB, of each institution at which we or our collaboratorsconduct clinical trials of our product candidates, or a central IRB if appropriate, would need to review and approve the proposed clinical trial. Similarly,foreign regulatory authorities may issue new guidelines concerning the development and marketing authorization for gene therapy products and require thatwe comply with these new guidelines.The FDA, NIH and the European Medicines Agency, or EMA, have each expressed interest in further regulating biotechnology, including gene therapy andgenetic testing. For example, the EMA advocates a risk-based approach to the development of a gene therapy product candidate. Agencies at both the federaland state level in the United States, as well as the U.S. congressional committees and other governments or governing agencies, have also expressed interestin further regulating the biotechnology industry. Such actions may delay or prevent development and, if approved, commercialization of URO-902. 49These regulatory review committees and advisory groups and any new guidelines they promulgate may lengthen the regulatory review process, require us toperform additional testing, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval andcommercialization of URO-902 or lead to significant post-approval limitations or restrictions. As we advance our gene therapy product candidate, we will berequired to consult with these regulatory and advisory groups, and comply with applicable guidelines. If we fail to do so, we may be required to delay ordiscontinue development of URO-902. These additional processes may result in a review and approval process that is longer than we otherwise would haveexpected. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market coulddecrease our ability to generate sufficient product revenue, and our business, financial condition, results of operations and prospects would be adverselyaffected.Negative public opinion of gene therapy and increased regulatory scrutiny of gene therapy and genetic research may adversely impact public perception ofour current and future product candidates.Our gene therapy product candidate, URO-902, involves introducing genetic material into patients’ cells. The clinical and commercial success of URO-902and any future gene therapy product candidates will depend in part on public acceptance of the use of gene therapy and gene regulation for the prevention ortreatment of human diseases. Public attitudes may be influenced by claims that gene therapy and gene regulation are unsafe, unethical or immoral and,consequently, any gene therapy product candidates that we may develop may not gain the acceptance of the public or the medical community. Adversepublic attitudes may adversely impact our ability to enroll patients in our clinical trials. Moreover, our success will depend upon physicians prescribing, andtheir patients being willing to receive, treatments that involve the use of gene therapy product candidates that we may develop in lieu of, or in addition to,existing treatments with which they are already familiar and for which greater clinical data may be available.More restrictive government regulations or negative public opinion would have a negative effect on our business or financial condition and may delay orimpair the development and commercialization of URO-902. For example, in 2003, clinical trials using early versions of murine gamma-retroviral vectors,which integrate with, and thereby alter, the host cell’s DNA, have led to several well publicized adverse events, including reported cases of leukemia. Adverseevents in our clinical trials, even if not ultimately attributable to our gene therapy product candidate, and the resulting publicity could result in increasedgovernmental regulation, unfavorable public perception, potential regulatory delays in the testing or approval of URO-902 or any future gene therapyproduct candidates, stricter labeling requirements for such product candidates if approved and a decrease in demand for any such product candidates. The riskof cancer remains a concern for gene therapy and we cannot assure that it will not occur in any of our planned or future clinical trials. In addition, there is thepotential risk of delayed adverse events following exposure to gene therapy due to persistent biological activity of the genetic material or other componentsof products used to carry the genetic material. If any such adverse events occur, our clinical trials and, if approved, commercialization of URO-902 or anyfuture product candidates could be halted or delayed, which would have a negative impact on our business and operations.Reported data or other clinical development announcements by Kyorin or other third parties may adversely affect our clinical development plan. Kyorin developed vibegron for the treatment of OAB in Japan and in September 2018, received marketing approval from Japan’s Ministry of Health, Labourand Welfare for vibegron for the treatment of adults with OAB. Kyorin reported positive results from its Phase 3 clinical trial in Japan for the treatment ofOAB. If subsequent announcements by Kyorin regarding its development of vibegron are unfavorable, or post-marketing or Phase 4 clinical trials conductedby Kyorin are unfavorable or result in new safety signals in Japan during any such post-marketing or Phase 4 clinical trial, it could negatively impact ourclinical development plans and potential approval for vibegron in the United States. Any unexpected measure by the Japanese regulatory agencies followingapproval of vibegron in Japan, including any measures due to unexpected post-marketing safety signals, will also affect the potential approval for vibegronin the United States. In addition, we face similar risks to the extent that third parties develop vibegron in other Asian territories.50The results of our clinical trials may not support our proposed claims for our product candidates, or regulatory approval at all.Success in nonclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the results of laterclinical trials will replicate the results of prior nonclinical testing and clinical trials. Likewise, promising results in interim analyses or other preliminaryanalyses do not ensure that the clinical trial as a whole will be successful. A number of companies in the pharmaceutical industry, including biotechnologycompanies, have suffered significant setbacks in clinical trials, even after promising results in earlier nonclinical studies or clinical trials. These setbacks havebeen caused by, among other things, nonclinical findings made while clinical trials were underway and safety or efficacy observations made in clinical trials,including previously unreported adverse events. The results of nonclinical studies and early clinical trials of our product candidates may not be predictive ofthe results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite havingprogressed through nonclinical and initial clinical trials. For example, we may not succeed in demonstrating that vibegron offers a differentiated profilecompared to current OAB therapies, including the potential for broader efficacy claims if the FDA does not approve the inclusion of urgency data, rapid onsetof action data, and a single, convenient once-daily and crushable dose in the label. A future failure of a clinical trial to meet its pre-specified endpoints wouldlikely cause us to abandon a product candidate and may delay development of any other product candidates.Any delay in, or termination of, our clinical trials will delay the submission of our NDA to the FDA or other similar applications with other relevant foreignregulatory authorities and, ultimately, our ability to commercialize vibegron and generate product revenue. Even if our clinical trials are completed asplanned, we cannot be certain that their results will support these claims for differentiation or the effectiveness or safety of vibegron. The FDA has substantialdiscretion in the review and approval process and may disagree that our studies support the differentiated claims we propose. We cannot guarantee that wewill obtain approval for the differentiated claims we propose, if at all.Interim, “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data becomeavailable and are subject to audit and verification procedures that could result in material changes in the final data.From time to time, we may publicly disclose preliminary or “top-line” data from our clinical trials, which is based on a preliminary analysis of then-availabletop-line data, and the results and related findings and conclusions are subject to change following a full analyses of all data related to the particular trial. Forexample, the top-line data analysis from our Phase 3 EMPOWUR study did not include full vital sign data, including blood pressure. If the results of theambulatory blood pressure study of vibegron are less favorable than we currently anticipate and vibegron is shown to have a similar or more significantimpact on blood pressure than mirabegron, our ability to obtain approval for and commercialize our product candidates, our business, operating results,prospects or financial condition may be harmed. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and wemay not have received or had the opportunity to fully and carefully evaluate all data. As a result, the top-line results that we report may differ from futureresults of the same trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.Top-line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data wepreviously published. As a result, top-line data should be viewed with caution until the final data are available. We may also disclose interim data from ourclinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change aspatient enrollment continues and more patient data become available. Adverse differences between preliminary or interim data and final data couldsignificantly harm our business prospects.Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpretor weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particularproduct candidate or product and our business in general. In addition, the information we choose to publicly disclose regarding a particular study or clinicaltrial is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriateinformation to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to futuredecisions, conclusions, views, activities or otherwise regarding a particular drug, product candidate or our business. If the top-line data that we report differfrom actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for and commercializeour product candidates, our business, operating results, prospects or financial condition may be harmed.51Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or renderedimpossible by multiple factors outside our control.We may encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of our clinical trials on our current timelines, orat all, and even once enrolled we may be unable to retain a sufficient number of patients to complete any of our trials. Enrollment in our clinical trials may beslower than we anticipate, leading to delays in our development timelines. For example, we may face difficulty enrolling or maintaining a sufficient numberof patients in our clinical trials due to the existing alternative treatments approved for the treatment of OAB as patients may decline to enroll or decide towithdraw from our clinical trials due to the risk of receiving placebo or the perceived risks of gene therapy as compared to more traditional treatment options.Patient enrollment and retention in clinical trials depends on many factors, including the size of the patient population, the nature of the trial protocol, ourability to recruit clinical trial investigators with the appropriate competencies and experience, the existing body of safety and efficacy data with respect tothe study drug, the number and nature of competing treatments and ongoing clinical trials of competing drugs for the same indication, the proximity ofpatients to clinical sites, the eligibility criteria for the trial and the proportion of patients screened that meets those criteria, our ability to obtain and maintainpatient consents, and the risk that patients enrolled in clinical trials will drop out of the trials before completion. Furthermore, any negative results or new safety signals we or third parties may report in clinical trials of our product candidates may make it difficult orimpossible to recruit and retain patients in our clinical trials. Similarly, negative results reported by our competitors about their drug candidates maynegatively affect patient recruitment in our clinical trials. Also, marketing authorization of competitors in this same class of drugs may impair our ability toenroll patients into our clinical trials, delaying or potentially preventing us from completing recruitment of one or more of our trials. Delays or failures inplanned patient enrollment or retention may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop ourproduct candidates, or could render further development impossible. In addition, we expect to rely on CROs and clinical trial sites to ensure proper andtimely conduct of our future clinical trials, and, while we intend to enter into agreements governing their services, we will be limited in our ability to compeltheir actual performance.We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to competeeffectively.Drug development is highly competitive and subject to rapid and significant technological advancements. For example, there are several large and smallpharmaceutical companies focused on delivering therapeutics for OAB. Further, it is likely that additional drugs will become available in the future for thetreatment of OAB and our other target indications.We are aware of several companies that are working to develop drugs that would compete against vibegron and URO-902 for the treatment of OAB. Forexample, Velicept Therapeutics, Inc. is advancing solabegron, a beta-3 agonist initially developed by GlaxoSmithKline plc, as a twice-daily and once-dailyformulation into Phase 2b clinical trials. In addition to solabegron, there are several other product candidates under development for the treatment of OAB.Taiho Pharmaceutical Co., Ltd., is developing TAC-302, a novel neurite outgrowth enhancer, currently in Phase 2 clinical trials in Japan. Dong-A ST Co.,Ltd., is developing DA-8010, a novel anticholinergic, currently in a Phase 1 clinical trial. Taris Biomedical LLC is developing TAR-302, an intravesiculardrug-delivery system for trospium, an anticholinergic drug, currently in Phase 1b clinical trials. Outpost Medicine, LLC’s IND for OP-687 for OAB wasaccepted by the FDA in late 2017. In addition, a number of companies are developing injectable neurotoxins (biosimilar onabotulinumtoxinA,abobotulinumtoxinA, and nivobotulinumtoxinA) for OAB.We also face competition from other drugs and therapies currently approved for the treatment of OAB. Anticholinergic drugs have been the standard ofpharmacologic care for OAB since the approval of flavoxate in 1970 and oxybutynin in 1975. Anticholinergics continue to account for the largest share ofprescriptions written for the treatment of OAB in the United States. There are a number of widely prescribed anticholinergics approved for sale in the UnitedStates, including solifenacin, tolterodine and oxybutynin. In addition, we will face competition from mirabegron (Myrbetriq, marketed by Astellas) andAllergan’s BOTOX, each of which are FDA-approved therapies used for the treatment of OAB. Furthermore, we expect to face additional competition fromgeneric products as the patent protection for competitor’s products expire. For example, we expect to face competition from a generic version of mirabegronfollowing Myrbetriq’s loss of marketing exclusivity, which we expect to occur in 2023 or 2024. Any such competition from generics could adversely affectthe market size and opportunity for vibegron, and there can be no assurance that generic competition will not reach the market even sooner than we expect.52Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greaterexperience in the discovery and development of product candidates, as well as in obtaining regulatory approvals of those product candidates in the UnitedStates and in foreign countries. Many of our current and potential future competitors also have significantly more experience commercializing drugs thathave been approved for marketing. Mergers and acquisitions in the pharmaceutical and biotechnology industries could result in even more resources beingconcentrated among a smaller number of our competitors. Competition may reduce the number and types of patients available to us to participate in clinicaltrials, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment inthese industries. Our competitors may succeed in developing, acquiring or licensing, on an exclusive basis, drugs that are more effective or less costly thanany product candidate that we may develop.Our ability to compete successfully will depend largely on our ability to: •develop and commercialize therapies that are superior to other products in the market; •demonstrate through our clinical trials that our product candidates are differentiated from existing and future therapies; •attract qualified scientific, product development and commercial personnel; •obtain patent or other proprietary protection for our technologies and product; •obtain required regulatory approvals, including approvals to market our product candidates in ways that are differentiated from existing andfuture therapies; •successfully commercialize our product candidates, if approved; •obtain coverage and adequate reimbursement from, and negotiate competitive pricing with, third-party payors; and •successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new therapies.The availability of our competitors’ products could limit the demand and the price we are able to charge for any product candidate we develop. The inabilityto compete with existing or subsequently introduced drugs would have an adverse impact on our business, financial condition and prospects.Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compoundsthat could make our product candidates less competitive. In addition, any new product that competes with an approved product must demonstrate compellingadvantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commercially successful. Accordingly, ourcompetitors may succeed in obtaining patent protection, discovering, developing, receiving FDA or other regulatory authority approval for orcommercializing medicines before we do, which would have an adverse impact on our business and results of operations.If we are not able to obtain required regulatory approvals, we will not be able to commercialize our product candidates, and our ability to generateproduct revenue will be materially impaired.Activities associated with the development and commercialization of our product candidates, including the design, research, testing, manufacture, safety,efficacy, recordkeeping, labeling, packaging, storage, approval, advertising, promotion, sale and distribution of our product candidates are subject tocomprehensive regulation by the FDA and other regulatory agencies in the United States and by similar regulatory authorities outside the United States.Failure to obtain marketing approval for, and thus commercialize our product candidates, could negatively impact our ability to generate any revenue fromproduct sales.We have not received approval from regulatory authorities to market any product candidate in any jurisdiction, and it is possible that none of our productcandidates will ever obtain the appropriate regulatory approvals necessary for us to commence product sales. Neither we nor any current or futurecollaborator, is permitted to market any of our product candidates in the United States or any other jurisdiction until we receive regulatory approval of anNDA from the FDA or similar regulatory authorities outside of the United States. 53The time required to obtain approval of an NDA by the FDA or similar regulatory authorities outside of the United States is unpredictable but typically takesmany years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatoryauthority. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of aproduct candidate’s clinical development and may vary among jurisdictions.Securing marketing approvals requires the submission of extensive nonclinical and clinical data and supporting information to regulatory authorities foreach therapeutic indication to establish the safety and efficacy of the product candidate for that indication. We expect to rely on third-party CROs,consultants and personnel from RSI and RSG to assist us in filing and supporting the applications necessary to gain marketing approvals. Securing marketingapproval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, theregulatory authorities. Delays or errors in the submission of applications for marketing approval or issues, including those related to gathering the appropriatedata and the inspection process, may ultimately delay or affect our ability to obtain regulatory approval, commercialize our product candidates and generateproduct revenue.Our product candidates may cause adverse effects or have other properties that could delay or prevent their regulatory approval or limit the scope of anyapproved label or market acceptance.Adverse events caused by our product candidates or that of adjuncts, could cause us, other reviewing entities, clinical trial sites or regulatory authorities tointerrupt, delay or halt clinical trials, and could result in the denial of regulatory approval. If an unacceptable frequency or severity of adverse events or newsafety signals are reported in our clinical trials for our current or future product candidates, our ability to obtain regulatory approval for such productcandidates may be negatively impacted. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete thetrial or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medicalstaff. Any of these occurrences may harm our business, financial condition and prospects.In particular, there have been several significant adverse side effects in gene therapy treatments in the past, including reported cases of leukemia in trialsusing earlier generation viral vectors. While URO-902 uses a plasmid vector, gene therapy is still a relatively new approach to disease treatment andadditional adverse side effects could develop. There is the potential risk of delayed adverse events following exposure to gene therapy products due topersistent biologic activity of the genetic material or other components of products used to carry the genetic material. Possible adverse side effects that mayoccur with treatment with gene therapy products include an immunologic reaction early after administration that could substantially limit the effectiveness ofthe treatment or represent safety risks for patients. Many times, side effects are only detectable after investigational products are tested in larger scale, pivotalclinical trials or, in some cases, after they are made available to patients on a commercial scale after approval. If any of our current or future productcandidates are approved and then cause serious or unexpected side effects, a number of potentially significant negative consequences could result, including: •regulatory authorities may withdraw their approval of the product or require a REMS (or equivalent outside the United States) to imposerestrictions on its distribution or other risk management measures; •we may be required to recall a product; •additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or anycomponent thereof; •regulatory authorities may require the addition of labeling statements, such as warnings or contraindications, or require other labeling changes; •we may be required to change the way the product is administered or to conduct additional clinical trials; •we may be required to repeat a preclinical study or clinical trial or terminate a program, even if other studies or trials related to the program areongoing or have been successfully completed; •we could be sued and held liable for harm caused to patients; •we could elect to discontinue the sale of our product; •the product may become less competitive; and •our reputation may suffer.54Any of these events could prevent us from achieving or maintaining market acceptance of the affected product candidate and could substantially increase thecosts of commercializing our current or future product candidates, if approved.The FDA may impose restrictions that limit the scope of any approved label and affect our market acceptance.The FDA has substantial discretion in the product label review and approval process and may disagree that our studies support the differentiated claims wepropose. Even if we are successful in demonstrating that our product offers a differentiated profile compared to current therapies, the FDA may restrict us frommentioning such claims in the U.S. label, which could potentially adversely affect product differentiation. Further, the FDA could institute a “class” label forall products in the same market, which could require us to include warnings or other information on the label of our product that may not be specificallyapplicable to our product.The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and even ifwe obtain approval for a product candidate in one country or jurisdiction, we may never obtain approval for or commercialize it in any other jurisdiction,which would limit our ability to realize our full market potential.Prior to obtaining approval to commercialize a product candidate in any jurisdiction, we or our collaborators must demonstrate with substantial evidencefrom well controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory agencies, that such product candidates are safe andeffective for their intended uses. Results from nonclinical studies and clinical trials can be interpreted in different ways. Even if we believe the nonclinical orclinical data for a product candidate are promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities. In orderto market any products in any particular jurisdiction, we must establish and comply with numerous and varying regulatory requirements on a country-by-country basis regarding safety and efficacy. Approval by the FDA does not ensure approval by regulatory authorities in any other country or jurisdictionoutside the United States. In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, andregulatory approval in one country does not guarantee regulatory approval in any other country. Approval processes vary among countries and can involveadditional product testing and validation, as well as additional administrative review periods. Seeking regulatory approval could result in difficulties andcosts for us and require additional nonclinical studies or clinical trials, which could be costly and time consuming. Regulatory requirements can vary widelyfrom country to country and could delay or prevent the introduction of our products in those countries. We do not have any product candidates approved forsale in any jurisdiction, including in international markets, and we do not have experience in obtaining regulatory approval. If we fail to comply withregulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed,our target market will be reduced and our ability to realize the full market potential of any product we develop will be unrealized. Even if we obtain regulatory approval for any of our current or future product candidates, we will still face extensive regulatory requirements and ourproduct may face future development and regulatory difficulties.Any product candidate for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, packaging,distribution, adverse event reporting, storage, recordkeeping, export, import, advertising and promotional activities for such product, among other things,will be subject to extensive and ongoing requirements of and review by the FDA and other regulatory authorities. These requirements include submissions ofsafety and other post-marketing information and reports, establishment of registration and drug listing requirements, continued compliance with cGMPrequirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regardingthe distribution of drug product samples to physicians, recordkeeping and GCP requirements for any clinical trials that we conduct post-approval. Even ifmarketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may bemarketed or to the conditions of approval or the FDA or other regulatory authorities may require that contraindications, warnings or precautions-including insome cases, a boxed warning be included in the product labeling, which could limit sales of the product.55Regulatory authorities closely regulate the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indicationsand in accordance with the provisions of the approved labeling. Regulatory authorities impose stringent restrictions on manufacturers’ communicationsregarding off-label use, and if we do not market our products for their approved indications, we may be subject to enforcement action for off-label marketing.Violations of the Federal Food, Drug, and Cosmetic Act in the United States and other comparable regulations in foreign jurisdictions relating to thepromotion of prescription drugs may lead to enforcement actions and investigations by the FDA, Department of Justice, State Attorneys General and otherforeign regulatory agencies alleging violations of United States federal and state health care fraud and abuse laws, as well as state consumer protection lawsand comparable laws in foreign jurisdictions.In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failureto comply with regulatory requirements may yield various results, including: •restrictions on the manufacture of such products; •restrictions on the labeling or marketing of such products; •restrictions on product distribution or use; •requirements to conduct post-marketing studies or clinical trials, or any regulatory holds on our clinical trials; •requirement of a REMS (or equivalent outside the United States); •Warning or Untitled Letters; •withdrawal of the products from the market; •recall of products; •fines, restitution or disgorgement of profits or revenues; •suspension or withdrawal of marketing approvals; •refusal to permit the import or export of such products; •product seizure; or •injunctions or the imposition of civil or criminal penalties.The FDA and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delayregulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from futurelegislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or to theadoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may haveobtained.For example, certain policies of the current U.S. administration may impact our business and industry. Namely, the current U.S. administration has takenseveral executive actions, including the issuance of a number of Executive Orders, that could impose significant burdens on, or otherwise materially delay,the FDA’s ability to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance, andreview and approval of marketing applications. It is difficult to predict how these executive actions, including the Executive Orders will be implemented, andthe extent to which they will impact the FDA’s ability to exercise its regulatory authority. If these executive actions impose constraints on the FDA’s abilityto engage in oversight and implementation activities in the normal course, our business may be negatively impacted.56Even if any of our current or future product candidates receives marketing approval, it may fail to achieve market acceptance by physicians, patients,third-party payors or others in the medical community necessary for commercial success.Even if any of our current or future product candidates receives marketing approval, it may nonetheless fail to gain sufficient market acceptance byphysicians, patients, third-party payors and others in the medical community. If it does not achieve an adequate level of acceptance, we may not generatesignificant product revenue or become profitable. The degree of market acceptance of a product candidate, if approved for commercial sale, will depend on anumber of factors, including but not limited to: •the efficacy and potential advantages compared to alternative treatments; •the prevalence and severity of any side effects; •the content of the approved product label; •product label differentiation from other OAB therapies; •the effectiveness of sales and marketing efforts; •the cost of treatment in relation to alternative treatments, including any similar generic treatments; •our ability to offer our products for sale at competitive prices; •the convenience and ease of administration compared to alternative treatments; •the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; •the strength of marketing and distribution support; •the availability of third-party coverage and adequate reimbursement; •utilization controls imposed by third-party payors, such as prior authorizations and step edits; and •any restrictions on the use of our product, if approved, together with other medications.Because we expect sales of vibegron, if approved, to generate substantially all of our product revenue for the foreseeable future, the failure of vibegron to findmarket acceptance would harm our business and could require us to seek additional financing.If we are unable to establish sales, marketing and distribution capabilities, either on our own or in collaboration with third parties, we may not besuccessful in commercializing any of our current or future product candidate, if approved.We do not currently have any infrastructure for the sales, marketing, or distribution of any product, and the cost of establishing and maintaining such anorganization may exceed the cost-effectiveness of doing so. In order to market any product that may be approved, we must build our sales, distribution,marketing, managerial and other nontechnical capabilities or make arrangements with third parties to perform these services. To achieve commercial successfor any product for which we obtain marketing approval, we will need a sales and marketing organization.We expect to build a focused sales, distribution and marketing infrastructure to market our product candidate in the United States, if approved. There aresignificant expenses and risks involved with establishing our own sales, marketing and distribution capabilities, including our ability to hire, retain andappropriately incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, and effectivelymanage geographically dispersed sales and marketing teams. Any failure or delay in the development of our internal sales, marketing and distributioncapabilities could delay any product launch, which would adversely impact its commercialization. For example, if we recruit a sales force and establishmarketing capabilities in anticipation of the commercial launch of our lead product candidate, vibegron, and such launch is delayed or does not occur for anyreason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if wecannot retain or reposition our sales and marketing personnel.57Factors that may inhibit our efforts to commercialize our products on our own include: •our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; •the inability of sales personnel to obtain access to physicians or attain adequate numbers of physicians to prescribe any drugs; •the inability to negotiate with third party payors regarding reimbursement for our products; and •unforeseen costs and expenses associated with creating an independent sales and marketing organization.We do not anticipate having the resources in the foreseeable future to allocate to the sales and marketing of our product candidates in certain marketsoverseas. Therefore, our future success will depend, in part, on our ability to enter into and maintain collaborative relationships for such capabilities, thecollaborator’s strategic interest in our products, and that collaborator’s ability to successfully market and sell the product. We intend to pursue collaborativearrangements regarding the sales and marketing of our product candidates, if approved, for certain markets overseas; however, we cannot assure you that wewill be able to establish or maintain such collaborative arrangements, or if able to do so, that they will have effective sales forces. To the extent that wedepend on third parties for marketing and distribution, any revenue we receive will depend upon the efforts of such third parties, and there can be noassurance that such efforts will be successful.If we are unable to build our own sales force or negotiate a collaborative relationship for the commercialization of our product candidates, we may be forcedto delay potential commercialization or reduce the scope of our sales or marketing activities. If we elect to increase our expenditures to fundcommercialization activities ourselves, we will need to obtain additional capital, which may not be available to us on acceptable terms, or at all. If we do nothave sufficient funds, we will not be able to bring any current or future product candidates to market or generate product revenue. We could enter intoarrangements with collaborative partners at an earlier stage than otherwise would be ideal and we may be required to relinquish certain rights to any currentor future product candidate or otherwise agree to terms unfavorable to us, any of which may have an adverse effect on our business, operating results andprospects. If we are unable to establish adequate sales, marketing, and distribution capabilities, either on our own or in collaboration with third parties, we will not besuccessful in commercializing any current or future product candidate and may not become profitable. We will be competing with many companies thatcurrently have extensive and well-funded marketing and sales operations. Without an internal team or the support of a third party to perform marketing andsales functions, we may be unable to compete successfully against these more established companies.If we obtain approval to commercialize any products outside of the United States, a variety of risks associated with international operations couldadversely affect our business.If our product candidates are approved for commercialization outside of the United States, we intend to enter into agreements with third parties to market incertain jurisdictions in which we have exclusive commercialization rights. We expect that we will be subject to additional risks related to internationaloperations or entering into international business relationships, including: •different regulatory requirements for drug approvals and rules governing drug commercialization in foreign countries; •reduced or no protection of intellectual property rights; •unexpected changes in tariffs, trade barriers and regulatory requirements; •economic weakness, including inflation, or political instability in particular foreign economies and markets; •compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; •foreign reimbursement, pricing and insurance regimes; •foreign taxes; •any foreign partners or collaborators not fulfilling their respective regulatory reporting requirements and any foreign regulatory authorities takingactions with respect to such failures, which would be reportable to the FDA;58 •any foreign partners or collaborators not informing us of any new post-marketing safety signals in a timely manner; •foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doingbusiness in another country; •workforce uncertainty in countries where labor unrest is more common than in the United States; •potential noncompliance with the FCPA, the UK Bribery Act or similar antibribery and anticorruption laws in other jurisdictions; •production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and •business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons,floods and fires.We have no prior experience in commercializing any product, and many biopharmaceutical companies have found the process of marketing their products inforeign countries to be very challenging.Our current and future relationships with investigators, health care professionals, consultants, third-party payors, and customers will be subject toapplicable healthcare regulatory laws, which could expose us to penalties. Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors, patient support,charitable organizations and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations. These laws regulatethe business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell, and distribute ourproducts for which we obtain marketing approval. Such laws include, among others: •the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering,receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of anindividual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in wholeor in part, under a federal healthcare program such as Medicare and Medicaid. The term “remuneration” has been broadly interpreted to includeanything of value. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities fromprosecution, the exceptions and safe harbors are drawn narrowly. Practices that involve remuneration that may be alleged to be intended toinduce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. A person orentity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation;in addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statuteconstitutes a false or fraudulent claim for purposes of the False Claims Act. Violations of the federal Anti-Kickback Statute may result in civilmonetary penalties up to $74,792 for each violation, plus up to three times the remuneration involved. Civil penalties for such conduct canfurther be assessed under the federal False Claims Act. Violations can also result in criminal penalties, including criminal fines and imprisonmentof up to 10 years. Similarly, violations can result in exclusion from participation in government healthcare programs, including Medicare and Medicaid; •the federal false claims laws, including the False Claims Act, which imposes criminal and civil penalties, including through civil whistleblower orqui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims forpayment that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false orfraudulent claim, or knowingly making or causing to be made, a false statement to avoid, decrease or conceal an obligation to pay money to thefederal government. When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines andpenalties and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs;59 •the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for, among otherthings, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false orfraudulent statements relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actualknowledge of the statute or specific intent to violate it to have committed a violation; •HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementingregulations, which also impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security, andtransmission of individually identifiable health information on health plans, health care clearing houses, and most providers and their businessassociates, defined as independent contractors or agents of covered entities that create, receive or obtain protected health information inconnection with providing a service for or on behalf of a covered entity; •the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies for whichpayment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to thegovernment information related to payments or other “transfers of value” made to physicians and teaching hospitals, and requires applicablemanufacturers and group purchasing organizations to report annually to the government ownership and investment interests held by thephysicians described above and their immediate family members and payments or other “transfers of value” to such physician owners (coveredmanufacturers are required to submit reports to the government by the 90th day of each calendar year); and •analogous state and foreign laws and regulations, such as state antikickback and false claims laws, which may apply to our business practices,including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or servicesreimbursed by non-governmental third-party payors, including private insurers, or otherwise restrict payments that may be made to healthcareproviders and other potential referral sources; and state laws that require pharmaceutical companies to comply with the pharmaceutical industry’svoluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, and state laws that require drugmanufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketingexpenditures; and state and foreign laws governing the privacy and security of health information in some circumstances, many of which differfrom each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.Efforts to ensure that our current and future business arrangements with third parties will comply with applicable healthcare laws and regulations will involvesubstantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes,regulations, agency guidance or case law involving applicable healthcare laws. If our operations are found to be in violation of any of these or any otherhealth regulatory laws that may apply to us, we may be subject to significant penalties, including the imposition of significant civil, criminal andadministrative penalties, damages, monetary fines, disgorgement, individual imprisonment, possible exclusion from participation in Medicare, Medicaid andother federal healthcare programs or similar programs in other countries or jurisdictions, contractual damages, reputational harm, diminished profits andfuture earnings, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolveallegations of non-compliance with these laws, and curtailment or restructuring of our operations, any of which could adversely affect our ability to operateour business and our results of operations. Even the mere issuance of a subpoena or the fact of an investigation alone, regardless of the merit, may result innegative publicity, a drop in our share price and other harm to our business, financial condition and results of operations. Defending against any such actionscan be costly, time-consuming and may require significant financial and personnel resources. Therefore, even if we are successful in defending against anysuch actions that may be brought against us, our business may be impaired.The Patient Protection and Affordable Care Act and future legislative changes may increase the difficulty and cost for us to obtain marketing approval forand commercialize our product candidates and affect the prices we may obtain.In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changesand proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrictor regulate post-approval activities, and affect our ability to profitably sell any products for which we obtain marketing approval. 60For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectivelythe Affordable Care Act, was enacted to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies againstfraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the healthcare industry, andimpose additional healthcare policy reforms. The law has continued the downward pressure on pharmaceutical pricing, especially under the Medicareprogram, and increased the industry’s regulatory burdens and operating costs. Among the provisions of the Affordable Care Act of importance to ourpotential product candidates are the following: •an annual, nondeductible fee payable by any entity that manufactures or imports specified branded prescription drugs and biologic agents; •an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; •a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled,infused, instilled, implanted or injected; •a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiatedprices of applicable brand drugs to eligible beneficiaries under their coverage gap period, as a condition for the manufacturer’s outpatient drugsto be covered under Medicare Part D; •extension of manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations; •expansion of eligibility criteria for Medicaid programs in certain states; •expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; •a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and •a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research,along with funding for such research.We cannot predict the full impact of the Affordable Care Act on pharmaceutical companies, as many of the reforms require the promulgation of detailedregulations implementing the statutory provisions, some of which have not yet fully occurred. For example, in January 2016, the Centers for Medicare andMedicaid Services issued a final rule regarding the Medicaid Drug Rebate Program, effective April 1, 2016, that, among other things, revises the manner inwhich the “average manufacturer price” is to be calculated by manufacturers participating in the program and implements certain amendments to theMedicaid rebate statute created under the Affordable Care Act. Further, there have been judicial and Congressional challenges to the Affordable Care Act. Weexpect there will be additional challenges and amendments to the Affordable Care Act in the future. We continue to evaluate the effect that the AffordableCare Act and its possible repeal and replacement has on our business.Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. For example, in August 2011, the President of theUnited States signed into law the Budget Control Act of 2011, which, among other things, included further reductions to Medicare payments to providers of2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2027 unlessadditional Congressional action is taken. Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among otherthings, reduced Medicare payments to several types of providers and increased the statute of limitations period in which the government may recoveroverpayments to providers from three to five years. Further, there have been several recent United States Congressional inquiries and proposed federal andstate legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patientprograms, reduce the out-of-pocket cost of prescription drugs, reform government program reimbursement methodologies for drugs, increase manufacturerrebates for certain drugs in Medicare Part D and provide Medicare Part D plans more control over formularies.61Moreover, the Drug Supply Chain Security Act, which was enacted in 2012 as part of the Food and Drug Administration Safety and Innovation Act, imposesnew obligations on manufacturers of pharmaceutical products related to product tracking and tracing. Legislative and regulatory proposals have been madeto expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We are not sure whether additionallegislative changes will be enacted, or whether the current regulations, guidance or interpretations will be changed, or what the impact of such changes onour business, if any, may be. In addition, increased scrutiny by the United States Congress of the FDA’s approval process may significantly delay or preventmarketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal andstate governments will pay for healthcare products and services, which could result in reduced demand for our product candidate or additional pricingpressures.Coverage and adequate reimbursement may not be available for our product candidate, which could make it difficult for us to sell it profitably, ifapproved.Market acceptance and sales of any approved product that we develop will depend in part on the extent to which coverage and adequate reimbursement forthese products and related treatments will be available from third-party payors, including government health administration authorities and private healthinsurers. For example, in May 2018, we commissioned a third-party market research study to assess how vibegron would be covered, if approved. Theresearch firm interviewed representatives of payors, who are involved with, but not solely responsible for, access and reimbursement decisions. Suchinterviewees represented payors covering over 80 million U.S. commercial and Medicare Part D lives. The payor representatives interviewed expect thatvibegron would be managed at a preferred or non-preferred branded tier, without prior authorization, allowing physicians and patients to make the choice ofwhether to pay a higher co-pay for a branded product or a lower co-pay for a generic. This market research study has no bearing on the payors, and anyassumptions or interpretations based on the results of this study, may ultimately be inaccurate. The payor research does not warrant this management will takeplace at launch or prior to product review. There is no assurance that vibegron, if approved, would achieve adequate coverage and reimbursement levels, orthat prior authorizations will not be required by payors. There also is no assurance as to the timeline for obtaining any level of coverage for vibegron;coverage and reimbursement levels may not be achieved at or near launch.In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors. Third-party payors decide which drugsthey will pay for and establish reimbursement levels. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting theirown coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any productcandidates that we develop through approval will be made on a plan-by-plan basis. One payor’s determination to provide coverage for a product does notassure that other payors will also provide coverage and adequate reimbursement for the product. Additionally, a third-party payor’s decision to providecoverage for a drug does not imply that an adequate reimbursement rate will be approved. Each plan determines whether or not it will provide coverage for adrug, what amount it will pay the manufacturer for the drug, on what tier of its formulary the drug will be placed and whether to require step therapy. Theposition of a drug on a formulary generally determines the co-payment that a patient will need to make to obtain the drug and can strongly influence theadoption of a drug by patients and physicians. Patients who are prescribed treatments for their conditions and providers prescribing such services generallyrely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products unless coverage is provided andreimbursement is adequate to cover a significant portion of the cost of our products. Further, from time to time, typically on an annual basis, payment rates areupdated and revised by third-party payors. Such updates could impact the demand for our products, to the extent that patients who are prescribed ourproducts, if approved, are not separately reimbursed for the cost of the product. An example of payment updates is the Medicare program updates to physicianpayments, which is done on an annual basis. In the past, when the application of the formula resulted in lower payment, Congress has passed interimlegislation to prevent the reductions. The Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, ended the use of the statutory formula andprovided for a 0.5% annual increase in payment rates under the Medicare Physician Fee Schedule through 2019, but no annual update from 2020 through2025. MACRA also introduced a merit based incentive bonus program for Medicare physicians beginning in 2019. At this time, it is unclear how theintroduction of the merit based incentive program will impact overall physician reimbursement under the Medicare program. Any resulting decrease inpayment under the merit based reimbursement system may adversely affect our business, financial condition and prospects. In addition, the Medicarephysician fee schedule has been adapted by some private payors into their plan-specific physician payment schedule. We cannot predict how pending andfuture healthcare legislation will impact our business, and any62changes in coverage and reimbursement that further restricts coverage of our product candidates or lowers reimbursement for procedures using our productscould harm our business. The process for determining whether a third-party payor will provide coverage for a product may be separate from the process for setting the price of a productor for establishing the reimbursement rate that such a payor will pay for the product. Even if we do obtain adequate levels of reimbursement, third-partypayors, such as government or private healthcare insurers, carefully review and increasingly question the coverage of, and challenge the prices charged for,products. A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Increasingly, third-party payors are requiring that pharmaceuticalcompanies provide them with predetermined discounts from list prices and are challenging the prices charged for products. We may also be required toconduct expensive pharmacoeconomic studies to justify the coverage and the amount of reimbursement for particular medications. We cannot be sure thatcoverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement willbe. Inadequate coverage or reimbursement may impact the demand for, or the price of, any product for which we obtain marketing approval. If coverage andadequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize any product candidatesthat we develop.Additionally, there have been a number of legislative and regulatory proposals to change the healthcare system in the United States and in some foreignjurisdictions that could affect our ability to sell any future drugs profitably. There can be no assurance that any of our current or future product candidates, ifapproved, will be considered medically reasonable and necessary, that they will be considered cost-effective by third-party payors, that coverage or anadequate level of reimbursement will be available, or that reimbursement policies and practices in the United States and in foreign countries where ourproducts are sold will not adversely affect our ability to sell our product candidates profitably, if they are approved for sale.Risks Related to Our Dependence on Third PartiesWe do not have our own manufacturing capabilities and will rely on third parties to produce clinical and commercial supplies of our current and futureproduct candidates.We do not have the capabilities to conduct drug formulation or manufacturing and do not own or operate, and we do not expect to own or operate, facilitiesfor product manufacturing, storage and distribution or testing. Both Merck and ICI are obligated to reasonably assist us during a specified time-period with atechnical transfer of the manufacturing process to us or our designee for production of vibegron and URO-902, respectively. Although Merck has alreadytransferred the manufacturing process of vibegron to us, we may still need additional assistance if we experience any setbacks with the manufacturing on thelarger scale. If Merck or ICI fail to fulfill their respective obligations, as applicable, or if we require additional assistance after their obligation to assist usexpires, our development of our product candidates could be significantly delayed or otherwise adversely affected.Pursuant to our agreement with Merck, Merck provided us with a supply of vibegron, which we may only utilize in preclinical and clinical work. We expectthat the vibegron drug substance transferred to us under our agreement with Merck will be sufficient for us to complete our currently planned clinical trialsfor the treatment of OAB in men with BPH and abdominal pain due to IBS. Additionally, supplies from our planned commercial manufacturers have becomeavailable and may be used in on-going and future clinical studies. We also expect that the URO-902 drug substance transferred to us under our licenseagreement with ICI will be sufficient for us to complete our planned Phase 2a study if materials continue to meet all specifications. We have recentlycontracted with a third-party vendor for the manufacturing of URO-902 for future preclinical studies and clinical trials, but the vendor has not yetmanufactured any URO-902. We intend to contract with third-party vendors for commercialization if and when URO-902 receives marketing approval.If we are unable to initiate or continue our relationship with one or more of these third-party manufacturers, we could experience delays in our developmentefforts and subsequent commercialization if any of our product candidates are approved, as we locate and qualify new or additional manufacturers.Third-party vendors may be difficult to identify for process and formulation development and manufacturing for our product candidates due to specialcapabilities required, and they may not be able to meet our quality standards. Any significant delay in the supply of a product candidate, or the raw materialcomponents thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinicaltrials, product testing and potential regulatory approval of our product candidates. If our manufacturers or we are unable to purchase these raw materials afterregulatory approval has been obtained for our product63candidates, the commercial launch of our product candidates would be delayed or there would be a shortage in supply, which would impair our ability togenerate revenue from the sale of our product candidates.The facilities used by our contract manufacturers to manufacture our product candidates must be approved by the FDA pursuant to inspections that will beconducted after we submit our NDA to the FDA. We do not control the manufacturing process of, and are completely dependent on, our contractmanufacturing partners for compliance with cGMP requirements for manufacture of drug products. If our contract manufacturers cannot successfullymanufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or comparable foreign regulatory authorities, theywill not be able to secure or maintain regulatory approval for their manufacturing facilities. In addition, we have no control over the ability of our contractmanufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or comparable foreign regulatory authorities do notapprove these facilities for the manufacture of our product candidates or if they withdraw any such approval in the future, we may need to find alternativemanufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, ifapproved. Further, our reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured product candidates ourselves,including: •inability to meet our product specifications and quality requirements consistently; •delay or inability to procure or expand sufficient manufacturing capacity; •manufacturing and product quality issues related to scale-up of manufacturing; •costs and validation of new equipment and facilities required for scale-up; •failure to comply with applicable laws, regulations and standards, including cGMP and similar foreign standards; •deficient or improper record-keeping; •inability to negotiate manufacturing agreements with third parties under commercially reasonable terms; •termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; •reliance on a limited number of sources, and in some cases, single sources for product components, such that if we are unable to secure a sufficientsupply of these product components, we will be unable to manufacture and sell our product candidates, if approved, or any future productcandidate in a timely fashion, in sufficient quantities or under acceptable terms; •lack of qualified backup suppliers for those components that are currently purchased from a sole or single source supplier; •operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including thebankruptcy of the manufacturer or supplier or other regulatory sanctions related to the manufacture of another company’s products; •carrier disruptions or increased costs that are beyond our control; and •failure to deliver our products under specified storage conditions and in a timely manner.In addition, the process for manufacturing gene therapy product candidates, such as URO-902, is more complex than those required for most chemicalpharmaceuticals. Moreover, unlike chemical pharmaceuticals, characterization and testing of a gene therapy product candidate such as ours generally can bechallenging. The complexity of these processes, as well as strict government standards for the manufacture and storage of gene therapy product candidates,subjects us to increased manufacturing risks for URO-902. If supply from a third-party manufacturing facility is interrupted, there could be a significantdisruption in supply of URO-902.Any of these events could lead to clinical trial delays, cost overruns, delay or failure to obtain regulatory approval or impact our ability to successfullycommercialize our product candidates, if approved, as well as potential product liability litigation, product recalls or product withdrawals. Some of theseevents could be the basis for FDA or other regulatory authority action, including injunction, recall, seizure, or total or partial suspension of production of ourproduct candidates.64We currently rely on a single supplier for the enzyme used to manufacture vibegron, and if we encounter any difficulties in procuring such enzyme, it mayharm our business. Currently, we rely on a single supplier, Codexis, for its proprietary enzyme that we use to manufacture vibegron, and we have agreed to purchase fromCodexis all of our requirements for such enzyme for use in our clinical and commercial production of vibegron for the first six years after the first approval ineither the United States, Europe or Canada. However, if following the first six years after such approval, if any, we are unable to continue to obtain theproprietary enzyme from Codexis, or make arrangements for an alternative source for such enzyme, we may encounter difficulties or delays in continuing toproduce vibegron on a commercial scale.Furthermore, there can be no assurance that Codexis will be able to meet our commercial needs, if any, for the enzyme used to manufacture vibegron. Anybusiness or economic challenges our supplier faces, including compliance with regulatory authorities, whether in the ordinary course or not, could impair itsability to meet our needs. Accordingly, there is a risk that supplies of our product may be significantly delayed by or may become unavailable as a result ofany issues affecting our supplier’s production of its proprietary enzyme.Changes in methods of product manufacturing or formulation may result in additional costs or delays.It is common that various aspects of the development program, such as manufacturing methods and formulation, are altered in an effort to optimize yield andmanufacturing batch size, minimize costs and achieve consistent quality and results. Such changes carry the risk that they will not achieve these intendedobjectives. Any of these changes could cause our products to perform differently and affect the results of planned clinical trials or other future clinical trialsconducted with the altered materials. This could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinicaltrials, increase clinical trial costs, delay approval of our product candidates and jeopardize our ability to commercialize our product candidates and generateany revenue.We are reliant on third parties to conduct, supervise and monitor our clinical trials, and if those third parties perform in an unsatisfactory manner, it mayharm our business.We currently do not have the ability to independently conduct nonclinical studies that comply with Good Laboratory Practice, or GLP, requirements. Wealso do not currently have the ability to independently conduct any clinical trials. We rely exclusively on CROs and clinical trial sites, which need tocomply with GCP, to ensure the proper and timely conduct of our clinical trials, and we have limited influence over their actual performance.We rely upon CROs to monitor and manage data for our clinical programs, as well as for the execution of nonclinical studies. We control only certain aspectsof our CROs’ activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal,regulatory and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities.We and our CROs are required to comply with GLP and GCP regulations and guidelines enforced by the FDA, and are also required by the competentauthorities of the member states of the European Economic Area and other comparable foreign regulatory authorities to comply with the InternationalCouncil for Harmonization guidelines for any of our product candidates that are in nonclinical and clinical development. The regulatory authorities enforceGCP regulations through periodic inspections of trial sponsors, principal investigators and clinical trial sites. Although we rely on CROs to conduct our GLP-compliant nonclinical studies and GCP-compliant clinical trials, we remain responsible for ensuring that each of our GLP nonclinical studies and GCPclinical trials is conducted in accordance with its investigational plan and protocol and applicable laws and regulations, and our reliance on the CROs doesnot relieve us of our regulatory responsibilities. If we or our CROs fail to comply with GCP requirements, the clinical data generated in our clinical trials maybe deemed unreliable and the FDA or comparable foreign regulatory authorities may reject our marketing applications or require us to perform additionalclinical trials before approving our marketing applications. Accordingly, if we or our CROs fail to comply with these regulations or other applicable laws,regulations or standards, or fail to recruit a sufficient number of subjects, we may be required to repeat clinical trials, which would delay the relevantregulatory approval process. Failure by our CROs to properly execute study protocols in accordance with applicable law could also create product liabilityand healthcare regulatory risks for us as sponsors of those studies.65While we will have agreements governing their activities, our CROs are not our employees, and we will not control whether or not they devote sufficient timeand resources to our future clinical and nonclinical programs. These CROs may also have relationships with other commercial entities, including ourcompetitors, for whom they may also be conducting clinical trials, or other drug development activities, which could harm our competitive position. We facethe risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs, which may reduce our trade secret and intellectualproperty protection and allow our potential competitors to access and exploit our proprietary technology. If our CROs do not successfully carry out theircontractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to thefailure to adhere to our (or their own) clinical protocols or regulatory requirements or for any other reasons, our clinical trials may be extended, delayed orterminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any product candidate that we develop. As a result, ourfinancial results and the commercial prospects for any product candidate that we develop could be harmed, our costs could increase and our ability togenerate revenue could be delayed.If our relationships with these CROs terminate, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonableterms or in a timely manner. Switching or adding additional CROs involves substantial cost and requires management time and focus. In addition, there is anatural transition period when a new CRO commences work. As a result, delays occur, which can adversely impact our ability to meet our desired clinicaldevelopment timelines. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges ordelays in the future or that these delays or challenges will not have an adverse impact on our business, financial condition and prospects.Risks Related to Our Intellectual PropertyIf we are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent protection obtained is notsufficiently broad, we may not be able to compete effectively in our markets.We rely, and will continue to rely, upon a combination of patents, trademarks, trade secret protection and confidentiality agreements with employees,consultants, collaborators, advisors and other third parties to protect the intellectual property related to our current and future drug development programsand product candidates. Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countrieswith respect to our current and any future product candidates. We seek to protect our proprietary position by filing patent applications in the United Statesand abroad related to our current and future drug development programs and product candidates. The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Thepatent applications that we own or in-license may fail to result in issued patents with claims that cover our current and any future product candidates in theUnited States or in other foreign countries. We may also inadvertently make statements to regulatory agencies during the regulatory approval process thatmay be inconsistent with positions that have been taken during prosecution of our patents, which may result in such patents being narrowed, invalidated orheld unenforceable. The patents and patent applications that we own or in-license may fail to result in issued patents with claims that protect our current and any future productcandidates in the United States or in other foreign countries. There is no assurance that all of the potentially relevant prior art relating to our patents andpatent applications has been found, which can prevent a patent from issuing from a pending patent application, or be used to invalidate a patent. Theexamination process may require us to narrow our claims, which may limit the scope of patent protection that we may obtain. Even if patents do successfullyissue based on our patent applications, and even if such patents cover vibegron and URO-902, uses of vibegron and URO-902, or other aspects related tovibegron, URO-902 or any future product candidates, third parties may challenge their validity, enforceability or scope, which may result in such patentsbeing narrowed, invalidated or held unenforceable. Any successful opposition to these patents or any other patents owned by or licensed to us in the futurecould deprive us of rights necessary for the successful commercialization of any of our current or future product candidates, if approved. Further, if weencounter delays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced.66If the patent applications we hold or have in-licensed with respect to our development programs and product candidates fail to issue, if their breadth orstrength of protection is threatened, or if they fail to provide meaningful exclusivity for any of our current or future product candidates, it could dissuadecompanies from collaborating with us to develop product candidates, and threaten our ability to commercialize, future drugs. Our pending applicationscannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications. Anysuch outcome could have an adverse effect on our business.The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and has inrecent years been the subject of much litigation. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of theUnited States. For example, European patent law restricts the patentability of methods of treatment of the human body more than U.S. law does. Publicationsof discoveries in scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typicallynot published until 18 months after filing, or in some cases not at all. Therefore, we cannot know with certainty whether we were the first to make theinventions claimed in our owned or licensed patents or pending patent applications, or that we were the first to file for patent protection of such inventions.As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patentapplications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others fromcommercializing competitive technologies and products. Changes in either the patent laws or interpretation of the patent laws in the United States and othercountries may diminish the value of our patents or narrow the scope of our patent protection.Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense ofour issued patents. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act made anumber of significant changes to United States patent laws. These include provisions that affect the way patent applications are prosecuted and challenged atthe U.S. Patent and Trademark Office, or the USPTO, and may also affect patent litigation. The USPTO has developed and continues to develop newregulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act, subsequent rulemaking, and judicial interpretation of the Leahy-Smith Act and regulations will have on the operation of our business. However,the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and theenforcement or defense of our issued patents, all of which could have an adverse effect on our business and financial condition. The inventorship and ownership rights for patents that we own or in-license may be challenged by third parties. Such challenges could result in loss ofexclusive rights to such patents, which could limit our ability to stop others from using or commercializing similar or identical technology and products, orrequire us to obtain a license from such third parties on commercially reasonable terms to secure exclusive rights. If any such challenges to inventorship orownership were asserted, there is no assurance that a court would find in our favor or that, if we choose to seek a license, such license would be available to uson acceptable terms or at all.Moreover, we may be subject to a third-party pre-issuance submission of prior art to the USPTO or become involved in opposition, derivation, reexamination,inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others. An adverse determination in anysuch submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology orproducts and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuadecompanies from collaborating with us to license, develop or commercialize current or future product candidates.The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged inthe courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims beingnarrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar oridentical technology and products, or limit the duration of the patent protection of our technology and products. Moreover, patents have a limited lifespan.In the United States, the natural expiration of a patent is generally 20 years after it is filed. Various extensions may be available; however, the life of a patent,and the67protection it affords, is limited. Without patent protection for our current or future product candidates, we may be open to competition from generic versionsof such products. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting suchcandidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide uswith sufficient rights to exclude others from commercializing products similar or identical to ours.If we do not obtain protection under the Hatch-Waxman Amendments by extending the patent term and obtaining data exclusivity for our productcandidates, our business may be harmed.Our commercial success will largely depend on our ability to obtain and maintain patent and other intellectual property in the United States and othercountries with respect to our proprietary technology, product candidates and our target indications. Given the amount of time required for the development,testing and regulatory review of new product candidates, patents protecting our product candidates might expire before or shortly after such candidates beginto be commercialized. We expect to seek extensions of patent terms in the United States and, if available, in other countries where we are prosecuting patents.Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates, one or more of our U.S. patents may be eligible forlimited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments.The Hatch-Waxman Amendments permit a patent restoration term of up to five years beyond the normal expiration of the patent as compensation for patentterm lost during development and the FDA regulatory review process, which is limited to the approved indication (or any additional indications approvedduring the period of extension). This extension is limited to only one patent that covers the approved product, the approved use of the product, or a methodof manufacturing the product. However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatoryauthority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, ormay grant more limited extensions than we request. We may not be granted an extension because of, for example, failing to apply within applicabledeadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time-periodor the scope of patent protection afforded could be less than we request.If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry dates, our competitors may be able to takeadvantage of our investment in development and clinical trials by referencing our clinical and preclinical data to obtain approval of competing productsfollowing our patent expiration and launch their product earlier than might otherwise be the case.The validity, scope and enforceability of any patents listed in the Orange Book that cover our product candidates can be challenged by third parties.If one of our product candidates is approved by the FDA, one or more third parties may challenge the current patents, or patents that may issue in the future,within our portfolio, which could result in the invalidation of, or render unenforceable, some or all of the relevant patent claims or a finding of non-infringement. For example, if a third party files an Abbreviated New Drug Application, or ANDA, for a generic drug containing vibegron, and relies in wholeor in part on studies conducted by or for us, the third party will be required to certify to the FDA that either: (1) there is no patent information listed in theFDA’s Orange Book with respect to our NDA for the applicable approved product candidate; (2) the patents listed in the Orange Book have expired; (3) thelisted patents have not expired, but will expire on a particular date and approval is sought after patent expiration; or (4) the listed patents are invalid or willnot be infringed by the manufacture, use or sale of the third party’s generic drug. A certification that the new drug will not infringe the Orange Book-listedpatents for the applicable approved product candidate, or that such patents are invalid, is called a paragraph IV certification. If the third party submits aparagraph IV certification to the FDA, a notice of the paragraph IV certification must also be sent to us once the third party’s ANDA is accepted for filing bythe FDA. We may then initiate a lawsuit to defend the patents identified in the notice. The filing of a patent infringement lawsuit within 45 days of receipt ofthe notice automatically prevents the FDA from approving the third party’s ANDA until the earliest of 30 months or the date on which the patent expires, thelawsuit is settled, or the court reaches a decision in the infringement lawsuit in favor of the third party. If we do not file a patent infringement lawsuit withinthe required 45-day period, the third party’s ANDA will not be subject to the 30-month stay of FDA approval.68Moreover, a third party may challenge the current patents, or patents that may issue in the future, within our portfolio, which could result in the invalidationof some or all of the patents that might otherwise be eligible for listing in the Orange Book for one of our products. If a third party successfully challenges allof the patents that might otherwise be eligible for listing in the Orange Book for one of our products, we will not be entitled to the 30-month stay of FDAapproval upon the filing of an ANDA for a generic drug containing, for example, vibegron, and relies in whole or in part on studies conducted by or for us.Litigation or other proceedings to enforce or defend intellectual property rights are often very complex in nature, may be very expensive and time-consuming, may divert our management’s attention from our core business, and may result in unfavorable results that could limit our ability to prevent thirdparties from competing with our product candidates.The validity, scope and enforceability of any patents that cover our biologic product candidates can be challenged by third parties. For biologics, such as URO-902, the BPCIA provides a mechanism for one or more third parties to seek FDA approval to manufacture or sell a biosimilar orinterchangeable versions of brand name biological products. Due to the large size and complexity of biological products, as compared to small molecules, abiosimilar must be “highly similar” to the reference product with “no clinically meaningful differences between the two.” The BPCIA also provides referenceproduct sponsors with 12 years of market exclusivity, but unlike the Hatch-Waxman Act, it does not require reference product sponsors to list patents in anOrange Book and does not include an automatic 30-month stay of FDA approval upon the timely filing of a lawsuit. The BPCIA, however, does require aformal pre-litigation process which includes the exchange of information between a biosimilar applicant and a reference biologic sponsor that includes theidentification of relevant patents and each parties’ basis for infringement and invalidity. After the exchange of this information, we may then initiate alawsuit within 30 days to defend the patents identified in the exchange. If the biosimilar applicant successfully challenges the asserted patent claims it couldresult in the invalidation of, or render unenforceable, some or all of the relevant patent claims or result in a finding of non-infringement.There is a risk that our current or any future gene therapy product candidate approved as a biological product under a BLA would not qualify for the 12-yearperiod of exclusivity or that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider our productcandidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated.Moreover, the extent to which a biosimilar, once approved, will be substituted for our current or any future reference products in a way that is similar totraditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are stilldeveloping. In addition, the biosimilar regulatory framework is still being implemented by the FDA and is subject to ongoing litigation disputes to interpretthe laws and implementing regulations. Depending on actions by the United States Congress, the federal courts and the USPTO, the laws and regulationsgoverning biosimilars could change in unpredictable ways that would weaken our ability to obtain or maintain approval as a biologic and 12 years of marketexclusivity.If we fail to comply with our obligations under any license, collaboration or other agreements, we may be required to pay damages and could loseintellectual property rights that are necessary for developing and protecting our product candidate.We have licensed certain intellectual property rights covering vibegron from Merck and URO-902 from ICI. If, for any reason, our license agreement witheither of these licensors is terminated or we otherwise lose those rights, it could adversely affect our business. These license agreements impose, and anyfuture collaboration agreements or license agreements we enter into are likely to impose various development, commercialization, funding, milestone,royalty, diligence, sublicensing, insurance, patent prosecution and enforcement or other obligations on us. If we breach any material obligations, or use theintellectual property licensed to us in an unauthorized manner, we may be required to pay damages and the licensor may have the right to terminate thelicense, which could result in us being unable to develop, manufacture and sell products that are covered by the licensed technology, or having to negotiatenew or reinstated licenses on less favorable terms, or enable a competitor to gain access to the licensed technology.69Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and otherrequirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with theserequirements.Periodic maintenance fees on any issued patent are due to be paid to the USPTO and other foreign patent agencies in several stages over the lifetime of thepatent. The USPTO and various foreign national or international patent agencies require compliance with a number of procedural, documentary, fee paymentand other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by othermeans in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patentapplication, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapseof patent rights include, but are not limited to, failure to timely file national and regional stage patent applications based on our international patentapplication, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formaldocuments. If we or our licensors fail to maintain the patents and patent applications covering any of our current or future product candidates, ourcompetitors might be able to enter the market, which would have an adverse effect on our business.We may need to license intellectual property from third parties, and such licenses may not be available or may not be available on commerciallyreasonable terms.A third party may hold intellectual property, including patent rights that are important or necessary to the development of our product candidates. It may benecessary for us to use the patented or proprietary technology of one or more third parties to commercialize our product candidates, including for example,use of a patented or proprietary DNA delivery-related technology to manufacture and commercialize URO-902. If we are unable to obtain licenses from suchthird parties when needed or on commercially reasonable terms, our ability to commercialize our product candidates, if approved, would likely be delayed.The risks described elsewhere pertaining to our intellectual property rights also apply to the intellectual property rights that we in-license, and any failure byus or our licensors to obtain, maintain, defend and enforce these rights could have an adverse effect on our business. In some cases we may not have controlover the prosecution, maintenance or enforcement of the patents that we license, and may not have sufficient ability to provide input into the patentprosecution, maintenance and defense process with respect to such patents, and our licensors may fail to take the steps that we believe are necessary ordesirable in order to obtain, maintain, defend and enforce the licensed patents.Third-party claims or litigation alleging infringement of patents or other proprietary rights, or seeking to invalidate patents or other proprietary rights,may delay or prevent the development and commercialization of any of our current or future product candidates.Our commercial success depends in part on our avoiding infringement and other violations of the patents and proprietary rights of third parties. There is asubstantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology andpharmaceutical industries, including patent infringement lawsuits, interferences, derivation and administrative law proceedings, inter partes review and post-grant review before the USPTO, as well as oppositions and similar processes in foreign jurisdictions. Numerous United States and foreign issued patents andpending patent applications, which are owned by third parties, exist in the fields in which we and our collaborators are developing product candidates. As thebiotechnology and pharmaceutical industries expand and more patents are issued, and as we gain greater visibility and market exposure, the risk increasesthat our product candidates or other business activities may be subject to claims of infringement of the patent and other proprietary rights of third parties.Third parties may assert that we are infringing their patents or employing their proprietary technology without authorization. For example, we haveconducted searches for information in support of patent protection and otherwise evaluating the patent landscape for vibegron, and based on these searchesand evaluations to date, we do not believe that there are valid patents that contain granted claims that could be asserted with respect to vibegron. However,we may be incorrect.70There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to theuse or manufacture of our product candidates. Because patent applications can take many years to issue, there may be currently pending patent applicationsthat may later result in issued patents that our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use ofour technologies infringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process ofany of our product candidates, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may beable to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire.Similarly, if any third-party patent was to be held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture ormethods of use, including combination therapy, the holders of any such patent may be able to block our ability to develop and commercialize the applicableproduct candidate unless we obtained a license or until such patent expires. In either case, such a license may not be available on commercially reasonableterms or at all. In addition, we may be subject to claims that we are infringing other intellectual property rights, such as trademarks or copyrights, ormisappropriating the trade secrets of others, and to the extent that our employees, consultants or contractors use intellectual property or proprietaryinformation owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.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 infringement or other intellectual property claimagainst us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses fromthird parties, pay royalties or redesign our affected products, which may be impossible or require substantial time and monetary expenditure. We cannotpredict whether any such license would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in theabsence of litigation, we may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates, and wehave done so from time to time. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would beunable to further develop and commercialize one or more of our product candidates, which could harm our business significantly. Claims that we havemisappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.We cannot provide any assurances that third-party patents do not exist which might be enforced against our drugs or product candidates, resulting in eitheran injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties or other forms of compensation to third parties.We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which mightadversely affect our ability to develop and market our products.We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expirationof relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in theUnited States and abroad that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction. The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history. Ourinterpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market ourproducts. We may incorrectly determine that our products are not covered by a third-party patent or may incorrectly predict whether a third party’s pendingapplication will issue with claims of relevant scope. Our determination of the expiration date of any patent in the United States or abroad that we considerrelevant may be incorrect, and our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market ourproducts.71We may become involved in lawsuits to protect or enforce our patents, the patents of our licensors or our other intellectual property rights, which could beexpensive, time consuming and unsuccessful.Competitors may infringe or otherwise violate our patents, the patents of our licensors or our other intellectual property rights. To counter infringement orunauthorized use, we may be required to file legal claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a courtmay decide that a patent of ours or our licensors is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue onthe grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of ourpatents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing. The initiation of a claim against athird party may also cause the third party to bring counter claims against us such as claims asserting that our patents are invalid or unenforceable. In patentlitigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could bean alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or lack of statutory subject matter.Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant materialinformation from the USPTO, or made a materially misleading statement, during prosecution. Third parties may also raise similar validity claims before theUSPTO in post-grant proceedings such as ex parte reexaminations, inter partes review, or post-grant review, or oppositions or similar proceedings outside theUnited States, in parallel with litigation or even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability isunpredictable. We cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. For thepatents and patent applications that we have licensed, we may have limited or no right to participate in the defense of any licensed patents against challengeby a third party. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of any futurepatent protection on our current or future product candidates. Such a loss of patent protection could harm our business.We may not be able to detect or prevent, alone or with our licensors, misappropriation of our intellectual property rights, particularly in countries where thelaws may not protect those rights as fully as in the United States. Our business could be harmed if in litigation the prevailing party does not offer us a licenseon commercially reasonable terms. Any litigation or other proceedings to enforce our intellectual property rights may fail, and even if successful, may resultin substantial costs and distract our management and other employees.Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetarydamages, which may or may not be an adequate remedy. Furthermore, because of the substantial amount of discovery required in connection with intellectualproperty litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There couldalso be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceivethese results to be negative, it could have an adverse effect on the price of our common shares. Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties.Because of the expense and uncertainty of litigation, we may conclude that even if a third party is infringing our issued patent, any patents that may beissued as a result of our pending or future patent applications or other intellectual property rights, the risk-adjusted cost of bringing and enforcing such aclaim or action may be too high or not in the best interest of our company or our shareholders. In such cases, we may decide that the more prudent course ofaction is to simply monitor the situation or initiate or seek some other non-litigious action or solution.Changes in United States patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairingour ability to protect our products.The United States has recently enacted and implemented wide-ranging patent reform legislation. The United States Supreme Court has ruled on several patentcases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certainsituations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertaintywith respect to the value of patents, once obtained. Depending on actions by the United States Congress, the federal courts and the USPTO, the laws andregulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we havelicensed or that we might obtain in the future. Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in thegovernmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability toobtain new patents or to enforce patents that we have licensed or that we may obtain in the future.72The United States federal government retains certain rights in inventions produced with its financial assistance under the Bayh-Dole Act. The federalgovernment retains a “nonexclusive, nontransferable, irrevocable, paid-up license” for its own benefit. The Bayh-Dole Act also provides federal agencieswith “march-in rights”. March-in rights allow the government, in specified circumstances, to require the contractor or successors in title to the patent to granta “nonexclusive, partially exclusive, or exclusive license” to a “responsible applicant or applicants.” If the patent owner refuses to do so, the governmentmay grant the license itself.We may not be able to protect our intellectual property rights throughout the world, which could impair our business.Filing, prosecuting and defending patents covering our current and any future product candidates throughout the world would be prohibitively expensive.Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may exportotherwise infringing products to territories where we may obtain patent protection, but where patent enforcement is not as strong as that in the United States.These products may compete with our products in jurisdictions where we do not have any issued or licensed patents and any future patent claims or otherintellectual property rights may not be effective or sufficient to prevent them from so competing.Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systemsof some countries do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to stop theinfringement of our patents generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our effortsand attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at riskof not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or otherremedies awarded, if any, may not be commercially meaningful. Many countries, including European Union countries, India, Japan and China, have compulsory licensing laws under which a patent owner may becompelled under specified circumstances to grant licenses to third parties. In those countries, we may have limited remedies if patents are infringed or if weare compelled to grant a license to a third party, which could materially diminish the value of those patents. This could limit our potential revenueopportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercialadvantage from the intellectual property that we develop or license.Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our tradesecrets will be misappropriated or disclosed.Because we expect to rely on third parties to manufacture our current and any future product candidates, and we expect to continue to collaborate with thirdparties on the development of our current and any future product candidates, we must, at times, share trade secrets with them. We also conduct joint researchand development programs that may require us to share trade secrets under the terms of our collaboration or similar agreements. For example, under ourcollaboration agreement with Kyorin, we are obligated to share with Kyorin certain information relating to the development of vibegron including reportsfrom nonclinical studies and clinical trials. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, ifapplicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third-party contractors andconsultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or discloseour confidential information, including our trade secrets. Despite the contractual provisions employed when working with third parties, the need to sharetrade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporatedinto the technology of others, or are disclosed or used in violation of these agreements. Any disclosure, either intentional or unintentional, by our employees,the employees of third parties with whom we share our facilities or third-party consultants and vendors that we engage to perform research, clinical trials ormanufacturing activities, or misappropriation by third parties (such as through a cybersecurity breach) of our trade secrets or proprietary information couldenable competitors to duplicate or surpass our technological achievements, thus eroding our competitive position in our market. Further, adequate remediesmay not exist in the event of unauthorized use or disclosure. Given that our proprietary position is based, in part, on our know-how and trade secrets, acompetitor’s discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have an adverse effect onour business and results of operations.73In addition, these agreements typically restrict the ability of our advisors, employees, third-party contractors and consultants to publish data potentiallyrelating to our trade secrets, although our agreements may contain certain limited publication rights. Policing unauthorized use of our or our licensors’intellectual property is difficult, expensive and time-consuming, and we may be unable to determine the extent of any unauthorized use. Moreover, enforcinga claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. Inaddition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. Despite our efforts to protect our trade secrets,our competitors may discover our trade secrets, either through breach of our agreements with third parties, independent development or publication ofinformation by any of our third-party collaborators. A competitor’s discovery of our trade secrets would impair our competitive position and have an adverseimpact on our business.We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information oftheir former employers or other third parties.We employ individuals who were previously employed at other biotechnology or pharmaceutical companies. Although we seek to protect our ownership ofintellectual property rights by ensuring that our agreements with our employees, collaborators and other third parties with whom we do business includeprovisions requiring such parties to assign rights in inventions to us, we may be subject to claims that we or our employees, consultants or independentcontractors have inadvertently or otherwise used or disclosed confidential information of our employees’ former employers or other third parties. We mayalso be subject to claims that former employers or other third parties have an ownership interest in our patents. Litigation may be necessary to defend againstthese claims. There is no guarantee of success in defending these claims, and if we fail in defending any such claims, in addition to paying monetarydamages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Even if we aresuccessful, litigation could result in substantial cost and be a distraction to our management and other employees. Moreover, any such litigation or the threatthereof may adversely affect our reputation, our ability to form strategic alliances or sublicense our rights to collaborators, engage with scientific advisors orhire employees or consultants, each of which would have an adverse effect on our business, results of operations and financial condition.In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to executeagreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact developsintellectual property that we regard as our own. Our and their assignment agreements may not be self-executing or may be breached, and we may be forced tobring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.If we or our licensors fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual propertyrights or personnel. Even if we and our licensors are successful in prosecuting or defending against such claims, litigation could result in substantial costs andbe a distraction to management.Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, andcould distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results ofhearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have anadverse effect on the price of our common shares. Such litigation or proceedings could substantially increase our operating losses and reduce the resourcesavailable for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources toconduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings moreeffectively than we can because of their greater financial resources. Accordingly, despite our efforts, we may not be able to prevent third parties frominfringing upon or misappropriating our intellectual property. In addition, the uncertainties associated with litigation could compromise our ability to raisethe funds necessary to continue our clinical trials and internal research programs, or in-license needed technology or other product candidates. Uncertaintiesresulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace,including compromising our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technologyfrom third parties, or enter into development collaborations that would help us commercialize our product candidates, if approved.74If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.In addition to seeking patents for our current and any future product candidates, we also rely on trade secrets, including unpatented know-how, technologyand other proprietary information, to maintain our competitive position. We seek to protect our trade secrets, in part, by entering into non-disclosure andconfidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contractmanufacturers, consultants, advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with ouremployees and consultants. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including ourtrade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated atrade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States areless willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, wewould have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of ourtrade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.Any trademarks we have obtained or may obtain may be infringed or successfully challenged, resulting in harm to our business.We expect to rely on trademarks as one means to distinguish any of our product candidates that are approved for marketing from the products of ourcompetitors. Once we select new trademarks and apply to register them, our trademark applications may not be approved. Third parties may oppose or attemptto cancel our trademark applications or trademarks, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfullychallenged, we could be forced to rebrand our drugs, which could result in loss of brand recognition and could require us to devote resources to advertisingand marketing new brands. Our competitors may infringe our trademarks and we may not have adequate resources to enforce our trademarks. If we attempt toenforce our trademarks and assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or thatthe party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced tocease use of such trademarks.Intellectual property rights do not necessarily address all potential threats to our competitive advantage.The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may notadequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative: •others may be able to make formulations or compositions that are the same as or similar to our product candidates, but that are not covered by theclaims of the patents that we own; •others may be able to make product that is similar to product candidates we intend to commercialize that is not covered by the patents that weexclusively licensed and have the right to enforce; •we, our licensor or any collaborators might not have been the first to make the inventions covered by the issued patents or pending patentapplications that we own; •we or our licensor might not have been the first to file patent applications covering certain of our inventions; •others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectualproperty rights; •it is possible that our pending patent applications will not lead to issued patents; •issued patents that we own may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legalchallenges; •our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patentinfringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use theinformation learned from such activities to develop competitive products for sale in our major commercial markets; and •we may not develop additional proprietary technologies that are patentable.75Risks Related to Ownership of Our Common SharesAn active public market for our common shares may not continue to develop or be liquid enough for you to sell your shares quickly or at market price.Prior to the listing of our common shares on Nasdaq in connection with our IPO in October 2018, no public market for our common shares existed. If an activetrading market for our common shares is not sustained, you may not be able to sell your shares quickly or at or above the market price. An inactive marketmay also impair our ability to raise capital to continue to fund operations by selling common shares and may impair our ability to acquire other companies ortechnologies by using our common shares as consideration.In addition, our common shares are held by a relatively small number of holders. RSL owns approximately 75% of our outstanding common shares as ofMarch 31, 2019 and our officers and directors have the potential to acquire shares through any equity awards granted to them, subject to vesting conditions.Consequently, our common shares may have a limited public float and low average daily trading volume, which could affect a holder’s ability to sellcommon shares or the price at which they can be sold. In addition, future sales of substantial amounts of our common shares in the public market by thoselarger holders, or the perception that these sales could occur, may adversely impact the market price of our common shares and our shares could be difficultfor a holder to liquidate.The market price of our common shares has been and is likely to continue to be highly volatile.The market price of our common shares has been and is likely to continue to be highly volatile and may be subject to wide fluctuations in response to avariety of factors, including the following: •any delay in the commencement, enrollment and ultimate completion of our clinical trials; •results of clinical trials of our product candidates or those of our competitors; •any delay in filing an NDA or similar application for vibegron and any adverse development or perceived adverse development with respect tothe FDA or other regulatory authority’s review of that NDA or similar application, as the case may be; •failure to successfully develop and commercialize our current or any future product candidates; •failure to maintain our relationships with Merck and ICI or to comply with the terms of our license agreements with these licensors; •inability to obtain additional funding; •regulatory or legal developments in the United States or other countries or jurisdictions applicable to our current and any future productcandidates; •adverse regulatory decisions; •changes in the structure of healthcare payment systems; •inability to obtain adequate product supply for our current or any future product candidates, or the inability to do so at acceptable prices; •introduction of new products, services or technologies by our competitors; •failure to meet or exceed financial projections we provide to the public; •failure to meet or exceed the estimates and projections of the investment community; •changes in the market valuations of similar companies; •market conditions in the pharmaceutical and biotechnology sectors and the issuance of new or changed securities analysts’ reports orrecommendations; •announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; •variations in our financial results or the financial results of companies that are perceived to be similar to us; •changes in estimates of financial results or investment recommendations by securities analysts;76 •significant lawsuits, including patent or shareholder litigation and disputes or other developments relating to our proprietary rights, includingpatents, litigation matters and our ability to obtain patent protection for our technologies; •additions or departures of key scientific or management personnel; •short sales of our common shares; •sales of a substantial number of shares of our common shares in the public market, or the perception in the market that the holders of a largenumber of shares intend to sell shares; •sales or purchases of our common shares by our Section 16 officers; •sales of our common shares by us or our shareholders in the future; •negative coverage in the media or analyst reports, whether accurate or not; •issuance of subpoenas or investigative demands, or the public fact of an investigation by a government agency, whether meritorious or not; •size of our public float; •trading liquidity of our common shares; •investors’ general perception of our company and our business; •general economic, industry and market conditions; and •the other factors described in this “Risk Factors” section.In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equitysecurities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Broadmarket and industry factors, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of our commonshares, regardless of our actual operating performance. Volatility in our share price could subject us to securities class action litigation.In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk isespecially relevant for us because pharmaceutical companies have experienced significant share price volatility in recent years. If we face such litigation, itcould result in substantial costs and a diversion of management’s attention and resources, which could harm our business.We are a “controlled company” within the meaning of the applicable Nasdaq listing rules and, as a result, qualify for exemptions from certain corporategovernance requirements. As long as we rely on these exemptions, you will not have the same protections afforded to shareholders of companies that aresubject to such requirements.RSL controls a majority of the voting power of our outstanding common shares. As a result, we are a “controlled company” within the meaning of applicableNasdaq listing rules. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group oranother company is a “controlled company.” In addition, for so long as the RSL designated directors control all matters presented to our board of directors fora vote, we will be a “controlled company.” For so long as we remain a “controlled company,” we may elect not to comply with certain corporate governancerequirements, including the requirements: •that a majority of the board of directors consists of independent directors; •for an annual performance evaluation of the nominating and corporate governance and compensation committees; •that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charteraddressing the committee’s purpose and responsibilities; and •that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’spurpose and responsibility.77We have elected to use certain of these exemptions, and we may continue to use all or some of these exemptions in the future. As a result, you may not havethe same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.RSL owns a significant percentage of our common shares and will be able to exert significant control over matters subject to shareholder approval.RSL beneficially owns approximately 75% of the voting power of our outstanding common shares as of March 31, 2019. As a result, RSL has the ability tosubstantially influence us and exert significant control through this ownership position. For example, RSL and its shareholders will be able to controlelections of directors, issuance of equity, including to our employees under equity incentive plans, amendments of our organizational documents, orapproval of any merger, amalgamation, sale of assets or other major corporate transaction. RSL’s interests may not always coincide with our corporateinterests or the interests of other shareholders, and it may exercise its voting and other rights in a manner with which our other shareholders may not agree orthat may not be in the best interests of our other shareholders. Further, RSL is a privately held company whose ownership and governance structure is nottransparent to our other shareholders. There may be changes to the management or ownership of RSL, or to RSL’s business model, that could impact RSL’sinterests in a way that may not coincide with our corporate interests or the interests of other shareholders. Any such changes may diminish, or eliminateentirely, any benefits we expect to derive from our membership in the Roivant family of companies. So long as RSL continues to own a significant amount ofour equity, it will continue to be able to strongly influence and effectively control our decisions.RSL has the right to appoint two directors to our board of directors, each of whom has three votes.RSL is entitled to appoint two directors to our board of directors, each of whom has three votes on all matters presented to the board of directors. All otherdirectors have one vote on all matters presented to the board of directors. While the directors appointed by RSL are obligated to act in accordance with theirfiduciary duty, they may have equity or other interests in RSL and, accordingly, their interests may be aligned with RSL’s interests, which may not alwayscoincide with our corporate interests or the interests of our other shareholders. The two directors appointed by RSL and who currently serve on our board ofdirectors are able to determine the outcome of all matters presented to the board of directors.Our organizational and ownership structure may create significant conflicts of interests.Our organizational and ownership structure involves a number of relationships that may give rise to certain conflicts of interest between us and minorityholders of our common shares, on the one hand, and RSL and its shareholders, on the other hand. Certain of our directors and employees have equity interestsin RSL and, accordingly, their interests may be aligned with RSL’s interests, which may not always coincide with our corporate interests or the interests ofour other shareholders. Further, our other shareholders may not have visibility into the RSL ownership of any of our directors or officers, which may change atany time through acquisition, disposition, dilution, or otherwise. Any change in our directors’ or officers’ RSL ownership could impact the interests of thoseholders.In addition, we are party to certain related party agreements with RSL, RSI and RSG. These entities and their shareholders, including certain of our directorsand employees, may have interests which differ from our interests or those of the minority holders of our common shares. Any material transaction between usand RSL, RSI, RSG or any other subsidiary of RSL is subject to our related party transaction policy, which requires prior approval of such transaction by ouraudit committee. To the extent we fail to appropriately deal with any such conflicts of interests, it could negatively impact our reputation and ability to raiseadditional funds and the willingness of counterparties to do business with us, all of which could have an adverse effect on our business, financial condition,results of operations, and cash flows.If securities or industry analysts cease to publish research or reports about our business, or publish negative reports about our business, our share priceand trading volume could decline.The trading market for our common shares depends, in part, on the research and reports that securities or industry analysts publish about us or our business.We do not have any control over these analysts. If our financial performance fails to meet analyst estimates or one or more of the analysts who cover usdowngrade our common shares or change their opinion of our common shares, our share price would likely decline. If one or more of these analysts ceasecoverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price ortrading volume to decline.78We do not anticipate paying any cash dividends on our common shares in the foreseeable future.We have never declared or paid any cash dividends on our common shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Additionally, we are subjectto Bermuda legal constraints that may affect our ability to pay dividends on our common shares and make other payments. In addition, the terms of our LoanAgreement with Hercules restrict our ability to pay dividends to limited circumstances. As a result, investors in our common shares may only receive a returnif the market price of our common shares increases.Future sales of our common shares may depress our share price.Sales of a substantial number of our common shares in the public market, or the perception that these sales might occur, could depress the market price of ourcommon shares and could impair our ability to raise capital through the sale of additional equity securities. All of the shares sold in our IPO are freelytransferable without restrictions or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for any shares held by ouraffiliates, including RSL, as such term is defined in Rule 144 promulgated under the Securities Act.We, our executive officers, directors and holders of a substantial majority of our common shares and securities exercisable for our common shares, includingRSL, were subject to lock-up agreements or other contractual restrictions that restrict transfers for 180 days from September 26, 2018. As the lock-up period inthe lock-up agreements and other contractual restrictions expired on March 25, 2019, we and our locked-up security holders are able to sell our commonshares in the public market. Sales of a substantial number of such common shares, or the perception that such sales may occur, could cause our share price tofall.As of March 31, 2019, there were an aggregate of 4,063,866 common shares subject to outstanding options and restricted stock units. We have filed aregistration statement on Form S-8 under the Securities Act to register the total number of our common shares that may be issued under our equity incentiveplans, including these outstanding options, restricted stock units and any equity awards we may grant in the future. Accordingly, these shares may be freelysold in the public market upon issuance as permitted by any applicable vesting requirements, subject to the lock-up agreements and other contractualrestrictions described above. Sales of these common shares may have an adverse effect on the trading price of our common shares. In addition, in the future wemay issue common shares or other securities if we need to raise additional capital. The number of our new common shares issued in connection with raisingadditional capital could constitute a material portion of our then outstanding common shares.We have incurred, and will continue to incur, increased costs as a result of operating as a public company, and our management will be required to devotesubstantial time to compliance with our public company responsibilities and corporate governance practices.As a public company, and particularly after we are no longer an “emerging growth company,” we will incur significant legal, accounting and other expenses.The Sarbanes-Oxley Act of 2002, or the Sarbanes Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements ofNasdaq and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel willneed to devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal andfinancial compliance costs and will make some activities more time-consuming and costly. If, notwithstanding our efforts to comply with new or changinglaws, regulations and standards, we fail to comply, regulatory authorities may initiate legal proceedings against us, and our business may be harmed. Further,failure to comply with these laws, regulations and standards may make it more difficult and more expensive for us to obtain directors’ and officers’ liabilityinsurance, which could make it more difficult for us to attract and retain qualified members to serve on our board of directors or committees or as members ofsenior management. We cannot predict or estimate the amount of additional costs we will incur as a public company or the timing of such costs.79As a result of becoming a public company, we will be obligated to develop and maintain proper and effective internal controls over financial reportingand any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value ofour common shares.We will be required, pursuant to Section 404 of the Sarbanes Oxley Act, or Section 404, to furnish a report by management on, among other things, theeffectiveness of our internal controls over financial reporting for the fiscal year beginning April 1, 2019. This assessment will need to include disclosure ofany material weaknesses identified by our management in our internal controls over financial reporting. Our independent registered public accounting firmwill not be required to attest to the effectiveness of our internal controls over financial reporting until our first annual report required to be filed with the SECfollowing the date we are no longer an emerging growth company, as defined in the JOBS Act. At such time as we are required to obtain auditor attestation, ifwe then have a material weakness, we would receive an adverse opinion regarding our internal control over financial reporting from our independentregistered public accounting firm. We will be required to disclose significant changes made in our internal controls procedures on a quarterly basis.We are beginning the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed tocomply with Section 404, and we may not be able to complete our evaluation, testing and any required remediation in a timely fashion. Our compliance withSection 404 will require that we incur substantial legal, accounting and other compliance expense and expend significant management efforts. We currentlydo not have an internal audit group, and we will need to hire additional accounting and finance staff and consultants with appropriate public companyexperience and technical accounting knowledge and compile the system and process documentation necessary to perform the evaluation needed to complywith Section 404. During the evaluation and testing process of our internal controls, if we identify one or more material weaknesses in our internal controls over financialreporting, we will be unable to assert that our internal controls over financial reporting are effective. We cannot assure you that there will not be materialweaknesses or significant deficiencies in our internal controls over financial reporting in the future. Any failure to maintain effective internal controls overfinancial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that ourinternal controls over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness orsignificant deficiency in our internal controls over financial reporting, we could lose investor confidence in the accuracy and completeness of our financialreports, the market price of our common shares could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatoryauthorities. Failure to remedy any material weakness in our internal controls over financial reporting, or to implement or maintain other effective controlsystems required of public companies, could also negatively impact our ability to access to the capital markets.In addition, effective disclosure controls and procedures enable us to make timely and accurate disclosure of financial and non-financial information that weare required to disclose. As a public company, if our disclosure controls and procedures are ineffective, we may be unable to report our financial results ormake other disclosures accurately on a timely basis, which could cause our reported financial results or other disclosures to be materially misstated and resultin the loss of investor confidence and cause the market price of our common shares to decline.We are an emerging growth company and a smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable toemerging growth companies and smaller reporting companies will make our common shares less attractive to investors.We are an emerging growth company, as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage ofexemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” includingexemption from compliance with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation andexemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachutepayments not previously approved. We will remain an emerging growth company until the earlier of (1) the date (a) March 31, 2024, (b) in which we havetotal annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our commonshares that are held by non-affiliates exceeds $700 million as of the prior September 30th, and (2) the date on which we have issued more than $1.0 billion innon-convertible debt during the prior three-year period. In addition, under the JOBS Act, emerging growth companies can delay adopting new or revisedaccounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemptionfrom new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies thatare not emerging growth companies.80Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to takeadvantage of many of the same exemptions and reduced disclosure obligations, including with respect to executive compensation disclosure in our periodicreports and proxy statements. We cannot predict if investors will find our common shares less attractive because we may rely on these exemptions. If some investors find our commonshares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.We are a Bermuda company and it may be difficult for shareholders to enforce judgments against us or our directors and executive officers.We are a Bermuda exempted company. As a result, the rights of our shareholders are governed by Bermuda law and our memorandum of association and bye-laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders of companies incorporated in another jurisdiction. It may bedifficult for investors to enforce in the U.S. judgments obtained in U.S. courts against us based on the civil liability provisions of the U.S. securities laws. It isdoubtful whether courts in Bermuda will enforce judgments obtained in other jurisdictions, including the United States, against us or our directors or officersunder the securities laws of those jurisdictions or entertain actions in Bermuda against us or our directors or officers under the securities laws of otherjurisdictions.Bermuda law differs from the laws in effect in the United States and may afford less protection to our shareholders.We are incorporated under the laws of Bermuda. As a result, our corporate affairs are governed by the Bermuda Companies Act 1981, as amended, or theCompanies Act, which differs in some material respects from laws typically applicable to U.S. corporations and shareholders, including the provisionsrelating to interested directors, amalgamations, mergers and acquisitions, takeovers, shareholder lawsuits and indemnification of directors. Generally, theduties of directors and officers of a Bermuda company are owed to the company only. Shareholders of Bermuda companies typically do not have rights totake action against directors or officers of the company and may only do so in limited circumstances. Shareholder class actions are not available underBermuda law. The circumstances in which shareholder derivative actions may be available under Bermuda law are substantially more proscribed and lessclear than they would be to shareholders of U.S. corporations. The Bermuda courts, however, would ordinarily be expected to permit a shareholder tocommence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate powerof the company or illegal, or would result in the violation of the company’s memorandum of association or bye-laws. Furthermore, consideration would begiven by a Bermuda court to acts that are alleged to constitute a fraud against the minority shareholders or, for instance, where an act requires the approval ofa greater percentage of the company’s shareholders than those who actually approved it.When the affairs of a company are being conducted in a manner that is oppressive or prejudicial to the interests of some shareholders, one or moreshareholders may apply to the Supreme Court of Bermuda, which may make such order as it sees fit, including an order regulating the conduct of thecompany’s affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the company. Additionally, under ourbye-laws and as permitted by Bermuda law, each shareholder has waived any claim or right of action against our directors or officers for any action taken bydirectors or officers in the performance of their duties, except for actions involving fraud or dishonesty. In addition, the rights of our shareholders and thefiduciary responsibilities of our directors under Bermuda law are not as clearly established as under statutes or judicial precedent in existence in jurisdictionsin the United States, particularly the State of Delaware. Therefore, our shareholders may have more difficulty protecting their interests than wouldshareholders of a corporation incorporated in a jurisdiction within the United States.There are regulatory limitations on the ownership and transfer of our common shares.Common shares may be offered or sold in Bermuda only in compliance with the provisions of the Companies Act and the Bermuda Investment Business Act2003, which regulates the sale of securities in Bermuda. In addition, the Bermuda Monetary Authority must approve all issues and transfers of shares of aBermuda exempted company. However, the Bermuda Monetary Authority has, pursuant to its statement of June 1, 2005, given its general permission underthe Exchange Control Act 1972 and related regulations for the issue and free transfer of our common shares to and among persons who are non-residents ofBermuda for exchange control purposes as long as the shares are listed on an appointed stock exchange, which includes Nasdaq. Additionally, we havesought and have obtained a specific permission from the Bermuda Monetary Authority for the issue and transfer of our common81shares up to the amount of our authorized capital from time to time, and options, warrants, depository receipts, rights, loan notes, debt instruments and ourother securities to persons resident and non-resident for exchange control purposes with the need for prior approval of such issue or transfer. The generalpermission or the specific permission would cease to apply if we were to cease to be listed on Nasdaq or another appointed stock exchange.Legislation enacted in Bermuda in response to the European Union’s review of harmful tax competition could be harmful to our business.During 2017, the European Union Economic and Financial Affairs Council, or ECOFIN, released a list of non-cooperative jurisdictions for tax purposes. Thestated aim of this list, and accompanying report, was to promote good governance worldwide in order to maximize efforts to prevent tax fraud and taxevasion. In an effort to remain off this list, Bermuda committed to address concerns relating to economic substance by December 31, 2018. In accordance withthat commitment, Bermuda has enacted legislation that requires certain entities in Bermuda engaged in “relevant activities” to maintain a substantialeconomic presence in Bermuda and to satisfy economic substance requirements. The list of “relevant activities” includes carrying on as a business in any oneor more of: banking, insurance, fund management, financing, leasing, headquarters, shipping, distribution and service center, intellectual property andholding entities. At present, it is unclear what (if anything) the company would be required to do in order to satisfy economic substance requirements inBermuda, but to the extent we are required to increase our substance in Bermuda to satisfy such requirements, it could result in additional costs that couldadversely affect our financial condition or results of operations. If we were required to satisfy economic substance requirements in Bermuda but failed to doso, we could face automatic disclosure to competent authorities in the EU of the information filed by us with the Bermuda Registrar of Companies inconnection with the economic substance requirements and may also face financial penalties, restriction or regulation of our business activities and/or may bestruck off as a registered entity in Bermuda. Despite enacting legislation designed to satisfy the commitment made by Bermuda to address ECOFIN’sconcerns relating to economic substance, on March 12, 2019, Bermuda was placed on the EU’s list of non-cooperative tax jurisdictions. The effect of thislisting is not yet clear, but Member States of the European Union may choose to apply a range of countermeasures to Bermuda and entities registered inBermuda, including increased monitoring and audits, withholding taxes, special documentation requirements and anti-abuse provisions. In addition, newprovisions in EU legislation prohibit EU funds from being channeled or transited through entities in countries on the list of non-cooperative tax jurisdictions.The Bermuda Government has stated that it believes the relevant Bermuda legislation complies with EU requirements and is committed to reversingBermuda’s inclusion on the list of non-cooperative tax jurisdictions at the earliest opportunity, but there can be no assurance that the Bermuda Governmentwill be successful in these efforts.Our amended and restated bye-laws enable our board of directors to issue preference shares, which may discourage a change of control.Our amended and restated bye-laws contain provisions that enable our board of directors to determine the powers, preferences and rights of our preferenceshares and to issue the preference shares without shareholder approval.This could discourage, delay or prevent a transaction involving a change in control of our company and may prevent our shareholders from receiving thebenefit from any premium to the market price of our common shares offered by a bidder in a takeover context. Even in the absence of a takeover attempt, theexistence of this provision may adversely affect the prevailing market price of our common shares if it is viewed as discouraging takeover attempts in thefuture.We may become subject to unanticipated tax liabilities and higher effective tax rates.We are incorporated under the laws of Bermuda, where we are not subject to any income or withholding taxes. We are centrally managed and controlled inthe United Kingdom, and, under current U.K. tax law, a company which is centrally managed and controlled in the United Kingdom is regarded as resident inthe United Kingdom for taxation purposes. Accordingly, we expect to be subject to U.K. taxation on our income and gains and subject to U.K.’s controlledforeign company rules, except where an exemption applies. We may be treated as a dual resident company for U.K. tax purposes. As a result, our right to claimcertain reliefs from U.K. tax may be restricted, and changes in law or practice in the United Kingdom could result in the imposition of further restrictions onour right to claim U.K. tax reliefs. We may also become subject to income, withholding or other taxes in certain jurisdictions by reason of our activities andoperations, and it is also possible that taxing authorities in any such jurisdictions could assert that we are subject to greater taxation than we currentlyanticipate. Any such additional tax liability could adversely affect our results of operations.82The intended tax effects of our corporate structure and intercompany arrangements depend on the application of the tax laws of various jurisdictions andon how we operate our business.We and RSL, our majority shareholder, are incorporated under the laws of Bermuda. We currently have subsidiaries in the United Kingdom, Switzerland andthe United States. If we succeed in growing our business, we expect to conduct increased operations through our subsidiaries in various countries and taxjurisdictions, in part through intercompany service agreements between us, our parent company and our subsidiaries. In that case, our corporate structure andintercompany transactions, including the manner in which we develop and use our intellectual property, will be organized so that we can achieve ourbusiness objectives in a tax-efficient manner and in compliance with applicable transfer pricing rules and regulations. If two or more affiliated companies arelocated in different countries or tax jurisdictions, the tax laws and regulations of each country generally will require that transfer prices be the same as thosebetween unrelated companies dealing at arm’s length and that appropriate documentation be maintained to support the transfer prices. While we believe thatwe operate in compliance with applicable transfer pricing laws and intend to continue to do so, our transfer pricing procedures are not binding on applicabletax authorities. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business,there are many transactions and calculations for which the ultimate tax determination is uncertain. For example, our effective tax rates could be adverselyaffected by changes in foreign currency exchange rates or by changes in the relevant tax, accounting and other laws, regulations, principles andinterpretations. As we intend to operate in numerous countries and taxing jurisdictions, the application of tax laws can be subject to diverging and sometimesconflicting interpretations by tax authorities of these jurisdictions. It is not uncommon for taxing authorities in different countries to have conflicting views,for instance, with respect to, among other things, the manner in which the arm’s length standard is applied for transfer pricing purposes, or with respect to thevaluation of intellectual property. In addition, tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law areissued or applied. We continue to assess the impact of such changes in tax laws and interpretations on our business and may determine that changes to ourstructure, practice, tax positions or the manner in which we conduct our business are necessary in light of such changes and developments in the tax laws ofthe jurisdictions in which we operate. Such changes may nevertheless be ineffective in avoiding an increase in our consolidated tax liability, which couldadversely affect our financial condition, results of operations and cash flows.If tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arm’s length transactions, they could require usto adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices, which could result in a higher tax liability to us. Inaddition, if the country from which the income is reallocated does not agree with the reallocation, both countries could tax the same income, potentiallyresulting in double taxation. If tax authorities were to allocate income to a higher tax jurisdiction, subject our income to double taxation or assess interestand penalties, it would increase our consolidated tax liability, which could adversely affect our financial condition, results of operations and cash flows.Changes in our effective tax rate may reduce our net income in future periods.Our tax position could be adversely impacted by changes in tax rates, tax laws, tax practice, tax treaties or tax regulations or changes in the interpretationthereof by the tax authorities in Europe (including the United Kingdom and Switzerland), the United States, Bermuda and other jurisdictions as well as beingaffected by certain changes currently proposed by the Organisation for Economic Co-operation and Development and their action plan on Base Erosion andProfit Shifting. Such changes may become more likely as a result of recent economic trends in the jurisdictions in which we operate, particularly if suchtrends continue. If such a situation was to arise, it could adversely impact our tax position and our effective tax rate. Failure to manage the risks associatedwith such changes, or misinterpretation of the laws providing such changes, could result in costly audits, interest, penalties and reputational damage, whichcould adversely affect our business, results of our operations and our financial condition.Our actual effective tax rate may vary from our expectation and that variance may be material. A number of factors may increase our future effective tax rates,including: (1) the jurisdictions in which profits are determined to be earned and taxed; (2) the resolution of issues arising from any future tax audits withvarious tax authorities; (3) changes in the valuation of our deferred tax assets and liabilities; (4) increases in expenses not deductible for tax purposes,including transaction costs and impairments of goodwill in connection with acquisitions; (5) changes in the taxation of share-based compensation;(6) changes in tax laws or the interpretation of such tax laws, and changes in generally accepted accounting principles; and (7) challenges to the transferpricing policies related to our structure.83U.S. holders that own 10% or more of the vote or value of our common shares may suffer adverse tax consequences because we and/or any of our non-U.S.subsidiaries are expected to be characterized as a “controlled foreign corporation,” or a CFC, under Section 957(a) of the U.S. Internal Revenue Code of1986, as amended, or the Code.A non-U.S. corporation is considered a CFC if more than 50% of (1) the total combined voting power of all classes of stock of such corporation entitled tovote, or (2) the total value of the stock of such corporation, is owned, or is considered as owned by applying certain constructive ownership rules, by UnitedStates shareholders (U.S. persons who own stock representing 10% or more of the vote or, for taxable years of non-U.S. corporations beginning afterDecember 31, 2017 and for taxable years of shareholders with or within which such taxable years of non-U.S. corporations end, 10% or more of the value) onany day during the taxable year of such non-U.S. corporation. Certain United States shareholders of a CFC generally are required to include currently in grossincome such shareholders’ share of the CFC’s “Subpart F income,” a portion of the CFC’s earnings to the extent the CFC holds certain U.S. property, and aportion of the CFC’s “global intangible low-taxed income” (as defined under Section 951A of the Code). Such United States shareholders are subject tocurrent U.S. federal income tax with respect to such items, even if the CFC has not made an actual distribution to such shareholders. “Subpart F income”includes, among other things, certain passive income (such as income from dividends, interests, royalties, rents and annuities or gain from the sale of propertythat produces such types of income) and certain sales and services income arising in connection with transactions between the CFC and a person related tothe CFC. “Global intangible low-taxed income” may include most of the remainder of a CFC’s income over a deemed return on its tangible assets.We believe that we and our non-U.S. subsidiaries are classified as CFCs in the taxable year ended March 31, 2019. For U.S. holders who hold 10% or more ofthe vote or value of our common shares, this may result in adverse U.S. federal income tax consequences, such as current U.S. taxation of Subpart F incomeand of any such shareholder’s share of our accumulated non-U.S. earnings and profits (regardless of whether we make any distributions), taxation of amountstreated as global intangible low-taxed income under Section 951A of the Code with respect to such shareholder, and being subject to certain reportingrequirements with the U.S. Internal Revenue Service. Any such U.S. holder who is an individual generally would not be allowed certain tax deductions orforeign tax credits that would be allowed to a U.S. corporation. If you are a U.S. holder who holds 10% or more of the vote or value of our common shares,you should consult your own tax advisors regarding the U.S. tax consequences of acquiring, owning, or disposing our common shares. U.S. holders of our common shares may suffer adverse tax consequences if we are characterized as a passive foreign investment company.Generally, if, for any taxable year, at least 75% of our gross income is passive income, or at least 50% of the value of our assets is attributable to assets thatproduce passive income or are held for the production of passive income, including cash, we would be characterized as a passive foreign investmentcompany, or a PFIC, for U.S. federal income tax purposes. For purposes of these tests, passive income includes dividends, interest, and gains from the sale orexchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the activeconduct of a trade or business. Additionally, a look-through rule generally applies with respect to 25% or more owned subsidiaries. If we are characterized asa PFIC, U.S. holders of our common shares may suffer adverse tax consequences, including having gains realized on the sale of our common shares treated asordinary income, rather than capital gain, the loss of the preferential tax rate applicable to dividends received on our common shares by individuals who areU.S. holders, and having interest charges apply to distributions by us and the proceeds of sales of our common shares. In addition, special informationreporting may be required.Our status as a PFIC will depend on the nature and composition of our income and the nature, composition and value of our assets from time to time. The 50%passive asset test described above is generally based on the fair market value of each asset, with the value of goodwill and going concern value determined inlarge part by reference to the market value of our common shares, which may be volatile. If we are a CFC and not publicly traded throughout the relevanttaxable year, however, the test may be applied based on the adjusted basis of our assets. Our status may also depend, in part, on how quickly we utilize thecash proceeds from our IPO and the Hercules Loan Agreement in our business and whether we earn primarily passive income (such as interest income) in thecurrent taxable year or future taxable years. We believe that we were classified as a CFC prior to our IPO in the current taxable year beginning on April 1,2018. Based on the current and expected adjusted basis of our assets, we believe we were not classified as a PFIC with respect to the taxable year endedMarch 31, 2019. However, because the determination of whether we are a PFIC for any taxable year is a factual determination made annually after the end ofeach taxable year, there can be no assurance that we will not be considered a PFIC in any taxable year. Our U.S. counsel expresses no opinion with respect toour PFIC status for our current or future taxable years. We will determine whether we were a PFIC or not for each taxable year and make such determinationavailable to U.S. holders.84In our current taxable year ended March 31, 2019, we have implemented structures and arrangements intended to mitigate the possibility that we will beclassified as a PFIC. There can be no assurance that the IRS will not successfully challenge these structures and arrangements, which may result in an adverseimpact on the determination of whether we are classified as a PFIC in the current and future taxable years.The tax consequences that would apply if we are classified as a PFIC would also be different from those described above if a U.S. holder were able to make avalid “qualified electing fund,” or QEF, election. At this time, we do not expect to provide U.S. shareholders with the information necessary for a U.S. holderto make a QEF election. Prospective investors should assume that a QEF election will not be available.Item 1B. Unresolved Staff Comments.Not applicable.Item 2. Properties.Our registered office is located at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda and our principal office is located at Suite 1, 3rd Floor, 11-12St. James’s Square, London SW1Y 4LB, United Kingdom. We also have business operations at 5281 California Avenue, Suite 100, Irvine, California 92617and 324 Blackwell Street Bay 11, Suite 1104, Durham, North Carolina 27701.Our wholly owned subsidiary, USI, entered into a lease agreement in November 2018 for 21,489 square feet of office space located in Irvine, California forclinical research and development operations and administrative functions that expires seven years from the lease commencement date with an option toterminate after five years. The lease commenced in June 2019. Previously, USI had a sublease for approximately 8,038 square feet of office space in Irvine,California which was terminated in June 2019. USI also entered into a sublease agreement with our affiliate, RSI, in June 2019 for 2,784 square feet of officespace located in Durham, North Carolina for clinical research and development and other activities carried out by our personnel. The lease expires in July2025.Our affiliate, RSG, leases office space in Basel, Switzerland for business development, intellectual property management and other administrative functions.Our wholly owned subsidiary, USG, may sublease space from RSG in Basel in the future, from where we would plan to conduct business development,intellectual property management, commercial preparation and clinical research and development activities.We believe that our leased facilities are in good condition and are well maintained and that our current arrangements will be sufficient to meet our needs forthe foreseeable future and that any required additional space will be available on commercially reasonable terms to meet space requirements if they arise.Item 3. Legal Proceedings.From time to time, we may become involved in legal proceedings related to claims arising from the ordinary course of business. We are not currently a partyto any material legal proceedings, and we are not aware of any pending or threatened legal proceedings against us that we believe could have a materialadverse effect on our business, operating results, or financial condition.Item 4. Mine Safety Disclosures.Not applicable.85PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.Market Information for Common SharesIn October 2018, we completed our initial public offering, or IPO, and our common shares began trading on the Nasdaq Global Select Market, or Nasdaq,under the symbol “UROV” on September 27, 2018. Prior to that date, there was no established public trading market for our common shares.ShareholdersAmerican Stock Transfer & Trust Company is the transfer agent and registrar for our common shares. As of the close of business on June 13, 2019, we had twoshareholders of record. The actual number of shareholders is greater than this number of record shareholders and includes shareholders who are beneficialowners, but whose shares are held in street name by brokers and other nominees. The number of shareholders of record also does not include shareholderswhose shares may be held in trust by other entities.Dividend PolicyWe have never declared or paid cash dividends on our common shares. We anticipate that we will retain all of our future earnings, if any, for use in theexpansion and operation of our business and do not anticipate paying cash dividends in the foreseeable future. Any decision to declare and pay dividends inthe future will be made at the sole discretion of our board of directors and will depend on a number of factors, among other things, our results of operations,cash requirements, financial condition, contractual restrictions and other factors that our board of directors may deem relevant. In addition, pursuant toBermuda law, a company may not declare or pay dividends if there are reasonable grounds for believing that (1) the company is, or would after the paymentbe, unable to pay its liabilities as they become due or (2) that the realizable value of its assets would thereby be less than its liabilities. Under our amendedand restated bye-laws, each common share is entitled to dividends if, as and when dividends are declared by our board of directors, subject to any preferreddividend right of the holders of any preference shares. Furthermore, our ability to pay cash dividends is currently restricted by the terms of the Hercules LoanAgreement.Recent Sales of Unregistered Equity SecuritiesThere were no reportable sales of unregistered equity securities other than as reported in the Company’s Current Report on Form 8-K filed on February 22,2019.Purchases of Equity Securities by the IssuerNone.Use of Proceeds from Initial Public OfferingOn October 1, 2018, we issued and sold 10,000,000 common shares in our IPO, and on October 19, 2018, we issued and sold an additional 297,813 commonshares pursuant to the underwriters’ partial exercise of their over-allotment option to purchase additional shares, in each case, at a public offering price of$14.00 per share. All of the common shares issued and sold in our IPO were registered under the Securities Act pursuant to our registration statement on FormS-1 (No. 333-226169), which was declared effective by the SEC on September 26, 2018. J.P. Morgan Securities LLC, Jefferies LLC and Cowen and Company,LLC acted as joint book-running managers for the offering. Following the sale of the shares in connection with the closing of the IPO, the offering terminated.As a result of the IPO, we received total net proceeds of $132.9 million, after deducting total expenses of $11.3 million, consisting of underwriting discountsand commissions of $10.1 million and offering-related expenses of $1.2 million. No offering expenses or proceeds were paid directly or indirectly to any ofour directors or officers (or their associates) or persons owning 10% or more of any class of our equity securities or to any other affiliates.We have been using the net proceeds from our IPO primarily to fund the nonclinical and clinical development of vibegron and URO-902, to expand ourinternal research and development capabilities, for commercial readiness, and for general corporate purposes.There has been no material change in the planned use of proceeds from our IPO from that described in the final prospectus filed by us with the SEC onSeptember 27, 2018 pursuant to Rule 424(b) of the Securities Act.Item 6. Selected Financial Data.Under SEC rules and regulations, because we are considered to be a “smaller reporting company”, we are not required to provide the information required bythis item in this report.86Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.The following discussion and analysis of our financial condition, results of operations, and cash flows should be read in conjunction with the auditedconsolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K. Some of the information containedin this discussion and analysis or elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for ourbusiness, include forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” set forth in this Annual Report onForm 10-K for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by theforward-looking statements contained in the following discussion and analysis.OverviewWe are a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for urologic conditions. Our leadproduct candidate, vibegron, is an oral, once-daily, small molecule that was observed to be highly selective for the human beta-3 adrenergic receptor in invitro assays. Vibegron is currently being developed for three potential indications: overactive bladder, or OAB, the treatment of OAB in men with benignprostatic hyperplasia, or BPH, and the treatment of abdominal pain due to irritable bowel syndrome, or IBS. Our second product candidate, URO-902, is anovel gene therapy that we are developing for patients with OAB who have failed oral pharmacological therapy.In March 2019, we reported positive top-line results from our international pivotal Phase 3 EMPOWUR trial evaluating vibegron for the treatment of OAB. Inthis pivotal Phase 3 clinical trial with over 1,500 patients, vibegron 75 mg met both co-primary efficacy endpoints and all seven key secondary endpoints.Onset of action for the co-primary endpoints was observed as early as week two, the first time point measured, and statistically significant efficacy wasmaintained at all timepoints measured through the end of the study. We plan to submit a new drug application, or NDA, to the U.S. Food and DrugAdministration, or FDA, by the first quarter of 2020. OAB is a highly prevalent condition, with more than 30 million Americans over the age of 40 sufferingfrom bothersome symptoms. In large, randomized, placebo-controlled, international Phase 2b and Japanese Phase 3 clinical trials in a total of over 2,600 OABpatients, vibegron 50 mg and 100 mg met all primary and secondary efficacy endpoints compared to placebo at week 8 and week 12, respectively. OurPhase 3 clinical trial had a design in line with these clinical trials. We believe vibegron, if approved by the FDA, may offer a differentiated profile comparedto current OAB therapies, including the potential for broader efficacy claims if the FDA approves the inclusion of urgency data, rapid onset of action data,and a single convenient once-daily dose in the label. Vibegron has been well tolerated in all clinical trials to date, has not been associated with clinicallyrelevant drug-drug interactions, such as the inhibition of CYP2D6, and has not demonstrated a QTc signal at any of the human doses tested.In March 2019, we initiated the Phase 3 COURAGE randomized, double blind, placebo-controlled trial for OAB in men with BPH who are also taking BPHmedications but continue experiencing OAB symptoms in approximately 1,000 patients. The study is being conducted in two phases, with the first phasefocusing on safety and the second phase assessing efficacy and safety, and is testing 75 mg of vibegron versus placebo, the same dose studied in our Phase 3EMPOWUR trial. The primary efficacy analysis for the co-primary efficacy endpoints will be measured at 12 weeks and include change from baseline in theaverage number of micturitions per 24 hours and change from baseline in the average number of urgency episodes per 24 hours. Secondary endpoints includechange from baseline in the average number of nocturia episodes per night, which is awakening at night to use the bathroom to urinate. The duration for thedouble-blind study is 24 weeks. In addition, a 28-week open-label extension study will evaluate the long-term safety and efficacy of vibegron in men withOAB symptoms and on another therapy for BPH. In December 2018, we enrolled our first patient in a 200 patient Phase 2a randomized, double blind, placebo-controlled trial with vibegron 75 mg forabdominal pain due to IBS. We expect to receive top-line data from the Phase 2a clinical trial in 2020. The primary endpoint will be a 30% reduction inabdominal pain intensity, while secondary endpoints will include Global Improvement Scale ratings, stool symptoms and safety.Our second product candidate, URO-902, is a novel gene therapy that we are developing for patients with OAB who have failed oral pharmacologicaltherapy. There are no currently available FDA-approved gene therapy treatments for OAB. We plan to initiate a placebo-controlled, randomized, multicenterproof-of-concept Phase 2a clinical trial in the fourth quarter of 2019 to evaluate the safety and efficacy of URO-902 in approximately 50 to 80 patients. 87We were incorporated in January 2016, and our operations to date have been limited to organizing and staffing our company, identifying and in-licensingour product candidates, including acquiring the rights to vibegron and URO-902, preparing for and advancing the clinical development of our productcandidates and preparing for the potential commercialization of vibegron. We have not generated any revenue and have incurred significant operating lossessince inception. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventualcommercialization of vibegron, URO-902 and any future product candidates.Our operations were previously supported by our affiliates, Roivant Sciences, Inc. (“RSI”) and Roivant Sciences GmbH (“RSG”), each a wholly ownedsubsidiary of our parent company, Roivant Sciences Ltd. (“RSL”). RSI provided us with certain administrative, financial and research and developmentservices, and RSG provided us with services in relation to the identification of potential product candidates, assistance with clinical trials and otherdevelopment, administrative and financial activities, in each case, pursuant to the Services Agreements. Under the terms of the services agreements with RSIand RSG, we are obligated to pay or reimburse RSI and RSG for the costs they, or third parties acting on their behalf, incur in providing services to us. Inaddition, we are obligated to pay to RSI and RSG a pre-determined markup on costs incurred by them in connection with any general and administrative andsupport services as well as research and development services. Our reliance on RSI and RSG has decreased significantly as we have completed the hiring ofpersonnel to manage our operations and the development and potential commercialization of vibegron and any future product candidates. We do not expectour reliance on RSI and RSG to be significant in the future.In October 2018, we completed our initial public offering, or IPO, in which we sold 10,297,813 common shares, including the partial exercise of theunderwriters’ over-allotment option to purchase additional shares, at a public offering price of $14.00 per common share. The net proceeds to us wereapproximately $132.9 million, after deducting $10.1 million in underwriting discounts and commissions and $1.2 million in offering expenses.In February 2019, we and our subsidiaries, Urovant Holdings Limited (“UHL”), Urovant Sciences GmbH (“USG”) and Urovant Sciences, Inc. (“USI”), enteredinto a secured debt financing agreement with Hercules Capital, Inc., or Hercules, as agent and lender, or the Loan Agreement, in the amount of$100.0 million. A first tranche of $15.0 million was funded upon execution of the Loan Agreement, and the remaining $85.0 million is available in threeadditional optional tranches through June 30, 2021, subject to certain terms and conditions, including the achievement of certain milestones.As of March 31, 2019, we had an accumulated deficit of $175.5 million. We recorded net losses of $111.3 million and $37.1 million for the yearsended March 31, 2019 and 2018.Financial Operations OverviewRevenueWe currently do not have any products approved for sale and have not generated any revenue since inception. If we are able to successfully develop, receiveregulatory approval for and commercialize vibegron, URO-902 or any future product candidate alone or in collaboration with third parties, we may generaterevenue from vibegron, URO-902 or any such future product candidate.Research and Development ExpensesOur research and development expenses to date have been primarily attributed to the license of the rights to vibegron and the continued development ofvibegron for OAB. We expect to increase the number of our research and development programs while maintaining our current research and developmentspend as we complete the open-label extension study of our ongoing Phase 3 EMPOWUR trial for the treatment of OAB, advance our Phase 3 clinical trial ofvibegron for the treatment of OAB in men with BPH, advance our Phase 2a clinical trial of vibegron for the treatment of abdominal pain due to IBS, andinitiate and advance our planned Phase 2a clinical trial for URO-902 for the treatment of OAB in patients who have not responded to oral pharmacologicaltherapies. Research and development expenses will include program-specific costs, as well as unallocated costs.Program-specific costs include: •direct third-party costs such as expenses incurred under agreements with clinical research organizations, or CROs, and contract manufacturingorganizations, or CMOs, the cost of consultants who assist with the development of vibegron on a program-specific basis, investigator grants,sponsored research, manufacturing costs in connection with producing materials for use in conducting nonclinical studies and clinical trials, andother third-party expenses directly attributable to the development of our product candidates.88Unallocated costs primarily include: •employee-related expenses, such as salaries, share-based compensation, benefits and travel expense for our research and development personnel; •costs allocated to us for activities performed by RSI and RSG under the Services Agreements and share-based compensation expense allocated tous from RSL; and •other expenses, which include the costs of consultants who assist with research and development activities not specific to a program.Research and development expenses also include in-process research and development expense related to our acquisition of the rights to our productcandidates from Merck and ICI.Research and development activities will continue to be central to our business model. Product candidates in later stages of clinical development, such asvibegron, generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration oflater-stage clinical trials. We expect our research and development expenses to be significant over the next several years as we advance the clinicaldevelopment of vibegron and prepare to seek regulatory approval. It is difficult to determine with certainty the duration and completion costs of any clinicaltrial we may conduct.The duration, costs and timing of clinical trials of our current and future product candidates will depend on a variety of factors that include, but are notlimited to: the number of trials required for approval; the per patient trial costs; the number of patients that participate in the trials; the number of sitesincluded in the trials; the countries in which the trial is conducted; the length of time required to enroll eligible patients; the number of doses that patientsreceive; the drop-out or discontinuation rates of patients; the potential additional safety monitoring or other studies requested by regulatory agencies; theduration of patient follow-up; the timing and receipt of regulatory approvals; the costs of clinical trial material; and the efficacy and safety profile of theproduct candidate.In addition, the probability of success for vibegron, URO-902 and any other product candidates will depend on numerous factors, including competition,manufacturing capability and commercial viability. As a result, we are unable to determine the duration and completion costs of our programs or when and towhat extent we will generate revenue from commercialization and sale of any of our product candidates. Our research and development activities may besubject to change from time to time as we evaluate our priorities and available resources.General and Administrative ExpensesGeneral and administrative expenses consist primarily of employee-related expenses, such as salaries, share-based compensation, benefits and travel expensesfor general and administrative personnel, professional fees for legal, consulting, accounting, auditing and tax services, commercial readiness costs, rent andfacilities expense, information technology costs, general overhead and services received under the Services Agreements with RSI and RSG.We anticipate that our general and administrative expenses will increase in the future to support our continued research and development activities, potentialcommercialization efforts and increased costs of continuing to operate as a public company. These increases will likely include increased costs related to thehiring of additional personnel, professional fees and additional rent and other facilities related costs, among other expenses. Additionally, we anticipateincreased costs associated with being a public company, including expenses related to services associated with maintaining compliance with therequirements of The Nasdaq Global Select Market, or Nasdaq, and the SEC, insurance and investor relations costs. We expect to incur increased costsassociated with establishing sales, marketing, and commercialization functions in advance of potential future regulatory approvals and commercialization ofour product candidates. If any of our current or future product candidates obtains U.S. regulatory approval, we expect that we would incur significantlyincreased expenses associated with building a sales and marketing team and funding commercial activities. 89Results of OperationsThe following table sets forth our results of operations for the years ended March 31, 2019 and 2018 (in thousands): Year Ended March 31, 2019 2018 Operating expenses: Research and development $92,198 $32,359 General and administrative 18,585 4,640 Total operating expenses 110,783 36,999 Other income (expense): Interest expense, net (259) — Other expense (257) (38)Loss before provision for income taxes (111,299) (37,037)Provision for income taxes 47 37 Net loss $(111,346) $(37,074)Research and Development ExpensesFor the years ended March 31, 2019 and 2018, our research and development expenses consisted of the following (in thousands): Year Ended March 31, 2019 2018 Program-specific costs: Vibegron $81,213 $23,562 URO-902 262 — License fees 252 — Unallocated costs: Share-based compensation 1,296 2,477 Personnel expenses 5,419 50 Services Agreements 2,176 5,240 Other expense 1,580 1,030 Total research and development expenses $92,198 $32,359 Research and development expenses increased by $59.8 million, to $92.2 million, for the year ended March 31, 2019 compared to $32.4 million for the yearended March 31, 2018. The increase in research and development expenses primarily includes the following changes: •$49.6 million increase in CRO costs primarily to advance the Phase 3 EMPOWUR study; •$3.9 million increase in chemistry, manufacturing and controls costs; •$4.4 million increase in other program-specific third-party research and development costs; •$5.3 million increase due to personnel-related costs; •$1.2 million increase in share-based compensation expense for stock options and restricted stock units granted to employees; •$0.5 million increase in other unallocated third-party research and development costs; •$0.3 million increase for in-process research and development paid under the ICI license agreement; •$2.4 million decrease in share-based compensation expense allocated to us by RSL; and •$3.0 million decrease in costs billed to us under the Service Agreements.90General and Administrative ExpensesGeneral and administrative expenses increased by $14.0 million, to $18.6 million, for the year ended March 31, 2019 compared to $4.6 million for the yearended March 31, 2018. The increase in general and administrative expenses primarily includes the following changes: •$5.5 million increase in personnel-related costs; •$2.0 million increase in legal and other professional and consulting fees; •$1.9 million increase in market research and other commercial readiness costs; •$2.5 million increase in general overhead and corporate expenses; •$1.8 million increase in share-based compensation expense for stock options granted to employees, board members and consultants; and •$0.3 million increase in share-based compensation expense allocated to us by RSL and costs billed under the Services Agreements.Interest Expense, NetInterest expense, net consists of interest expense related to the Hercules Loan Agreement as well as the associated non-cash amortization of debt discount andissuance costs, partially offset by interest income earned on cash equivalents. Interest expense, net, was $0.3 million for the year ended March 31, 2019.Liquidity and Capital ResourcesSources of LiquidityIn October 2018, we completed our IPO, in which we sold 10,297,813 common shares, including 297,813 common shares pursuant to the partial exercise ofthe underwriters’ over-allotment option to purchase additional shares, at a public offering price of $14.00 per common share. The net proceeds to us wereapproximately $132.9 million, after deducting $10.1 million in underwriting discounts and commissions and $1.2 million in offering expenses.In February 2019, we entered into a Loan Agreement with Hercules, as agent and lender in the amount of $100.0 million. A first tranche of $15.0 million wasfunded in February 2019, and the remaining $85.0 million is available in three additional optional tranches through June 30, 2021, subject to certain termsand conditions, including the achievement of certain milestones. As a result of the positive Phase 3 EMPOWUR data achieved in March 2019, one of theadditional optional defined tranches of $30.0 million is currently accessible by us through September 30, 2019. As of March 31, 2019, we had an accumulated deficit of $175.5 million and a cash and cash equivalents balance of $85.4 million, as compared to$64.2 million and $7.2 million, respectively, as of March 31, 2018. Prior to our IPO and the Loan Agreement with Hercules, all operations to date had beenfinanced through capital contributions or short-term advances from RSL or its affiliates.Capital RequirementsFor the years ended March 31, 2019 and 2018, we had a net loss of $111.3 million and $37.1 million, respectively, and we have never generated any revenue.We expect to continue to incur significant operating losses at least for the next several years. We do not expect to generate product revenue until wesuccessfully complete development and obtain regulatory approval for any of our current or future product candidates, which may never occur. Our net lossesand negative cash flows may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials, ourexpenditures on other research and development activities and our pre-commercialization efforts. We anticipate that our capital requirements will increasesubstantially as we: •advance our Phase 3 trial of vibegron for the treatment of OAB in men with BPH; •advance our Phase 2a trial of vibegron for the treatment of abdominal pain due to IBS; •initiate and advance our planned Phase 2a clinical trial for URO-902 for the treatment of OAB in patients who have not responded to oralpharmacological therapies;91 •finish the EMPOWUR clinical trial and file the NDA for vibegron in adults with OAB; •expand our chemistry, manufacturing, and control and other manufacturing related activities; •seek to identify, acquire, develop and commercialize additional product candidates; •integrate acquired technologies into a comprehensive regulatory and product development strategy; •maintain, expand and protect our intellectual property portfolio; •hire scientific, clinical, quality control and administrative personnel; •add operational, financial and management information systems and personnel, including personnel to support our drug development efforts; •seek regulatory approvals for any product candidates that successfully complete clinical trials; •ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any drugcandidates for which we may obtain regulatory approval; •service debt obligations and payment of interest associated with the Hercules Loan Agreement; and •continue to operate as a public company.Our primary use of cash is to fund the development of vibegron for the treatment of OAB, advance our Phase 3 clinical trial for vibegron for the treatment ofOAB in men with BPH, advance our Phase 2a clinical trial for vibegron in patients with abdominal pain due to IBS, and initiate and advance our plannedPhase 2a clinical trial for URO-902 for the treatment of OAB in patients who have not responded to oral pharmacological therapies. We expect our operatingexpenses to continue to increase in the future as we expand our operations to continue to develop our product candidates and prepare for the potential futureregulatory approvals and commercialization of vibegron. Based on anticipated spend and timing of expenditure assumptions, we currently believe that ourexisting cash and cash equivalents, together with the $30.0 million tranche under the Hercules Loan Agreement, which is available through September 30,2019, will be sufficient to fund our committed operating expenses and capital expenditure requirements for at least the next 12 months from the filing date ofthis Annual Report on Form 10-K. The availability of the $30.0 million tranche was subject to achievement of a clinical milestone, which was achieved withthe positive top-line results from the Phase 3 EMPOWUR trial, among other conditions that were also met. This estimate is based on our current assumptions,including assumptions relating to our ability to manage our spend, that may prove to be wrong, and we could use our available capital resources sooner thanwe currently expect. We will need additional funding to complete the clinical development of, and seek regulatory approval for, vibegron for the treatment ofOAB in men with BPH and abdominal pain due to IBS, URO-902, and commercially launch vibegron or URO-902, if approved. Adequate additional fundingmay not be available to us on acceptable terms, or at all.Until such time, if ever, as we can generate substantial product revenue from sales of vibegron, URO-902 or any future product candidate, we expect tofinance our cash needs through a combination of the remaining financing commitment available to us from the Hercules Loan Agreement, equity offerings,debt financings and potential collaboration, license or development agreements. To the extent that we raise additional capital through the sale of equity orconvertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences thatadversely affect your rights as a common shareholder. Our agreement with Hercules Capital, Inc. involves, and any agreements for future debt or preferredequity financings, if available, may involve covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, makingcapital expenditures or declaring dividends.In addition, if we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, wemay be required to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses onterms that may not be favorable to us. If we are unable to raise capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay,scale back or discontinue the development or commercialization of vibegron or URO-902, grant rights to develop and market product candidates that wewould otherwise prefer to develop and market ourselves or potentially discontinue operations.92Cash FlowsThe following table sets forth a summary of our cash flows for the years ended March 31, 2019 and 2018 (in thousands): Year Ended March 31, 2019 2018 Net cash used in operating activities $(109,036) $(34,086)Net cash used in investing activities $(593) $(522)Net cash provided by financing activities $188,631 $37,035 Operating ActivitiesFor the year ended March 31, 2019, $109.0 million of cash was used in operating activities. This was primarily attributable to a net loss of $111.3 million, anincrease of $7.5 million in prepaid expenses and other current assets and a decrease of $1.5 million in amounts due to RSL. These amounts were partiallyoffset by an increase of $6.7 million in accounts payable and accrued expenses, $3.4 million in share-based compensation expense from stock options andrestricted stock units granted to employees, board members and consultants, and $0.6 million in share-based compensation expense allocated to us by RSLbased upon the relative percentage of time utilized by employees of RSL, RSG and RSI on our matters.For the year ended March 31, 2018, $34.1 million of cash was used in operating activities. This was primarily attributable to a net loss of $37.1 million andan increase of $5.2 million in prepaid expenses and other current assets. These amounts were partially offset by an increase of $4.4 million in accountspayable and accrued expenses, $0.4 million in share-based compensation expense from stock options granted to employees and consultants, $2.8 million inshare-based compensation expense allocated to us by RSL based upon the relative percentage of time utilized by employees of RSL, RSG and RSI on ourmatters, and an increase of $0.6 million in amounts due to RSL based on the allocation of personnel expenses associated with the formation of our company,development of our product pipeline and corporate matters.Investing ActivitiesFor the year ended March 31, 2019, $0.6 million of cash was used in investing activities, all for the purchase of furniture and equipment.For the year ended March 31, 2018, $0.5 million of cash was used in investing activities, all for the purchase of furniture and equipment.Financing ActivitiesFor the year ended March 31, 2019, cash provided by financing activities of $188.6 million was primarily attributable to the net proceeds of $132.9 millionfrom our IPO, capital contributions from RSL of $41.6 million and net proceeds of $14.1 million from the debt financing with Hercules Capital, Inc.For the year ended March 31, 2018, cash provided by financing activities of $37.0 million was attributable to capital contributions from RSL.Contractual Obligations and CommitmentsWe enter into agreements in the normal course of business with vendors for services and products for operating purposes such as CROs for clinical trials,which are cancelable at any time by us, subject to payment of our remaining obligations under binding purchase orders and, in certain cases, nominal earlytermination fees, generally upon 30 days’ prior written notice. These payments are not included in the table of contractual obligations below.93The following table provides information with respect to our contractual obligations as of March 31, 2019 and the effect such obligations are expected tohave on our liquidity and cash flows in future years (in thousands): Payments due by period Total Less than1 year 1-3 years 3-5 years More than5 years Contractual obligations Long-term debt obligation, including interest and end of term charge $18,723 $1,417 $17,306 $— $— Operating lease obligations 4,926 455 1,367 1,442 1,662 $23,649 $1,872 $18,673 $1,442 $1,662 Long-Term Debt ObligationLong-term debt obligation reflects our obligation to pay interest on the outstanding principal amount as of March 31, 2019 of $15.0 million under theHercules Loan Agreement and to make periodic principal repayments, along with an end of term charge of 4.25% of the principal amount at maturity underthe Hercules Loan Agreement. Our long-term debt obligation under the Hercules Loan Agreement bears interest at a prime-based variable rate with a floor of10.15% per annum and maximum of 12.15% per annum. The related interest on the aggregate principal amounts outstanding to Hercules included in theabove table was estimated using the interest rate in effect at March 31, 2019. See Note 5, “Long-term debt,” to our audited consolidated financial statementsincluded elsewhere in this Annual Report on Form 10-K for further discussion of the Hercules Loan Agreement.Operating Lease ObligationsOperating lease obligations include future rent payments under two office leases in Irvine, California. The first lease was for 8,038 square feet of office spacepursuant to a lease agreement that was set to expire in February 2020 but was terminated early in June 2019. The second lease is for 21,489 square feet ofoffice space pursuant to a lease agreement which commenced in June 2019 and expires in May 2026, with the option to extend the lease term for anadditional five years. The minimum lease payments included in the table above do not include any related common area maintenance charges or real estatetaxes. In addition, the operating lease obligations included in the table above do not include potential rent payments during the optional lease renewal term.In June 2019, we entered into a sublease agreement with our affiliate, RSI, for 2,784 square feet of office space located in Durham, North Carolina that expiresin July 2025. The lease has scheduled rent increases each year. The total future minimum lease payments under this sublease agreement are not included inthe table above but are approximately $0.6 million.License and Collaboration AgreementsWe received an exclusive license to develop, manufacture and commercialize vibegron worldwide, excluding Japan and certain other Asian territories,pursuant to our license agreement with Merck Sharp & Dohme Corp., or Merck, which we entered into in February 2017. Pursuant to this agreement, we madean upfront payment of $25.0 million to Merck during the year ended March 31, 2017. Additionally, we agreed to pay Merck up to an aggregate of$44.0 million upon the achievement of certain regulatory milestone events and up to an aggregate of $80.0 million upon the achievement of certain salesmilestone events. Further, we agreed to pay Merck tiered royalties in the sub-teen double-digits on net sales of licensed products made by us, our affiliates orour sublicensees, subject to standard offsets and reductions as set forth in the agreement. We cannot, at this time, estimate the timing or likelihood ofachieving these milestones or generating future product sales which result in royalty payments to be made under this agreement. Therefore, such paymentsare not included in the table above. See Note 3, “License agreements,” to our audited consolidated financial statements included elsewhere in this AnnualReport on Form 10-K for further discussion of our license agreement with Merck.In June 2017, we entered into an intellectual property purchase agreement with RSG, a wholly owned subsidiary of our parent company, RSL, as amended onMay 22, 2018, pursuant to which we assigned all of our rights, titles, claims and interests in and to all intellectual property rights under our license agreementwith Merck, solely as it relates to any of our rights or obligations in China, to RSG. In connection with this assignment, we also entered into a separatecollaboration agreement with RSG in June 2018, setting forth the parties’ respective rights and obligations to each other in connection with the developmentof vibegron in their respective territories. See Note 6, “Related party transactions,” to our audited consolidated financial statements included elsewhere inthis Annual Report on Form 10-K for additional information. 94Vibegron is also being developed by Kyorin Pharmaceutical Co., Ltd., or Kyorin, for the treatment of OAB in Japan and certain other Asian territories. Weentered into a collaboration agreement with Kyorin in August 2017. Pursuant to this agreement, our maximum obligation to Kyorin is $11.5 million, ofwhich $1.0 million was paid during the year ended March 31, 2018. The remaining obligations under this agreement will be due upon the achievement ofcertain regulatory milestones by Kyorin in Japan and us in the United States, subject to certain conditions. In September 2018, Kyorin received marketingapproval from Japan’s Ministry of Health, Labour and Welfare for vibegron for the treatment of adults with OAB. We cannot, at this time, estimate the timingor likelihood of achieving the milestones under this agreement. Therefore, such payments are not included in the table above. See Note 10, “Commitmentsand contingencies,” to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional informationregarding our collaboration agreement with Kyorin.We received an exclusive license to develop, manufacture and commercialize URO-902 worldwide, pursuant to our license agreement with Ion ChannelInnovations, LLC, or ICI, which we entered into in August 2018. Pursuant to this agreement, we made an upfront payment of $0.25 million to ICI during theyear ended March 31, 2019. Additionally, we agreed to pay ICI up to an aggregate of $35.0 million upon the achievement of certain development andregulatory milestone events and up to an aggregate of $60.0 million upon the achievement of certain sales milestone events. Further, we agreed to pay ICItiered royalties in the mid-to-high single digits on net sales of licensed products made by us, our affiliates or our sublicensees, subject to certain reductions.We cannot, at this time, estimate the timing or likelihood of achieving these milestones or generating future product sales which result in royalty payments tobe made under this agreement. Therefore, such payments are not included in the table above. See Note 3, “License agreements,” to our audited consolidatedfinancial statements included elsewhere in this Annual Report on Form 10-K for further discussion of our license agreement with ICI.Supply AgreementAs of March 31, 2019, under our enzyme supply agreement, we could be required to make minimum purchase commitments of up to $3.75 million and amilestone payment of $0.5 million. We are unable to estimate the timing or likelihood of the payments under this agreement as the financial commitment issubject to the first regulatory approval of vibegron in any of the United States, Europe or Canada. See Note 10, “Commitments and contingencies,” to ouraudited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information regarding our enzyme supplyagreement.Off-Balance Sheet ArrangementsDuring the periods presented, we did not have nor do we currently have, any off-balance sheet arrangements, as defined in the rules and regulations of theSEC.Jumpstart Our Business Startups ActWe are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Under this act, an emerging growthcompany can delay the adoption of new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards wouldotherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and,therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. However, weintend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestationrequirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended. We will remain an emerging growth company until the earlier of (1) the date(a) March 31, 2024, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer,which means the market value of our common shares that are held by non-affiliates exceeds $700 million as of the prior September 30th, and (2) the date onwhich we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.Critical Accounting Policies and Significant Judgments and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which havebeen prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of theseconsolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities,disclosure of contingent assets and liabilities as of the dates of the consolidated balance sheets and the reported amounts of expenses during the reportingperiods. In accordance with U.S. GAAP, we evaluate our estimates and95judgments on an ongoing basis. Significant estimates include assumptions used in the determination of some of our costs incurred under our ServicesAgreements, which costs are charged to research and development and general and administrative expense, as well as assumptions used to estimate the fairvalue of common share and option awards. We base our estimates on historical experience and on various other factors that we believe are reasonable underthe circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparentfrom other sources. Actual results may differ from these estimates under different assumptions or conditions.We define our critical accounting policies as those under U.S. GAAP that require us to make subjective estimates and judgments about matters that areuncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply thoseprinciples. While our accounting policies are more fully described in Note 2 to our audited consolidated financial statements appearing elsewhere in thisAnnual Report on Form 10-K, we believe the following are the critical accounting policies used in the preparation of our consolidated financial statementsthat require significant estimates and judgments.Share-Based CompensationWe recognize share-based compensation expense related to stock options granted to employees based on the estimated fair value of the awards on the date ofgrant. We estimate the grant date fair value, and the resulting share-based compensation expense, for stock options that only have service vestingrequirements or performance-based vesting requirements without market conditions using the Black-Scholes option-pricing model. The grant date fair valueof the share-based awards with service vesting requirements is generally recognized on a straight-line basis over the requisite service period, which isgenerally the vesting period of the respective awards. Determining the appropriate amount to expense for performance-based awards based on theachievement of stated goals requires judgment. The estimate of expense is revised periodically based on the probability of achieving the requiredperformance targets and adjustments are made as appropriate. The cumulative impact of any revisions is reflected in the period of change. If any applicablefinancial performance goals are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. For performance-based awards with market conditions, we determine the fair value of awards as of the grant date using a Monte Carlo simulation model.We recognize share-based compensation expense related to stock options granted to non-employees issued in exchange for services based on the estimatedfair value of the awards on the date of grant. We estimate the grant date fair value, and the resulting share-based compensation expense, using the Black-Scholes option-pricing model; however, the fair value of the stock options granted to non-employees is remeasured each reporting period until the service iscomplete, and the resulting increase or decrease in value, if any, is recognized as expense or a reduction in previously recognized expense, respectively,during the period the related services are rendered.The Black-Scholes option-pricing model requires the use of highly subjective assumptions, which determine the fair value of share-based awards. Theseassumptions include:Expected term. Our expected term represents the period that the share-based awards are expected to be outstanding. Since we have limited option exercisehistory, we have generally elected to estimate the expected life of an award based upon the SEC approved “simplified method” (based on the mid-pointbetween the vesting date and the end of the contractual term) noted under the provisions of Staff Accounting Bulletin, or SAB, No. 107 with the continueduse of this method extended under the provisions of SAB No. 110. For share-based awards granted to non-employees, the expected term represents thecontractual term of the award.Expected volatility. Because we do not have an extended trading history for our common shares, the expected volatility was estimated using weighted-average measures of implied volatility and the historical volatility of our peer group of companies for a period equal to the expected life of the stock options.Our peer group of publicly traded biopharmaceutical companies was chosen based on our similar size, stage in the life cycle or area of specialty.Risk-free interest rate. The risk-free interest rate is based on the rates paid on securities issued by the United States Treasury with a term approximating theexpected life of the stock options.Expected dividend. We have never paid, and do not anticipate paying, cash dividends on our common shares. Therefore, the expected dividend yield wasassumed to be zero.96In addition to the Black-Scholes option-pricing model assumptions, we adopted ASU No. 2016-09, Compensation - Stock Compensation (Topic 718):Improvements to Employee Share-Based Payment Accounting, or ASU No. 2016-09, on April 1, 2017 and as a result, have made an entity-wide accountingpolicy election to account for pre-vesting award forfeitures when they occur.As part of the valuation of share-based compensation under the Black-Scholes option-pricing model, it is necessary for us to estimate the fair value of ourcommon shares. Prior to our initial public offering, we were required to periodically estimate the fair value of our common shares when issuing options and incomputing our estimated share-based compensation expense. Given the absence of a public trading market prior to the completion our initial public offering,and in accordance with the American Institute of Certified Public Accountants’ Practice Guide, Valuation of Privately-Held-Company Equity SecuritiesIssued as Compensation, we exercised reasonable judgment and considered numerous objective and subjective factors to determine our best estimate of thefair value of our common shares. The estimation of the fair value of the common shares considered factors including the following: the estimated presentvalue of our future cash flows; our business, financial condition and results of operations; our forecasted operating performance; the illiquid nature of ourcommon shares; industry information such as market size and growth; market capitalization of comparable companies and the estimated value of transactionssuch companies have engaged in; and macroeconomic conditions. In connection with our initial public offering, we reassessed the fair value of our options.Subsequent to our initial public offering, the estimated fair value of share-based payment awards has been determined as indicated in the precedingparagraphs.Research and Development ExpenseResearch and development costs are expensed as incurred. Clinical trial costs are accrued over the service periods specified in the contracts and adjusted asnecessary based upon an ongoing review of the level of effort and costs actually incurred. The estimate of the work completed is developed throughdiscussions with internal personnel and external service providers as to the progress of stage of completion of the services and the agreed-upon fee to be paidfor such services. As actual costs become known, the accrued estimates are adjusted. Such estimates are not expected to be materially different from amountsactually incurred, however our understanding of the status and timing of services performed, the number of subjects enrolled, and the rate of subjectenrollment may vary from estimates and could result in reporting amounts that are higher or lower than incurred in any particular period. The estimate ofaccrued research and development expense is dependent, in part, upon the receipt of timely and accurate reporting from clinical research organizations andother third-party service providers. Payments for a product license prior to regulatory approval of the product and payments for milestones achieved prior toregulatory approval of the product are expensed in the period incurred as research and development. Milestone payments made in connection with regulatoryapprovals are capitalized and amortized to cost of product sales over the remaining useful life of the asset. Research and development costs are charged toexpense when incurred and primarily consist of the intellectual property and research and development materials acquired and expenses from third partieswho conduct research and development activities on our behalf.We have evaluated the in-license agreements of vibegron from Merck and URO-902 from ICI based on the applicable guidance in ASC No. 805, BusinessCombinations, and have determined that the in-process research and development, or IPR&D, assets licensed did not meet the definition of a business andthus the transactions were not considered a business combination. We then evaluated, pursuant to ASC 730, Research and Development, whether the IPR&Dassets had an alternative future use and concluded they did not. As a result, we recorded the upfront license payment of $25.0 million under the Merckagreement and $0.25 million upfront license payment under the ICI agreement as research and development expense upon entry into the license agreements.Income TaxesDeferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amountsof existing assets and liabilities and the respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply totaxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of achange in tax rates is recognized in income in the period that includes the enactment date.When uncertain tax positions exist, we recognize the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. Thedetermination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as considerationof the available facts and circumstances. As of March 31, 2019 and 2018, we did not have any significant uncertain tax positions.97Recent Accounting PronouncementsFor information regarding recently issued accounting pronouncements and the expected impact on our audited consolidated financial statements, see Note 2,“Summary of significant accounting policies,” to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.Item 7A. Quantitative and Qualitative Disclosures About Market Risk.Under SEC rules and regulations, because we are considered to be a “smaller reporting company,” we are not required to provide the information required bythis item in this report.Item 8. Financial Statements and Supplementary Data.All consolidated financial statements and schedules required to be filed hereunder are listed in the Index to Consolidated Financial Statements and areincorporated herein by reference.Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.None.Item 9A. Controls and Procedures.Evaluation of Disclosure Controls and ProceduresUnder the supervision of our principal executive officer and principal financial officer, we evaluated the effectiveness of our disclosure controls andprocedures as of March 31, 2019, the end of the period covered by this report. The term “disclosure controls and procedures” (as defined in Rules 13a-15(e)and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), means controls and other procedures of a company that aredesigned to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act isrecorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information requiredto be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including ourprincipal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. Based on thisevaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective asof March 31, 2019 at the reasonable assurance level.Management’s Annual Report on Internal Control Over Financial ReportingThis Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting due to atransition period established by rules of the SEC for newly public companies.Inherent Limitations on Effectiveness of ControlsOur management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or ourinternal controls, will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute,assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, andthe benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls canprovide absolute assurance that all control issues and instances of fraud, if any, within Urovant Sciences Ltd. have been detected.Attestation Report of the Registered Public Accounting FirmThis Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting due to an exemption established by the JOBS Act for “emerging growth companies.”Changes in Internal Control over Financial ReportingNo changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscalquarter ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.Item 9B. Other Information.None. 98PART IIIWe intend to file a definitive proxy statement for our 2019 Annual General Meeting of Shareholders, or the 2019 Proxy Statement, with the SEC, pursuant toRegulation 14A, not later than 120 days after March 31, 2019. Accordingly, certain information required by Part III has been omitted under GeneralInstruction G(3) to Form 10-K. Only those sections of the 2019 Proxy Statement that specifically address the items set forth herein are incorporated byreference.Item 10. Directors, Executive Officers and Corporate Governance.The information required by this item will be contained in our 2019 Proxy Statement under the captions “Election of Directors,” “Information RegardingBoard of Directors and Corporate Governance,” “Executive Officers” and, if applicable, “Delinquent Section 16(a) Reports” and is incorporated herein byreference.Code of ConductWe have adopted a Code of Business Conduct and Ethics, or Code of Conduct, that applies to all of our directors, officers and employees, including ourprincipal executive officer and principal financial and accounting officer. The Code of Conduct is posted on our website located at www.urovant.com. Weintend to disclose any material future amendments to, or waivers of, provisions of the Code of Conduct on our website within 4 business days following thedate of the amendment or waiver.Item 11. Executive Compensation.The information required by this item will be contained in our 2019 Proxy Statement under the captions “Information Regarding Board of Directors andCorporate Governance,” “Executive Compensation” and “Director Compensation” and is incorporated herein by reference.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.The information required by this item will be contained in our 2019 Proxy Statement under the captions “Security Ownership of Certain Beneficial Ownersand Management” and “Equity Compensation Plan Information” and is incorporated herein by reference.Item 13. Certain Relationships and Related Transactions, and Director Independence.The information required by this item will be contained in our 2019 Proxy Statement under the captions “Transactions with Related Persons” and“Information Regarding the Board of Directors and Corporate Governance” and is incorporated herein by reference.Item 14. Principal Accountant Fees and Services.The information required by this item will be contained in our 2019 Proxy Statement under the captions “Ratification of Selection of Independent RegisteredPublic Accounting Firm, Appointment of Auditor for Statutory Purposes and Authorization for the Board to set Auditor Remuneration” and is incorporatedherein by reference.99PART IVItem 15. Exhibits and Financial Statement Schedules. (a)Documents filed as part of this Annual Report on Form 10-K: (1)Financial Statements. Our audited consolidated financial statements and the Report of Independent Registered Public Accounting Firm areincluded herein on the pages indicated: PageReport of Independent Registered Public Accounting FirmF-2 Consolidated Balance Sheets as of March 31, 2019 and 2018F-3 Consolidated Statements of Operations for the Years Ended March 31, 2019 and 2018F-4 Consolidated Statements of Comprehensive Loss for the Years Ended March 31, 2019 and 2018F-5 Consolidated Statements of Shareholders’ Equity for the Years Ended March 31, 2019 and 2018F-6 Consolidated Statements of Cash Flows for the Years Ended March 31, 2019 and 2018F-7 Notes to Consolidated Financial StatementsF-8 (2)Financial Statement Schedules. All financial statement schedules are omitted because they are not applicable or the required information isincluded in the audited consolidated financial statements or notes thereto.100 (3)Exhibits. ExhibitNumber Incorporated by Reference Filed Description Form File No. Exhibit Filing Date Herewith 3.1 Certificate of Incorporation. S-1 333-226169 3.1 7/13/18 3.2 Memorandum of Association. S-1 333-226169 3.2 7/13/18 3.3 Amended and Restated Bye-laws. S-1 333-226169 3.3 7/13/18 4.1 Warrant Agreement, dated February 20, 2019, issued toHercules Capital, Inc. 8-K 001-38667 4.1 2/22/19 4.2 Description of Securities. X 10.1* License Agreement, dated February 3, 2017, by and betweenUrovant Sciences GmbH and Merck Sharp & Dohme Corp., asamended on April 27, 2017 and March 19, 2018. S-1/A 333-226169 10.1 9/10/18 10.2* Collaboration Agreement, dated as of August 24, 2017, by andbetween Urovant Sciences GmbH and Kyorin PharmaceuticalCo., Ltd. S-1/A 333-226169 10.2 9/10/18 10.3* China IP Purchase Agreement, effective as of June 12, 2017,by and between Urovant Sciences GmbH and RoivantSciences GmbH, as amended on May 22, 2018. S-1 333-226169 10.3 7/13/18 10.4* Collaboration Agreement, dated June 1, 2018, by and betweenUrovant Sciences GmbH and Roivant Sciences GmbH. S-1 333-226169 10.4 7/13/18 10.5* Enzyme Supply Agreement, effective as of September 1, 2017,by and between Urovant Sciences GmbH and Codexis, Inc. S-1/A 333-226169 10.5 9/10/18 10.6 Amended and Restated Services Agreement, effective as ofJuly 9, 2018, by and among Roivant Sciences, Inc., UrovantSciences GmbH, Urovant Sciences, Inc. and the Registrant. S-1 333-226169 10.6 7/13/18 10.7 Amended and Restated Services Agreement, effective as ofJuly 9, 2018, by and among Roivant Sciences GmbH andUrovant Sciences GmbH. S-1 333-226169 10.7 7/13/18 10.8 Information Sharing and Cooperation Agreement, dated as ofJuly 9, 2018, by and between Roivant Sciences Ltd. and theRegistrant. S-1 333-226169 10.8 7/13/18 10.9 Registration Rights Agreement, dated as of July 7, 2018, byand between Roivant Sciences Ltd. and the Registrant. S-1 333-226169 10.9 7/13/18 101 10.10* Data Sharing Agreement, effective as of May 22, 2018, by andbetween Urovant Sciences GmbH and Datavant, Inc. S-1 333-226169 10.10 7/13/18 10.11* License Agreement, dated August 24, 2018, by and betweenUrovant Sciences GmbH and Ion Channel Innovations, LLC. S-1/A 333-226169 10.11 8/30/18 10.12+ Form of Indemnification Agreement with directors andexecutive officers. S-1/A 333-226169 10.12 8/30/18 10.13+ 2017 Equity Incentive Plan, as amended and restated. S-1/A 333-226169 10.13 9/17/18 10.14+ Forms of Option Grant Notice and Option Agreement underthe 2017 Equity Incentive Plan, as amended and restated. S-1/A 333-226169 10.14 9/17/18 10.15+ Form of Early Exercise Stock Purchase Agreement under the2017 Equity Incentive Plan, as amended and restated. S-1/A 333-226169 10.15 9/17/18 10.16+ Employment Agreement, dated September 14, 2017, by andbetween Keith A. Katkin and Urovant Sciences, Inc. S-1/A 333-226169 10.16 8/30/18 10.17+ Employment Agreement, dated September 13, 2018, by andbetween Christine G. Ocampo and Urovant Sciences, Inc. S-1/A 333-226169 10.17 9/17/18 10.18+ Employment Agreement, dated September 13, 2018, by andbetween Nori Ebersole and Urovant Sciences, Inc. S-1/A 333-226169 10.18 9/17/18 10.19+ Employment Agreement, dated September 13, 2018, by andbetween Cornelia Haag-Molkenteller, M.D., Ph.D. and UrovantSciences, Inc. S-1/A 333-226169 10.19 9/17/18 10.20+ Employment Agreement, dated September 13, 2018, by andbetween Michael McFadden and Urovant Sciences, Inc. S-1/A 333-226169 10.20 9/17/18 10.21+ Employment Agreement, dated September 13, 2018, by andbetween Bryan E. Smith and Urovant Sciences, Inc. S-1/A 333-226169 10.21 9/17/18 10.22+ Forms of Restricted Stock Unit Grant Notice and RestrictedStock Unit Award Agreement under the 2017 Equity IncentivePlan, as amended and restated. 10-Q 001-38667 10.1 2/13/19 10.23 Loan and Security Agreement, dated February 20, 2019, byand among Hercules Capital, Inc., Urovant Sciences Ltd.,Urovant Holdings Limited, Urovant Sciences GmbH andUrovant Sciences, Inc. X 102 10.24 Unconditional Secured Guaranty, dated February 20, 2019, byand between Hercules Capital, Inc. and Urovant Sciences, Inc. X 21.1 Subsidiaries of the Registrant. X 23.1 Consent of Ernst & Young LLP, independent registered publicaccounting firm. X 31.1 Certification of Principal Executive Officer Pursuant to Rule13a-14(a) of the Securities Exchange Act of 1934, as AdoptedPursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 31.2 Certification of Principal Financial Officer Pursuant to Rule13a-14(a) of the Securities Exchange Act of 1934, as AdoptedPursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 32.1** Certification of Principal Executive Officer Pursuant to 18U.S.C. Section 1350, as Adopted Pursuant to Section 906 ofthe Sarbanes-Oxley Act of 2002. X 32.2** Certification of Principal Financial Officer Pursuant to 18U.S.C. Section 1350, as Adopted Pursuant to Section 906 ofthe Sarbanes-Oxley Act of 2002. X 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document +Indicates management contract or compensatory plan.*Confidential treatment has been granted for portions omitted from this exhibit (indicated by asterisks) and those portions have been separately filedwith the SEC.**These certifications are being furnished solely to accompany this Annual Report on Form 10-K pursuant to 18 U.S.C. Section 1350, and are not beingfiled for purposes of Section 18 of the Exchange Act, and are not to be incorporated by reference into any filing of the Registrant, whether made beforeor after the date hereof, regardless of any general incorporation language in such filing.Item 16. Form 10-K SummaryNone.103SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to besigned on its behalf by the undersigned, thereunto duly authorized. Company Name Date: June 14, 2019 By:/s/ Keith A. Katkin Keith A. Katkin Principal Executive Officer Power of AttorneyKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Keith A. Katkin and Christine G.Ocampo, jointly and severally, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her andin his or her name, place and stead, in any and all capacities, to sign this Annual Report on Form 10-K of Urovant Sciences Ltd., and any or all amendments(including post-effective amendments) thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with theSecurities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act andthing requisite or necessary to be done in and about the premises hereby ratifying and confirming all that said attorneys-in-fact and agents, or his, her or theirsubstitute or substitutes, may lawfully do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf ofthe Registrant in the capacities and on the dates indicated. Name Title Date /s/ Keith A. Katkin Principal Executive Officer and Director June 14, 2019Keith A. Katkin /s/ Christine G. Ocampo Principal Financial and Accounting Officer (Urovant’s authorizedrepresentative in the United States) June 14, 2019Christine G. Ocampo /s/ Myrtle S. Potter Director June 14, 2019Myrtle S. Potter /s/ Sef P. Kurstjens Director June 14, 2019Sef P. Kurstjens, M.D., Ph.D. /s/ Pierre Legault Director June 14, 2019Pierre Legault /s/ James Robinson Director June 14, 2019James Robinson /s/ Frank M. Torti Director June 14, 2019Frank M. Torti, M.D. 104INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting FirmF-2 Consolidated Balance Sheets as of March 31, 2019 and 2018F-3 Consolidated Statements of Operations for the Years Ended March 31, 2019 and 2018F-4 Consolidated Statements of Comprehensive Loss for the Years Ended March 31, 2019 and 2018F-5 Consolidated Statements of Shareholders’ Equity for the Years Ended March 31, 2019 and 2018F-6 Consolidated Statements of Cash Flows for the Years Ended March 31, 2019 and 2018F-7 Notes to Consolidated Financial StatementsF-8 F-1Report of Independent Registered Public Accounting FirmTo the Shareholders and the Board of Directors of Urovant Sciences Ltd.Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Urovant Sciences Ltd. (the Company) as of March 31, 2019 and 2018, the relatedconsolidated statements of operations, comprehensive loss, shareholders' equity and cash flows for each of the two years in the period ended March 31, 2019,and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly,in all material respects, the financial position of the Company at March 31, 2019 and 2018, and the results of its operations and its cash flows for each of thetwo years in the period ended March 31, 2019, in conformity with U.S. generally accepted accounting principles.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations ofthe 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 financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, norwere we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding ofinternal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financialreporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures inthe financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ Ernst & Young LLPWe have served as the Company’s auditor since 2018.Irvine, CaliforniaJune 14, 2019 F-2UROVANT SCIENCES LTD.Consolidated Balance Sheets(in thousands, except share and per share data) March 31, 2019 March 31, 2018 Assets Current assets: Cash and cash equivalents $85,353 $7,194 Restricted cash 243 — Prepaid expenses and other current assets 12,914 5,196 Total current assets 98,510 12,390 Furniture and equipment, net 923 510 Restricted cash, net of current portion 600 — Other assets 88 84 Total assets $100,121 $12,984 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $1,925 $833 Accrued expenses 9,877 3,595 Due to Roivant Sciences Ltd. 15 1,482 Total current liabilities 11,817 5,910 Long-term debt 13,534 — Total liabilities 25,351 5,910 Commitments and contingencies (Note 10) Shareholders' equity Common shares, par value $0.000037453 per share, 267,001,308 shares authorized, 30,322,911 and 20,025,098 issued and outstanding at March 31, 2019 and 2018, respectively 1 1 Common shares subscribed (1) (1)Shareholder receivable — (1,310)Accumulated other comprehensive income 269 7 Additional paid-in capital 250,032 72,562 Accumulated deficit (175,531) (64,185)Total shareholders' equity 74,770 7,074 Total liabilities and shareholders' equity $100,121 $12,984 The accompanying notes are an integral part of these consolidated financial statements. F-3UROVANT SCIENCES LTD.Consolidated Statements of Operations(in thousands, except share and per share data) Year Ended March 31, 2019 2018 Operating expenses: Research and development(1) $92,198 $32,359 General and administrative(2) 18,585 4,640 Total operating expenses 110,783 36,999 Other income (expense): Interest expense, net (259) — Other expense (257) (38)Loss before provision for income taxes (111,299) (37,037)Provision for income taxes 47 37 Net loss $(111,346) $(37,074)Net loss per common share—basic and diluted $(4.43) $(2.16)Weighted average common shares outstanding—basic and diluted 25,145,211 17,124,659 (1)Includes $2,251 and $7,713 of costs allocated from Roivant Sciences Ltd. during the years ended March 31, 2019 and 2018, respectively. Alsoincludes share-based compensation expense (see Note 9).(2)Includes $1,692 and $1,377 of costs allocated from Roivant Sciences Ltd. during the years ended March 31, 2019 and 2018, respectively. Alsoincludes share-based compensation expense (see Note 9).The accompanying notes are an integral part of these consolidated financial statements. F-4UROVANT SCIENCES LTD.Consolidated Statements of Comprehensive Loss(in thousands) Year Ended March 31, 2019 2018 Net loss $(111,346) $(37,074)Other comprehensive income (loss): Foreign currency translation adjustment 262 32 Total other comprehensive income 262 32 Comprehensive loss $(111,084) $(37,042) The accompanying notes are an integral part of these consolidated financial statements.F-5UROVANT SCIENCES LTD.Consolidated Statements of Shareholders’ Equity(in thousands, except share data) Common Shares CommonShares Shareholder AdditionalPaid-in Accumulated AccumulatedOtherComprehensive TotalShareholders' Shares Amount Subscribed Receivable Capital Deficit Income (Loss) Equity Balance at March 31, 2017 2,670,013 $— $— $— $31,046 $(27,111) $(25) $3,910 Capital contributions — — — (1,310) 38,345 — — 37,035 Issuance of common shares to Roivant Sciences Ltd. 17,355,085 1 (1) — — — — — Share-based compensation expense — — — — 416 — — 416 Capital contribution - share-based compensation expense — — — — 2,755 — — 2,755 Foreign currency translation adjustment — — — — — — 32 32 Net loss — — — — — (37,074) — (37,074)Balance at March 31, 2018 20,025,098 1 (1) (1,310) 72,562 (64,185) 7 7,074 Capital contributions — — — 1,310 40,321 — — 41,631 Share-based compensation expense — — — — 3,398 — — 3,398 Capital contribution - share-based compensation expense — — — — 580 — — 580 Issuance of common shares in initial public offering, net of commissions and offering costs of $11.3 million 10,297,813 — — — 132,931 — — 132,931 Warrants issued with long-term debt — — — — 240 — — 240 Foreign currency translation adjustment — — — — — — 262 262 Net loss — — — — — (111,346) — (111,346)Balance at March 31, 2019 30,322,911 $1 $(1) $— $250,032 $(175,531) $269 $74,770 The accompanying notes are an integral part of these consolidated financial statements. F-6UROVANT SCIENCES LTD.Consolidated Statements of Cash Flows(in thousands) Year Ended March 31, 2019 2018 Cash flows from operating activities: Net loss $(111,346) $(37,074)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 180 12 Share-based compensation expense 3,978 3,171 Amortization of debt discount and issuance costs 92 — Unrealized foreign currency translation adjustment 262 32 Changes in operating assets and liabilities: Prepaid expenses and other current assets (7,462) (5,187)Other assets (4) (84)Due to Roivant Sciences Ltd. (1,467) 640 Accounts payable 1,092 817 Accrued expenses 5,639 3,587 Net cash used in operating activities (109,036) (34,086)Cash flows from investing activities: Purchases of furniture and equipment (593) (522)Net cash used in investing activities (593) (522)Cash flows from financing activities: Proceeds from capital contributions from Roivant Sciences Ltd. 41,631 37,035 Proceeds from issuance of common shares in initial public offering, net of offering costs 132,931 — Cash proceeds from debt financing, net of financing costs 14,069 — Net cash provided by financing activities 188,631 37,035 Net change in cash, cash equivalents and restricted cash 79,002 2,427 Cash, cash equivalents and restricted cash—beginning of year 7,194 4,767 Cash, cash equivalents and restricted cash—end of year $86,196 $7,194 Non-cash financing activities: Shareholder receivable for the sale of intellectual property rights in China recorded as a deemed capital contribution (see Note 6[B]) $— $1,310 Warrants issued with long-term debt $240 $— Deferred financing costs included in accounts payable and accrued expenses $387 $— Supplemental disclosure of cash paid: Income taxes $178 $20 Interest $169 $— The accompanying notes are an integral part of these consolidated financial statements. F-7 UROVANT SCIENCES LTD.Notes to Consolidated Financial StatementsNote 1—Description of business and liquidity[A] Description of business:Urovant Sciences Ltd. and its subsidiaries (collectively, the “Company”) is a clinical-stage biopharmaceutical company focused on developing andcommercializing innovative therapies for urologic conditions. The Company’s lead product candidate, vibegron, is an oral, once-daily, small molecule beta-3 agonist. The Company is currently developing vibegron for the treatment of overactive bladder, or OAB. The Company is also developing vibegron for thetreatment of two additional potential indications: OAB in men with benign prostatic hyperplasia and abdominal pain due to irritable bowel syndrome. TheCompany’s second product candidate, URO-902 (formerly known as hMaxi-K), is a novel gene therapy that the Company is developing for patients withOAB who have failed oral pharmacological therapy. There are no currently available FDA-approved gene therapy treatments for OAB. The Company wasfounded on January 27, 2016 as a Bermuda Exempted Limited Company and a wholly owned subsidiary of Roivant Sciences Ltd. In November 2016, theCompany incorporated as its wholly owned subsidiaries (1) Urovant Holdings Ltd. (“UHL”), a private limited company incorporated under the laws ofEngland and Wales, (2) Urovant Sciences GmbH (“USG”), a company with limited liability formed under the laws of Switzerland, (3) Urovant Sciences, Inc.(“USI”), a Delaware corporation based in the United States of America, and in March 2019 incorporated as its wholly owned subsidiaries (4) Urovant TreasuryHolding, Inc. (“UTH”), a Delaware corporation based in the United States of America, and (5) Urovant Sciences Treasury, Inc. (“UST”), a Delawarecorporation based in the United States of America.Since its inception, the Company has devoted substantially all of its efforts to organizing and staffing the Company, acquiring its product candidates,vibegron and URO-902, and preparing for and advancing vibegron into clinical development. Vibegron was licensed from Merck Sharp & Dohme Corp.(“Merck”), a subsidiary of Merck & Co., in February 2017. URO-902 was licensed from Ion Channel Innovations, LLC (“ICI”) in August 2018. The Companyhas determined that it has one operating and reporting segment as it allocates resources and assesses financial performance on a consolidated basis.[B] Liquidity:The Company has not historically been capitalized with sufficient funding to conduct its operations. Certain other costs of conducting the Company’soperations prior to the Company’s initial public offering, which was completed in October 2018, were paid by Roivant Sciences Ltd., inclusive of its whollyowned subsidiaries (“RSL”), and were reimbursed by the Company including amounts pursuant to services agreements with Roivant Sciences, Inc. (“RSI”)and Roivant Sciences GmbH (“RSG”).The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets andsatisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments relating to the recoverabilityand classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. TheCompany has incurred and expects to continue to incur significant and increasing operating losses and negative cash flows for at least the next several years.To date, the Company has not generated any revenues and does not anticipate generating any revenues unless and until it successfully completesdevelopment and obtains regulatory approval for one of its product candidates. The Company currently believes its existing cash and cash equivalents,together with the financing commitment currently available to be drawn down by the Company of $30 million from Hercules Capital, Inc. (see Note 5), willbe sufficient to fund its committed operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of theseconsolidated financial statements. This estimate is based on the Company’s current assumptions, including assumptions relating to its ability to manage its’spend, and that the Company could use its available capital resources sooner than currently expected. These funds will not be sufficient to enable theCompany to complete all necessary development activities and commercially launch vibegron or URO-902. Accordingly, the Company will seek to obtainadditional capital through equity financings, the sale of debt or other arrangements. However, there can be no assurance that the Company will be able toraise additional capital when needed or under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issuedshares may contain senior rights and preferences compared to currently outstanding common shares. The Company’s agreement with Hercules Capital, Inc.involves, and any agreements for future debt or preferred equity financings, if available, may involve covenants limiting or restricting the Company’s abilityto take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If the Company is unable to obtain suchadditional financing, operations would need to be scaled back or discontinued.F-8UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued The Company’s future operations are highly dependent on a combination of factors, including (1) the success of its research and development programs;(2) the timely and successful completion of any additional financing; (3) the development of competitive therapies by other biotechnology andpharmaceutical companies; (4) the Company’s ability to manage growth of the organization; (5) the Company’s ability to protect its technology andproducts; and, ultimately (6) regulatory approval and market acceptance of vibegron, URO-902 or any future product candidate.Note 2—Summary of significant accounting policies[A] Basis of presentation:The Company’s fiscal year ends on March 31. The accompanying consolidated financial statements have been prepared in conformity with accountingprinciples generally accepted in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to theauthoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the FinancialAccounting Standards Board (“FASB”). The consolidated financial statements include the accounts of USL and UHL, USG, USI, UTH, and UST, USL’swholly owned subsidiaries. USL has no unconsolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.On September 11, 2018, the Company’s board of directors approved a 1-for-3.7453 reverse share split of the Company’s authorized and issued andoutstanding common shares. The reverse share split increased par value to $0.000037453. The reverse split became effective on September 13, 2018. Theaccompanying consolidated financial statements and notes to the consolidated financial statements give retroactive effect to the reverse share split for allperiods presented.[B] Use of estimates:The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect theamounts reported in the consolidated financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related toassets, liabilities, costs, expenses and compensation expense allocated to the Company under its services agreements with RSI and RSG, as well as share-based compensation, research and development costs and income taxes. The Company bases its estimates and assumptions on historical experience and onvarious other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carryingvalues of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates.[C] Risks and uncertainties:The Company is subject to risks common to early stage companies in the biopharmaceutical industry including, but not limited to, uncertainties related tocommercialization of products, regulatory approvals, dependence on key products, third-party service providers such as contract research organizations andcontract manufacturing organizations, protection of intellectual property rights and the ability to make milestone, royalty or other payments due under anylicense, collaboration or supply agreements.[D] Cash, cash equivalents and restricted cash:Cash and cash equivalents include cash deposits in banks and all highly liquid investments that are readily convertible to cash. The Company considers allhighly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains cash deposits and cashequivalents in highly-rated, federally-insured financial institutions in excess of federally insured limits. The Company has established guidelines relative todiversification and maturities to maintain liquidity and preservation of capital. The Company has not experienced any credit losses related to these financialinstruments and does not believe that it is exposed to any significant credit risk related to these instruments.Restricted cash consists of legally restricted non-interest-bearing deposit accounts held as compensating balances against the Company’s corporate creditcard program and an irrevocable standby letter of credit connected to an office lease entered into in November 2018 with an expiration date in 2026 (see Note10). Restricted cash classified as a current asset consists of the restricted deposit account relating to the Company’s corporate credit card agreement.Restricted cash classified as a long-term asset consists of the restricted deposit account related to the irrevocable standby letter of credit.F-9UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued Cash as reported in the consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted cash as presented onthe consolidated balance sheets. Cash as reported in the consolidated statements of cash flows consists of (in thousands): March 31, 2019 March 31, 2018 Cash and cash equivalents $85,353 $7,194 Restricted cash 843 — Cash, cash equivalents and restricted cash $86,196 $7,194[E] Property and equipment:Property and equipment, consisting of computers, equipment, furniture and fixtures and leasehold improvements, is recorded at cost. Maintenance and repairsthat do not improve or extend the lives of the respective assets are expensed to operations as incurred. Upon disposal, retirement or sale, the related cost andaccumulated depreciation is removed from the accounts and any resulting gain or loss is included in the consolidated results of operations. Depreciation isrecorded for property and equipment using the straight-line method over the estimated useful lives of three to seven years, once the asset is installed andplaced in service. Leasehold improvements are amortized using the straight-line method over the estimated useful life or remaining lease term, whichever isshorter.The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate thatthe carrying amount of a long-lived asset might not be recoverable. Recoverability is measured by comparison of the book values of the assets to future netundiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured bythe amount by which the book value of the assets exceed their fair value, which is measured based on the projected discounted future net cash flows arisingfrom the assets.[F] Deferred offering costs:Deferred offering costs consist of qualified legal, accounting, and other direct costs related to the Company’s efforts to raise capital through a public orprivate sale of the Company’s capital stock. These costs are deferred until the completion of the applicable offering, at which time such costs are reclassifiedto additional paid-in-capital as a reduction of the proceeds. The Company’s initial public offering costs were reclassified to additional paid-in capital uponthe closing of the Company’s initial public offering on October 1, 2018.[G] Debt issuance costs and debt discount:Debt issuance costs include the costs of debt financings undertaken by the Company, including legal fees, accounting fees, and other direct costs of thefinancing. Debt issuance costs related to a recognized debt liability are presented in the consolidated balance sheets as a direct deduction from the carryingamount of the debt liability, consistent with debt discounts, and are amortized to interest expense over the term of the related debt using the effective interestmethod. Further, debt discounts created as a result of the allocation of proceeds received from a debt issuance to warrants issued in conjunction with the debtissuance are amortized to interest expense under the effective interest method over the life of the recognized debt liability.[H] Financial instruments:The Company applies a fair value framework in order to measure and disclose its financial assets and liabilities. Fair value is defined as the exchange pricethat would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in anorderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observableinputs, where available, and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measurefair value: •Level 1 - Quoted prices in active markets for identical assets or liabilities. •Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are notactive; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets orliabilities. Fair values are determined by utilizing quoted prices for similar assets and liabilities in active markets or other market observableinputs such as interest rates and yield curves.F-10UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued •Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets orliabilities. To the extent the valuation is based on models or inputs that are less observable in the market, the determination of fair value requires more judgment.Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financialinstrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.The Company’s financial instruments consist of cash, cash equivalents consisting of money market accounts, restricted cash, accounts payable, accruedexpenses, amounts due to and from RSL and long-term debt. The carrying value of the Company’s long-term debt approximates fair value based on currentinterest rates for similar types of borrowings and is included in Level 2 of the fair value hierarchy. The remaining financial instruments are stated at theirrespective historical carrying amounts, which approximates fair value due to their short-term nature.[I] Contingencies:The Company may be, from time to time, a party to various disputes and claims arising from normal business activities. The Company continually assesseslitigation to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss which could be estimated. In accordance with theguidance of the FASB on accounting for contingencies, the Company accrues for all contingencies at the earliest date at which the Company deems itprobable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and noamount within the range is more likely than another, the Company accrues the minimum of the range. In the cases where the Company believes that areasonably possible loss exists, the Company discloses the facts and circumstances of the litigation, including an estimable range, if possible.[J] Research and development expense:Research and development costs are expensed as incurred. Payments for a product license prior to regulatory approval of the product and payments formilestones achieved prior to regulatory approval of the product are expensed in the period incurred as research and development. Milestone payments madein connection with regulatory approvals are capitalized and amortized to cost of product sales over the remaining useful life of the asset. Research anddevelopment expenses primarily consist of employee-related expenses, such as salaries, share-based compensation, benefits and travel expenses for researchand development personnel, expenses from third parties who conduct research and development activities on behalf of the Company, the intellectualproperty and research and development materials acquired from Merck and ICI (see Note 3) and certain costs charged by RSI and RSG under their servicesagreements with the Company (see Note 6[A]). The estimated costs of research and development activities conducted by third-party service providers, whichprimarily include the conduct of clinical trials and contract manufacturing activities, are accrued over the service periods specified in the contracts andadjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. The estimate of the work completed is developedthrough discussions with internal personnel and external service providers as to the progress of stage of completion of the services and the agreed-upon fee tobe paid for such services. As actual costs become known, the accrued estimates are adjusted. Such estimates are not expected to be materially different fromamounts actually incurred, however the Company’s understanding of the status and timing of services performed, the number of subjects enrolled, and therate of subject enrollment may vary from estimates and could result in reporting amounts that are higher or lower than incurred in any particular period. Theestimate of accrued research and development expense is dependent, in part, upon the receipt of timely and accurate reporting from clinical researchorganizations and other third-party service providers.[K] Leases:At the inception of a lease, the Company evaluates the lease agreement to determine whether the lease is an operating or capital lease. For operating leases,the Company recognizes rent expense on a straight-line basis over the lease term and records the difference between cash rent payments and the recognitionof rent expense as a deferred liability. Where lease agreements contain rent escalation clauses, rent abatements and/or concessions, such as rent holidays andtenant improvement allowances, the Company applies them in the determination of straight-line rent expense over the lease term.F-11UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued Certain lease agreements also require the Company to make additional payments for taxes, insurance, and other operating expenses incurred during the leaseperiod, which are expensed as incurred.[L] Income taxes:The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for theexpected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets andliabilities are determined on the basis of the differences between the consolidated financial statement and tax bases of assets and liabilities using enacted taxrates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities isrecognized in income in the period that includes the enactment date.The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination,the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected futuretaxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets inthe future in excess of its net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reducethe provision for income taxes.When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not berealized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well asconsideration of the available facts and circumstances. The Company’s policy is to recognize interest and/or penalties related to income tax matters inincome tax expense.[M] Share-based compensation:The Company recognizes share-based compensation expense related to stock options granted to employees based on the estimated fair value of the awards onthe date of grant. The Company estimates the grant date fair value, and the resulting share-based compensation expense, for stock options that only haveservice vesting requirements or performance-based vesting requirements without market conditions using the Black-Scholes option-pricing model. The grantdate fair value of the share-based awards with service vesting requirements is generally recognized on a straight-line basis over the requisite service period,which is generally the vesting period of the respective awards. Determining the appropriate amount to expense for performance-based awards based on theachievement of stated goals requires judgment. The estimate of expense is revised periodically based on the probability of achieving the requiredperformance targets and adjustments are made as appropriate. The cumulative impact of any revisions is reflected in the period of change. If any applicablefinancial performance goals are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. For performance-based awards with market conditions, the Company determines the fair value of awards as of the grant date using a Monte Carlo simulation model.The Company recognizes share-based compensation expense related to stock options granted to non-employees issued in exchange for services based on theestimated fair value of the awards on the date of grant. The Company estimates the grant date fair value, and the resulting share-based compensation expense,using the Black-Scholes option-pricing model; however, the fair value of the stock options granted to non-employees is remeasured each reporting perioduntil the service is complete, and the resulting increase or decrease in value, if any, is recognized as expense or a reduction in previously recognized expense,respectively, during the period the related services are rendered.The Black-Scholes option-pricing model requires the use of subjective assumptions, which determine the fair value of share-based awards. These assumptionsinclude:Expected term. The Company’s expected term represents the period that the share-based awards are expected to be outstanding. Since the Company haslimited option exercise history, it has generally elected to estimate the expected life of an award based upon the Securities and Exchange Commission(“SEC”) approved “simplified method” (based on the mid-point between the vesting date and the end of the contractual term) noted under the provisions ofStaff Accounting Bulletin (“SAB”) No. 107 with the continued use of this method extended under the provisions of SAB No. 110. For share-based awardsgranted to non-employees, the expected term represents the contractual term of the award.F-12UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued Expected volatility. Because the Company does not have an extended trading history for its common shares, the expected volatility was estimated usingweighted-average measures of implied volatility and the historical volatility of its peer group of companies for a period equal to the expected life of the stockoptions. The Company’s peer group of publicly traded biopharmaceutical companies was chosen based on their similar size, stage in the life cycle or area ofspecialty.Risk-free interest rate. The risk-free interest rate is based on the rates paid on securities issued by the United States Treasury with a term approximating theexpected life of the stock options.Expected dividend. The Company has never paid, and does not anticipate paying, cash dividends on its common shares. Therefore, the expected dividendyield was assumed to be zero.In addition to the Black-Scholes option-pricing model assumptions, the Company adopted ASU No. 2016-09, Compensation - Stock Compensation (Topic718): Improvements to Employee Share-Based Payment Accounting, (“ASU No. 2016-09”) on April 1, 2017 and as a result, has made an entity-wideaccounting policy election to account for pre-vesting award forfeitures when they occur. The impact of this adoption was immaterial and has been reflected inthe Company’s consolidated statement of operations for the year ended March 31, 2018.As part of the valuation of share-based compensation under the Black-Scholes option-pricing model, it is necessary for the Company to estimate the fairvalue of its common shares. Prior to the Company’s initial public offering, it was required to periodically estimate the fair value of its common shares whenissuing options and in computing its estimated share-based compensation expense. Given the absence of a public trading market prior to the completion itsinitial public offering, and in accordance with the American Institute of Certified Public Accountants’ Practice Guide, Valuation of Privately-Held-CompanyEquity Securities Issued as Compensation, the Company exercised reasonable judgment and considered numerous objective and subjective factors todetermine its best estimate of the fair value of its common shares. The estimation of the fair value of the common shares considered factors including thefollowing: the estimated present value of the Company’s future cash flows; the Company’s business, financial condition and results of operations; theCompany’s forecasted operating performance; the illiquid nature of the Company’s common shares; industry information such as market size and growth;market capitalization of comparable companies and the estimated value of transactions such companies have engaged in; and macroeconomic conditions. Inconnection with the Company’s initial public offering, the Company reassessed the fair value of its options. Subsequent to the Company’s initial publicoffering, the estimated fair value of share-based payment awards has been determined as indicated in the preceding paragraphs.[N] Foreign currency:The Company has operations in the United States, the United Kingdom and Switzerland. The results of its non-U.S. dollar based functional currencyoperations are translated to U.S. dollars at the average exchange rates during the period. The Company’s assets and liabilities are translated using the currentexchange rate as of the consolidated balance sheet date and shareholders’ equity is translated using historical rates. Adjustments resulting from thetranslation of the consolidated financial statements of the Company’s foreign functional currency subsidiaries into U.S. dollars are excluded from thedetermination of net loss and are accumulated in a separate component of shareholders’ equity. Foreign exchange transaction gains and losses are included inother income (expense) in the Company’s consolidated results of operations.[O] Net loss per common share:Basic net loss per common share is computed by dividing net loss applicable to common shareholder by the weighted-average number of common sharesoutstanding during the period. Diluted net loss per common share is computed by dividing the net loss applicable to common shareholders by the dilutedweighted-average number of common shares outstanding during the period calculated in accordance with the treasury stock method. In periods in which theCompany reports a net loss, all common share equivalents are deemed anti-dilutive such that basic net loss per common share and diluted net loss percommon share are equal. Potentially dilutive common shares have been excluded from the diluted net loss per common share computations in all periodspresented because such securities have an anti-dilutive effect on net loss per common share due to the Company’s net loss. There are no reconciling itemsused to calculate the weighted-average number of total common shares outstanding for basic and diluted net loss per common share data.F-13UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued At March 31, 2019 and 2018, potentially dilutive securities were as follows: March 31, 2019 2018 Options 4,058,866 1,737,838 Restricted stock units (unvested) 5,000 — Warrants 33,259 — Total 4,097,125 1,737,838[P] Recently adopted accounting standards:In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU No. 2016-16”),which eliminates the exception in existing guidance which defers the recognition of the tax effects of intra-entity asset transfers other than inventory until thetransferred asset is sold to a third party. Rather, the amended guidance requires an entity to recognize the income tax consequences of an intra-entity transferof an asset other than inventory when the transfer occurs. This guidance is effective for interim and annual periods beginning after December 15, 2017, withearly adoption permitted as of the beginning of an annual reporting period. Entities must apply the guidance on a modified retrospective basis though acumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The adoption of ASU No. 2016-16 on April 1, 2018 did nothave a material impact on the Company's consolidated financial position, results of operations and related disclosures.In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230), (“ASU No. 2016-18”) which requires thatrestricted cash be added to cash and cash equivalents when reconciling the beginning and ending amounts on the consolidated statements of cash flows. Theguidance also requires entities that report cash and cash equivalents and restricted cash separately on the consolidated balance sheets to reconcile thoseamounts to the consolidated statements of cash flows. ASU No. 2016-18 is effective for interim and annual reporting periods beginning after December 15,2017 and early adoption is permitted. Entities must apply the guidance retrospectively to each period presented. As a result, the Company added restrictedcash to the ending amounts on the consolidated statements of cash flows for the year ended March 31, 2019.In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU No. 2017-01”),which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accountedfor as acquisitions (or disposals) of assets or businesses. ASU No. 2017-01 is effective for annual reporting periods beginning after December 15, 2017, andinterim periods within those years, with early adoption permitted. The Company adopted this ASU on April 1, 2018 and will apply the guidance toapplicable transactions after the adoption date. The impact on the Company’s consolidated financial position, results of operations and related disclosureswill depend on the facts and circumstances of any specific future transactions.In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain TaxEffects from Accumulated Other Comprehensive Income (“ASU No. 2018-02”). ASU No. 2018-02 allows companies to reclassify stranded tax effects resultingfrom the Tax Cuts and Jobs Act, from accumulated other comprehensive (loss) income to retained earnings. ASU No. 2018-02 is effective for interim andannual reporting periods beginning after December 15, 2017 and early adoption is permitted. The adoption of ASU No. 2018-02 on April 1, 2018 did nothave a material impact on the Company's consolidated financial position, results of operations and related disclosures.In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting BulletinNo. 118 (SAB No. 118) (“ASU No. 2018-05”). ASU No. 2018-05 adds various SEC paragraphs pursuant to the issuance of the December 2017 SEC StaffAccounting Bulletin (SAB) No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, which was effective immediately. The SEC issuedSAB No. 118 to address concerns about reporting entities’ ability to comply timely with the accounting requirements to recognize the effects of the Tax Cutsand Jobs Act in the period of enactment. SAB No. 118 allows disclosure that timely determination of some or all of the income tax effects from the Tax Cutsand Jobs Act are incomplete by the due date of the financial statements and if possible to provide a reasonable estimate. As permitted by SAB No. 118, theCompany recorded provisional amounts in the year ended March 31, 2018 and finalized its accounting for these provisional estimates based on guidance,interpretations and all available data in the year ended March 31, 2019. No material adjustments were made to the provisional amounts.F-14UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued [Q] Recently issued accounting standards:In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”), which is a comprehensive new lease standard that amendsvarious aspects of existing accounting guidance for leases. The core principle of ASU No. 2016-02 will require lessees to present the assets and liabilities thatarise from leases on their consolidated balance sheets. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, and interimperiods within fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company plans to adopt this standard as of April 1, 2019using the optional modified retrospective transition method. Upon adoption, the Company intends to apply the transition package of practical expedientsallowed by the standard and to transition to the standard by recognizing a cumulative-effect adjustment to the opening balance of accumulated deficit.Comparative periods will not be restated. ASU No. 2016-02 is expected to impact the Company’s consolidated financial statements as the Company hascertain operating lease arrangements for which the Company is the lessee. The Company has implemented a process to identify its outstanding lease portfolioand is currently evaluating its outstanding leases to determine the financial impact the new standard will have on its corresponding consolidated financialstatements. The Company expects that the adoption of this standard will result in the recognition of an asset for the right to use a leased facility on theCompany’s consolidated balance sheet, as well as the recognition of a corresponding lease liability. The Company plans to elect the following package ofpractical expedients when assessing the transition impact as the lessee as of April 1, 2019: (1) not to reassess whether any expired or existing contracts are orcontain leases; (2) not to reassess the lease classification for any expired or existing leases; and (3) not to reassess initial direct costs for any existing leases.Leases with an initial term of 12 months or less will not be recorded on the consolidated balance sheet as the Company will recognize lease expense for theseleases on a straight-line basis over the remaining lease term. The Company plans to elect to: (1) use the total lease term in its initial incremental borrowingrate calculation; (2) combine its lease and non-lease components and account for them as a single lease component; and (3) not apply the use of hindsight indetermining the lease term when considering lessee options to extend or terminate the lease and to purchase the underlying asset. The Company expects itsfuture financial statement disclosures for its leasing arrangements will be expanded to present additional qualitative and quantitative details. While theconsolidated balance sheet presentation is expected to change, the Company does not expect a material change to the consolidated statements of operations,comprehensive loss or cash flows.In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based PaymentAccounting (“ASU No. 2018-07”). ASU No. 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods andservices from nonemployees. ASU No. 2018-07 is effective for interim and annual reporting periods beginning after December 15, 2018 and early adoption ispermitted. Entities must apply the guidance retrospectively with a cumulative effect adjustment to retained earnings as of the beginning of the period ofadoption. The Company will adopt this ASU effective April 1, 2019 and does not expect the adoption to have a material impact on the Company'sconsolidated financial position, results of operations and related disclosures.In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements (“ASU No. 2018-09”), to make changes to a variety of topics to clarify, correcterrors in, or make minor improvements to the ASC. Certain items of the amendments in ASU No. 2018-09 will be effective for the Company in annual periodsbeginning after December 15, 2018. The Company will adopt this ASU effective April 1, 2019 and does not expect the adoption to have a material impact onthe Company's consolidated financial position, results of operations and related disclosures.In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework Changes to the Disclosure Requirementsfor Fair Value Measurement, (“ASU No. 2018-13”) which provides guidance that remove, modify and add to the disclosure requirements related to fair valuemeasurements. The guidance removes the requirements to disclose the amount and reasons for transfers between Level 1 and Level 2 assets, the policy fortiming and transfers between levels and the valuation process for Level 3 fair value measurements. The guidance modifies disclosure requirements forinvestments in certain entities that calculate net asset value and clarifies the purpose of the measurement uncertainty disclosure. The guidance addsrequirements to disclose changes in unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value measurements and todisclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective forfiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company is currently evaluating the new standard and itsimpact on the Company’s consolidated financial position, results of operations and related disclosures.F-15UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued Note 3—License agreements[A] Merck agreement:On February 3, 2017, the Company’s wholly owned subsidiary, USG, entered into an exclusive license agreement with Merck for the development andcommercialization of vibegron in exchange for the following consideration: •An initial one-time, non-refundable, non-creditable payment of $25.0 million; •Up to an aggregate of $44.0 million upon the achievement of certain regulatory milestones; •Up to an aggregate of $80.0 million upon the achievement of certain annual sales-based milestones; and •An escalating low double-digit royalty on annual net sales which may be reduced by a portion of royalty payments, and in certain cases otherpayments, made to third parties, as well as, on a country-by-country basis, if generic products achieve a certain market share. Our royaltyobligations with respect to vibegron will end, on a country-by-country basis, on the latest of 15 years from first commercial sale or the expirationof marketing exclusivity or enforceable Merck patents.The Territory for our exclusive license for vibegron is worldwide, except for Japan, Brunei, Cambodia, Hong Kong, Indonesia, Korea, Laos, Malaysia,Myanmar, Philippines, Singapore, Taiwan, Thailand, and Vietnam.For the consideration above, the Company also received a small quantity of inventory of vibegron, and certain research and development historical records.The Company did not hire, or receive, any Merck employees working on vibegron, or any research, clinical or manufacturing equipment. Additionally, theCompany did not assume from Merck any contracts, licenses or agreements between Merck and any third party with respect to vibegron. The Company willneed to develop independently all clinical processes and procedures for its clinical trials through the use of internal and external resources once appropriateand acceptable resources have been identified and obtained.The Company evaluated the in-license agreement of vibegron from Merck based on the applicable guidance in ASC No. 805, Business Combinations, (“ASCNo. 805”), and determined that the in-process research and development (“IPR&D”) asset licensed did not meet the definition of a business and thus thetransaction was not considered a business combination. The Company then evaluated, pursuant to ASC 730, Research and Development, (“ASC No.730”),whether the IPR&D asset had an alternative future use and concluded it did not. As a result, the Company recorded the initial payment under thelicense agreement of $25.0 million as research and development expense. There were no amounts due to or paid to Merck for the years ended March 31, 2019and 2018.[B] ICI agreement:On August 24, 2018, the Company’s wholly owned subsidiary, USG, entered into an exclusive license agreement with ICI (the “ICI Agreement”) for thedevelopment and commercialization of URO-902 in exchange for the following consideration: •An initial one-time, non-refundable, non-creditable payment of $0.25 million; •Up to an aggregate of $35.0 million upon the achievement of certain development and regulatory milestones; •Up to an aggregate of $60.0 million upon the achievement of certain annual sales-based milestones; and •An escalating mid-to-high single-digit royalty on annual net sales of licensed products made by the Company, its affiliates or its sublicensees,subject to certain reductions as set forth in the ICI Agreement. The Company’s royalty obligations apply on a product-by-product and country-by-country basis and end upon the date on which the last valid claim of the licensed patents expires with respect to a given product in a givencountry.The exclusive license under the ICI Agreement extends to all countries and territories worldwide.For the consideration above, the Company received certain research and development historical records. The Company did not receive any materialinventory of URO-902, did not hire, or receive, any ICI employees working on URO-902, and did not receive any research, clinical or manufacturingequipment. Additionally, the Company did not assume from ICI any contracts, licenses or agreements between ICI and any third party with respect to URO-902. The Company will need to develop independently all clinical processes and procedures for its clinical trials through the use of internal and externalresources once appropriate and acceptable resources have been identified and obtained.F-16UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued The Company has evaluated the in-license agreement of URO-902 from ICI based on the applicable guidance in ASC No. 805 and has determined that theIPR&D asset licensed did not meet the definition of a business and thus the transaction was not considered a business combination. The Company thenevaluated, pursuant to ASC No. 730 whether the IPR&D asset had an alternative future use and concluded it did not. As a result, the Company recorded theinitial payment under the license agreement of $0.25 million as research and development expense in the accompanying consolidated statement ofoperations for the year ended March 31, 2019.Note 4—Accrued expensesAccrued expenses at March 31, 2019 and 2018 consist of the following (in thousands): March 31, 2019 March 31, 2018 Research and development expenses $4,993 $2,482 General and administrative expenses 615 429 Bonuses and other compensation expenses 3,398 549 Professional services expenses 821 90 Other expenses 50 45 Total accrued expenses $9,877 $3,595 Note 5—Long-term debtOn February 20, 2019, the Company and its subsidiaries, UHL, USG (collectively with the Company and UHL, the “Borrowers”) and USI (collectively withthe Borrowers, the “Loan Parties”) entered into a secured debt financing agreement (the “Hercules Loan Agreement”) with Hercules Capital, Inc., as agent andlender (the “Administrative Agent”) in the amount of $100 million (the “Term Loans”). A first tranche of $15 million, or net cash proceeds of $14.1 million,was funded upon execution of the Loan Agreement, and the remaining $85 million is available in three additional optional tranches through June 30, 2021,subject to certain terms and conditions, including the achievement of certain milestones.The Term Loans bear a variable interest rate equal to the greater of (i) 10.15% or (ii) the lesser of (x) the prime rate as reported in The Wall Street Journal plus4.65% and (y) 12.15%. The Company is obligated to make monthly payments of accrued interest for the first 12 months from closing (the “Interest-onlyPeriod”), followed by monthly installments of principal and interest through the maturity date. The Interest-only Period may be extended up to an aggregateof 24 months after closing if certain milestones are met. The Company’s obligations under the Hercules Loan Agreement are fully and unconditionallyguaranteed by the subsidiaries of the Borrowers, including USI. The Loan Parties’ obligations under the Hercules Loan Agreement are secured by a firstpriority security interest on substantially all of their personal property, other than intellectual property, and subject to certain other exceptions.The Term Loans mature 36 months from closing and include an option for the Loan Parties to extend the maturity date up to 18 months if certain definedmilestones are met. The Loan Parties have the option to prepay the Terms Loans and the prepayment of the Term Loans will be subject to, in somecircumstances, a prepayment charge equal to 2% in the first 12 months from closing, 1% in the second 12 months, and 0% thereafter. Upon repayment of theTerm Loans, the Company will be obligated to pay an end of term charge in an amount equal to 4.25% of the amount of the Term Loans actually advanced.The Hercules Loan Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarilyrequired for similar financings. The agreement also contains a minimum cash covenant that requires the Loan Parties to hold certain minimum cash balancesin the event that either certain milestones are not achieved or the market capitalization of the Company is below a certain threshold for certain periods oftime. Such minimum cash covenant ceases to apply if the Company achieves certain clinical development and financial milestones as set forth in theHercules Loan Agreement. The Hercules Loan Agreement also contains customary events of default (subject, in certain instances, to specified grace periods).If any event of default occurs, the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts under the TermLoans may become due and payable immediately. Upon the occurrence of an event of default, a default interest rate of an additional 5% may be applied tothe outstanding principal balance, and the Administrative Agent may declare all outstanding obligations immediately due and payable (subject, in certaininstances, to specified grace periods) and take such other actions as set forth in the Hercules Loan Agreement. Upon the occurrence of certain bankruptcy andinsolvency events, the obligations under the Hercules Loan Agreement would automatically become due and payable. The Company is in compliance withthe covenants under the Hercules Loan Agreement as of March 31, 2019.F-17UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued In connection with each funding of the Term Loans, the Company is required to issue to the Administrative Agent a warrant (the “Warrants”) to purchase anumber of the Company’s common shares equal to 2% of the principal amount of the relevant Term Loan funded divided by the exercise price, which will bebased on the closing price of the Company’s common shares on the business day immediately prior to the relevant Term Loan funding (or for the first andsecond tranches only at the lower of (i) $9.02 per share or (ii) the closing price of the Company’s common shares on the business day immediately prior to therelevant Term Loan funding). The Warrants may be exercised on a cashless basis, and are immediately exercisable through the seventh anniversary of theapplicable funding date. The number of common shares for which each Warrant is exercisable and the associated exercise price are subject to certainproportional adjustments as set forth in such Warrant.In connection with the first tranche of the Term Loans, the Company issued a Warrant to the Administrative Agent, exercisable for an aggregate of 33,259 ofthe Company’s common shares at an exercise price of $9.02 per share. The Company accounted for the Warrant as an equity instrument since it was indexedto the Company’s common shares and met the criteria for classification in shareholders’ equity. The relative fair value of the Warrant related to the firsttranche funding was approximately $0.2 million and was treated as a discount to the Term Loan. This amount is being amortized to interest expense using theeffective interest method over the life of the Term Loan. The Company estimated the fair value of the Warrant using the Black-Scholes option-pricing modelbased on the following key assumptions: Tranche 1 Exercise price $9.02 Common share price on date of issuance $10.50 Expected volatility 69.6% Contractual term, in years 7.00 Risk-free interest rate 2.55% Expected dividend yield —% The Company issued the first tranche of the Term Loan at a discount of $1.8 million, including the proceeds allocated to the related Warrant, and incurredfinancing costs of $0.4 million relating to the Hercules Loan Agreement which are recorded as an offset to long-term debt on the Company’s consolidatedbalance sheet. The debt discount and deferred financing costs are being amortized over the term of the debt using the effective interest method, and areincluded in interest expense in the Company’s consolidated statement of operations. During the year ended March 31, 2019, interest expense included $0.1million of amortized debt discount and issuance costs related to the Term Loan.Outstanding debt obligations to Hercules Capital, Inc. are as follows (in thousands): March 31, 2019 Principal amount $15,000 End of term charge 638 Less: unamortized debt discount and issuance costs (2,104)Loan payable less unamortized debt discount and issuance costs 13,534 Less: current maturities — Long-term debt, net of unamortized debt discount and issuance costs $13,534 Annual maturities of long-term debt outstanding, excluding interest and the end of term charge, as of March 31, 2019 are as follows (in thousands): Years Ending March 31, 2020 $— 2021 7,101 2022 7,899 Total $15,000 F-18UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued Note 6—Related party transactions[A] Services agreements:In May 2017, the Company entered into a services agreement with RSI effective January 17, 2017, as amended and restated on July 9, 2018, under which RSIagreed to provide certain administrative and research and development services to the Company during its formative period. Under this services agreement,the Company will pay or reimburse RSI for any expenses it, or third parties acting on its behalf, incurs for the Company. For any general and administrativeand research and development activities performed by RSI employees, RSI will charge back the employee compensation expense plus a pre-determinedmarkup. RSI also provided such services prior to the formalization of this services agreement, and such costs have been recognized by the Company in theperiod in which the services were rendered. Employee compensation expense, inclusive of base salary and fringe benefits, is determined based upon therelative percentage of time utilized on Company matters. All other costs will be billed back at cost. The consolidated financial statements also include third-party expenses that have been paid by RSI and RSL since the inception of the Company.During the years ended March 31, 2019 and 2018, RSL and RSI provided certain administrative and research and development services on behalf of theCompany. Total compensation expense, inclusive of base salary, fringe benefits and share-based compensation, is proportionately allocated to the Companybased upon the relative percentage of time utilized on the Company’s matters. A significant component of total compensation expense allocated back to theCompany relates to the RSL common share awards and RSL options issued by RSL to RSL and RSI employees. The term of the RSI services agreement willcontinue until terminated upon 90 days’ written notice by RSI or by either USI or USG with respect to the services either such party receives thereunder.In May 2017, USG entered into a separate services agreement with RSG effective as of January 17, 2017, as amended and restated on July 9, 2018, for theprovision of services by RSG to USG in relation to the identification of potential product candidates and project management of clinical trials, as well asother services related to clinical development, administrative and financial activities. Under the terms of the services agreement, the Company is obligated topay or reimburse RSG for the costs they, or third parties acting on their behalf, incur in providing services to USG, including administrative and supportservices, as well as research and development services. In addition, the Company is obligated to pay to RSG a pre-determined mark-up on the costs incurreddirectly by RSG in connection with any general and administrative and research and development services. The term of the RSG services agreement willcontinue until terminated by RSG or USG upon 90 days’ written notice.Under the RSI and RSG services agreements, for the years ended March 31, 2019 and 2018, the Company incurred expenses of $3.4 million and $6.3 million,respectively, inclusive of the mark-up. Based upon the service performed under the services agreements, amounts included in research and developmentexpenses totaled $2.2 million and $5.2 million, and amounts included in general and administrative expenses totaled $1.2 million and $1.1 million duringthe years ended March 31, 2019 and 2018, respectively.[B] China intellectual property purchase agreement:On June 12, 2017, USG and RSG entered into an intellectual property purchase agreement, as amended on May 22, 2018, pursuant to which USG assigned toRSG all of its rights, titles, claims and interests in and to all intellectual property rights under the Merck license agreement, solely as it relates to USG’s rightsand obligations in China. The assignment is subject to the terms of the Merck license agreement, and RSG is obligated to make royalty and milestonepayments owed under the Merck license agreement to USG, to the extent such payment obligations arise from the development, regulatory approval or salesof any vibegron product in China. In connection with this assignment, the Company also entered into a separate collaboration agreement with RSG on June1, 2018, setting forth the parties’ respective rights and obligations to each other in connection with the development of vibegron in their respectiveterritories.The consideration for the assignment of the rights to China under the Merck license agreement was $1.8 million plus applicable Swiss VAT and wasdetermined based on an independent third-party valuation. Since the IPR&D asset acquired from Merck was expensed during the year ended March 31, 2017,the carrying value of the intellectual property rights transferred to RSG was $0. Since the assignment of such intellectual property rights from USG to RSGwere between entities under common control with no carrying value, the Company accounted for the consideration of $1.8 million as a deemed capitalcontribution from its parent, RSL. In July 2017, the Company received payment of $0.5 million under such agreement and the remaining consideration dueof $1.3 million was classified within equity as a shareholder receivable in the accompanying consolidated balance sheet as of March 31, 2018. The remainingconsideration of $1.3 million was received in October 2018.F-19UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued [C] Information sharing and cooperation agreement:On July 9, 2018, the Company entered into an information sharing and cooperation agreement (the “Cooperation Agreement”) with RSL. The CooperationAgreement, among other things: (1) obligates the Company to deliver to RSL periodic financial statements and other information upon reasonable requestand to comply with other specified financial reporting requirements; (2) requires the Company to supply certain material information to RSL to assist it inpreparing any future SEC filings; and (3) requires the Company to implement and observe certain policies and procedures related to applicable laws andregulations. The Company agreed to indemnify RSL and its affiliates and their respective officers, employees and directors against all losses arising out of,due to or in connection with RSL’s status as a shareholder under the Cooperation Agreement and the operations of or services provided by RSL or itsaffiliates or their respective officers, employees or directors to the Company or any of the Company’s subsidiaries, subject to certain limitations set forth inthe Cooperation Agreement. No amounts have been paid or received under this agreement; however, the Company believes this agreement is material to itsbusiness and operations.[D] Data sharing agreement:On May 22, 2018, USG entered into a data sharing agreement (the “Data Sharing Agreement”) with Datavant, Inc. (“Datavant”), a subsidiary of theCompany’s parent company, RSL. Pursuant to this Data Sharing Agreement, USG granted to Datavant a royalty-free, worldwide (excluding jurisdictionsprohibited by the United States government), non-exclusive, irrevocable license to all data, subject to certain exceptions set forth in the Data SharingAgreement, collected as part of clinical trials (but not prior to completion of such clinical trials and the publication or presentation of the data generated inconnection with such clinical trials) or other patient-level data that is owned or licensed by USG and all other data mutually agreed by USG and Datavant,solely for Datavant to (1) use such data to develop its data or other analytics products (the “Datavant Products”), or (2) provide such data to third parties,subject to the limitations and conditions set forth in the Data Sharing Agreement, including limitations on providing such data to any third party thatcompetes with USG. Pursuant to the Data Sharing Agreement, Datavant granted to USG a royalty-free, worldwide (excluding jurisdictions prohibited by theUnited States government), nonexclusive, irrevocable license to use all data, subject to certain exceptions set forth in the Data Sharing Agreement, owned orlicensed by Datavant and applicable Datavant Products for such specified purposes as set forth in the Data Sharing Agreement. The Data Sharing Agreementhas an initial term of two years and will automatically renew annually thereafter, subject to 30 days’ written notice of termination by either party. In addition,either party may terminate (1) upon a change of control of either party upon 60 days’ written notice or (2) upon 90 days’ written notice for an uncuredmaterial breach by the other party. No amounts have been paid or received under this agreement, however, the Company believes this agreement is materialto its business and operations.Note 7—Shareholders’ equity[A] Overview:The Company’s Memorandum of Association, filed on January 27, 2016 in Bermuda, authorized the creation of one class of shares. As of March 31, 2019, theCompany had 267,001,308 shares authorized with a par value of $0.000037453 per share.[B] Transactions:Initial public offeringOn September 26, 2018, the Company’s registration statement on Form S-1 relating to its initial public offering of its common shares was declared effectiveby the SEC. In the initial public offering, which closed on October 1, 2018, the Company issued and sold 10,000,000 common shares at a price to the publicof $14.00 per share. On October 18, 2018, the Company issued and sold an additional 297,813 common shares at the public offering price of $14.00 per sharepursuant to the partial exercise of the underwriters’ over-allotment option in the initial public offering. Our sole shareholder prior to the initial publicoffering, RSL, purchased 2,678,571 shares in the initial public offering at the public offering price of $14.00. The aggregate net proceeds to the Companyfrom the initial public offering, inclusive of the proceeds from the partial over-allotment exercise, were $132.9 million after deducting underwriting discountsand commissions of $10.1 million and offering related expenses of $1.2 million.F-20UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued Capital contributionsFor the years ended March 31, 2019 and 2018, RSL made cash capital contributions of $40.3 million and $36.5 million, respectively. No additional commonshares of the Company were issued in connection with these capital contributions as RSL owned 100% of the shares issued and outstanding.In connection with the China intellectual property purchase agreement with RSG, USG assigned all of its rights, titles, claims and interests in and to allintellectual property rights under the Merck license agreement, solely as it relates to USG’s rights and obligations in China to RSG for cash consideration of$1.8 million of which $0.5 million was received during the year ended March 31, 2018 and the remaining $1.3 million during the year ended March 31,2019. As RSG and USG are under common control, the consideration of $1.8 million was recorded as a capital contribution from the Company’s parent, RSL(see Note 6[B]).Share issuanceOn June 1, 2017, upon approval of the Board of Directors, the Company issued an additional 17,355,085 shares for consideration of $650 or par value of$0.000037453 to RSL, increasing the total number of issued and outstanding shares to 20,025,098 as of March 31, 2018.Note 8—Income taxesThe loss before income taxes and the related tax provision are as follows (in thousands): Year Ended March 31, 2019 2018 Loss before income taxes: United States $(1,437) $(159)Switzerland (107,905) (36,805)Bermuda (1,924) (81)Other(1) (33) 8 Total loss before income taxes $(111,299) $(37,037)Current taxes: United States $42 $36 Switzerland — — Bermuda — — Other(1) 5 1 Total current tax expense 47 37 Deferred taxes: United States — — Switzerland — — Bermuda — — Other(1) — — Total deferred tax expense — — Total income tax provision $47 $37(1)Primarily United States state and United Kingdom activity.As of March 31, 2019 and 2018, the Company had an aggregate income tax receivable (payable) of $$0.1 million and $(0.02 million), respectively, from/tovarious federal, state, and local jurisdictions which is included in prepaid expenses and other current assets and accrued expenses in the accompanyingconsolidated balance sheets, respectively.F-21UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued A reconciliation of income tax provision computed at the Bermuda statutory rate to income tax provision reflected in the consolidated financial statements isas follows (in thousands): Year Ended March 31, 2019 2018 Income tax provision at Bermuda statutory rate $— — % $— — %Foreign rate differential(2) (18,720) 16.82 (4,177) 11.28 Tax reform — — 39 (0.11) Other 22 (0.02) — — Valuation allowance 18,745 (16.84) 4,175 (11.27) Total income tax provision $47 (0.04)% $37 (0.10)%(2)Mainly related to current tax on United States operations including permanent and temporary differences (e.g. research and development credits, etc.) aswell as operations in Switzerland and the United Kingdom at rates different than the Bermuda rate.The Company’s effective tax rate for the years ended March 31, 2019 and 2018 was (0.04)% and (0.10)%, respectively, driven by the Company’sjurisdictional earnings by location and a valuation allowance that eliminates the Company’s global net deferred tax assets.Deferred taxes reflect the tax effects of the differences between the amounts recorded as assets and liabilities for financial reporting purposes and thecomparable amounts recorded for income tax purposes. Significant components of the deferred tax assets (liabilities) at March 31, 2019 and 2018 are asfollows (in thousands): March 31, 2019 March 31, 2018 Deferred tax assets: Research tax credits $4,081 $528 Intangibles 3,041 2,685 Net operating losses 18,052 3,745 Share-based compensation 805 87 Other 5 106 Subtotal 25,984 7,151 Valuation allowance (25,773) (7,044)Deferred tax liabilities: Depreciation (155) (107)Other (56) — Total deferred tax assets $— $— The Company has net operating losses in Switzerland and the United Kingdom in the amount of $136.0 million and $1.9 million, respectively. The netoperating losses in Switzerland will begin to expire in fiscal year 2024. The net operating losses in the United Kingdom can be carried forward indefinitelywith an annual usage limitation. As of March 31, 2019, the Company has research and development credit carryforwards in the United States in the amount of$4.1 million which will begin to expire in fiscal year 2037.The Company assesses the realizability of the net deferred tax assets at each balance sheet date based on available positive and negative evidence in order todetermine the amount which is more likely than not to be realized and record a valuation allowance as necessary. Due to the Company’s cumulative lossposition which provides significant negative evidence difficult to overcome, the Company has recorded a valuation allowance of $25.8 million and$7.0 million as of March 31, 2019 and 2018, respectively, representing the portion of the net deferred tax assets that is not more likely than not to be realized.During the years ended March 31, 2019 and 2018, the Company recorded an increase to its valuation allowance of $18.7 million and $4.1 million,respectively. The amount of the net deferred tax assets considered realizable, could be adjusted for future factors that would impact the assessment of theobjective and subjective evidence of the Company. The Company will continue to assess the realizability of net deferred tax assets at each consolidatedbalance sheet date in order to determine the proper amount, if any, required for a valuation allowance.F-22UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued There are outside basis differences related to our investment in subsidiaries for which no deferred taxes have been recorded as these would not be subject totax on repatriation as Bermuda has no tax regime for Bermuda exempted limited companies, and the United Kingdom tax regime relating to companydistributions generally provides for exemption from tax for most overseas profits, subject to certain exceptions.The Company is subject to tax and files income tax returns in the United Kingdom, Switzerland, and United States federal, state, and local jurisdictions. TheCompany is subject to tax examinations for fiscal year 2016 and forward in all applicable income tax jurisdictions. Tax audits and examinations can involvecomplex issues, interpretations and judgments. The resolution of matters may span multiple years particularly if subject to litigation or negotiation. TheCompany believes it has appropriately recorded its tax position using reasonable estimates and assumptions, however the potential tax benefits may impactthe consolidated results of operations or cash flows in the period of resolution, settlement or when the statutes of limitations expire. There are no uncertaintax benefits recorded as of March 31, 2019 and 2018.Note 9—Share-based compensationEquity Incentive Plan:On June 1, 2017, the Company adopted its 2017 Equity Incentive Plan (the “2017 Plan”), under which 2,002,509 common shares are reserved for grant. OnJune 15, 2018, the Board of Directors approved an increase in the common shares reserved for grant under the 2017 Plan of 1,068,006 common shares. The2017 Plan was approved by the Company’s shareholders in September 2018. In connection with the Company’s initial public offering, the 2017 Plan wasamended effective upon the execution of the underwriting agreement related to the offering. All references herein to the Company’s 2017 Plan will bedeemed to refer to the 2017 Plan, as amended and restated, unless context otherwise requires. Share-based awards under the 2017 Plan are subject to terms and conditions established by the Compensation Committee of the Company’s Board ofDirectors. The 2017 Plan provides for the grant of incentive options within the meaning of Section 422 of the Internal Revenue Code to the Company’semployees and its parent and subsidiary corporations’ employees, and for the grant of nonstatutory options, restricted share awards, restricted share unitawards, share appreciation rights, performance share awards and other forms of share compensation to its employees, including officers, consultants anddirectors. The 2017 Plan also provides for the grant of performance cash awards to the Company’s employees, consultants and directors. The Company’spolicy is to issue new common shares upon the exercise of stock options, conversion of share units or purchase of restricted shares.Pursuant to the “evergreen” provision contained in the 2017 Plan, the number of common shares reserved for issuance under the 2017 Plan automaticallyincreases on November 1 of each year, commencing on November 1, 2018 and ending on November 1, 2028, in an amount equal to 4% of the total number ofthe Company’s common shares outstanding on the last day of the preceding month, or by a lesser number of common shares as may be determined by theCompany’s Board of Directors prior to any such increase date. On November 1, 2018, the number of common shares authorized for issuance increasedautomatically by 1,212,916 shares in accordance with the evergreen provision of the 2017 Plan.At March 31, 2019, a total of 219,565 common shares were available for future issuance under the 2017 Plan.Stock options:The Company estimated the fair value of each stock option on the date of grant using the Black-Scholes option-pricing model applying the range ofassumptions in the following table: Year Ended March 31, 2019 2018Risk-free interest rate 2.53% - 3.06% 2.01% - 2.76%Expected term, in years 6.00 - 6.25 6.25 - 10.00Expected volatility 65.6% - 68.4% 68.5% - 72.2%Expected dividend yield —% —% F-23UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued The following table presents a summary of stock option activity and data under the Company’s 2017 Plan through March 31, 2019 (in thousands, exceptshare and per share data): Number ofOptions WeightedAverageExercisePrice WeightedAverageGrant DateFair Value WeightedAverageRemainingContractualLife AggregateIntrinsicValue Options outstanding at March 31, 2018 1,737,838 $3.84 $2.46 9.58 $— Granted 2,329,038 $7.79 $4.98 Forfeited (8,010) $6.33 $5.72 Options outstanding at March 31, 2019 4,058,866 $6.10 $3.90 9.13 $16,854 Options exercisable at March 31, 2019 622,017 $3.85 $2.47 8.59 $4,105 The aggregate intrinsic value is calculated as the difference between the exercise price of all outstanding stock options and the quoted market price of theCompany’s common shares at March 31, 2019. At March 31, 2019, there were 622,017 vested or exercisable options outstanding. During the year endedMarch 31, 2019, the Company granted options to purchase 2,329,038 common shares to certain employees and directors of the Company with a weighted-average exercise price and grant date fair value per share of $7.79 and $4.98, respectively, under the 2017 Plan.Restricted stock unit (“RSUs”):A summary of restricted stock unit activity under the Company’s 2017 Plan through March 31, 2019 is as follows: Number of Shares Unvested balance at March 31, 2018 — Granted 5,000 Unvested balance at March 31, 2019 5,000 The weighted average grant-date fair value of RSUs granted during the year ended March 31, 2019 was $7.84 per unit.[A] Share-based compensation expense:Share-based compensation expense was as follows (in thousands): Year Ended March 31, 2019 2018 Share-based compensation recognized as: Research and development $1,296 $2,477 General and administrative 2,682 694 Total $3,978 $3,171 Share-based compensation expense is included in research and development and general and administrative expenses in the accompanying consolidatedstatements of operations consistent with the grantee’s salary classification. Share-based compensation expense presented in the table above includes share-based compensation expense allocated to the Company by RSL as described below in Note 9[B].Of the total share-based compensation expense, amounts recognized for options granted to non-employees were immaterial for all periods presented.For the years ended March 31, 2019 and 2018, the Company recorded share-based compensation expense related to stock options and restricted stock unitsissued to employees, directors and consultants of $3.4 million and $0.4 million, respectively. This share-based compensation expense is included in generaland administrative expenses and research and development expenses in the accompanying consolidated statements of operations.Total unrecognized share-based compensation expense was approximately $13.1 million at March 31, 2019 and is expected to be recognized over aweighted-average period of 3.21 years.F-24UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued [B] Share-based compensation allocated to the Company by RSL: In relation to the RSL common share awards and options issued by RSL to RSL, RSI and RSG employees, the Company recorded share-based compensationexpense of $0.6 million and $2.8 million for the years ended March 31, 2019 and 2018, respectively.Share-based compensation expense is allocated to the Company by RSL based upon the relative percentage of time utilized by RSL, RSI and RSG employeeson Company matters.The RSL common share awards and RSL options are valued at fair value on the date of grant and that fair value is recognized over the requisite serviceperiod. Significant judgment and estimates were used to estimate the fair value of these RSL awards and RSL options, as they are not publicly traded. RSLcommon share awards and RSL options are subject to specified vesting schedules and requirements (a mix of time-based and performance-based events). Thefair value of each RSL common share award is based on various corporate event-based considerations, including targets for RSL’s post-IPO marketcapitalization and future financing events. The fair value of each RSL option on the date of grant is estimated using the Black-Scholes option-pricing model.Compensation expense will be allocated to the Company over the required service period over which these RSL common share awards and RSL optionswould vest and is based upon the relative percentage of time utilized by RSL, RSI and RSG employees on Company matters.RSL RSUs:In connection with his employment agreement, the Company’s Principal Executive Officer was granted 66,845 RSUs of the Company’s parent company,RSL, during the year ended March 31, 2018. The RSUs have a requisite service period of eight years and have no dividend rights. The RSUs will vest uponthe achievement of both a performance and liquidity condition, if both are achieved within the requisite service period. As of March 31, 2019, theperformance condition had not been met and was deemed not probable of being met.For the years ended March 31, 2019 and 2018, the Company recorded no share-based compensation expense related to the RSUs that were issued. At March31, 2019, there was $0.9 million of unrecognized compensation expense related to non-vested RSUs. The Company will recognize the expense upon theprobable achievement of the performance condition through the requisite service period.Note 10—Commitments and contingenciesThe Company entered into certain commitments under the Merck license agreement (see Note 3[A]), the ICI license agreement (see Note 3[B]), the Codexisenzyme supply agreement (see Note 10[A]), the Kyorin information sharing collaboration agreement (see Note 10[B]) and the services agreements with RSIand RSG (see Note 6[A]).In addition, the Company has entered into services agreements with third parties for pharmaceutical research and development and manufacturing activities.Expenditures to contract research organizations, or CROs, and contract manufacturing organizations, or CMOs, represent significant costs in the Company’sclinical development of its product candidates. Subject to required notice periods, a nominal early termination fee, in certain cases, and the Company’sremaining obligations under binding purchase orders, the Company can elect to discontinue the work under these agreements at any time. The Companyexpects to enter into additional commitments as the business further develops.The Company leased 8,038 square feet of office space located in Irvine, California, pursuant to an operating lease agreement that was set to expire inFebruary of 2020. This lease and all future obligations under this lease were terminated in June 2019 upon the commencement of the Company’s new officelease agreement below.In November 2018, the Company entered into a lease agreement for 21,489 square feet of office space located in Irvine, California that expires seven yearsfrom the lease commencement date, with an option to terminate after five years. The lease has scheduled rent increases each year and the Company has theoption to extend the lease term for an additional five years. The lease commenced in June 2019.F-25UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued Approximate future operating lease obligations (excluding the optional lease renewal term) as of March 31, 2019 are as follows (in thousands): Years Ending March 31, Operating Leases 2020 $455 2021 675 2022 692 2023 711 2024 731 Thereafter 1,662 Total minimum operating lease payments $4,926 Rent expense for the years ended March 31, 2019 and 2018 was approximately $0.3 million and $0.1 million, respectively. [A] Codexis:On September 1, 2017, the Company entered into a supply agreement (the “Codexis Agreement”) with Codexis, Inc. (“Codexis”), pursuant to which Codexisagreed to supply its proprietary enzyme, currently used in the production of vibegron, to the Company on a non-exclusive basis. Pursuant to the CodexisAgreement, the Company agreed to purchase from Codexis all of the Company’s requirements for such enzyme for use in the clinical and commercialproduction of vibegron for the first six years after the first approved vibegron product in any of the United States, Europe or Canada. The Company could berequired to make minimum purchase commitments of up to $3.75 million and a milestone payment of $0.5 million, subject to the first regulatory approval ofvibegron in any of the United States, Europe or Canada. No milestone payments were made pursuant to this agreement during the years ended March 31,2019 and 2018.[B] Kyorin information sharing collaboration agreement:On August 24, 2017, the Company entered into an information sharing collaboration agreement (the “Kyorin Agreement”) with Kyorin Pharmaceutical Co.,Ltd. (“Kyorin”). Under the Kyorin Agreement, the Company and Kyorin have agreed to share with each other certain information, including clinical studyreports, and have granted each other rights of reference to the others’ regulatory materials for the purposes of developing and commercializing vibegron intheir respective territories. Additionally, Kyorin has agreed to share with the Company its statistical analysis system datasets and relevant sections of its trialmaster file. The Kyorin Agreement does not include any joint operating activities between the parties and is solely for the purpose of sharing certaininformation and granting each other rights of reference to regulatory materials as it relates to vibegron.Pursuant to this agreement, the Company’s maximum obligation to Kyorin is $11.5 million, of which $1.0 million was paid during the year ended March 31,2018 and is included in research and development expense in the accompanying consolidated statement of operation. No payments were made pursuant tothis agreement during the year ended March 31, 2019. The remaining obligations under this agreement will be due upon achievement of certain regulatorymilestones by Kyorin in Japan and the Company in the United States, subject to certain conditions. Additionally, the Company has granted Kyorin a right offirst review and negotiation if the Company acquires the Japanese rights to any urology asset(s), which right expires in 2027.[C] Indemnities and guarantees:The Company has made certain indemnities, under which the Company may be required to make payments to an indemnified party, in relation to certaintransactions. We indemnify our officers and directors to the maximum extent permitted under applicable laws. The duration of these indemnities varies and,in certain cases, is indefinite. These indemnities do not provide for any limitation of the maximum potential future payments we could be obligated to make.Historically, we have not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities in theaccompanying consolidated balance sheets.F-26UROVANT SCIENCES LTD.Notes to Consolidated Financial Statements — Continued Note 11—Subsequent events[A] Operating lease – related party:In June 2019, the Company entered into a sublease agreement with our affiliate, RSI, for 2,784 square feet of office space located in Durham, North Carolinathat expires in July 2025. The lease has scheduled rent increases each year.Approximate future operating lease obligations under this lease agreement are as follows (in thousands): Years Ending March 31, Operating Lease 2020 $72 2021 88 2022 91 2023 93 2024 96 Thereafter 133 Total minimum operating lease payments $573 F-27 Exhibit 4.2Description of Share CapitalThe following description of our share capital and provisions of our memorandum of association and amended and restated bye-laws are summaries. Youshould also refer to the memorandum of association and the amended and restated bye-laws, which are filed as exhibits to our Annual Report on Form 10-K.GeneralWe are an exempted company incorporated under the laws of Bermuda. We are registered with the Registrar of Companies in Bermuda under registrationnumber 51141. We were incorporated on January 27, 2016 under the name Roivant PPS Holdings Ltd. We changed our name to Thalavant Sciences Ltd. inNovember 2016 and Urovant Sciences Ltd. in January 2017. Our principal office is located at Suite 1, 3rd Floor, 11-12 St. James’s Square, London SW1Y4LB, United Kingdom, and our registered office is located in Bermuda at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda. We also havebusiness operations at 5281 California Avenue, Suite 100, Irvine, California 92617 and 324 Blackwell Street Bay 11, Suite 1104, Durham, North Carolina27701.The objects of our business are unrestricted, and Urovant Sciences Ltd. has the capacity of a natural person. We can therefore undertake activities withoutrestriction on our capacity.Since our incorporation, other than a subdivision of our authorized and issued share capital, there have been no material changes to our share capital,mergers, amalgamations or consolidations of us or any of our subsidiaries, no material changes in the mode of conducting our business, no material changesin the types of products produced or services rendered. There have been no bankruptcy, receivership or similar proceedings with respect to us or oursubsidiaries.There have been no public takeover offers by third parties for our shares nor any public takeover offers by us for the shares of another company that haveoccurred during the last or current financial years.Share capitalOur authorized share capital consists of 267,001,308 common shares, $0.000037453 par value per common share. Pursuant to our amended and restated bye-laws, subject to the requirements of The Nasdaq Global Select Market, or Nasdaq, and to any resolution of the shareholders to the contrary, our board ofdirectors is authorized to issue any of our authorized but unissued shares. There are no limitations on the right of non-Bermudians or non-residents ofBermuda to hold or vote our shares provided our common shares remain listed on an appointed stock exchange, which includes Nasdaq.Common sharesHolders of common shares have no pre-emptive, redemption, conversion or sinking fund rights. Holders of common shares are entitled to one vote per shareon all matters submitted to a vote of holders of common shares, subject to the limitations described below. Unless a different majority is required by law or byour amended and restated bye-laws, resolutions to be approved by holders of common shares require approval by a simple majority of the votes cast at ameeting at which a quorum is present.Other than as set forth in our amended and restated bye-laws, shareholder voting rights may only be altered with the consent of our shareholders as set forthunder “—Variation of rights” below. In the event of our liquidation, dissolution or winding up, the holders of common shares are entitled to share equally and ratably in our assets, if any,remaining after the payment of all of our debts and liabilities, subject to any liquidation preference on any issued and outstanding preference shares.Preference sharesPursuant to Bermuda law and our amended and restated bye-laws, our board of directors may, by resolution, establish one or more series of preference shareshaving such number of shares, designations, dividend rates, relative voting rights, conversion or exchange rights, redemption rights, liquidation rights andother relative participation, optional or other special rights, qualifications, limitations or restrictions as may be fixed by the board of directors without anyfurther shareholder approval. Such rights, preferences, powers and limitations, as may be established, could have the effect of discouraging an attempt toobtain control of our company.  Dividend rightsUnder Bermuda law, a company may not declare or pay dividends, or make distributions out of contributed surplus, if there are reasonable grounds forbelieving that (1) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (2) the realizable value of its assetswould thereby be less than its liabilities. “Contributed surplus” is defined for purposes of section 54 of the Bermuda Act to include the proceeds arising fromdonated shares, credits resulting from the redemption or conversion of shares at less than the amount set up as nominal capital and donations of cash andother assets to the company. Under our amended and restated bye-laws, each common share is entitled to dividends if, as and when dividends are declared byour board of directors, subject to any preferred dividend right of the holders of any preference shares. We do not anticipate paying cash dividends in theforeseeable future.Variation of rightsIf at any time we have more than one class of shares, the rights attaching to any class, unless otherwise provided for by the terms of issue of the relevant class,may be varied either: (1) with the consent in writing of the holders of 75% of the issued shares of that class; or (2) with the sanction of a resolution passed bya simple majority of the votes cast at a general meeting of the relevant class of shareholders at which a quorum is present. Our amended and restated bye-lawsspecify that the creation or issue of shares ranking equally with existing preference shares will not, unless expressly provided by the terms of issue of existingpreference shares, vary the rights attached to existing preference shares. In addition, the creation or issue of preference shares ranking prior to common shareswill not be deemed to vary the rights attached to common shares or, subject to the terms of any other class or series of preference shares, to vary the rightsattached to any other class or series of preference shares.Transfer of sharesOur board of directors may, in its absolute discretion and without assigning any reason, refuse to register the transfer of a share on the basis that it is not fullypaid. Our board of directors may also refuse to recognize an instrument of transfer of a share unless it is accompanied by the relevant share certificate and suchother evidence of the transferor’s right to make the transfer as our board of directors shall reasonably require and must refuse to register the transfer unless allapplicable consents, authorizations and permissions of any governmental agency or body in Bermuda have been obtained. Subject to these restrictions, aholder of common shares may transfer the title to all or any of his common shares by completing a form of transfer in the form set out in our amended andrestated bye-laws (or as near thereto as circumstances admit) or in such other common form as our board of directors may accept or in accordance with therules of the exchange on which the common shares are listed. If required, the instrument of transfer must be signed by the transferor and transferee, althoughin the case of a fully paid share our board of directors may accept the instrument signed only by the transferor. Meetings of shareholdersUnder Bermuda law, a company is required to convene at least one general meeting of shareholders each calendar year, which we refer to as the annualgeneral meeting. However, the shareholders may by resolution waive this requirement, either for a specific year or period of time, or indefinitely. When therequirement has been so waived, any shareholder may, on notice to the company, terminate the waiver, in which case an annual general meeting must becalled. We have chosen not to waive the convening of an annual general meeting.Bermuda law provides that a special general meeting of shareholders may be called by the board of directors of a company and must be called upon therequest of shareholders holding not less than 10% of the paid-up capital of the company carrying the right to vote at general meetings. Bermuda law alsorequires that shareholders be given at least five days’ advance notice of a general meeting, but the accidental omission to give notice to any person does notinvalidate the proceedings at a meeting. Our amended and restated bye-laws provide that our principal executive officer or the chairperson or any twodirectors or any director and the secretary or board of directors may convene an annual general meeting and our principal executive officer or the chairpersonor any two directors or any director and the secretary or our board of directors may convene a special general meeting. Under our amended and restated bye-laws, at least 14 days’ notice of an annual general meeting or ten days’ notice of a special general meeting must be given to each shareholder entitled to voteat such meeting. This notice requirement is subject to the ability to hold such meetings on shorter notice if such notice is agreed: (1) in the case of an annualgeneral meeting by all of the shareholders entitled to attend and vote at such meeting; or (2) in the case of a special general meeting by a majority in numberof the shareholders entitled to attend and vote at the meeting holding not less than 95% in nominal value of the shares entitled to vote at such meeting. Aquorum will be present at any general meeting of shareholders if holders of a majority of the aggregate voting power of our issued and outstanding sharesentitled to vote at the meeting are present, in person or by proxy.The chairperson of our board of directors will chair all general meetings at which such individual is present.2 Access to books and records and dissemination of informationMembers of the general public have a right to inspect the public documents of a company available at the office of the Registrar of Companies in Bermuda.These documents include a company’s amended and restated memorandum of association, including its objects and powers, and certain alterations to theamended and restated memorandum of association. The shareholders have the additional right to inspect the bye-laws of the company, minutes of generalmeetings and the company’s audited financial statements, which must be presented in the annual general meeting. The register of members of a company isalso open to inspection by shareholders and by members of the general public without charge. The register of members is required to be open for inspectionfor not less than two hours in any business day (subject to the ability of a company to close the register of members for not more than thirty days in a year). Acompany is required to maintain its share register in Bermuda but may, subject to the provisions of the Companies Act establish a branch register outside ofBermuda. A company is required to keep at its registered office a register of directors and officers that is open for inspection for not less than two hours in anybusiness day by members of the public without charge. Bermuda law does not, however, provide a general right for shareholders to inspect or obtain copies ofany other corporate records.Election and removal of directors Our amended and restated bye-laws provide that our board of directors shall consist of such number of directors (not being less than five directors or morethan seven directors) as the board of directors may determine. Prior to the first date on which Roivant Sciences Ltd., or RSL, ceases to hold at least 25% of theaggregate voting power of our issued and outstanding shares, RSL is entitled to appoint two directors, or the RSL Directors, by notice to us, each of whomwill have three votes for each matter presented to the board of directors or any duly authorized committee thereof, other than our audit committee. Eachmember of our audit committee will have one vote on all matters presented. All other duly executed directors will have one vote for each matter presented tothe board of directors or any duly authorized committee thereof. Each member of our board of directors (other than an RSL Director), will serve a term asdetermined by our shareholders and each RSL Director will serve a term as determined by RSL. In either case, if no such determination is made, each suchdirector will serve a one-year term expiring at our next annual meeting of shareholders, subject to his or her office being vacated sooner pursuant to ouramended and restated bye-laws.A shareholder holding at least 3% of the common shares in issue, or a group of not more than 20 shareholders holding at least an aggregate 3% of thecommon shares in issue, who in each case have held such shares for at least three years, may propose for election as a director (other than an RSL Director)someone who is not an existing director or is not proposed by our board of directors. Where a director is to be elected at an annual general meeting, notice ofany such proposal for election must be given not less than 90 days nor more than 120 days before the anniversary of the last annual general meeting prior tothe giving of the notice or, in the event the annual general meeting is called for a date that is not less than 30 days before or after such anniversary the noticemust be given not later than ten days following the earlier of the date on which notice of the annual general meeting was posted to shareholders or the date onwhich public disclosure of the date of the annual general meeting was made. Where a director is to be elected at a special general meeting, that notice must begiven not later than seven days following the earlier of the date on which notice of the special general meeting was posted to shareholders or the date onwhich public disclosure of the date of the special general meeting was made; or, alternatively, if the special general meeting is held upon the request ofshareholders holding not less than 10% of the paid-up capital of the company carrying the right to vote at general meetings, must be given in the requisitionof special general meeting.A director (other than an RSL Director) may be removed, with or without cause, by the shareholders, either by a notice to that effect signed by the holders of amajority of the aggregate voting rights of the issued and outstanding shares, and delivered to us, or by a resolution passed in a shareholders meetingconvened on notice to remove the director given to the director. The notice must contain a statement of the intention to remove the director and a summary ofthe facts justifying the removal and must be served on the director not less than 14 days before the meeting. The director is entitled to attend the meeting andbe heard on the motion for his removal. Prior to the first date on which RSL ceases to hold at least 25% of the aggregate voting power of our issued andoutstanding shares, directors appointed by RSL may be removed, with or without cause, by RSL upon written notice to us. On or after the date on which RSLceases to hold at least 25% of the aggregate voting power of our issued and outstanding shares, any director may be removed, with or without cause, by theshareholders, either by a joint written notice to us to that effect signed by the holders of a majority of the aggregate voting power of our issued andoutstanding shares or by a resolution passed in a shareholders meeting convened on notice to remove the director and given to the director, as set out above.3 Proceedings of board of directorsOur amended and restated bye-laws provide that our business is to be managed and conducted by our board of directors. Bermuda law permits individual andcorporate directors and there is no requirement in our bye-laws or Bermuda law that directors hold any of our shares. There is also no requirement in ouramended and restated bye-laws or Bermuda law that our directors must retire at a certain age. The compensation of our directors is determined by the board of directors, and there is no requirement that a specified number or percentage of“independent” directors must approve any such determination. Our directors may also be paid all travel, hotel and other reasonable out-of-pocket expensesproperly incurred by them in connection with our business or their duties as directors.A director who discloses a direct or indirect interest in any contract or arrangement with us as required by Bermuda law will not be entitled to vote in respectof any such contract or arrangement in which he or she is interested unless the chairman of the relevant meeting of the board of directors determines that suchdirector is not disqualified from voting.The chairperson of our board of directors will chair all meetings of the board of directors at which such individual is present. Prior to the date on which RSLceases to hold at least 25% of the aggregate voting power of our issued and outstanding shares, the chairperson of our board of directors will be an RSLDirector designated to us by duly executed notice from RSL. On or after the date on which RSL ceases to hold at least 25% of the aggregate voting power ofour issued and outstanding shares, the chairperson of our board of directors will be elected by the directors.Indemnification of directors and officersSection 98 of the Companies Act provides generally that a Bermuda company may indemnify its directors, officers and auditors against any liability whichby virtue of any rule of law would otherwise be imposed on them in respect of any negligence, default, breach of duty or breach of trust, except in cases wheresuch liability arises from fraud or dishonesty of which such director, officer or auditor may be guilty in relation to the company. Section 98 further providesthat a Bermuda company may indemnify its directors, officers and auditors against any liability incurred by them in defending any proceedings, whether civilor criminal, in which judgment is awarded in their favor or in which they are acquitted or granted relief by the Supreme Court of Bermuda pursuant toSection 281 of the Companies Act.Our amended and restated bye-laws provide that we shall indemnify our officers and directors in respect of their actions and omissions, except in respect oftheir fraud or dishonesty, and that we shall advance funds to our officers and directors for expenses incurred in their defense upon receipt of an undertaking torepay the funds if any allegation of fraud or dishonesty is proved. Our amended and restated bye-laws provide that the shareholders waive all claims or rightsof action that they might have, individually or in right of the company, against any of the company’s directors or officers for any act or failure to act in theperformance of such director’s or officer’s duties, except in respect of any fraud or dishonesty of such director or officer. Section 98A of the Companies Actpermits us to purchase and maintain insurance for the benefit of any officer or director in respect of any loss or liability attaching to him in respect of anynegligence, default, breach of duty or breach of trust, whether or not we may otherwise indemnify such officer or director. We have purchased and maintain adirectors’ and officers’ liability policy for such purpose.Amendment of memorandum of association and bye-lawsBermuda law provides that the memorandum of association of a company may be amended by a resolution passed at a general meeting of shareholders. Ouramended and restated bye-laws provide that no bye-law shall be rescinded, altered or amended, and no new bye-law shall be made, unless it shall have beenapproved by a resolution of our board of directors and by a resolution of our shareholders.Under Bermuda law, the holders of an aggregate of not less than 20% in par value of a company’s issued share capital or any class thereof have the right toapply to the Supreme Court of Bermuda for an annulment of any amendment of the memorandum of association adopted by shareholders at any generalmeeting, other than an amendment that alters or reduces a company’s share capital as provided in the Companies Act. Where such an application is made, theamendment becomes effective only to the extent that it is confirmed by the Supreme Court of Bermuda. An application for an annulment of an amendment ofthe memorandum of association must be made within 21 days after the date on which the resolution altering the company’s memorandum of association ispassed and may be made on behalf of persons entitled to make the application by one or more of their number as they may appoint in writing for the purpose.No application may be made by shareholders voting in favor of the amendment.4 Amalgamations and mergersThe amalgamation or merger of a Bermuda company with another company or corporation (other than certain affiliated companies) requires theamalgamation or merger agreement to be approved by the company’s board of directors and by its shareholders. Unless the company’s bye-laws provideotherwise, the approval of 75% of the shareholders voting at such meeting is required to approve the amalgamation or merger agreement, and the quorum forsuch meeting must be two or more persons holding or representing more than one-third of the issued shares of the company. Our amended and restated bye-laws provide that the approval of the amalgamation or merger agreement by 75% of the voting power of holders of common shares voting at a meeting shallbe sufficient (other than in respect of any amalgamation or merger constituting a “business combination”), and the quorum for such meeting shall be personsholding or representing more than 50% of the issued voting shares.Under Bermuda law, in the event of an amalgamation or merger of a Bermuda company with another company or corporation, a shareholder of the Bermudacompany who did not vote in favor of the amalgamation or merger and who is not satisfied that fair value has been offered for such shareholder’s shares may,within one month of notice of the shareholders meeting, apply to the Supreme Court of Bermuda to appraise the fair value of those shares.Business combinationsAlthough the Companies Act does not contain specific provisions regarding “business combinations” between companies organized under the laws ofBermuda and “interested shareholders,” we have included these provisions in our bye-laws. Specifically, our bye-laws contain provisions which prohibit usfrom engaging in a business combination with an interested shareholder for a period of three years after the date of the transaction in which the personbecame an interested shareholder, unless, in addition to any other approval that may be required by applicable law:•prior to the date of the transaction that resulted in the shareholder becoming an interested shareholder, our board of directors approved either the businesscombination or the transaction that resulted in the shareholder becoming an interested shareholder;•upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85%of our issued and voting shares outstanding at the time the transaction commenced; or•after the date of the transaction that resulted in the shareholder becoming an interested shareholder, the business combination is approved by our board ofdirectors and authorized at an annual general meeting or special general meeting of shareholders by the affirmative vote of at least 66 2/3% of our issuedand outstanding voting shares voted at the general meeting that are not owned by the interested shareholder.For purposes of these provisions, a “business combination” includes recapitalizations, mergers, amalgamations, consolidations, exchanges, asset sales, leases,certain issues or transfers of shares or other securities and other transactions resulting in a financial benefit to the interested shareholder. An “interestedshareholder” is any person or entity that beneficially owns 15% or more of our issued and outstanding voting shares and any person or entity affiliated withor controlling or controlled by that person or entity. Shareholder suitsClass actions and derivative actions are generally not available to shareholders under Bermuda law. The Bermuda courts, however, would ordinarily beexpected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is allegedto be beyond the corporate power of the company or illegal, or would result in the violation of the company’s memorandum of association or bye-laws.Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against the minority shareholders or, for instance,where an act requires the approval of a greater percentage of the company’s shareholders than that which actually approved it.When the affairs of a company are being conducted in a manner that is oppressive or prejudicial to the interests of some part of the shareholders, one or moreshareholders may apply to the Supreme Court of Bermuda, which may make such order as it sees fit, including an order regulating the conduct of thecompany’s affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the company.Our amended and restated bye-laws contain a provision by virtue of which our shareholders waive any claim or right of action that they have, bothindividually and on our behalf, against any director or officer in relation to any action or failure to take action by such director or officer, except in respect ofany fraud or dishonesty of such director or officer. We have been advised by the SEC that in the opinion of the SEC, the operation of this provision as awaiver of the right to sue for violations of federal securities laws would likely be unenforceable in U.S. courts.5 Capitalization of profits and reservesPursuant to our amended and restated bye-laws, our board of directors may (1) capitalize any part of the amount of our share premium or other reserveaccounts or any amount credited to our profit and loss account or otherwise available for distribution by applying such sum in paying up unissued shares tobe allotted as fully paid bonus shares pro rata (except in connection with the conversion of shares) to the shareholders; or (2) capitalize any sum standing tothe credit of a reserve account or sums otherwise available for dividend or distribution by paying up in full, partly paid or nil paid shares of thoseshareholders who would have been entitled to such sums if they were distributed by way of dividend or distribution.Untraced shareholdersOur amended and restated bye-laws provide that our board of directors may forfeit any dividend or other monies payable in respect of any shares that remainunclaimed for six years from the date when such monies became due for payment. In addition, we are entitled to cease sending dividend warrants and checksby post or otherwise to a shareholder if such instruments have been returned undelivered to, or left uncashed by, such shareholder on at least two consecutiveoccasions or, following one such occasion, reasonable enquires have failed to establish the shareholder’s new address. This entitlement ceases if theshareholder claims a dividend or cashes a dividend check or a warrant.Certain provisions of Bermuda law We have been designated by the Bermuda Monetary Authority as a non-resident for Bermuda exchange control purposes. This designation allows us toengage in transactions in currencies other than the Bermudan dollar, and there are no restrictions on our ability to transfer funds (other than fundsdenominated in Bermudan dollars) in and out of Bermuda or to pay dividends to U.S. residents who are holders of our common shares.The Bermuda Monetary Authority has given its consent for the issue and free transferability of our issued and outstanding common shares to and betweenresidents and non-residents of Bermuda for exchange control purposes, provided our shares remain listed on an appointed stock exchange, which includesNasdaq. Approvals or permissions given by the Bermuda Monetary Authority do not constitute a guarantee by the Bermuda Monetary Authority as to ourperformance or our creditworthiness. Accordingly, in giving such consent or permissions, neither the Bermuda Monetary Authority nor the Registrar ofCompanies in Bermuda shall be liable for the financial soundness, performance or default of our business or for the correctness of any opinions or statementsexpressed in this prospectus. Certain issues and transfers of common shares involving persons deemed resident in Bermuda for exchange control purposesrequire the specific consent of the Bermuda Monetary Authority. We have sought and have obtained a specific permission from the Bermuda MonetaryAuthority for the issue and transfer of our common shares up to the amount of our authorized capital from time to time, and options, warrants, depositoryreceipts, rights, loan notes, debt instruments and our other securities to persons resident and non-resident for exchange control purposes with the need forprior approval of such issue or transfer.In accordance with Bermuda law, share certificates are only issued in the names of companies, partnerships or individuals. In the case of a shareholder actingin a special capacity (for example as a trustee), certificates may, at the request of the shareholder, record the capacity in which the shareholder is acting.Notwithstanding such recording of any special capacity, we are not bound to investigate or see to the execution of any such trust.Registration rightsIn July 2018, we entered into a registration rights agreement with RSL, which provides RSL with certain registration rights. The registration of our commonshares pursuant to the exercise of registration rights described below would enable RSL to sell these common shares without restriction under the SecuritiesAct when the applicable registration statement is declared effective. We will pay the registration expenses, other than underwriting discounts, sellingcommissions and transfer taxes, of the shares registered pursuant to the piggyback and Form S-3 registrations described below.Generally, in an underwritten offering, the managing underwriter, if any, has the right, subject to specific conditions, to limit the number of sharesshareholders may include pursuant to such registration rights. The piggyback and Form S-3 registration rights described below will expire upon the earlier of(1) five years after the effective date of our initial public offering, (2) at such time as a shareholder can sell all of its shares under Rule 144 of the SecuritiesAct during any three-month period or (3) in the event of a change of control or liquidation of our company.6 Piggyback registration rightsIf we propose to register the offer and sale of any of our securities under the Securities Act either for our own account or for the account of other shareholders,RSL will be entitled to certain “piggyback” registration rights allowing it to include its common shares in such registration, subject to certain marketing andother limitations. As a result, whenever we propose to file a registration statement under the Securities Act, including a registration statement on Form S-3 asdiscussed below, RSL is entitled to notice of the registration and has the right, subject to limitations that the underwriters may impose on the number ofcommon shares included in the registration, to include its common shares in the registration. This does not include any registration statements relating to thesale of our securities to employees pursuant to an equity incentive plan, relating to an SEC Rule 145 transaction, or where the registration statement wouldnot include substantially the same information required to offer such securities. If we propose to register the offer and sale of any of our securities under the Securities Act either for our own account or for the account of other shareholders,Hercules Capital, Inc., or Hercules, will be entitled to certain “piggyback” registration rights allowing it to include its common shares, including thosecommon shares issuable upon exercises of its warrants, in such registration, subject to certain limitations. As a result, whenever we propose to file aregistration statement under the Securities Act that falls within Hercules’ “piggyback” registration rights, Hercules has the right to include its common sharesin the registration. This does not include any registration statements relating to the sale of our securities to employees pursuant to an equity incentive plan,relating to an SEC Rule 145 transaction, where the registration statement would not include substantially the same information required to offer suchsecurities, or pursuant to which we register up to $150,000,000 of securities in a registered offering or series of offerings declared effective prior toSeptember 30, 2019.Form S-3 registration rightsRSL is entitled to certain Form S-3 registration rights. RSL may request that we register their common shares on Form S-3 if we are qualified to file aregistration statement on Form S-3. Such request for registration on Form S-3 must cover securities with an aggregate offering price of at least $5.0 million,before payment of underwriting discounts, commissions and transfer taxes.Transfer agent and registrarA register of holders of the common shares is maintained by Conyers Corporate Services (Bermuda) Limited in Bermuda, and a branch register is maintainedin the United States by American Stock Transfer & Trust Company, LLC, which also serves as transfer agent. The transfer agent’s address is 6201 15th Avenue, Brooklyn, New York 11219.ListingOur common shares are listed on The Nasdaq Global Select Market under the symbol “UROV.”7 Exhibit 10.23LOAN AND SECURITY AGREEMENTTHIS LOAN AND SECURITY AGREEMENT is made and dated as of February 20, 2019 and is entered intoby and between UROVANT SCIENCES LTD., an exempted company limited by shares and organized under the laws ofBermuda (“Parent”), UROVANT HOLDINGS LIMITED, a private limited company incorporated under the laws ofEngland and Wales (“Urovant England”), UROVANT SCIENCES GMBH, a limited liability company (Gesellschaft mitbeschränkter Haftung) incorporated and organized under the laws of Switzerland (“Urovant Switzerland”, and each ofParent’s Subsidiaries that delivers a Joinder Agreement pursuant to Section 7.13 of the Agreement (hereinafter collectivelyreferred to as the “Borrowers” and each, a “Borrower”), UROVANT SCIENCES, INC., a Delaware corporation (“UrovantUSA” or the “Guarantor”), the several banks and other financial institutions or entities from time to time parties to thisAgreement (collectively, referred to as “Lender”) and HERCULES CAPITAL, INC., formerly known as HerculesTechnology Growth Capital, Inc., a Maryland corporation, in its capacity as administrative agent and collateral agent foritself and the Lender (in such capacity, the “Agent”).RECITALSA.Borrowers have requested Lender to make available to the Borrowers a loan in an aggregate principalamount of One Hundred Million Dollars ($100,000,000.00) (the “Term Loan”); andB.Lender is willing to make the Term Loan on the terms and conditions set forth in this Agreement.AGREEMENTNOW, THEREFORE, each Loan Party, Agent and Lender agree as follows:SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION1.1Unless otherwise defined herein, the following capitalized terms shall have the followingmeanings:“10 Non-Bank Rule” means the rule that the aggregate number of Lenders under this Agreement whichare not Qualifying Banks must not at any time exceed ten (10), all in accordance with the meaning of the Guidelines orlegislation or explanatory notes addressing the same issues that are in force at such time.“20 Non-Bank Rule” means the rule that the aggregate number of creditors (including the Lenders),other than Qualifying Banks, of the Borrower under all its outstanding debts relevant for classification as debenture(Kassenobligation) must not at any time exceed twenty (20), all in accordance with the meaning of the Guidelines orlegislation or explanatory notes addressing the same issues that are in force at such time. US-DOCS\105484033.25 “Account Control Agreement(s)” means any agreement entered into by and among the Agent, anyLoan Party and a third party Bank or other institution (including a Securities Intermediary) in which any Loan Partymaintains a Deposit Account or an account holding Investment Property and which grants Agent a perfected first prioritysecurity interest in the subject account or accounts, including as provided for in the Bermuda Security Documents, EnglishSecurity Documents and Swiss Security Documents.“ACH Authorization” means the ACH Debit Authorization Agreement in substantially the form ofExhibit H to the Disclosure Letter, which account numbers shall be redacted for security purposes if and when filed publiclyby Parent.“Acquisition Allocation” has the meaning given to it in clause (f) of the definition of PermittedAcquisition.“Advance(s)” means a Term Loan Advance.“Advance Date” means the funding date of any Advance.“Advance Request” means a request for an Advance submitted by any Borrower to Agent insubstantially the form of Exhibit A to the Disclosure Letter, which account numbers shall be redacted for security purposes ifand when filed publicly by Parent.“Affiliate” means any Person that directly or indirectly controls, is controlled by, or is under commoncontrol with the Person in question. As used in the definition of “Affiliate,” the term “control” means the possession,directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whetherthrough ownership of voting securities, by contract or otherwise.“Agent” has the meaning given to it in the preamble to this Agreement.“Agreement” means this Loan and Security Agreement, as amended from time to time. “Amortization Date” means April 1, 2020; provided however, if the following applicable milestonesoccur, the “Amortization Date” shall be as set forth below: MilestoneAmortization DateThe achievement of the Clinical Milestone on or before April 1, 2020October 1, 2020The achievement of each of:• the Clinical Milestone on or before April 1, 2020, and• Financial Milestone 1 on or before October 1, 2020.April 1, 2021 2US-DOCS\105484033.25 “Anti-Corruption Laws” shall mean all laws, rules, and regulations of any jurisdiction applicable toParent or any of its Subsidiaries or Affiliates from time to time concerning or relating to bribery or corruption, includingwithout limitation the United States Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010 and othersimilar legislation in any other jurisdictions.“Anti‑Terrorism Laws” means any laws, rules, regulations or orders relating to terrorism or moneylaundering, including without limitation Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOTAct, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.“Approval Milestone” means satisfaction of each of the following events: (a) no default or Event ofDefault shall have occurred and be continuing; and (b) any Loan Party or other third party collaborator with suchcollaborator and collaboration agreement being acceptable to Agent in its sole but reasonable discretion (such determinationnot to be unreasonably withheld, delayed or conditioned) shall have obtained final approval from the FDA of the New DrugApplication for Vibegron for the treatment of over-active bladder with a label generally consistent with the label sought inthe New Drug Application submitted by such Loan Party, subject to reasonable verification by Agent (including supportingdocumentation reasonably requested by Agent).“Assignee” has the meaning given to it in Section 11.14.“Bermuda Security Documents” means the following documents, each in form and substancereasonably satisfactory to Agent: (a) any Bermuda-law security agreement between Parent and Agent, and (b) such otherdocuments incidental to the foregoing documents as Agent may reasonably determine necessary.“Blocked Person” means any Person: (a) listed in the annex to, or is otherwise subject to the provisionsof, Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listedin the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with which any Lenderis prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person that commits,threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) a Person that isnamed a “specially designated national” or “blocked person” on the most current list published by OFAC or other similarlist.“Board” means Parent’s Board of Directors.“Board of Directors” means the board of directors or comparable governing body of such Person, orany subcommittee thereof, as applicable.“Borrower Products” means all products, software, service offerings, technical data or technologycurrently being designed, manufactured or sold by any Loan Party or which any Loan Party intends to sell, license, ordistribute in the future including any products or service offerings under development, collectively, together with allproducts, software, service offerings, technical data or technology that have been sold, licensed or distributed by any LoanParty since its incorporation or formation.3US-DOCS\105484033.25 “Business Day” means any day other than Saturday, Sunday and any other day on which bankinginstitutions in the State of California are closed for business.“Cash” means all cash, cash equivalents and liquid funds.“Change in Control” means(a)any reorganization, recapitalization, consolidation, amalgamation or merger (orsimilar transaction or series of related transactions) of Parent, or any sale or exchange of outstanding Common Shares (orsimilar transaction or series of related transactions) of Parent, and in each case as a result of such transaction any Person or“group” (within the meaning of the Exchange Act and the rules of the SEC thereunder as in effect on the date hereof) otherthan Roivant owns, directly or indirectly, shares representing more than thirty-five percent (35%) of the voting power ofParent or such surviving entity;(b)Parent ceases to own one hundred percent (100%) of the Equity Interests ofUrovant England; and(c)Urovant England ceases to own one hundred percent (100%) of the EquityInterests of each of Urovant USA and Urovant Switzerland. Notwithstanding the foregoing, the merger of a Loan Party intoParent, Urovant England, Urovant Switzerland or Urovant USA shall not constitute a Change in Control.“Change in Law” means the occurrence after the Closing Date or, with respect to any Lender, such laterdate on which such Lender becomes a party to this Agreement of (a) the adoption of any law, rule or regulation or treaty, (b)any change in any law, rule or regulation or treaty or in the administration, interpretation or application thereof by anyGovernmental Authority or (c) compliance by any Lender with any request, guideline or directive (whether or not having theforce of law) of any Governmental Authority made or issued after such date, provided that, notwithstanding anything hereinto the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines ordirectives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by theBank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) orthe United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a“Change in Law”, regardless of the date enacted, adopted or issued.“Claims” has the meaning given to it in Section 11.11(a).“Clinical Milestone” means satisfaction of each of the following events: (a) no default or Event ofDefault shall have occurred and be continuing; and (b) any Loan Party or other third party collaborator with suchcollaborator and collaboration agreement being acceptable to Agent in its sole but reasonable discretion (such determinationnot to be unreasonably withheld or delayed) has announced that the Phase 3 EMPOWUR study of Vibegron for thetreatment of overactive bladder (wet or dry) in women and men as described in clinical study protocol RVT- 901-3003 hasmet both protocol-specified co-4US-DOCS\105484033.25 primary efficacy endpoints with statistical significance and with Vibegron demonstrating an acceptable safety profile suchthat the data supports the filing of a New Drug Application with the FDA and such Loan Party’s executive officers haveapproved proceeding towards the filing of such New Drug Application, subject to reasonable verification by Agent(including supporting documentation reasonably requested by Agent).“Closing Date” means the date of this Agreement.“Code” means the Internal Revenue Code of 1986, as amended.“Collateral” has the meaning given to it in Section 3.4.“Common Shares” means the common shares of the Parent, $0.000037453 par value per share.“Compliance Certificate” means a compliance certificate in the form of Exhibit F.“Confidential Information” has the meaning given to it in Section 11.13.“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent orotherwise, of that Person with respect to (i) any Indebtedness, lease, dividend, letter of credit or other obligation of another,including any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse bythat Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect toundrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) allobligations arising under any Hedging Agreement; provided, however, that the term “Contingent Obligation” shall notinclude endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligationshall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which suchContingent Obligation is made or, if not stated or determinable, the amount that would be required to be shown as a liabilityon a balance sheet prepared in accordance with GAAP; provided, however, that such amount shall not in any event exceedthe maximum amount of the obligations under the guarantee or other support arrangement.“Contribution Notice” means a contribution notice issued by the UK Pensions Regulator under section38 or section 47 of the Pensions Act 2004.“Copyright License” means any written agreement granting any right to use any Copyright orCopyright registration, now owned or hereafter acquired by any Loan Party or in which any Loan Party now holds orhereafter acquires any interest.“Copyrights” means all copyrights, whether registered or unregistered, held pursuant to the laws of theUnited States of America, any State thereof, Bermuda, the United Kingdom, Switzerland or of any other country.5US-DOCS\105484033.25 “Core Indications” means (i) the use and application of clinical development programs of Vibegron forover-active bladder and over-active bladder in men with benign prostatic hyperplasia indications, and (ii) after the approvalof the New Drug Application for Vibegron, the commercialization of Vibegron to the urologist physician market segmentfor such indications.“Deposit Accounts” means any “deposit account”, as such term is defined in the UCC, and includesany checking account, savings account, or certificate of deposit wherever located.“Disclosure Letter” means that certain letter, dated as of the date hereof, delivered by Parent to Agent.“Dollars” means the lawful currency of the United States of America.“Due Diligence Fee” means Twenty-Five Thousand Dollars ($25,000.00), which fee has been paid toLender prior to the Closing Date.“End of Term Charge” means a charge of the aggregate amount of all Advances multiplied by four andone-quarter of one percent (4.25%).“English Security Documents” means the following documents, each in form and substance reasonablysatisfactory to Agent: (a) that certain English-law Debenture, dated as of the date hereof, between Urovant England and theAgent, (b) that certain English-law Share Charge, dated as of the date hereof, between Parent and the Agent, and (c) suchother documents incidental to the foregoing documents as Agent may reasonably determine necessary.“Equity Consideration” means consideration for Permitted Acquisitions paid in Equity Interests to theextent permitted pursuant to clause (g) of the definition of Permitted Acquisition.“Equity Interests” means, with respect to any Person, the capital stock, partnership or limited liabilitycompany interest, or other equity securities or equity ownership interests of such Person, but excluding, for the avoidance ofdoubt, securities offered in the Permitted Convertible Debt Financing and any other Indebtedness that is convertible into orotherwise exchangeable for, Equity Interests.“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and theregulations promulgated thereunder.“Event of Default” has the meaning given to it in Section 9.“Excluded Accounts” means (i) any Deposit Account that is used solely as a payroll account for theemployees of any Loan Party or any of its Subsidiaries or the funds in which consist solely of funds held in trust for anydirector, officer or employee of such Loan Party or Subsidiary or any employee benefit plan maintained by such Loan Partyor Subsidiary or funds representing deferred compensation for the directors and employees6US-DOCS\105484033.25 of such Loan Party or Subsidiary, collectively not to exceed 150% of the amount to be paid in the ordinary course ofbusiness in the then-next payroll cycle, (ii) escrow accounts, Deposit Accounts and trust accounts, in each case holdingassets that are pledged or otherwise encumbered pursuant to clauses (ii), (vi) and (xiv) of the definition of Permitted Liens(but only to the extent required to be excluded pursuant to the underlying documents entered into in connection with suchPermitted Liens in the ordinary course of business), (iii) accounts containing no (zero) balance, (iv) prior to the lapse of anygrace period set forth therein, accounts described in the Schedule 5.24 to the Disclosure Letter, and (v) any Deposit Accountwith a balance less than $100,000; provided, that the aggregate balance of all such Deposit Accounts excluded pursuant tothis clause (v) shall at no time exceed Five Hundred Thousand Dollars ($500,000).“Excluded Assets” means (i) nonassignable licenses or contracts, which by their terms require theconsent of the licensor thereof or another party (but only to the extent such prohibition on transfer is enforceable underapplicable law, including, without limitation, Sections 9406, 9407 and 9408 of the UCC); (ii) assets subject to a Lienpermitted by clause (vi) of the definition of Permitted Liens or purchase money debt obligations permitted under clause (iii)of the definition of Permitted Indebtedness, in each case in favor of a Person other than Parent and its Subsidiaries andpermitted hereunder, if the contract or other agreement in which such Lien is granted prohibits the creation of any other Lienon such assets or creates a right of termination in favor of such Person (other than to the extent that any such prohibitionwould be rendered ineffective pursuant to the UCC of any relevant jurisdiction or any other applicable law), provided that,in each case, the applicable Loan Party has exercised its good faith best efforts to not agree to such contractual limitations;(iii) the assets of any non-wholly owned subsidiaries pursuant to customary restrictions and conditions contained inagreements governing joint ventures or strategic alliances in the ordinary course of business, provided that the applicableLoan Party has exercised its good faith best efforts to not agree to such contractual limitations; (iv) any Excluded Accounts;and (v) interests in joint ventures that constitute Permitted Investments pursuant to customary restrictions and conditionscontained in agreements governing such joint ventures in the ordinary course of business, provided that the applicable LoanParty has exercised its good faith best efforts to not agree to such contractual limitations. “Excluded Taxes” means any of the following Taxes imposed on or with respect to a Lender or Agentor required to be withheld or deducted from a payment to a Lender or Agent, (a) Taxes imposed on or measured by netincome (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of suchLender or Agent being organized under the laws of, or having its principal office or, in the case of any Lender, its applicablelending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are OtherConnection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for theaccount of such Lender with respect to an applicable interest in a Loan or Term Commitment pursuant to a law in effect onthe date on which (i) such Lender acquires such interest in the Loan or (ii) such Lender changes its lending office, except ineach case to the extent that, pursuant to Section 2.9, amounts with respect to such Taxes were payable either to suchLender's assignor immediately before such Lender became a7US-DOCS\105484033.25 party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Lender orAgent’s failure to comply with Section 2.9(g), (d) any withholding Taxes imposed under FATCA, (e) Swiss WithholdingTax imposed as a result of a Lender (A) having sold (including any sale of a participation) or assigned any interest in theLoan or Term Commitment or (B) ceasing to be a Qualifying Bank other than as a result of any Change in Law after thedate it became a party to this Agreement, and (f) any U.K. Withholding Tax imposed on amounts payable to or for theaccount of a Lender (or an assignee of a Lender) with respect to an applicable interest in a Loan or Term Commitment to theextent such Lender (or assignee) was not (subject to the completion of any relevant procedural formalities) entitled to a fullexemption from U.K. Withholding Tax with respect to the relevant payment on the date of execution of this Agreement (orin the case of an assignee, the date the assignee became a Lender in accordance with Section 11.07(c)) or after that date isnot so entitled, other than as a result of a change in (or in the interpretation, administration, or application of) any law ortreaty or any published practice or published concession of any relevant taxing authority.“Extension Fee” means a non-refundable fee of Seventy-Five Thousand Dollars ($75,000), due andpayable on or before June 30, 2020 in the event the Loan Parties elect to extend the Tranche 3 Availability End Date as setforth in the definition therein, which fee shall be deemed fully earned on the Closing Date solely in the event the LoanParties elect to extend the Tranche 3 Availability End Date.“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or anyamended or successor version that is substantively comparable and not materially more onerous to comply with), any currentor future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of theCode and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treatyor convention among Governmental Authorities and implementing such Sections of the Code.“FDA” means the U.S. Food and Drug Administration or any successor thereto or any othercomparable Governmental Authority.“Financial Milestone 1” means satisfaction of each of the following events: (a) no Event of Defaultshall have occurred and be continuing; and (b) Parent has raised at least One Hundred Million Dollars ($100,000,000.00), incumulative unrestricted (including, not subject to any redemption, clawback, escrow or similar encumbrance or restrictionother than in the case the Permitted Convertible Debt Financing) net cash proceeds from one or more bona fide equityfinancings, Subordinated Indebtedness (which, for the avoidance of doubt, may include the net proceeds received from anyPermitted Convertible Debt Financing (other than any amounts used to purchase equity derivatives in connection with suchPermitted Convertible Debt Financing)) and/or upfront proceeds from business development transactions permitted underthis Agreement, in each case after January 24, 2019 and on or prior to June 30, 2020, subject to reasonable verification byAgent (including supporting documentation requested by Agent).8US-DOCS\105484033.25 “Financial Milestone 2” means satisfaction of each of the following events: (a) no Event of Defaultshall have occurred and be continuing; and (b) Parent has raised at least One Hundred Fifty Million Dollars($150,000,000.00) (inclusive of any amounts raised under Financial Milestone 1), in cumulative unrestricted (including, notsubject to any redemption, clawback, escrow or similar encumbrance or restriction other than in the case the PermittedConvertible Debt Financing) net cash proceeds from one or more bona fide equity financings, Subordinated Indebtedness(which, for the avoidance of doubt, may include the net proceeds received from any Permitted Convertible Debt Financing(other than any amounts used to purchase equity derivatives in connection with such Permitted Convertible Debt Financing))and/or upfront proceeds from business development transactions permitted under this Agreement, in each case after January24, 2019 and prior to the Advance Date for the Tranche 3 Advance, subject to reasonable verification by Agent (includingsupporting documentation requested by Agent).“Financial Statements” has the meaning given to it in Section 7.1.“Financial Support Direction” means a financial support direction issued by the UK Pensions Regulatorunder section 43 of the Pensions Act 2004.“Foreign Collateral” has the meaning given to it in Section 3.4. “GAAP” means generally acceptedaccounting principles in the United States of America, as in effect from time to time.“Governmental Authority” means the government of any nation or any political subdivision thereof,whether state, local, territory, province or otherwise, and any agency, authority, instrumentality, regulatory body, court,central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functionsof or pertaining to government (including any supranational bodies such as the European Union or the European CentralBank).“Guarantor” has the meaning given to it in the preamble to this Agreement.“Guidelines” means, together, guideline S-02.123 in relation to interbank loans of 22 September 1986(Merkblatt "Verrechnungssteuer auf Zinsen von Bankguthaben, deren Gläubiger Banken sind (Interbankguthaben)" vom22. September 1986), guideline S-02.122.1 in relation to bonds of April 1999 (Merkblatt "Obligationen" vom April 1999),guideline S-02.130.1 in relation to money market instruments and book claims of April 1999 (Merkblatt vom April 1999betreffend Geldmarktpapiere und Buchforderungen inländischer Schuldner), guideline S-02.128 in relation to syndicatedcredit facilities of January 2000 (Merkblatt "Steuerliche Behandlung von Konsortialdarlehen, Schuldscheindarlehen,Wechseln und Unterbeteiligungen" vom Januar 2000), circular letter No. 34 of 26 July 2011 (1-034-V-2011) in relation todeposits (Kreisschreiben Nr. 34 "Kundenguthaben" vom 26. Juli 2011) and the circular letter No. 15 of 3 October 2017 (1-015-DVS-2017) in relation to bonds and derivative financial instruments as subject matter of taxation of Swiss federalincome tax, Swiss withholding tax and Swiss stamp taxes (Kreisschreiben Nr. 15 "Obligationen und derivativeFinanzinstrumente als Gegenstand der direkten Bundessteuer, der Verrechnungssteuer und der Stempelabgaben" vom 3.Oktober 2017), in each case as issued, amended or replaced from time to time, by the Swiss Federal Tax Administration oras substituted or superseded and overruled by any law, statute, ordinance, court decision, regulation or the like as in forcefrom time to time.9US-DOCS\105484033.25 “Hedging Agreement” means any interest rate exchange agreement, foreign currency exchangeagreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedgingarrangement incurred by any Loan Party or any of its Subsidiaries not for speculative purposes and entered into in theordinary course of business.“HMRC” means HM Revenue & Customs of the U.K.“Indebtedness” means indebtedness of any kind, including (a) all indebtedness for borrowed money orthe deferred purchase price of property or services (excluding trade credit entered into in the ordinary course of business),including reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidencedby notes, bonds, debentures or similar instruments, (c) all capital lease obligations, (d) equity securities of any Person subjectto repurchase or redemption other than at the sole option of such Person, (e) “earnouts”, purchase price adjustments, profitsharing arrangements, deferred purchase money amounts and similar payment obligations or continuing obligations of anynature arising out of purchase and sale contracts, (f) non-contingent obligations to reimburse any bank or Person in respect ofamounts paid under a letter of credit, banker’s acceptance or similar instrument, and (g) all Contingent Obligations.“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to anypayment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent nototherwise described in clause (a), Other Taxes.“Initial Facility Charge” means Six Hundred Thousand Dollars ($600,000.00), which is payable toLender in accordance with Section 4.1(g).“Insolvency Event” means, in relation to an entity that: (a) such entity shall make an assignment for thebenefit of creditors; (b) such entity shall be unable to pay its debts as they become due, or be unable to pay or perform underthe Loan Documents, or shall become insolvent or is deemed to, or is declared to, be unable to pay its debts under anyapplicable law; (c) such entity shall file a voluntary petition in bankruptcy; (d) such entity shall file any petition, answer, ordocument seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similarrelief under any present or future statute, law or regulation pertinent to such circumstances; (e) such entity shall seek orconsent to or acquiesce in the appointment of any trustee, receiver, or liquidator of such entity or of all or any substantial part(i.e., 33-1/3% or more) of the assets or property of such entity; (f) such entity shall cease operations of its business as itsbusiness has normally been conducted, or terminate substantially all of its employees; (g) such entity or its directors ormajority shareholders shall take any action initiating any of the foregoing actions described in clauses (a) through (e); (h) (i)thirty (30) days shall have expired after the commencement of an involuntary action against such entity seekingreorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or futurestatute, law or regulation, without such action being dismissed or all orders or proceedings thereunder affecting theoperations or the business of such entity being stayed, (ii) a stay of any such order or proceedings shall thereafter be10US-DOCS\105484033.25 set aside and the action setting it aside shall not be timely appealed, (iii) such entity shall file any answer admitting or notcontesting the material allegations of a petition filed against such entity in any such proceedings, (iv) the court in which suchproceedings are pending shall enter a decree or order granting the relief sought in any such proceedings, or (v) thirty (30)days shall have expired after the appointment, without the consent or acquiescence of such entity of any trustee, receiver orliquidator of such entity or of all or any substantial part of the properties of such entity without such appointment beingvacated; (i) such entity is dissolved (other than pursuant to a consolidation, amalgamation or merger); (j) such entity institutesor has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative orregulatory jurisdiction over it in the jurisdiction of its incorporation or organization or the jurisdiction of its head or homeoffice, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvencylaw or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation by it or suchregulator, supervisor or similar official; (k) such entity has instituted against it a proceeding seeking a judgment of insolvencyor bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or apetition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted orpresented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (j)above and (i) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an orderfor its winding-up or liquidation, or (ii) is not dismissed, discharged, stayed or restrained in each case within thirty (30) daysof the institution or presentation thereof; (l) such entity suspends or threatens to suspend making payments on all of its debts;(m) by reason of actual or anticipated financial difficulties, commences arrangements with one or more of its creditors(excluding Agent or Lender in its capacity as such) to reschedule all of its indebtedness; (n) the value of the assets of suchentity is less than its liabilities (taking into account contingent and prospective liabilities); (o) a moratorium is declared inrespect of all indebtedness of such entity; (p) any corporate action, legal proceedings or other procedure or step is taken inrelation to (i) the suspension of payments, a moratorium of all indebtedness, winding-up, dissolution, administration orreorganization (by way of voluntary arrangement, scheme of arrangement or otherwise) of such entity, (ii) a composition,assignment or arrangement with the creditors of such entity generally, or (iii) the appointment of a liquidator, receiver,administrative receiver, administrator, compulsory manager or other similar officer in respect of such entity or any of itsassets, or (iv) enforcement over any material portion of the Collateral, or any analogous procedure or step is taken in anyjurisdiction, provided this clause (p) shall not apply to any winding-up petition which is frivolous or vexatious and isdischarged, stayed or dismissed within fourteen (14) days of commencement; (q) such entity causes or is subject to any eventwith respect to such entity which, under the applicable laws of any jurisdiction, has an analogous effect to any of the eventsspecified in paragraphs (a) to (p) above; or (r) such entity takes any action in furtherance of, or indicating its consent to,approval of, or acquiescence in, any of the foregoing acts.11US-DOCS\105484033.25 “Insolvency Proceeding” is any proceeding by or against any Person under the United StatesBankruptcy Code, any Insolvency Event or any other bankruptcy or insolvency law, including assignments for the benefit ofcreditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or othersimilar relief.“Intellectual Property” means all of each Loan Party’s Copyrights; Trademarks; Patents; Licenses; tradesecrets and inventions; mask works; service marks, designs, business names, data base rights, design rights, domain names,moral rights, inventions, confidential information, know-how and other intellectual property rights and interests whetherregistered or unregistered; each Loan Party’s applications therefor and reissues, extensions, or renewals thereof; and eachLoan Party’s goodwill associated with any of the foregoing, together with each Loan Party’s rights to sue for past, presentand future infringement of Intellectual Property and the goodwill associated therewith.“Inventory” means “inventory” as defined in Article 9 of the UCC.“Investment” means any beneficial ownership (including shares, stock, partnership or limited liabilitycompany interests) of or in any Person, or any loan, advance or capital contribution to any Person or the acquisition of all, orsubstantially all, of the assets of another Person.“IRS” means the United States Internal Revenue Service.“Joinder Agreements” means for each Subsidiary, a completed and executed (i) Joinder Agreement insubstantially the form attached hereto as Exhibit G with respect to Subsidiaries formed or organized under the laws of theUnited States of America or any state, commonwealth or territory thereof, or (ii) joinder documentation in form andsubstance reasonably satisfactory to Agent joining such Subsidiary as a party under the Bermuda Security Documents,English Security Documents, Swiss Security Documents or similar security documents under the relevant jurisdictions, asapplicable, with respect to Subsidiaries organized outside of the United States or any of the foregoing jurisdictions.“Lender” has the meaning given to it in the preamble to this Agreement.“License” means any Copyright License, Patent License, Trademark License or other license of rightsor interests.“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, securityinterest, encumbrance, levy, lien or charge of any kind, and any other security interest or any other agreements orarrangement having a similar effect, whether voluntarily incurred or arising by operation of law or otherwise, against anyproperty, any conditional sale or other title retention agreement, and any lease in the nature of a security interest.“Loan” means the Advances made under this Agreement.12US-DOCS\105484033.25 “Loan Documents” means this Agreement, the Notes (if any), the ACH Authorization (if in effect), theAccount Control Agreements, the Joinder Agreements, the Disclosure Letter, each Process Letter, all UCC FinancingStatements, any Warrant, the Pledge Agreement, the Bermuda Security Documents, the English Security Documents, theSwiss Security Documents and any other documents executed in connection with the Secured Obligations or the transactionscontemplated hereby, as the same may from time to time be amended, modified, supplemented or restated.“Loan Party” means each of the Borrowers and the Guarantor.“Material Adverse Effect” means a material adverse effect upon: (i) the business, operations, properties,assets or financial condition of the Loan Parties and its Subsidiaries, taken as a whole; or (ii) the ability of the Loan Parties,taken as a whole, to perform or pay the Secured Obligations in accordance with the terms of the Loan Documents, or theability of Agent or Lender to enforce any of its rights or remedies with respect to the Secured Obligations; or (iii) theCollateral or Agent’s Liens on the Collateral or the priority of such Liens.“Maximum Amount” has the meaning set forth in Section 11.22(a).“Maximum Rate” has the meaning set forth in Section 2.3.“Maximum Term Loan Amount” means One Hundred Million and No/100 Dollars ($100,000,000.00).“Minimum Cash A/P Amount” means the amount of the Loan Parties’ accounts payable under GAAPnot paid after the later of (a) the 120th day following the invoice date for such account payable and (b) the earlier of (i) the30th day following the date of actual receipt of any Loan Party of the invoice for such account payable and (ii) the 150th dayfollowing the invoice date for such account payable.“Non-Bank Rules” means, together, the 10 Non-Bank Rule and the 20 Non-Bank Rule.“Non-Core Indication” means any development and commercialization of Vibegron outside the Core-Indications.“Note(s)” means a Term Note.“OFAC” is the U.S. Department of Treasury Office of Foreign Assets Control.“OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked Persons Listmaintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list ofterrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to anyother applicable Executive Orders.13US-DOCS\105484033.25 “Other Connection Taxes” means, with respect to any Lender, Taxes imposed as a result of a present orformer connection between such Lender and the jurisdiction imposing such Tax (other than connections arising from suchLender having executed, delivered, become a party to, performed its obligations under, received payments under, received orperfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold orassigned an interest in any Loan or Loan Document).“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing orsimilar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement orregistration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document,except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.“Parent’s Market Capitalization” means the public closing price per share of Parent’s common stock (asquoted by Bloomberg L.P. or such other inter-dealer quotation system reasonably acceptable to Agent in its reasonablediscretion) as of the end of each trading day multiplied by the fully diluted shares outstanding.“Patent License” means any written agreement granting any right with respect to any invention onwhich a Patent is in existence or a Patent application is pending, in which agreement any Loan Party now holds or hereafteracquires any interest.“Patents” means all letters patent of, or rights corresponding thereto, in the United States of America orin any other country, all registrations and recordings thereof, and all applications for letters patent of, or rights correspondingthereto, in the United States of America, Bermuda, the United Kingdom, Switzerland or any other country.“Permitted Acquisition” shall mean any acquisition (including by way of merger) by any Loan Party ofall or substantially all of the assets of another Person, or of a division or line of business of another Person, or capital stock ofanother Person, which is conducted in accordance with the following requirements:(a)such acquisition is of a business or Person engaged in a line of business similar,related, or complementary to lines of business of the Loan Parties or their Subsidiaries;(b)if such acquisition is structured as a stock acquisition, then the Person so acquiredshall either (i) become a wholly-owned Subsidiary of a Loan Party or of a Subsidiary and such Loan Party shall comply, orcause such Subsidiary to comply, with Section 7.13 hereof or (ii) such Person shall be merged with and into a Loan Party(with such Loan Party being the surviving entity);(c)if such acquisition is structured as the acquisition of assets, such assets shall beacquired by a Loan Party;14US-DOCS\105484033.25 (d)Parent shall have delivered to Lender not less than ten (10) nor more than forty five(45) days prior to the date of such acquisition, notice of such acquisition together with pro forma projected financialinformation, copies of then-current drafts of all material documents relating to such acquisition, and historical financialstatements for such acquired entity (to the extent available), division or line of business, in each case in form and substancesatisfactory to Lender and demonstrating compliance with the covenants set forth in Section 7.20 hereof on a pro formabasis;(e)both immediately before and immediately after such acquisition no default or Eventof Default shall have occurred and be continuing; and(f)the cash portion of such proposed new acquisition computed on the basis of totalacquisition consideration paid or incurred, or to be paid or incurred, by Borrower with respect thereto, including the amountof Permitted Indebtedness assumed or to which such assets, businesses or business or ownership interest or shares, or anyPerson so acquired is subject (excluding Indebtedness comprised of performance-based milestones, earnouts, or royalties thatqualify as Permitted Indebtedness pursuant to subsection (v) of the definition thereof), shall not be greater than, in theaggregate for all such acquisitions during the term of this Agreement, an amount equal to the sum of (i) (x) prior to theachievement of the Clinical Milestone, Zero Dollars ($0), and (y) following the achievement of the Clinical Milestone, anamount equal to Four Million Three Hundred Thousand Dollars ($4,300,000), plus (ii) ten percent (10%) of all Advancesplus (iii) five percent (5%) of the first One Hundred Million Dollars ($100,000,000) of net proceeds of new issuances ofEquity Interests of Parent following the achievement of the Clinical Milestone plus (iv) ten percent (10%) of the net proceedsof new issuances of Equity Interests of Parent following the achievement of the Clinical Milestone in excess of OneHundred Million Dollars ($100,000,000) (the sum of clauses (i) through (iv), the “Acquisition Allocation”); and(g)the sum of any consideration for all such acquisitions paid in Equity Interests ofany Loan Party shall not exceed the sum of (i) Fifteen Million Dollars ($15,000,000) plus (ii) 10% of the amount by whichParent’s Market Capitalization, determined as of the last trading day of the calendar month immediately preceding theconsummation of such acquisition, exceeds Four Hundred Million Dollars ($400,000,000). “Permitted Convertible Debt Financing” means issuance by Parent of convertible notes in an aggregateprincipal amount of not more than One Hundred Fifty Million Dollars ($150,000,000); provided that such convertible notesshall (a) have a scheduled maturity date no earlier than one hundred eighty (180) days after the Term Loan Maturity Date,(b) be unsecured, (c) not be guaranteed by any Subsidiary of Parent that is not a Loan Party, (d) contain usual and customarysubordination terms for underwritten offerings of senior subordinated convertible notes and (e) shall specifically designatethis Agreement and all Secured Obligations as “designated senior indebtedness” or similar term so that the subordinationterms referred to in clause (d) of this definition specifically refer to such notes as being subordinated to the SecuredObligations pursuant to such subordination terms.15US-DOCS\105484033.25 “Permitted Indebtedness” means: (i) Indebtedness of any Loan Party in favor of Lender or Agent arisingunder this Agreement or any other Loan Document; (ii) Indebtedness existing on the Closing Date which is disclosed inSchedule 1A to the Disclosure Letter; (iii) Indebtedness of up to One Million Dollars ($1,000,000) outstanding at any timeprior to the achievement of the Clinical Milestone and, at all times following achievement of the Clinical Milestone, ThreeMillion Dollars ($3,000,000) at any time outstanding, in each case secured by a Lien described in clause (vii) of the definedterm “Permitted Liens,” provided such Indebtedness does not exceed the cost of the assets financed with such Indebtedness;(iv) Indebtedness to trade creditors incurred in the ordinary course of business; (v) Indebtedness that also constitutes aPermitted Investment and Indebtedness consisting of obligations under deferred or contingent consideration arrangements(including earn-outs, milestone payments, royalties and other contingent or deferred obligations as long as such obligationsare not evidenced by any “seller notes” or similar Indebtedness); (vi) Subordinated Indebtedness; (vii) reimbursementobligations in connection with letters of credit and cash management services and issued on behalf of a Borrower or aSubsidiary thereof in an amount not to exceed One Million Five Hundred Thousand Dollars ($1,500,000) at any timeoutstanding prior to the achievement of the Clinical Milestone and, at all times following achievement of the ClinicalMilestone, Three Million Dollars ($3,000,000) at any time outstanding, (viii) Indebtedness incurred in the ordinary course ofbusiness with corporate credit cards, merchant cards, purchase chards, and debit cards; (ix) other unsecured Indebtedness inan amount not to exceed Two Million Dollars ($2,000,000) at any time outstanding; (x) intercompany Indebtedness as longas each of the obligor and the obligee under such Indebtedness is a Loan Party or a Subsidiary that has executed a JoinderAgreement and an intercompany subordination or pledge agreement (including, for the avoidance of doubt, an omnibusagreement covering all such Indebtedness) in form and substance reasonably acceptable to Agent; (xi) Permitted ConvertibleDebt Financing; (xii) obligations under any Hedging Agreement in an aggregate amount not to exceed One Million Dollars($1,000,000); (xiii) licenses permitted pursuant to clause (ii) of the definition of Permitted Transfers or otherwise permittedhereunder, to the extent involving the incurrence of Indebtedness; and (xiv) extensions, refinancings and renewals of anyitems of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified to imposematerially more burdensome terms upon Borrower or its Subsidiary, as the case may be.“Permitted Investment” means: (i) Investments existing on the Closing Date which are disclosed inSchedule 1B to the Disclosure Letter; (ii) (a) marketable direct obligations issued or unconditionally guaranteed by theUnited States of America or any agency or any State thereof maturing within one year from the date of acquisition thereof,(b) commercial paper maturing no more than one year from the date of creation thereof and currently having a rating of atleast A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (c) certificates of deposit issuedby any bank with assets of at least Five Hundred Million Dollars ($500,000,000) maturing no more than one year from thedate of investment therein, (d) money market accounts, and (e) other Investments described in Parent’s investment policy asapproved by Agent in writing (it being understood that the investment policy provided to Agent prior to the Closing Dateshall be deemed approved in writing) and the Board from time to time; (iii) repurchases of (A) shares or stock from formeremployees, directors, or consultants of Borrower under the16US-DOCS\105484033.25 terms of applicable repurchase agreements at the original issuance price of such securities in an aggregate amount not toexceed Two Hundred Fifty Thousand Dollars ($250,000) in any fiscal year or (B) equity derivatives and stock repurchases(including without limitation by means of accelerated stock repurchases and forward purchases) as permitted by Section 7.7,in each case provided that no Event of Default has occurred, is continuing or would exist immediately after entry into theagreement governing such derivatives or stock repurchases; (iv) Investments accepted in connection with PermittedTransfers; (v) Investments (including Indebtedness) (a) received in connection with the bankruptcy or reorganization ofcustomers or suppliers and in settlement of delinquent or doubtful obligations of, and other disputes with, customers orsuppliers arising in the ordinary course of any Borrower’s business and (b) Investments consisting of the endorsement ofnegotiable instruments for deposit or collection or similar transactions in the ordinary course of business; (vi) Investmentsconsisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are notAffiliates, in the ordinary course of business provided that this subparagraph (vi) shall not apply to Investments of Borrowerin any Subsidiary; (vii) Investments consisting of loans not involving the net transfer on a substantially contemporaneousbasis of cash proceeds to employees, officers or directors relating to the purchase of capital stock of Parent pursuant toemployee share or stock purchase plans or other similar agreements approved by the Board; (viii) Investments consisting oftravel advances, relocation loans, and other loan advances (or guarantees thereof) to employees, officers and directors in theordinary course of business; (ix) Investments in (A) newly-formed Subsidiaries, provided that each such Subsidiary entersinto a Joinder Agreement within the time periods specified in Section 7.13 and executes such other related documents asshall be reasonably requested by Agent, and (B) any Subsidiary that has entered into a Joinder Agreement or is otherwise a“Borrower” or “Guarantor” under the Loan Documents pursuant to other documentation entered into by such Subsidiaryand Collateral Agent; (x) joint ventures or strategic alliances in the ordinary course of Borrower’s business (includingInvestments comprised of joint ventures or strategic alliances in Non-Core Indications), provided that any cash Investmentsby Borrowers or a Subsidiary of a Borrower in connection therewith do not exceed Five Hundred Thousand Dollars ($500,000) in the aggregate in any fiscal year at any time prior to the achievement of the Clinical Milestone and, at all timesfollowing achievement of the Clinical Milestone, One Million Dollars ($1,000,000) in the aggregate in any fiscal year at anytime; (xi) Investments consisting of Permitted Acquisitions; (xii) Hedging Agreements permitted under clause (xii) of thedefinition of Permitted Indebtedness; and (xiii) additional Investments (including Investments in connection with in-licensingtransactions) that do not exceed the sum of (i) prior to the achievement of the Clinical Milestone, One Million Dollars($1,000,000) in the aggregate in any fiscal year and (ii) following the achievement of the Clinical Milestone, an amountequal to the sum of (a) the Acquisition Allocation plus (b) the Equity Consideration less (c) the aggregate amount of allInvestments made pursuant to this clause (xiii) less (d) all Investments made consisting of Permitted Acquisitions.17US-DOCS\105484033.25 “Permitted Liens” means any and all of the following: (i) Liens in favor of Agent or Lender; (ii) Liensexisting on the Closing Date which are disclosed in Schedule 1C to the Disclosure Letter; (iii) Liens for Taxes, fees,assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriateproceedings; provided, that Borrower maintains adequate reserves therefor in accordance with GAAP (to the extent requiredthereby); (iv) Liens securing claims or demands of materialmen, artisans, mechanics, carriers, warehousemen, landlords andother like Persons arising in the ordinary course of any Loan Party’s business and imposed without action of such parties;provided, that the payment thereof is not yet sixty (60) days past due; (v) Liens arising from judgments, decrees orattachments in circumstances which do not constitute an Event of Default hereunder; (vi) deposits to secure the performanceof obligations (including by way deposits to secure letters of credit issued to secure the same) under commercial supplyand/or manufacturing agreements and the following deposits, to the extent made in the ordinary course of business: depositsunder worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performanceof bids, tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or othersimilar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or tosecure statutory obligations (other than Liens arising under ERISA or environmental Liens) or surety or appeal bonds, or tosecure indemnity, performance or other similar bonds; (vii) Liens on Equipment, software, other intellectual property or otherassets constituting purchase money Liens and Liens in connection with capital leases securing Indebtedness permitted inclause (iii) of “Permitted Indebtedness”; (viii) Liens incurred in connection with Subordinated Indebtedness; (ix) leaseholdinterests in leases or subleases and licenses or sublicenses granted in the ordinary course of business and not interfering inany material respect with the business of the licensor; (x) Liens in favor of customs and revenue authorities arising as amatter of law to secure payment of custom duties that are promptly paid on or before the date they become due; (xi)[Reserved]; (xii) statutory and common law rights of set-off and other similar rights as to deposits of cash and securities infavor of banks, other depository institutions and brokerage firms; (xiii) easements, zoning restrictions, rights-of-way andsimilar encumbrances on real property imposed by law or arising in the ordinary course of business so long as they do notmaterially impair the value or marketability of the related property; (xiv) (A) Liens on Cash securing obligations permittedunder clause (vii) and (viii) of the definition of Permitted Indebtedness and (B) security deposits in connection with realproperty leases, the combination of (A) and (B) in an aggregate amount not to exceed One Million Five Hundred ThousandDollars ($1,500,000) at any time prior to the achievement of the Clinical Milestone and, at all times following achievementof the Clinical Milestone, Two Million Dollars ($2,000,000) at any time; (xv) other Liens in an aggregate amount not toexceed One Million Dollars ($1,000,000) at any time; provided that such liens be limited to specific assets and not all assetsor substantially all assets of any Borrower; (xvi) Liens incurred in connection with sales, transfers, licenses, sublicenses,leases, subleases or other dispositions of assets in the ordinary course of business and permitted hereunder and, in connectiontherewith, customary rights and restrictions contained in agreements relating to such transactions pending the completionthereof or during the term thereof, and any option or other agreement to sell, transfer, license, sublicense, lease, sublease ordispose of an asset permitted hereunder; and (xvii) Liens incurred in connection with the extension, renewal or refinancingof the Indebtedness secured by Liens of the type described in clauses (i) through (xv) above; provided, that any extension,renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of theIndebtedness being extended, renewed or refinanced (as may have been reduced by any payment thereon) does not increase.18US-DOCS\105484033.25 “Permitted Non-Qualifying Bank Lender” means a Lender which is not a Qualifying Bank but has beenaccepted as a Lender by the Borrower.“Permitted Transfers” means (i) sales, transfers or other dispositions of Inventory in the ordinary courseof business, (ii) (A) any non-exclusive outbound licenses, sublicenses and similar arrangements for the use of IntellectualProperty and related assets (whether for Core Indications or Non-Core Indications) in the ordinary course of business, (B)for any geographical areas outside of the United States of America (whether for Core Indications or Non-Core Indications),any arms-length exclusive outbound licenses, sublicenses and similar arrangements for the use of Intellectual Property andrelated assets in the ordinary course of business, including without limitation licenses and sublicenses that may be exclusivein respects other than territory, and (C) for the United States of America, solely for Non-Core Indications, any arms-lengthexclusive outbound licenses, sublicenses and similar arrangements for the use of Intellectual Property and related assets inthe ordinary course of business, including without limitation licenses and sublicenses that may be exclusive in respects otherthan territory and that may be exclusive as to territory (either (1) as part of any worldwide or territory that includes theUnited States of America or (2) the United States of America as the sole territory); (iii) transfers expressly permitted underSection 7.5, 7.6 or 7.7, (iv) dispositions constituting arms-length transactions of worn-out, obsolete or surplus assets at fairmarket value (as reasonably determined by Parent) in the ordinary course of business to a Person that is not an Affiliate ofany Loan Party, (v) [reserved], (vi) the surrender, waiver or settlement of contractual rights in the ordinary course ofbusiness, or the surrender, waiver or settlement of claims and litigation claims (whether or not in the ordinary course ofbusiness) as long as no Event of Default has occurred and is continuing, (vii) transfers of assets to Parent, Urovant England,Urovant Switzerland or Urovant USA in the ordinary course of business and in a manner that is not adverse to the interestsof the Lender, (viii) the use of cash and cash equivalents subject to the restrictions and limitations set forth in the LoanDocuments, and (viii) other transfers of assets having a fair market value of not more than Seven Hundred and FiftyThousand Dollars ($750,000) in the aggregate in any fiscal year.“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporatedorganization, association, corporation, limited liability company, institution, other entity or government.“Pledge Agreement” means the Pledge Agreement dated as of the Closing Date between UrovantEngland and Agent, as the same may from time to time be amended, restated, modified or otherwise supplemented.“Prepayment Charge” has the meaning set forth in Section 2.6.“Process Letter” has the meaning given to it in Section 11.20.“PSC Register” means the “PSC register” within the meaning of section 790C(10) of the CompaniesAct 2006.19US-DOCS\105484033.25 “Qualifying Bank” means:(a)any bank as defined in the Swiss Federal Code for Banks and Savings Banks dated8 November 1934 (Bundesgesetz über die Banken und Sparkassen); or(b)a person or entity which effectively conducts banking activities with its owninfrastructure and staff as its principal purpose and which has a banking license in full force and effect issued in accordancewith the banking laws in force in its jurisdiction of incorporation, or if acting through a branch, issued in accordance with thebanking laws in the jurisdiction of such branch, all and in each case within the meaning of the Guidelines.“Receivables” means (i) all of each Loan Party’s Accounts, Instruments, Documents, Chattel Paper,Supporting Obligations, letters of credit, proceeds of any letter of credit, and Letter of Credit Rights, and (ii) all customerlists, software, and business records related thereto.“Register” has the meaning set forth in Section 11.7.“Regulatory Milestone” means satisfaction of each of the following events: (a) no default or Event ofDefault shall have occurred and be continuing; and (b) the FDA shall have accepted for filing the New Drug Application forVibegron submitted by any Loan Party or other third party collaborator with such collaborator and collaboration agreementbeing acceptable to Agent in its sole but reasonable discretion (such determination not to be unreasonably withheld, delayedor conditioned) for the treatment of over-active bladder (wet or dry) in women and men, subject to reasonable verification byAgent (including supporting documentation reasonably requested by Agent).“Required Lenders” means at any time, the holders of more than 50% of the aggregate unpaid principalamount of the Term Loans then outstanding.“Roivant” means, collectively, Roivant Sciences, Ltd. and its controlled Affiliates (excluding the Parentand its direct and indirect Subsidiaries).“Roivant Documents” has the meaning set forth in Section 5.6.“Sanctioned Country” shall mean, at any time, a country or territory which is the subject or target of anySanctions.“Sanctioned Person” shall mean, at any time, (a) any Person listed in any Sanctions-related list ofdesignated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S.Department of State, or by the United Nations Security Council, the European Union or any EU member state, (b) anyPerson operating, organized or resident in a Sanctioned Country or (c) any Person controlled by any such Person.20US-DOCS\105484033.25 “Sanctions” shall mean economic or financial sanctions or trade embargoes imposed, administered orenforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Controlof the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, theEuropean Union or Her Majesty’s Treasury of the United Kingdom.“SEC” means the Securities and Exchange Commission.“Secured Obligations” means each Loan Party’s obligations under this Agreement and any LoanDocument (other than any Warrant), including any obligation to pay any amount now owing or later arising.“Specified Prepayment” means a one-time prepayment of Tranche 1 Advances to be made at the LoanParties’ option in the event the Clinical Milestone is not satisfied, such prepayment to be made on or before June 30, 2019and in accordance with Section 2.6, of principal in an amount not less than Seven Million Five Hundred Thousand Dollars($7,500,000) and not greater than Fifteen Million Dollars ($15,000,000), plus all accrued and unpaid interest with respect tothe principal balance being prepaid, plus all fees and other amounts owing under the Loan Documents at such time(including, for the avoidance of doubt, the applicable pro rata portion of the End of Term Charge).“Subordinated Indebtedness” means Indebtedness subordinated to the Secured Obligations in amountsand on terms and conditions reasonably satisfactory to Agent in its reasonable discretion.“Subsidiary” means an entity, whether corporate, partnership, limited liability company, joint venture orotherwise, in which any Loan Party owns or controls 50% or more of the outstanding voting securities, including eachentity listed on Schedule 1 to the Disclosure Letter.“Swiss Borrower” has the meaning set forth in Section 11.22.“Swiss Obligor” means a Loan Party which is incorporated in Switzerland or, if different, is consideredto be tax resident in Switzerland for Swiss Withholding Tax purposes.“Swiss Federal Tax Administration” means the tax authorities referred to in article 34 of the SwissWithholding Tax Act.“Swiss Security Documents” means the following documents, each in form and substance reasonablysatisfactory to Agent: (a) a quota pledge agreement between Urovant England as pledgor and Agent as pledgee, regardingthe pledgor’s quotas in Urovant Switzerland, (b) a bank account pledge agreement between Urovant Switzerland as pledgorand Agent as pledgee, regarding certain of the pledgor’s bank accounts, (c) a security assignment agreement betweenUrovant Switzerland as assignor and Agent as assignee, regarding certain of the assignor’s insurance receivables, intra-groupreceivables and trade receivables, and (d) such other documents incidental to the foregoing documents as Agent mayreasonably determine necessary. 21US-DOCS\105484033.25 “Swiss Withholding Tax” means taxes imposed under the Swiss Withholding Tax Act.“Swiss Withholding Tax Act” means the Swiss Federal Act on the Withholding Tax of 13 October1965 (Bundesgesetz über die Verrechnungssteuer).“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (includingbackup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest,additions to tax or penalties applicable thereto.“Term Commitment” means as to any Lender, the obligation of such Lender, if any, to make a TermLoan Advance to a Borrower in a principal amount not to exceed the amount set forth under the heading “TermCommitment” opposite such Lender’s name on Schedule 1.1. “Term Loan” has the meaning set forth in the recitals.“Term Loan Advance” means each Tranche 1 Advance, Tranche 2 Advance, Tranche 3 Advance,Tranche 4 Advance and any other Term Loan funds advanced under this Agreement.“Term Loan Interest Rate” means for any day a per annum rate of interest equal to the greater of (i) thelesser of (x) the prime rate as reported in The Wall Street Journal plus 4.65% and (y) 12.15%, and (ii) 10.15%.“Term Loan Maturity Date” means March 1, 2022; provided however, if the following applicablemilestones occur, the “Term Loan Maturity Date” shall be as set forth below: MilestoneTerm Loan MaturityDateThe achievement of the Clinical Milestone on or before September 30, 2019March 1, 2023The achievement of each of:• the Clinical Milestone on or before September 30, 2019, and• the Approval Milestone on or before April 30, 2023.September 1, 2023 “Term Note” means a Promissory Note in substantially the form of Exhibit B.“Trademark License” means any written agreement granting any right to use any Trademark orTrademark registration, now owned or hereafter acquired by any Loan Party or in which any Loan Party now holds orhereafter acquires any interest.“Trademarks” means all trademarks (registered, common law or otherwise) and any applications inconnection therewith, including registrations, recordings and applications in the United States Patent and Trademark Officeor in any similar office or agency of the United States of America, any State thereof, Bermuda, the United Kingdom,Switzerland or any other country or any political subdivision thereof.22US-DOCS\105484033.25 “Tranche 1 Advance” shall have the meaning assigned to such term in Section 2.2(a).“Tranche 2 Advance” shall have the meaning assigned to such term in Section 2.2(a).“Tranche 3 Advance” shall have the meaning assigned to such term in Section 2.2(a).“Tranche 3 Availability End Date” means June 30, 2020; provided however, if both of the followingoccur: (a) the Loan Parties pay the Extension Fee by June 30, 2020 and (b) achievement of Financial Milestone 2, the“Tranche 3 Availability End Date” shall be December 31, 2020.“Tranche 4 Advance” shall have the meaning assigned to such term in Section 2.2(a).“Tranche 4 Facility Charge” means one percent (1%) of the Tranche 4 Advance, which is payable toLender in accordance with Section 4.2(e).“UCC” means the Uniform Commercial Code as the same is, from time to time, in effect in the State ofCalifornia; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfectionor priority of, or remedies with respect to, Agent’s Lien on any Collateral is governed by the Uniform Commercial Code asthe same is, from time to time, in effect in a jurisdiction other than the State of California, then the term “UCC” shall meanthe Uniform Commercial Code as in effect, from time to time, in such other jurisdiction solely for purposes of the provisionsthereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to suchprovisions. “UCC Collateral” has the meaning set forth in Section 3.1.“U.K.” means the United Kingdom.“U.K. Withholding Tax” means any Taxes imposed by way of deduction or withholding by the U.K.“U.K. Treaty Lender” means a Lender that, subject to the completion of procedural formalities, iseligible to receive payments of interest hereunder without a deduction for U.K. Withholding Tax on the basis of anapplicable income tax treaty between the U.K. and the jurisdiction in which such Lender is resident for tax purposes.“UK Pensions Regulator” means the body corporate known as the Pensions Regulator and establishedby Part 1 of the U.K. Pensions Act 2004.“UK PSC Loan Party” means a Loan Party incorporated in England and Wales who is required tomaintain a PSC Register and whose shares are pledged as Collateral.23US-DOCS\105484033.25 “Unrestricted Cash” means Cash held by a Loan Party, in each case subject to an Account ControlAgreement in favor of Agent.“Upstream or Cross-Stream Secured Obligations” has the meaning set forth in Section 11.22(a).“Warrant” means any warrant, substantially in the form of Exhibit I attached hereto, entered into inconnection with the Loan, as may be amended, restated or modified from time to time.“Withholding Agent” means the Borrowers and the Agent.Unless otherwise specified, all references in this Agreement or any Annex or Schedule hereto to a “Section,”“subsection,” “Exhibit,” “Annex,” or “Schedule” shall refer to the corresponding Section, subsection, Exhibit, Annex, orSchedule in or to this Agreement or the Disclosure Letter, as applicable. Unless otherwise specifically provided herein, anyaccounting term used in this Agreement or the other Loan Documents shall have the meaning customarily given such term inaccordance with GAAP, and all financial computations hereunder shall be computed in accordance with GAAP,consistently applied. Without limiting the foregoing, leases shall continue to be classified and accounted for on a basisconsistent with that reflected in the audited financial statements for fiscal year ending March 31, 2018 for all purposes of thisAgreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutuallyacceptable amendment addressing such changes. Unless otherwise defined herein or in the other Loan Documents, termsthat are used herein or in the other Loan Documents and defined in the UCC shall have the meanings given to them in theUCC. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law(or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Personbecomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from theoriginal Person to the subsequent Person and (b) if any new Person comes into existence, such new Person shall be deemedto have been organized on the first date of its existence by the holders of its Equity Interests at such time.1.2Currency Exchange. For purposes of any determination under this Agreement measured inDollars, all amounts incurred, outstanding or proposed to be incurred or outstanding in currencies other than Dollars shall betranslated into Dollars at the spot rate for the purchase of Dollars for the applicable foreign currency as published in TheWall Street Journal in the "Exchange Rates" column under the heading "Currency Trading" or as made available by anyother source reasonably acceptable to the Agent on the date of such determination; provided, however, that (a) for purposesof determining compliance with respect to the amount of any Indebtedness, Transfer, Investment, transaction permitted bySection 7.7 or judgment in a currency other than Dollars, no Default or Event of Default shall be deemed to have occurredas a result of changes in rates of exchange occurring after the time such Indebtedness is incurred, or disposition, Investmentor transaction permitted by Section 7.7 is made, or such judgment entered, and (b) notwithstanding anything herein to thecontrary, nothing in this paragraph changes, modifies or alters the obligations of any Loan Party to pay all amounts owedhereunder in the Dollar amount required hereunder notwithstanding any changes or other fluctuations with respect to anycurrency exchanged into Dollars.24US-DOCS\105484033.25 SECTION 2. THE LOAN2.1[RESERVED]2.2Term Loan.(a)Advances. Subject to the terms and conditions of this Agreement, Lender will severally (and notjointly) make in an amount not to exceed its respective Term Commitment, and Borrower agrees to draw, a Term LoanAdvance of Fifteen Million Dollars ($15,000,000) on the Closing Date (the “Tranche 1 Advance”). Subject to the terms andconditions of this Agreement, beginning on the date Borrower achieves the Clinical Milestone and continuing throughSeptember 30, 2019, Borrower may request and Lender shall make an additional Term Loan Advance in a principal amountof Thirty Million Dollars ($30,000,000) (the “Tranche 2 Advance”). Subject to the terms and conditions of this Agreement,beginning on the date Borrower achieves both the Regulatory Milestone and Financial Milestone 1 and continuing throughthe Tranche 3 Availability End Date, Borrower may request and Lender shall make an additional Term Loan Advance in anaggregate principal amount of up to Fifteen Million Dollars ($15,000,000) (the “Tranche 3 Advance”). Subject to the termsand conditions of this Agreement, and conditioned on approval by Lenders’ investment committee in its sole and unfettereddiscretion, on or before June 30, 2021, Borrower may request additional Term Loan Advances in an aggregate principalamount up to Forty Million Dollars ($40,000,000), in minimum increments of $5,000,000 (each, a “Tranche 4Advance”). The aggregate outstanding Term Loan Advances may be up to the Maximum Term Loan Amount.(b)Advance Request. To obtain a Term Loan Advance, Borrower shall complete, sign and deliver anAdvance Request at least one (1) Business Day before the Advance Date to Agent. Lender shall fund the Term LoanAdvance in the manner requested by the Advance Request provided that each of the conditions precedent to such TermLoan Advance is satisfied as of the requested Advance Date.(c)Term Loan Interest Rate. The principal balance shall bear interest thereon from such Advance Date inan amount equal to the product of the outstanding Term Loan principal balance multiplied by the Term Loan Interest Ratebased on a year consisting of 360 days, with interest computed daily based on the actual number of days elapsed. The TermLoan Interest Rate will float and change on the day the prime rate changes from time to time.(d)Payment. Borrower will pay accrued but unpaid interest on each outstanding Term Loan Advance onthe first Business Day of each month, beginning the month after the Advance Date. Borrower shall repay the aggregateTerm Loan principal balance that is outstanding on the day immediately preceding the Amortization Date, in equal monthlyinstallments of principal and interest (mortgage style) beginning on the Amortization Date and continuing on the firstBusiness Day of each month thereafter until the Secured Obligations (other than inchoate indemnity obligations) arerepaid. Any remaining outstanding Term Loan principal balance, together with any and all accrued but unpaid interesthereunder, shall be due and payable on the Term Loan Maturity Date. 25US-DOCS\105484033.25 Subject to Section 2.9, Borrower shall make all payments under this Agreement without setoff, recoupment or deduction andregardless of any counterclaim or defense. Borrower shall wire in immediately available funds in Dollars to Agent orLender, as applicable and in each case as specified in writing by Agent or Lender, or Lender, subject to Schedule 5.24 of theDisclosure Letter, will initiate debit entries to the Borrower’s account as authorized on the ACH Authorization, in each case(i) on each payment date of all periodic obligations payable to Lender under each Term Loan Advance and (ii) reasonableand documented out-of-pocket legal fees and costs incurred by Agent or Lender in connection with Section 11.12 of thisAgreement, provided that an invoice of such out-of-pocket legal fees and costs has been provided to Borrower at least fifteen(15) days in advance of Lender initiating such payment.2.3Maximum Interest. Notwithstanding any provision in this Agreement or any other Loan Document, itis the parties’ intent not to contract for, charge or receive interest at a rate that is greater than the maximum rate permissibleby law that a court of competent jurisdiction shall deem applicable hereto (which under the laws of the State of Californiashall be deemed to be the laws relating to permissible rates of interest on commercial loans) (the “Maximum Rate”). If acourt of competent jurisdiction shall finally determine that Borrowers have actually paid to Lender an amount of interest inexcess of the amount that would have been payable if all of the Secured Obligations had at all times borne interest at theMaximum Rate, then such excess interest actually paid by Borrowers shall be applied as follows: first, to the payment of theSecured Obligations consisting of the outstanding principal; second, after all principal is repaid, to the payment of Lender’saccrued interest, costs, expenses, professional fees and any other Secured Obligations; and third, after all SecuredObligations are repaid, the excess (if any) shall be refunded to Borrower. 2.4Default Interest. In the event any payment is not paid on the scheduled payment date (other than afailure to pay due solely to an administrative or operational error of Agent or Lender or any Loan Party’s bank if such LoanParty had the funds to make the payment when due and makes the payment within three (3) Business Days following suchLoan Party’s knowledge of such failure to pay), an amount equal to five percent (5%) of the past due amount shall bepayable on demand. Upon the occurrence and during the continuation of an Event of Default hereunder, all SecuredObligations, including principal, interest, compounded interest, and professional fees shall bear interest at a rate per annumequal to the rate set forth in Section 2.2(c) plus five percent (5%) per annum. In the event any interest is not paid when duehereunder, delinquent interest shall be added to principal and shall bear interest on interest, compounded at the rate set forthin Section 2.2(c) or Section 2.4, as applicable.2.5Recalculation of Interest. If a Tax deduction is required by Swiss law to be made by a Swiss Obligorin respect of any interest payable by it under this Agreement and should paragraph (b) of Section 2.9 be unenforceable forany reason, the applicable interest rate in relation to that interest payment shall be (i) the interest rate which would haveapplied to that interest payment (as provided for in Section 2.2 in the absence of this Section 2.5 divided by (ii) one (1)minus the rate at which the relevant Tax deduction is required to be made (where the rate at which the relevant Taxdeduction is required to be made is26US-DOCS\105484033.25 for this purpose expressed as a fraction of one (1) rather than as a percentage) and (a) that the Swiss Obligor shall be obligedto pay the relevant interest at the adjusted rate in accordance with this Section 2.5 and (b) all references to a rate of interest inSection 2.2 shall be construed accordingly. No recalculation of interest shall be made under this Section 2.5 with respect to aspecific Lender if an Event of Default has not occurred or is continuing and the Non-Bank Rules would not have beenviolated if (i) such Lender which is not a Permitted Non-Qualifying Bank in relation to which the Swiss Obligor makes thepayment, was a Qualifying Bank but on that date that Lender is not or has ceased to be a Qualifying Bank other than as aresult of any change of law after the date it became a Lender under the Agreement or (ii) such Lender, in relation to whichthe Swiss Obligor makes the payment, had complied with its obligations under Section 11.7 and Section 11.8.2.6Prepayment. At its sole option upon at least seven (7) Business Days prior notice to Agent, a Borrower(on behalf of itself and all other Borrowers) may prepay all or any portion greater than or equal to Five Million Dollars($5,000,000) of the outstanding Advances by paying the entire principal balance (or such portion thereof), all accrued andunpaid interest with respect to the principal balance being prepaid, plus all fees and other amounts owing under the LoanDocuments at such time (including, for the avoidance of doubt, the applicable pro rata portion of the End of Term Charge), together with a prepayment charge equal to the following percentage of the Advance amount being prepaid: if such Advanceamounts are prepaid in any of the first twelve (12) months following the Closing Date, two percent (2%); after twelve (12)months but prior to twenty-four (24) months, one percent (1%); and thereafter, zero percent (0%) (each, a “PrepaymentCharge”). Borrowers agree that the Prepayment Charge is a reasonable calculation of Lender’s lost profits in view of thedifficulties and impracticality of determining actual damages resulting from an early repayment of the Advances. Borrowersshall prepay the outstanding amount of all principal and accrued interest of all Advances plus all other fees and amountsowing under the Loan Documents through the prepayment date and the Prepayment Charge upon the occurrence of aChange in Control. Notwithstanding the foregoing, Agent and Lender agree to waive the Prepayment Charge (x) withrespect to principal prepaid in connection with the Specified Prepayment, if any, and (y) if Agent and Lender or any affiliateof Agent or Lender (in its sole discretion) agree in writing to refinance the Advances prior to the Term Loan MaturityDate. Any amounts paid under this Section shall be applied by Agent to the then unpaid amount of any Secured Obligations(including principal and interest) in such order and priority as Agent may choose in its sole discretion. In connection withany prepayment of all outstanding Secured Obligations in accordance with the terms herein, Borrowers may request toterminate this Agreement and the Term Commitments upon such repayment of all outstanding Secured Obligations bywritten notice to Agent and Lender.2.7Notes. If so requested by Lender by written notice to Borrowers, then Borrowers shall execute anddeliver to Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of Lenderpursuant to Section 11.14) (promptly after the Borrowers’ receipt of such notice) a Note or Notes to evidence Lender’sLoans.27US-DOCS\105484033.25 2.8Pro Rata Treatment. Each payment (including prepayment) on account of any fee and any reduction ofthe Term Loans shall be made pro rata according to the Term Commitments of the relevant Lender.2.9Taxes. (a)Defined Terms. For purposes of this Section 2.9, the term “applicable law” includes FATCA.(b)Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Partyunder any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicablelaw. If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires thededuction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable WithholdingAgent shall be entitled to make such deduction or withholding in the minimum amount required by law and shall timely paythe full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if suchTax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that aftersuch deduction or withholding has been made (including such deductions and withholdings applicable to additional sumspayable under this Section) the Lender or Agent, as applicable, receives an amount equal to the sum it would have receivedhad no such deduction or withholding been made.(c)Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely pay to the relevantGovernmental Authority in accordance with applicable law, or at the option of the Agent timely reimburse it for the paymentof, any Other Taxes.(d)Indemnification by the Loan Parties. The Loan Parties shall jointly and severally indemnify the Lenderor Agent, as applicable, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (includingIndemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by suchLender or Agent, as applicable, or required to be withheld or deducted from a payment to such Lender or Agent, asapplicable, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxeswere correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of suchpayment or liability delivered to the Borrowers by a Lender (with a copy to the Agent), or by the Agent on its own behalf oron behalf of a Lender, shall be conclusive absent manifest error.(e)Indemnification by the Lenders. Each Lender shall severally indemnify the Agent, within ten (10) daysafter demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Partyhas not already indemnified the Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties todo so) and (ii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Agent inconnection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or notsuch Taxes were correctly or legally imposed or asserted by the relevant Governmental28US-DOCS\105484033.25 Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Agent shall beconclusive absent manifest error. Each Lender hereby authorizes the Agent to set off and apply any and all amounts at anytime owing to such Lender under any Loan Document or otherwise payable by the Agent to the Lender from any othersource against any amount due to the Agent under this paragraph (e). (f)Evidence of Payments. As soon as practicable after any payment of Taxes by any Loan Party to aGovernmental Authority pursuant to this Section 2.9, such Loan Party shall deliver to the Agent the original or a certifiedcopy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting suchpayment or other evidence of such payment reasonably satisfactory to the Agent.(g)Status of Lenders. (i)Any Lender that is entitled to an exemption from or reduction of withholding Tax with respectto payments made under any Loan Document shall deliver to the Borrowers and the Agent, at the time or timesreasonably requested by the Borrowers or the Agent (or, with respect to U.K. Withholding Taxes, deliver to theBorrowers and the Agent or submit to the appropriate Governmental Authority (as relevant) within twenty (20)days after a written request by the Borrowers or the Agent), such properly completed and executed documentationreasonably requested by Borrowers or the Agent as will permit such payments to be made without withholding orat a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrowers or the Agent,shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrowers orthe Agent as will enable the Borrowers or the Agent to determine whether or not such Lender is subject to backupwithholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding twosentences, the completion, execution and submission of such documentation shall not be required if in theLender’s reasonable judgment such completion, execution or submission would subject such Lender to anymaterial unreimbursed cost or expense or would materially prejudice the legal or commercial position of suchLender.(ii)Notwithstanding anything to the contrary herein, a U.K. Treaty Lender shall be deemed tohave satisfied the requirements of Section 2.9(g) if such Lender has either (x) notified Parent and Agent of itspassport number under the HMRC treaty passport scheme; or (y) submitted an application for withholding taxrelief under the applicable income tax treaty to the appropriate tax authority, in each case without regard towhether any document required from HMRC has been obtained.(iii)[Reserved].29US-DOCS\105484033.25 (iv)If a payment made to a Lender under any Loan Document would be subject to U.S. federalwithholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reportingrequirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable),such Lender shall deliver to Borrowers and Agent at the time or times prescribed by law and at such time or timesreasonably requested by Borrowers or Agent such documentation prescribed by applicable law (including asprescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested byBorrowers or Agent as may be necessary for Borrowers and Agent to comply with their obligations underFATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or todetermine the amount to deduct and withhold from such payment. Solely for purposes of this clause (iv),“FATCA” shall include any amendments made to FATCA after the date of this Agreement.(v)Each Lender agrees that if it becomes aware that any form or certification it previouslydelivered has expired or become obsolete or inaccurate in any respect, it shall update such form or certification orpromptly notify Borrowers and Agent in writing of its legal inability to do so.(h)Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of anyTaxes as to which it has been indemnified pursuant to this Section 2.9 (including by the payment of additionalamounts pursuant to this Section 2.9), it shall pay to the indemnifying party an amount equal to such refund (butonly to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to suchrefund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (otherthan any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifyingparty, upon the request of such indemnified party, shall repay to such indemnified party the amount paid overpursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant GovernmentalAuthority) in the event that such indemnified party is required to repay such refund to such GovernmentalAuthority. Notwithstanding anything to the contrary in this paragraph (h), in no event will the indemnified partybe required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of whichwould place the indemnified party in a less favorable net after-Tax position than the indemnified party would havebeen in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld orotherwise imposed and the indemnification payments or additional amounts with respect to such Tax had neverbeen paid. This paragraph shall not be construed to require any indemnified party to make available its Taxreturns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or anyother Person.30US-DOCS\105484033.25 (i)Qualifying Bank. (i)Each Lender which becomes a party to this Agreement after the Closing Date shall confirm,prior to becoming party to such Agreement, for the benefit of the Agent and without liability to any Borrower,which of the following categories it falls in:1.not a Qualifying Bank;2.a Qualifying Bank.(j)Increased Costs. If any Change in Law shall subject any Lender or the Agent to any Taxes (other than(i) Indemnified Taxes, (ii) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (iii) OtherConnection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes orbranch profits Taxes) on its Loans, Term Commitments or other obligations, or its deposits, reserves, other liabilities orcapital attributable thereto, and the result of any of the foregoing shall be to increase the cost to such Lender or the Agent ofmaking, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or toreduce the amount of any sum received or receivable by such Lender or the Agent hereunder (whether of principal, interestor any other amount) then, upon request of such Lender or the Agent, the Borrowers will pay to such Lender or Agent, asthe case may be, such additional amount or amounts as will compensate such Lender or Agent, as the case may be, for suchadditional costs incurred or reduction suffered.(k)U.S. Tax Reporting. For the avoidance of doubt, the Borrowers agree not to treat the Term Loan as a“contingent payment debt instrument” for U.S. income tax purposes.(l)Survival. Each party’s obligations under this Section 2.9 shall survive the resignation or replacement ofthe Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Term Commitment and therepayment, satisfaction or discharge of all obligations under any Loan Document.2.10End of Term Charge. (a)On the date of (i) the Specified Prepayment or (ii) any date that the Loan Parties prepay the outstandingSecured Obligations (other than any inchoate indemnity obligations and any other obligations which, by their terms, are tosurvive the termination of this Agreement) in part, the Loan Parties shall pay Lenders the pro rata portion of the End of TermCharge.(b)On the earliest to occur of (i) the Term Loan Maturity Date, (ii) the date that the Loan Parties prepay theoutstanding Secured Obligations (other than any inchoate indemnity obligations and any other obligations which, by theirterms, are to survive the termination of this Agreement) in full, or (iii) the date that the Secured Obligations become due andpayable, the Loan Parties shall pay Lenders the End of Term Charge minus any portion of the End of Term Charge whichhas already been paid prior to such date.(c)Notwithstanding the required payment date of such charge, it shall be deemed earned by Lenders as ofthe Closing Date.31US-DOCS\105484033.25 2.11Each Borrower agrees that the Prepayment Charge and the End of Term Charge payable shall bepresumed to be the liquidated damages sustained by each Lender as the result of the early termination, and each Borroweragrees that each is reasonable under the circumstances currently existing and existing as of the Closing Date. ThePrepayment Charge and the End of Term Charge shall also be payable in the event the Secured Obligations (and/or thisAgreement) are satisfied or released by foreclosure (whether by power of judicial proceeding), deed in lieu of foreclosure, orby any other means. Each Loan Party expressly waives (to the fullest extent it may lawfully do so) the provisions of anypresent or future statute or law that prohibits or may prohibit the collection of the foregoing Prepayment Charge and End ofTerm Charge in connection with any such acceleration. Each Borrower agrees (to the fullest extent that each may lawfullydo so): (a) each of the Prepayment Charge and the End of Term Charge is reasonable and is the product of an arm’s lengthtransaction between sophisticated business people, ably represented by counsel; (b) each of the Prepayment Charge and theEnd of Term Charge shall be payable notwithstanding the then prevailing market rates at the time payment is made; (c) therehas been a course of conduct between the Lenders and each Borrower giving specific consideration in this transaction forsuch agreement to pay the Prepayment Charge and the End of Term Charge as a charge (and not interest) in the event ofprepayment or acceleration; (d) each Borrower shall be estopped from claiming differently than as agreed to in thisparagraph. Each Borrower expressly acknowledges that their agreement to pay each of the Prepayment Charge and the Endof Term Charge to the Lenders as herein described was on the Closing Date and continues to be a material inducement to theLenders to provide the Term Loans.SECTION 3. SECURITY INTEREST3.1As security for the prompt and complete payment when due (whether on the payment dates orotherwise) of all the Secured Obligations, each Loan Party grants to Agent a security interest in all of such Loan Party’s right, title, and interest in and to the following personal property whether now owned or hereafter acquired (collectively, the“UCC Collateral”): (a) Receivables; (b) Equipment; (c) Fixtures; (d) General Intangibles (other than Intellectual Property); (e) Inventory; (f) Investment Property; (g) Deposit Accounts; (h) Cash; (i) Goods; and (j) all other tangible and intangiblepersonal property (other than Intellectual Property) of such Loan Party whether now or hereafter owned or existing, leased,consigned by or to, or acquired by, such Loan Party and wherever located, and any of such Loan Party’s property in thepossession or under the control of Agent; and, to the extent not otherwise included, all Proceeds of each of the foregoing andall accessions to, substitutions and replacements for, and rents, profits and products of each of the foregoing; provided,however, that the UCC Collateral shall include all Accounts and General Intangibles that consist of rights to payment andproceeds from the sale, licensing or disposition of all or any part, or rights in, the Intellectual Property (the “Rights toPayment”). Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy Court) holds that a securityinterest in the underlying Intellectual Property is necessary to have a security interest in the Rights to Payment, then the UCCCollateral shall automatically, and effective as of the date of this Agreement, include the Intellectual Property to the extentnecessary to permit perfection of Agent’s security interest in the Rights to Payment.32US-DOCS\105484033.25 3.2Notwithstanding the broad grant of the security interest set forth in Section 3.1, above, the UCCCollateral shall not include any Excluded Assets.3.3If this Agreement is terminated in accordance with its terms, Agent’s Lien in the Collateral shallcontinue until the Secured Obligations (other than inchoate indemnity obligations) are paid in full in accordance with theterms of this Agreement. At such time, the Collateral shall be released from the Liens created hereby, this Agreement and allobligations (other than those expressly stated to survive such termination) of the Agent, Lender and each Loan Partyhereunder shall terminate. Agent shall execute such documents, return any Collateral held by Agent hereunder and take suchother steps as are reasonably necessary to accomplish the foregoing, all at the Loan Parties’ sole cost and expense.3.4Parent, Urovant England and Urovant Switzerland have entered into the Bermuda Security Documents,English Security Documents and/or Swiss Security Documents in each case pursuant to which they have granted securityinterests in, to and under the collateral described therein (such collateral, collectively, the “Foreign Collateral”, and with theUCC Collateral, collectively, the “Collateral”) in favor of Agent for the benefit of the Lenders.SECTION 4. CONDITIONS PRECEDENT TO LOANThe obligations of Lender to make the Loan hereunder are subject to the satisfaction by Borrowers of the followingconditions:4.1Closing Date. On or prior to the Closing Date, Borrower shall have delivered to Agent the following:(a)other than as permitted pursuant to Schedule 5.24 to the Disclosure Letter, executed copies of the LoanDocuments (other than any Warrant, which shall be an original), a legal opinion of each of Loan Party’s Bermudian,English, Swiss and United States counsel, and all other documents and instruments reasonably required by Agent toeffectuate the transactions contemplated hereby or to create and perfect the Liens of Agent with respect to all Collateral, inall cases in form and substance reasonably acceptable to Agent;(b)a copy of resolutions of each of the Loan Parties’ respective Boards of Directors (and shareholder, withrespect to Urovant England, and quotaholder, with respect to Urovant Switzerland) evidencing (i) approval of (A) the Loanand other transactions evidenced by the Loan Documents and (B) with respect to Parent, any Warrant and transactionsevidenced thereby; (ii) authorizing a specified person or persons to execute the Loan Documents to which it is a party on itsbehalf and (iii) authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices(including, if relevant, any Advance Request or other relevant notice) to be signed and/or dispatched by it under or inconnection with the Loan Documents to which it is a party;33US-DOCS\105484033.25 (c)a certificate (as customary in the jurisdiction of Urovant England and containing specimen signatures) ofa director of Urovant England confirming that guaranteeing or securing the Loans would not cause any guaranteeing orsimilar limit binding on Urovant England to be exceeded and certifying that each copy document relating to it specified inthis Article 4, is correct, complete and the original of such copy document, is in full force and effect and has not beenamended or superseded as at a date no earlier than the Closing Date;(d)in respect to any UK PSC Loan Party, a copy of such UK PSC Loan Party’s PSC Register togetherwith confirmation from an authorized officer of such UK PSC Loan Party that no “warning notice” or “restrictions notice”(in each case as defined in Schedule 1B of the Companies Act 2006) has been issued in respect of the shares of such UKPSC Loan Party which constitute Collateral and no circumstances exist which entitle that UK PSC Loan Party to issue anysuch notice;(e)certified copies of the constitutional documents and the bylaws, as amended through the Closing Date,of each Loan Party;(f)a certificate of good standing (or insolvency search) for each Loan Party from its jurisdiction oforganization and similar certificates from all other jurisdictions in which it does business and where the failure to be qualifiedwould have a Material Adverse Effect;(g)payment of the Due Diligence Fee and reimbursement of Agent’s and Lender’s current expensesreimbursable pursuant to Section 11.12 of this Agreement;(h)payment of the Initial Facility Charge; and(i)such other documents as Agent may reasonably request.4.2All Advances. On or prior to each Advance Date:(a)Agent shall have received (i) an Advance Request for the relevant Advance as required by Section2.2(b), each duly executed by a Borrower’s Chief Executive Officer, Chief Financial Officer or any other duly authorizedofficer or director and (ii) any other documents Agent may reasonably request in its good faith business discretion;(b)the representations and warranties set forth in this Agreement shall be true and correct in all materialrespects on and as of the Advance Date with the same effect as though made on and as of such date, except to the extentsuch representations and warranties expressly relate to an earlier date;(c)the Loan Parties shall be in compliance with all the terms and provisions set forth herein and in eachother Loan Document on its part to be observed or performed, and at the time of and immediately after such Advance noEvent of Default shall have occurred and be continuing;34US-DOCS\105484033.25 (d)the Agent shall have received executed copies of the Account Control Agreements;(e)with respect to any Tranche 4 Advance, the Loan Parties shall have paid the Tranche 4 Facility Charge;(f)all certificates of insurance and copies of each insurance policy required hereunder;(g)Agent shall have received, in form and substance reasonably acceptable to Agent, an executed originalWarrant for such Advance, and all other documents and instruments reasonably required by Agent to effectuate thetransactions contemplated by such Warrant;(h)Each Advance Request shall be deemed to constitute a representation and warranty by such Borroweron the relevant Advance Date as to the matters specified in paragraphs (b) and (c) of this Section 4.2 and as to the matters setforth in the Advance Request.4.3No Default. As of the Closing Date and each Advance Date, (i) no fact or condition exists that would(or would, with the passage of time, the giving of notice, or both) constitute an Event of Default and (ii) no event that hashad or would reasonably be expected to have a Material Adverse Effect has occurred and is continuing.4.4Post-Close Obligations. Each Loan Party agrees to deliver all items as required under Schedule 5.24 tothe Disclosure Letter. SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIESEach Loan Party represents and warrants that:5.1Corporate Status. Each Loan Party is duly incorporated and/or organized, legally existing and in goodstanding under the laws of (a) Bermuda (with respect to Parent), (b) England and Wales (with respect to Urovant England),(c) Switzerland (with respect to Urovant Switzerland), or (d) Delaware (with respect to Guarantor), as applicable, and is dulyqualified as a foreign corporation or other entity, as applicable, in all jurisdictions in which the nature of its business orlocation of its properties require such qualifications and where the failure to be qualified would reasonably be expected tohave a Material Adverse Effect. Each Loan Party’s present name, former names (if any), locations, place of formation, taxidentification number, organizational identification number and other information are correctly set forth in Exhibit C to theDisclosure Letter, as may be updated by the Loan Parties in a written notice (including any Compliance Certificate) providedto Agent after the Closing Date.5.2Collateral. Each Loan Party owns the Collateral and the Intellectual Property, free of all Liens, exceptfor Permitted Liens. Each Loan Party has the power and authority to grant to Agent a Lien in the Collateral as security forthe Secured Obligations. 35US-DOCS\105484033.25 5.3Consents. Each Loan Party’s execution, delivery and performance of this Agreement and all otherLoan Documents, and Parent’s execution of each Warrant, (i) have been duly authorized by all necessary corporate action ofsuch Loan Party, (ii) will not result in the creation or imposition of any Lien upon the Collateral, other than Permitted Liensand the Liens created by this Agreement and the other Loan Documents, (iii) do not violate any provisions of such LoanParty’s constitutional documents, or other organizational or governing documents (as applicable), bylaws, or any law,regulation, order, injunction, judgment, decree or writ to which such Loan Party is subject and (iv) except as described onSchedule 5.3 to the Disclosure Letter, do not violate any material contract or material agreement or require the consent orapproval of any other Person which has not already been obtained. The individual or individuals executing the LoanDocuments and each Warrant are duly authorized to do so.5.4Material Adverse Effect. No event that has had or would reasonably be expected to have a MaterialAdverse Effect has occurred and is continuing. No Loan Party is aware of any event likely to occur that is reasonablyexpected to result in a Material Adverse Effect.5.5Actions Before Governmental Authorities. There are no actions, suits or proceedings at law or inequity or by or before any Governmental Authority now pending or, to the knowledge of any Loan Party, threatened inwriting against any Loan Party or its property, that is reasonably expected to result in a Material Adverse Effect.5.6Laws. (a)No Loan Party nor any of its Subsidiaries is in violation of any law, rule or regulation, or in default withrespect to any judgment, writ, injunction or decree of any Governmental Authority, where such violation or default isreasonably expected to result in a Material Adverse Effect. Attached hereto as Schedule 5.6 to the Disclosure Letter (as maybe supplemented by disclosures provided in Compliance Certificates) is a true, complete and correct list of all materialagreements and contracts (only to the extent such agreements or contracts would be required to be disclosed under theExchange Act and the rules of the SEC) between (i) any Loan Party and/or any of its Subsidiaries and (ii) Roivant (the“Roivant Documents”). No Loan Party is in default in any material manner under any provision of any agreement orinstrument evidencing material Indebtedness, or any other material agreement to which it is a party or by which it is bound,including the Roivant Documents, and, to the knowledge of any Loan Party with respect to any Person other than any LoanParty or its Subsidiaries, no event of default or event that with the passage of time would result in an event of default existingunder any provision of the Roivant Documents, nor any agreement or instrument evidencing material Indebtedness, nor anyother material agreement to which it is a party or by which it is bound.36US-DOCS\105484033.25 (b)No Loan Party nor any of its Subsidiaries is required to register as an “investment company” or acompany “controlled” by an “investment company” under the Investment Company Act of 1940, as amended. No LoanParty nor any of its Subsidiaries is engaged as one of its important activities in extending credit for margin stock (underRegulations X, T and U of the Federal Reserve Board of Governors). Each Loan Party and each of its Subsidiaries hascomplied in all material respects with the Federal Fair Labor Standards Act. No Loan Party nor any of its Subsidiaries is a“holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as eachterm is defined and used in the Public Utility Holding Company Act of 2005. No Loan Party’s nor any of its Subsidiaries’properties or assets has been used by such Loan Party or such Subsidiary or, to any Loan Party’s knowledge, by previousPersons, in disposing, producing, storing, treating, or transporting any hazardous substance other than in material compliancewith applicable laws. Each Loan Party and each of its Subsidiaries has obtained all material consents, approvals andauthorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that arenecessary to continue their respective businesses as currently conducted.(c)No Loan Party nor any of its Subsidiaries, or to any Loan Party’s knowledge any of its or itsSubsidiaries’ Affiliates, or any of their respective agents acting or benefiting in any capacity in connection with thetransactions contemplated by this Agreement is (i) in violation of any Anti-Terrorism Law, (ii) engaging in or conspiring toengage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of theprohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person. No Loan Party, nor any of its Subsidiaries, orto the knowledge of any Loan Party, any of their Affiliates or agents, acting or benefiting in any capacity in connection withthe transactions contemplated by this Agreement, (x) conducts any business or engages in making or receiving anycontribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages inany transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similarexecutive order or other Anti-Terrorism Law. None of the funds to be provided under this Agreement will be used, directlyor indirectly, (a) for any activities in violation of any applicable anti-money laundering, economic sanctions and anti-briberylaws and regulations laws and regulations, including the Anti-Bribery Laws, or (b) for any payment to any governmentalofficial or employee, political party, official of a political party, candidate for political office, or anyone else acting in anofficial capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the UnitedStates Foreign Corrupt Practices Act of 1977, as amended.(d)Each Loan Party has implemented and maintains in effect policies and procedures to the extentnecessary to ensure compliance by each Loan Party, its Subsidiaries and their respective directors, officers, employees andagents with Anti-Corruption Laws and applicable Sanctions, and Parent, its Subsidiaries and their respective officers andemployees and to the knowledge of Parent, its Subsidiaries and their respective directors and agents, are in compliance withAnti-Corruption Laws and applicable Sanctions in all material respects.37US-DOCS\105484033.25 (e)No Loan Party nor any of its Subsidiaries or any of their respective directors, officers or employees, is aSanctioned Person. No Loan, use of proceeds or other transaction contemplated by this Agreement will violate Anti-Corruption Laws or applicable Sanctions.5.7Information Correct and Current. No written information, report, Advance Request, financialstatement, exhibit or schedule furnished, by or on behalf of any Loan Party to Agent in connection with any Loan Documentor included therein or delivered pursuant thereto contained, or, when taken as a whole, contains or will contain any materialmisstatement of fact or, when taken together with all other such written information or documents, omitted, omits or willomit to state any material fact necessary to make the statements therein, in the light of the circumstances under which theywere, are or will be made, not materially misleading at the time such statement was made or deemed made. Additionally, anyand all financial or business projections provided by the Loan Parties to Agent, whether prior to or after the Closing Date,shall be (i) provided in good faith and based on the most current data and information available to the Loan Parties at thetime prepared, and (ii) the most current of such projections provided to the Board (it being understood that such projectionsare subject to significant uncertainties and contingencies, many of which are beyond the control of the Loan Parties, that noassurance is given that any particular projections will be realized, that actual results may differ).5.8Tax Matters. Except as described on Schedule 5.8 to the Disclosure Letter and except those beingcontested in good faith with adequate reserves under GAAP, (a) each Loan Party has filed all material federal, state and localtax returns that it is required to file, (b) each Loan Party has duly paid or fully reserved for all material taxes or installmentsthereof (including any interest or penalties) as and when due, or which have or may become due pursuant to such returns,and (c) each Loan Party has paid or fully reserved for any material tax assessment received by it which remains unpaid, ifany (including any taxes being contested in good faith and by appropriate proceedings).5.9Intellectual Property Claims. The Loan Parties are the sole owner of, or otherwise have the right to use,the Intellectual Property material to its business. Except as described on Schedule 5.9 to the Disclosure Letter (as may besupplemented by disclosures provided in Compliance Certificate) (i) each of the material Copyrights, Trademarks andPatents is valid and enforceable, (ii) no material part of the Intellectual Property has been judged invalid or unenforceable, inwhole or in part, and (iii) no claim has been made to a Loan Party that any material part of the Intellectual Property violatesthe rights of any third party. Exhibit D to the Disclosure Letter is a true, correct and complete list of each of the Loan Parties’Patents, registered Trademarks, registered Copyrights, and material agreements under which a Loan Party licensesIntellectual Property from third parties (other than shrink-wrap software licenses), together with application or registrationnumbers, as applicable, owned by a Loan Party, in each case as of the Closing Date. The Loan Parties are not in materialbreach of, nor have the Loan Parties failed to perform any material obligations under, any of the foregoing contracts, licensesor agreements and except as may be supplemented by disclosures provided in Compliance Certificate, to Borrowers’knowledge, no third party to any such contract, license or agreement is in material breach thereof or has failed to performany material obligations thereunder. 38US-DOCS\105484033.25 5.10Intellectual Property. Except as described on Schedule 5.10 to the Disclosure Letter, the Loan Partieshave all material rights with respect to Intellectual Property necessary or material in the operation or conduct of the LoanParties’ business as currently conducted and proposed to be conducted by Loan Parties. Without limiting the generality ofthe foregoing, and in the case of Licenses, except for restrictions that are unenforceable under Division 9 of the UCC orother applicable law, the Loan Parties have the right, to the extent required to operate their business, to freely transfer, licenseor assign Intellectual Property necessary or material in the operation or conduct of their business as currently conducted andproposed to be conducted by them, without condition, restriction or payment of any kind (other than license payments in theordinary course of business) to any third party, and the Loan Parties own or have the right to use, pursuant to valid licenses,all software development tools, library functions, compilers and all other third-party software and other items that arematerial to their business and used in the design, development, promotion, sale, license, manufacture, import, export, use ordistribution of Borrower Products except customary covenants in inbound license agreements and equipment leases where aLoan Party is the licensee or lessee. 5.11Borrower Products. Except as described on Schedule 5.11 to the Disclosure Letter, no materialIntellectual Property owned by any Loan Party or Borrower Product has been or is subject to any actual or, to theknowledge of the Loan Parties, threatened in writing litigation, proceeding (including any proceeding in the United StatesPatent and Trademark Office or any corresponding foreign office or agency) or outstanding decree, order, judgment,settlement agreement or stipulation that restricts in any material manner Borrower’s use, transfer or licensing thereof or thatmay affect the validity, use or enforceability thereof. There is no decree, order, judgment, agreement, stipulation, arbitralaward or other provision entered into in connection with any litigation or proceeding that obligates any Loan Party to grantlicenses or ownership interest in any material future Intellectual Property related to the operation or conduct of the businessof the Loan Parties or Borrower Products. No Loan Party has received any written notice or claim, or, to the knowledge ofthe Loan Parties, oral notice or claim, challenging or questioning their ownership in any Intellectual Property (or writtennotice of any claim challenging or questioning the ownership in any licensed Intellectual Property of the owner thereof) orsuggesting that any third party has any claim of legal or beneficial ownership with respect thereto nor, to the Loan Parties’knowledge, is there a reasonable basis for any such claim in each case to where such notice or claim would reasonably beexpected to have a Material Adverse Effect. To Loan Parties’ knowledge, no Loan Party’s use of its Intellectual Property orthe production and sale of Borrower Products infringes the valid Intellectual Property or other rights of others in any materialrespect. 5.12Financial Accounts. Exhibit E to the Disclosure Letter, as may be updated by Loan Parties in awritten notice provided to Agent after the Closing Date, is a true, correct and complete list of (a) all banks and other financialinstitutions at which any Loan Party or any Subsidiary maintains Deposit Accounts and (b) all institutions at which any LoanParty or any Subsidiary maintains an account holding Investment Property, and such exhibit correctly identifies the name,address and telephone number of each bank or other institution, the name in which the account is held, a description of thepurpose of the account, and the complete account number therefor.39US-DOCS\105484033.25 5.13Employee Loans. Except as permitted hereunder, no Loan Party has outstanding loans to anyemployee, officer or director of such Loan Party nor has any Loan Party guaranteed the payment of any loan made to anemployee, officer or director of such Loan by a third party.5.14Capitalization and Subsidiaries. The Loan Parties do not own any stock, partnership interest or othersecurities of any Person, except for Permitted Investments. Attached as Schedule 1 to the Disclosure Letter, as may beupdated by Loan Parties in a written notice provided after the Closing Date, is a true, correct and complete list of each directand indirect Subsidiary of Parent.5.15[Reserved].5.16Centre of Main Interests and Establishments. For the purposes of The Council of the European UnionRegulation No. 1346/2000 on Insolvency Proceedings (the “Regulation”), to the extent applicable to Urovant England,Urovant England’s centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated in England andWales and it has no “establishment” (as that term is used in Article 2(h) of the Regulation) in any other jurisdiction.5.17Pensions. (a) Urovant England is not, nor has it at any time been, an employer (for the purposes ofsections 38 to 51 of the UK Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme(both terms as defined in the UK Pensions Schemes Act 1993); and (b) Urovant England is not, nor has it at any time been,“connected” with or an “associate” of (as those terms are used in sections 38 and 43 of the UK Pensions Act 2004) such anemployer.5.18Non-Bank Rules. The Borrower is in compliance with the Non-Bank Rules; provided, that, theBorrower shall not be in breach of this representation if its number of creditors that are not Qualifying Banks in respect ofeither the 10 Non-Bank Rule or the 20 Non-Bank Rule is exceeded solely because a Lender having (a) made an incorrectdeclaration of its status as to whether or not it is a Qualifying Bank, (b) failed to comply with its obligations under Section11.7 or Section 11.8 of this Agreement or (c) ceased to be a Qualifying Bank other than as a result of any Change in Lawafter the date it became a Lender under this Agreement. For the purpose of its compliance with the 20 Non-Bank Rule underthis Section 5.18, the number of Lenders under this Agreement which are not Qualifying Banks shall be deemed to be ten(irrespective of whether or not there are, at any time, any such Lenders).40US-DOCS\105484033.25 SECTION 6. INSURANCE; INDEMNIFICATION6.1Coverage. The Loan Parties shall cause to be carried and maintained commercial general liabilityinsurance, on an occurrence form, against risks customarily insured against in the Loan Parties’ line of business. Such risksshall include the risks of bodily injury, including death, property damage, personal injury, advertising injury, and contractualliability per the terms of the indemnification agreement found in Section 6.3. The Loan Parties must maintain a minimum ofTwo Million Dollars ($2,000,000) (or foreign currency equivalent, if applicable) of commercial general liability insurancefor each occurrence. The Loan Parties have and agree to maintain a minimum of Two Million Dollars ($2,000,000) (orforeign currency equivalent, if applicable) of directors’ and officers’ insurance for each occurrence and Five Million Dollars($5,000,000) (or foreign currency equivalent, if applicable) in the aggregate. So long as there are any Secured Obligations(other than inchoate indemnity obligations) outstanding, the Loan Parties shall also cause to be carried and maintainedinsurance upon the Collateral, insuring against all risks of physical loss or damage howsoever caused, in an amount not lessthan the full replacement cost of the Collateral, provided that such insurance may be subject to standard exceptions anddeductibles. 6.2Certificates. The Loan Parties shall deliver to Agent certificates of insurance that evidence itscompliance with its insurance obligations in Section 6.1 and the obligations contained in this Section 6.2. The Loan Parties’insurance certificate shall state Agent (shown as “Hercules Capital, Inc., as Agent”) is an additional insured for commercialgeneral liability, and a loss payee for all risk property damage insurance, subject to the insurer’s approval. Other than aspermitted pursuant to Schedule 5.24 to the Disclosure Letter, attached to the certificates of insurance will be additionalinsured endorsements for liability and lender’s loss payable endorsements for all risk property damage insurance. Allcertificates of insurance will provide for a minimum of thirty (30) days advance written notice to Agent of cancellation (otherthan cancellation for non-payment of premiums, for which ten (10) days’ advance written notice shall be sufficient). Anyfailure of Agent to scrutinize such insurance certificates for compliance is not a waiver of any of Agent’s rights, all of whichare reserved. The Loan Parties agree that (i) with respect to any policies solely in the name of one or more of the LoanParties as of the Closing Date, the Loan Parties shall not amend such policies to include Roivant as an insured nor replacesuch policies with joint policies with Roivant, (ii) any insurance policies that have not been pledged to Agent as of theClosing Date with respect to Urovant England due to such policies being joint policies with Roivant shall be pledgedpromptly after Urovant England becomes sole holder or payor under such policies or any replacement policies, and (iii) uponentering or amending any insurance policy required hereunder, Loan Parties shall provide Agent with copies of such policiesand shall promptly deliver to Agent updated insurance certificates with respect to such policies.41US-DOCS\105484033.25 6.3Indemnity. Each Loan Party agrees to indemnify and hold Agent, Lender and their officers, directors,employees, agents, in-house attorneys, representatives and shareholders (each, an “Indemnified Person”) harmless from andagainst any and all claims, costs, expenses, damages and liabilities (including such claims, costs, expenses, damages andliabilities based on liability in tort, including strict liability in tort), including reasonable attorneys’ fees and disbursementsand other costs of investigation or defense (including those incurred upon any appeal) (collectively, “Liabilities”), that maybe instituted or asserted against or incurred by such Indemnified Person as the result of credit having been extended,suspended or terminated under this Agreement and the other Loan Documents or the administration of such credit, or inconnection with or arising out of the transactions contemplated hereunder and thereunder, or any actions or failures to act inconnection therewith, or arising out of the disposition or utilization of the Collateral, excluding in all cases Liabilities to theextent resulting solely from any Indemnified Person’s gross negligence or willful misconduct. Each Loan Party agrees topay, and to save Agent and Lender harmless from, any and all liabilities with respect to, or resulting from any delay inpaying, any and all registration, stamp, excise, sales or other similar taxes (excluding taxes imposed on or measured by thenet income of Agent or Lender) that may be payable or determined to be payable with respect to the execution, delivery,performance, enforcement or registration of any of the Collateral or the Loan Documents. In no event shall any Loan Partyor any Indemnified Person be liable on any theory of liability for any special, indirect, consequential or punitive damages(including any loss of profits, business or anticipated savings). This Section 6.3 shall survive the repayment of indebtednessunder, and otherwise shall survive the expiration or other termination of, the Loan Agreement.SECTION 7. COVENANTS OF BORROWEREach Loan Party agrees as follows:7.1Financial Reports. The Loan Parties shall furnish to Agent the financial statements and reports listedhereinafter (the “Financial Statements”):(a)as soon as practicable (and in any event within thirty (30) days) after the end of each month, unauditedinterim and year-to-date financial statements of Parent as of the end of such month (prepared on a consolidated basis),including balance sheet and related statement of income accompanied by a report detailing any material contingencies(including the commencement of any material litigation by or against Borrower), all certified by Parent’s Chief ExecutiveOfficer, Chief Financial Officer, Chief Accounting Officer or any other duly authorized officer or director to the effect thatthey have been prepared in accordance with GAAP, except (A) for the absence of footnotes, (B) that they are subject tonormal year end adjustments, and (C) they do not contain certain non-cash items that are customarily included in quarterlyand annual financial statements;42US-DOCS\105484033.25 (b)within forty-five (45) days after the end of each of the first three fiscal quarter of Parent’s fiscal year,unaudited interim and year-to-date financial statements of Parent as of the end of such calendar quarter (prepared on aconsolidated basis), including balance sheet and related statements of income and cash flows accompanied by a reportdetailing any material contingencies (including the commencement of any material litigation by or against Borrower),certified by Parent’s Chief Executive Officer, Chief Financial Officer chief accounting officer or any other duly authorizedofficer or director to the effect that they have been prepared in accordance with GAAP, except (i) for the absence offootnotes, and (ii) that they are subject to normal year end adjustments; provided that the financial statements delivered forthe fourth quarter of any fiscal year need not include a statement of cash flows;(c)within ninety (90) days after the end of each fiscal year of Parent, unqualified, and without any goingconcern or similar limitations (other than a going concern qualification solely with respect to having less than twelve (12)months of cash or the impending maturity of debt for the fiscal year ending prior to the maturity date of such debt), auditedfinancial statements of Parent as of the end of such year (prepared on a consolidated basis), including balance sheet andrelated statements of income and cash flows, and setting forth in comparative form the corresponding figures for thepreceding fiscal year, certified by a firm of independent certified public accountants selected by Parent and reasonablyacceptable to Agent (it being understood that Ernst & Young LLP and any other accounting firm of national standing isreasonably acceptable to Agent), accompanied by any management report from such accountants;(d) together with each set of financial statements delivered pursuant to Section 7.1(a), (b) or (c), aCompliance Certificate;(e)while an Event of Default has occurred and is continuing, as soon as practicable (and in any eventwithin ten (10) days) after the end of each month, a report showing agings of accounts receivable and accounts payable;(f)promptly after the sending or filing thereof, as the case may be, copies of any proxy statements, financialstatements or reports that Parent has made available to holders of any series of its Equity Interests generally and copies ofany regular, periodic and special reports or registration statements that Parent files with the SEC or any governmentalauthority that may be substituted therefor, or any national securities exchange;(g)promptly following each meeting of any Loan Party’s Board of Directors, copies of all presentationmaterials and minutes relating to research, clinical development, regulatory activities, and commercial timelines that eachLoan Party provides to its directors in connection with meetings of such Board of Directors, provided that all in all casessuch Loan Party may exclude any information or materials related to executive compensation, confidential information, anyattorney-client privileged information and any information that would raise a conflict of interest with Agent or Lenders, andminutes and other materials prepared exclusively for executive sessions of the independent directors and committees of suchBoard of Directors;43US-DOCS\105484033.25 (h)within ten (10) days after their approval by the Board, and in any event, within sixty (60) days after theend of Parent’s fiscal year, financial and business projections as approved by the Board, as well as budgets, operating plansand other financial information reasonably requested by Agent;(i)from July 1, 2019 and continuing until achievement of the Approval Milestone, evidence of compliancewith Section 7.20 (or evidence of the inapplicability of Section 7.20) in each Compliance Certificate and upon request inform and substance reasonably acceptable to Agent and supporting documentation reasonably requested by Agent, includingcertification of such compliance by the Chief Executive Officer, Chief Financial Officer, chief accounting officer or anyother duly authorized officer or director of Parent; and(j)immediate notice if any Loan Party or any Subsidiary has knowledge that any Loan Party, or anySubsidiary or Affiliate of any Loan Party, is listed on the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere to,(c) is indicted on, or (d) is arraigned and held over on charges involving money laundering or predicate crimes to moneylaundering.No Loan Party shall make any change in its (a) accounting policies or reporting practices, other than to the extentrequired or otherwise contemplated by GAAP, the SEC, the PCAOB or other applicable regulatory requirements or (b)fiscal years or fiscal quarters. The fiscal year of Parent shall end on March 31.The executed Compliance Certificate and all Financial Statements required to be delivered pursuant to clauses (a),(b) and (c) shall be sent via e-mail to financialstatements@herculestech.com with a copy to legal@herculestech.com,kkosofsky@htgc.com, and mdutra@htgc.com; provided, that if e-mail is not available or sending such Financial Statementsvia e-mail is not possible, they shall be faxed to Agent at: (866) 468‑8916, attention Chief Credit Officer. Notwithstanding the foregoing, documents required to be delivered under Sections 7.1(a), (b) and (c) (to the extentany such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if sodelivered, shall be deemed to have been delivered on the date on which Parent files such documents with the SEC and suchdocuments are publicly available on the SEC’s EDGAR filing system or any successor thereto.7.2Management Rights. The Loan Parties shall permit any representative that Agent or Lender authorizes,including its attorneys and accountants, to inspect the Collateral and examine and make copies and abstracts of the books ofaccount and records of the Loan Parties at reasonable times and upon reasonable notice during normal business hours;provided, however, that so long as no Event of Default has occurred and is continuing, such examinations shall be limited tono more often than once per fiscal year. In addition, any such representative shall have the right to meet with managementand officers of the Loan Parties to discuss such books of account and records. In addition, Agent or Lender shall be entitledat reasonable times and intervals to consult with and44US-DOCS\105484033.25 advise the management and officers of the Loan Parties concerning significant business issues affecting Borrower. Suchconsultations shall not unreasonably interfere with the Loan Parties’ business operations. The parties intend that the rightsgranted Agent and Lender shall constitute “management rights” within the meaning of 29 C.F.R. Section 2510.3-101(d)(3)(ii), but that any advice, recommendations or participation by Agent or Lender with respect to any business issues shall notbe deemed to give Agent or Lender, nor be deemed an exercise by Agent or Lender of, control over the Loan Parties’management or policies.7.3Further Assurances. Each Loan Party shall from time to time execute, deliver and file, alone or withAgent, any financing statements, security agreements, collateral assignments, notices, control agreements, or otherdocuments to perfect or give the highest priority to Agent’s Lien on the Collateral. Each Loan Party shall from time to timeprocure any instruments or documents as may be reasonably requested by Agent, and take all further action that may benecessary, or that Agent may reasonably request, to perfect and protect the Agent’s Liens on the Collateral (it beingunderstood that the requirements set forth in Section 7.13 are reasonable with respect to scope and deadlines). In addition,and for such purposes only, each Loan Party hereby authorizes Agent to execute and deliver on its behalf and to file suchfinancing statements (including an indication that the financing statement covers “all assets or all personal property other thanintellectual property” of such Loan Party in accordance with Section 9-504 of the UCC), collateral assignments, notices,control agreements, security agreements and other documents without the signature of the Loan Parties either in Agent’sname or in the name of Agent as agent and attorney-in-fact for the Loan Parties as necessary or appropriate to effect orperfect the grant of Agent’s Lien in the Collateral. Each Loan Party shall protect and defend its title to the Collateral andAgent’s Lien thereon against all Persons claiming any interest adverse to such Loan Party or Agent other than PermittedLiens. 7.4Indebtedness. No Loan Party shall create, incur, assume, guarantee nor be or remain liable with respectto any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness, or prepay any Indebtedness ortake any actions which impose on any Loan Party an obligation to prepay any Indebtedness, except for (a) the conversion ofIndebtedness into equity securities and the payment of cash in lieu of fractional shares in connection with such conversion,(b) in connection with refinancing or replacement Indebtedness, (c) purchase money Indebtedness pursuant to its then-applicable payment schedule, (d) prepayment by any Subsidiary of (i) inter-company Indebtedness owed by such Subsidiaryto any Loan Party, or (ii) if such Subsidiary is not a Loan Party, intercompany Indebtedness owed by such Subsidiary toanother Subsidiary that is not a Loan Party, (e) trade debt incurred in the ordinary course of business or (f) as otherwisepermitted hereunder or approved in writing by Agent.45US-DOCS\105484033.25 7.5Collateral. Each Loan Party shall at all times keep the Collateral, the Intellectual Property and all otherproperty and assets used in the Loan Parties’ business or in which the Loan Parties now or hereafter holds any interest freeand clear from any legal process or Liens whatsoever (except for Permitted Liens), and shall give Agent prompt writtennotice of any Liens affecting the Collateral (except for Permitted Liens), the Intellectual Property, or such other property andassets, provided however, that the Collateral, Intellectual Property and such other property and assets, to the extent such legalprocess would reasonably be expected to result in a Material Adverse Effect, may be subject to Permitted Liens. No LoanParty shall agree with any Person other than Agent or Lender not to encumber its Collateral other than pursuant to (a) anyagreements governing any purchase money Liens or capital lease obligations otherwise permitted hereby (in which case, anyprohibition or limitation shall only be effective against the assets financed thereby), (b) customary restrictions on theassignment of leases, licenses and other agreements and (c) customary restrictions on assets subject to Liens permitted undersubsection (xiv) of the definition of “Permitted Liens”. No Loan Party shall enter into or suffer to exist or become effectiveany agreement that prohibits or limits the ability of any Loan Party to create, incur, assume or suffer to exist any Lien uponany of its Intellectual Property, whether now owned or hereafter acquired, to secure its obligations under the LoanDocuments to which it is a party other than pursuant to (i) this Agreement and the other Loan Documents, (ii) anyagreements governing any purchase money Liens or capital lease obligations otherwise permitted hereby (in which case, anyprohibition or limitation shall only be effective against the assets financed thereby) or (iii) customary restrictions on theassignment, sublicense, or sublease of leases, licenses and other agreements, (iv) customary restrictions in licensing orcollaboration, co-development and co-marketing agreements relating to such Intellectual Property provided that suchrestrictions do not prohibit the Liens granted to the Agent pursuant to the Loan Documents, and (v) customary restrictionsand conditions contained in agreements governing joint ventures or strategic alliances in the ordinary course of business;provided that, in each case, the applicable Loan Party has exercised its good faith best efforts to not agree to such contractuallimitations. Each Loan Party shall cause its Subsidiaries to use commercially reasonable efforts to protect and defend suchSubsidiary’s title to its assets from and against all Persons claiming any interest adverse to such Subsidiary, and Borrowershall cause its Subsidiaries at all times to keep such Subsidiary’s property and assets free and clear from any Lienswhatsoever (except for Permitted Liens or as otherwise permitted by this Section 7.5), and shall give Agent prompt writtennotice of any Liens (other than Permitted Liens) affecting such Subsidiary’s assets.7.6Investments. No Loan Party shall directly or indirectly acquire or own, or make any Investment in or toany Person, or permit any of its Subsidiaries so to do, other than Permitted Investments.46US-DOCS\105484033.25 7.7Distributions. No Loan Party shall, and shall not allow any Subsidiary to, (a) repurchase or redeem anyclass of shares, stock or other Equity Interest other than (i) pursuant to employee, director or consultant repurchase plans orother similar agreements, provided, however, in each case the aggregate repurchase or redemption consideration does notexceed the original consideration paid for such shares, stock or Equity Interest, (ii) repurchases of such shares, stock orEquity Interest deemed to occur upon exercise of stock options or warrants if such repurchased shares, stock or EquityInterest represents a portion of the exercise price of such options or warrants, (iii) repurchases of such shares, stock or EquityInterest deemed to occur upon the withholding of a portion of such shares, stock or Equity Interest granted or awarded to acurrent or former officer, director, employee or consultant to pay for the taxes payable by such Person upon such grant oraward (or upon vesting thereof, or (iv) purchases of its Common Shares or equity derivatives with respect to its CommonShares (including capped call, call spread, accelerated stock repurchase and forward purchase transactions) using theproceeds from the simultaneous issuance of convertible notes under a Permitted Convertible Debt Financing, (and anypayments under or pursuant to, or settlements of, any such accelerated or forward stock repurchase arrangements, callspreads, capped calls or other derivatives entered into simultaneously at the time of and in connection with the issuance of aPermitted Convertible Debt Financing); provided that, the aggregate net purchase price of such transactions in the aggregateshall not exceed thirty-five percent (35%) of the net proceeds from the Permitted Convertible Debt Financing; or (b) declareor pay any cash dividend or make a cash distribution on any class of shares, stock or other Equity Interest, except that aSubsidiary may pay dividends or make distributions to any Loan Party; or (c) lend money to any employees, officers ordirectors or guarantee the payment of any such loans granted by a third party other than to the extent constituting PermittedInvestments; or (d) waive, release or forgive any Indebtedness (other than Indebtedness represented by a PermittedInvestment made pursuant to clause (vii) thereof) owed by any employees, officers or directors in excess of Five HundredThousand Dollars ($500,000) in the aggregate in any fiscal year.7.8Transfers. Except for Permitted Transfers, no Loan Party shall, and shall not allow any Subsidiary to,voluntarily or involuntarily transfer, sell, lease, license, lend or in any other manner convey any equitable, beneficial or legalinterest in any material portion of its assets or sell a controlling ownership interest in or majority equity interest in anySubsidiary organized or acquired after the Closing Date.7.9Mergers or Acquisitions; In-Licensing. No Loan Party shall merge or consolidate, or permit any of itsSubsidiaries to merge, amalgamate or consolidate, with or into any other business organization (other than mergers,amalgamations or consolidations of (a) a Subsidiary which is not a Loan Party into another Subsidiary or into a Loan Partyor (b) a Loan Party into another Loan Party (including any entity that becomes a Loan Party pursuant to Section 7.13substantially concurrently with the occurrence of such merger, amalgamation or consolidation)), or acquire, or permit any ofits Subsidiaries to acquire, in each case including for the avoidance of doubt through a merger, purchase, in-licensing or anysimilar transaction, all or substantially all of the capital stock or any property of another Person, other than in connection witha Permitted Investment.47US-DOCS\105484033.25 7.10Taxes. Each Loan Party and its Subsidiaries shall pay when due all material taxes, fees or othercharges of any nature whatsoever (together with any related interest or penalties) now or hereafter imposed or assessedagainst (i) any Loan Party, any of its Subsidiaries or the Collateral or (ii) upon any Loan Party’s or any of its Subsidiaries’ownership, possession, use, operation or disposition of the Collateral or upon any Loan Party’s or any of its Subsidiaries’rents, receipts or earnings arising therefrom. Each Loan Party shall file on or before the due date therefor all material taxreturns in respect of such Loan Party and its Subsidiaries, and all material personal property tax returns in respect of theCollateral. Notwithstanding the foregoing, any Loan Party may contest, in good faith and by appropriate proceedings, taxesfor which such Loan Party maintains adequate reserves therefor in accordance with GAAP.7.11Corporate Changes. No Loan Party nor any Subsidiary shall change its corporate name, legal form orjurisdiction of formation without twenty (20) days’ prior written notice to Agent. No Change in Control shall occur withoutconcurrent payment in full of all outstanding Secured Obligations (other than any inchoate indemnity obligations and anyother obligations which, by their terms, are to survive the termination of this Agreement). No Loan Party nor any Subsidiaryshall relocate its chief executive office or its principal place of business unless it has provided prior written notice to Agent(provided that such notice shall be deemed provided for the relocation to 5281 California Avenue, Suite 100, Irvine, CA92617). No Loan Party nor any Subsidiary shall relocate any item of Collateral (other than (w) clinical drug supplies utilizedin the ordinary course of business, (x) sales of assets made in accordance with Section 7.8, (y) relocations of assets having anaggregate value of up to Five Hundred Thousand Dollars ($500,000) in any fiscal year, and (z) relocations of Collateralfrom a location described on Exhibit C to the Disclosure Letter to another location described on Exhibit C to the DisclosureLetter) unless (i) it has provided prompt written notice to Agent, (ii) such relocation is within the England and Wales (withrespect to the Urovant England), Switzerland (with respect to Urovant Switzerland) or the continental United States ofAmerica (with respect to Guarantor) and, (iii) if such relocation is to a third party bailee, if not prohibited by applicable law,it has delivered a bailee agreement in form and substance reasonably acceptable to Agent. 7.12Deposit Accounts. Other than Excluded Accounts, no Loan Party nor any Subsidiary shall maintainany Deposit Accounts, or accounts holding Investment Property, except with respect to which Agent has (i) an AccountControl Agreement or (ii) such other agreement or arrangement as a result of which the Agent shall have a first priorityperfected security interest therein or as may be otherwise acceptable to Agent for Deposit Accounts and accounts holdingInvestment Property outside of the United States of America. 7.13Future Subsidiaries. Each Loan Party shall notify Agent of each Subsidiary formed subsequent to theClosing Date, within (i) fifteen (15) days of formation of any Subsidiary formed or organized under the laws of the UnitedStates of America or any state, commonwealth or territory thereof and (ii) thirty (30) days, or such longer period as Agentagrees to in its sole discretion, of formation of any Subsidiary that is organized outside of the United States of America orany state, commonwealth or territory thereof, shall cause any such Subsidiary, unless otherwise consented to by Agent, toexecute and48US-DOCS\105484033.25 deliver to Agent a Joinder Agreement. Notwithstanding the foregoing, a Subsidiary that is a joint venture permittedhereunder need not execute and deliver a Joinder Agreement if such execution and delivery is prohibited by customaryrestrictions and conditions contained in the agreements governing such joint ventures; provided that the Loan Parties haveexercised its good faith best efforts to not agree to such contractual limitations.7.14[Reserved].7.15Notification of Events of Default. Parent shall notify Agent promptly, and in any event within two (2)Business Days, of the occurrence of any Event of Default, and any default that is not cured, waived or revoked within two(2) Business Days of the occurrence of such default.7.16Warrants. On each of the dates of the Tranche 1 Advance, the Tranche 2 Advance, the Tranche 3Advance, and any Tranche 4 Advance, Parent shall deliver, in form and substance reasonably acceptable to Agent, anexecuted original Warrant for such Advance, and all other documents and instruments reasonably required by Agent toeffectuate the transactions contemplated by such Warrant.7.17Use of Proceeds. Borrower agrees that the proceeds of the Loans shall be used solely to pay relatedfees and expenses in connection with this Agreement and for working capital and/or other general corporate purposes. Theproceeds of the Loans will not be used in violation of Anti-Corruption Laws or applicable Sanctions.7.18[RESERVED]7.19No Loan Party nor any of its Subsidiaries shall, nor shall any Loan Party or any of its Subsidiariespermit any Affiliate under Parent’s direct or indirect control to, directly or indirectly, knowingly enter into any documents,instruments, agreements or contracts with any Person listed on the OFAC Lists. No Loan Party nor any of its Subsidiariesshall, nor shall any Loan Party or any of its Subsidiaries permit any Affiliate under Parent’s direct or indirect control to,directly or indirectly, (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including,without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of anyBlocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blockedpursuant to Executive Order No. 13224 or any similar executive order or other Anti‑Terrorism Law, or (iii) engage in orconspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate,any of the prohibitions set forth in Executive Order No. 13224 or other Anti‑Terrorism Law.7.20Minimum Cash Amount.(a)In the event the Loan Parties have not achieved the Clinical Milestone on or before June 30, 2019,beginning on July 1, 2019, the Loan Parties shall maintain Unrestricted Cash in an amount greater than or equal to TenMillion Dollars ($10,000,000) plus the Minimum Cash A/P Amount; provided that the foregoing Section 7.20(a) shall ceaseto apply after the earlier to occur of (i) achievement of the Approval Milestone and (ii) payment on or before June 30, 2019of the Specified Prepayment.49US-DOCS\105484033.25 (b)In the event any Tranche 2 Advance and/or Tranche 3 Advance is made, beginning on October 1,2019, at any time the Parent’s Market Capitalization is less than or equal to Five Hundred Million Dollars ($500,000,000)for a period of three (3) consecutive trading days, the Loan Parties shall maintain Unrestricted Cash in an amount greaterthan or equal to Twenty Million Dollars ($20,000,000) plus the Minimum Cash A/P Amount; provided that the foregoingSection 7.20(b) shall cease to apply after the achievement of the Approval Milestone. For the avoidance of doubt, at anytime in which Parent’s Market Capitalization is greater than Five Hundred Million Dollars ($500,000,000), the conditionsprovided in this Section 7.20(a) and (b) shall not apply during such time.7.21[Reserved]7.22COMI. Neither Urovant England nor any other Subsidiary of any Loan Party whose jurisdiction ofincorporation or organization is in a member state of the European Union shall change its “centre of main interests” (as thatterm is used in Article 3(1) of the Regulation and to the extent such Article is applicable to such entity).7.23Non-Bank Rules. Each Swiss Borrower shall ensure that it is at all times in compliance with the Non-Bank Rules, provided that a Swiss Borrower shall not be in breach of this undertaking if its number of creditors in respect ofeither the 10 Non-Bank Rule or the 20 Non-Bank Rule is exceeded solely because a Lender having (a) made an incorrectdeclaration of its status as to whether or not it is a Qualifying Bank, (b) failed to comply with its obligations under Section11.7 or Section 11.8 of this Agreement or (c) ceased to be a Qualifying Bank other than as a result of any Change in Lawafter the date it became a Lender under this Agreement. For the purpose of its compliance with the 20 Non-Bank Rule underthis Section 7.23, the number of Lenders under this Agreement which are not Qualifying Banks shall be deemed to be ten(10) (irrespective of whether or not there are, at any time, any such Lenders).7.24People with Significant Control Regime. Each Loan Party shall (and the Parent shall ensure that eachof its Subsidiaries will): (a) within the relevant timeframe, comply with any notice it receives pursuant to Part 21A of theCompanies Act 2006 from any UK PSC Loan Party; and (b) promptly provide Agent with a copy of that notice.50US-DOCS\105484033.25 SECTION 8. [RESERVED]SECTION 9. EVENTS OF DEFAULTThe occurrence of any one or more of the following events shall be an “Event of Default”:9.1Payments. Any Loan Party fails to pay any amount due under this Agreement or any of the other LoanDocuments on the due date; provided, however, that an Event of Default shall not occur on account of a failure to pay duesolely to an administrative or operational error of Agent or Lender or any Loan Party’s bank if such Loan Party had thefunds to make the payment when due and makes the payment within three (3) Business Days following such Loan Party’sknowledge of such failure to pay; or9.2Covenants. Any Loan Party breaches or defaults in the performance of any covenant or SecuredObligation under this Agreement, or any of the other Loan Documents, and (a) with respect to a default under any covenantunder this Agreement (other than under Sections 4.4, 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.15, 7.16, 7.17, 7.20, or 7.21) or anyother Loan Document, such default continues for more than thirty (30) days after the earlier of the date on which (i) Agent orLender has given notice of such default to the Loan Parties and (ii) any Loan Party has actual knowledge of such default or(b) with respect to a default under any of Sections 4.4, 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.15, 7.16, 7.17, 7.20, or 7.21, theoccurrence of such default; or9.3Material Adverse Effect. A circumstance has occurred that could reasonably be expected to have aMaterial Adverse Effect; provided that, solely for purposes of this Section 9.3, the following events shall not, in each case inand of itself, constitute a Material Adverse Effect: (a) adverse results or delays in any nonclinical or clinical trial, (b) thefailure to achieve the Clinical Milestone, Approval Milestone, Regulatory Milestone, or any other clinical or non-clinical trialgoals or objectives, including without limitation, the failure to demonstrate the desired safety or efficacy of any drug orcompanion diagnostic, (c) the denial, delay or limitation of approval of, or taking of any other regulatory action by the FDAwith respect to any drug or companion diagnostic, (d) a change in or discontinuation of a strategic partnership or othercollaboration or license arrangement so long as the same does not affect the ability of Borrowers to perform the SecuredObligations or (e) failure to achieve Financial Milestone 1 or Financial Milestone 2 so long as the same does not affect theability of Borrowers to perform the Secured Obligations.9.4Representations. Any representation or warranty made by any Loan Party in any Loan Document shallhave been false or misleading in any material respect when made or when deemed made; or9.5Insolvency. An Insolvency Event occurs with respect to any Loan Party; or9.6Attachments; Judgments. Any material portion of the assets of the Loan Parties, taken as a whole, isattached or seized, or a levy is filed against any such assets, or a judgment or judgments is/are entered for the payment ofmoney (not covered by independent third party insurance as to which liability has not been rejected by such51US-DOCS\105484033.25 insurance carrier), individually or in the aggregate, of at least One Million Five Hundred Thousand Dollars ($1,500,000),and such judgment remains unsatisfied, unvacated, or unstayed for a period of twenty (20) days after the entry thereof, orany Loan Party is enjoined or in any way prevented by court order from conducting any material part of its business; or 9.7Other Obligations. The occurrence of any default (after giving effect to any grace or cure period) underany agreement or obligation of any Loan Party involving any Indebtedness in excess of One Million Five HundredThousand Dollars ($1,500,000), which has resulted in a right by the holder of such Indebtedness, whether or not exercised,to accelerate the maturity of such Indebtedness; or9.8[Reserved]. 9.9Expropriation. The authority or ability of the Loan Parties to conduct their business as a whole ismaterially limited or wholly or substantially curtailed by any seizure, expropriation, nationalization, intervention, restrictionor other action by or on behalf of any governmental, regulatory or other authority or other Person in relation to the LoanParties or any of their respective assets; or9.10Pensions. The UK Pensions Regulator issues a Financial Support Direction or a Contribution Noticeis issued to Urovant England or any Subsidiary which is a company organized under the laws of England and Wales, unlessthe aggregate liability of Urovant England and such Subsidiaries under all Financial Support Directions and ContributionsNotices is less than Five Hundred Thousand Dollars ($500,000).SECTION 10. REMEDIES10.1General. Upon and during the continuance of any one or more Events of Default, (i) Agent may, atits option, accelerate and demand payment of all or any part of the Secured Obligations together with a Prepayment Chargeand declare them to be immediately due and payable (provided, that upon the occurrence of an Event of Default of the typedescribed in Section 9.5, all of the Secured Obligations (including, without limitation, the Prepayment Charge and the Endof Term Charge) shall automatically be accelerated and made due and payable, in each case without any further notice oract), (ii) Agent may, at its option, sign and file in any Loan Party’s name any and all collateral assignments, notices, controlagreements, security agreements and other documents it deems necessary or appropriate to perfect or protect the repaymentof the Secured Obligations, and in furtherance thereof, each Loan Party hereby grants Agent an irrevocable power ofattorney coupled with an interest, and (iii) Agent may notify any of any Loan Party’s account debtors to make paymentdirectly to Agent, compromise the amount of any such account on such Loan Party’s behalf and endorse Agent’s namewithout recourse on any such payment for deposit directly to Agent’s account. Agent may exercise all rights and remedieswith respect to the Collateral under the Loan Documents or otherwise available to it under the UCC and other applicablelaw, including the right to release, hold, sell, lease, liquidate, collect, realize upon, or otherwise dispose of all or any part ofthe Collateral and the right to occupy, utilize, process and commingle the Collateral. The Agent shall be entitled to exerciseany and all rights and remedies set forth in the Loan Documents. All Agent’s rights and remedies shall be cumulative andnot exclusive.52US-DOCS\105484033.25 10.2Collection; Foreclosure. Upon the occurrence and during the continuance of any Event of Default,Agent may, at any time or from time to time, apply, collect, liquidate, sell in one or more sales, lease or otherwise dispose of,any or all of the Collateral, in its then condition or following any commercially reasonable preparation or processing, in suchorder as Agent may elect. Any such sale may be made either at public or private sale at its place of business orelsewhere. Each Loan Party agrees that any such public or private sale may occur upon ten (10) calendar days’ prior writtennotice to such Loan Party. Agent may require any Loan Party to assemble the Collateral and make it available to Agent at aplace designated by Agent that is reasonably convenient to Agent and such Loan Party. The proceeds of any sale,disposition or other realization upon all or any part of the Collateral shall be applied by Agent in the following order ofpriorities:(i)First, to Agent and Lender in an amount sufficient to pay in full Agent’s and Lender’sreasonable costs and professionals’ and advisors’ fees and expenses as described in Section 11.12;(ii)Second, to Lender in an amount equal to the then unpaid amount of the Secured Obligations(including principal, interest, and any default interest pursuant to Section 2.4), in such order and priority as Agentmay choose in its sole discretion; and(iii)Finally, after the full and final payment in Cash of all of the Secured Obligations (other thaninchoate obligations), to any creditor holding a junior Lien on the Collateral, or to the Loan Parties or theirrepresentatives or as a court of competent jurisdiction may direct.Agent shall be deemed to have acted reasonably in the custody, preservation and disposition of any of theCollateral if it complies with the obligations of a secured party under the UCC.10.3No Waiver. Agent shall be under no obligation to marshal any of the Collateral for the benefit of theLoan Parties or any other Person, and each Loan Party expressly waives all rights, if any, to require Agent to marshal anyCollateral. 10.4Cumulative Remedies. The rights, powers and remedies of Agent hereunder shall be in addition to allrights, powers and remedies given by statute or rule of law and are cumulative. The exercise of any one or more of therights, powers and remedies provided herein shall not be construed as a waiver of or election of remedies with respect to anyother rights, powers and remedies of Agent.53US-DOCS\105484033.25 SECTION 11. MISCELLANEOUS11.1Severability. Whenever possible, each provision of this Agreement shall be interpreted in suchmanner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by orinvalid under such law, such provision shall be ineffective only to the extent and duration of such prohibition or invalidity,without invalidating the remainder of such provision or the remaining provisions of this Agreement.11.2Notice. Except as otherwise provided herein, any notice, demand, request, consent, approval,declaration, service of process or other communication (including the delivery of Financial Statements) that is required,contemplated, or permitted under the Loan Documents or with respect to the subject matter hereof shall be in writing, andshall be deemed to have been validly served, given, delivered, and received upon the earlier of: (i) the day of transmission byelectronic mail or hand delivery or delivery by an overnight express service or overnight mail delivery service; or (ii) thethird calendar day after deposit in the United States of America mails, with proper first class postage prepaid, in each caseaddressed to the party to be notified as follows:(a)If to Agent: HERCULES CAPITAL, INC.Legal DepartmentAttention: Chief Legal Officer, Kristen C. Kosofsky 400 Hamilton Avenue, Suite 310Palo Alto, CA 94301email: legal@herculestech.com, kkosofsky@htgc.com, mdutra@htgc.comTelephone: 650-289-3060 with a copy (which shall not constitute notice) to: LATHAM & WATKINS LLPAttention: Haim Zaltzman 505 Montgomery Street, Suite 2000San Francisco, CA 94111email: haim.zaltzman@lw.com Telephone: 415-395‑8870 (b)If to Lender: HERCULES CAPITAL, INC.Legal DepartmentAttention: Chief Legal Officer, Kristen C. Kosofsky 400 Hamilton Avenue, Suite 310Palo Alto, CA 94301email: legal@herculestech.com, kkosofsky@htgc.com, mdutra@htgc.com Telephone: 650-289-306054US-DOCS\105484033.25 with a copy (which shall not constitute notice) to: LATHAM & WATKINS LLPAttention: Haim Zaltzman 505 Montgomery Street, Suite 2000San Francisco, CA 94111email: haim.zaltzman@lw.com Telephone: 415-395‑8870 (c)If to any Loan Party: C/O UROVANT SCIENCES, INC.Attention: General Counsel 5151 California Avenue, Suite 250Irvine, CA 92617email: bryan.smith@urovant.comTelephone: 949-652-6852 with a copy (which shall not constitute notice) to: O’MELVENY & MYERS LLPAttention: Mark D. Peterson610 Newport Center Drive, 17th FloorNewport Beach, CA 92660email:mpeterson@omm.comTelephone: 949-823-6971 or to such other address as each party may designate for itself by like notice.11.3Entire Agreement; Amendments. (a)This Agreement and the other Loan Documents constitute the entire agreement and understanding ofthe parties hereto in respect of the subject matter hereof and thereof, and supersede and replace in their entirety any priorproposals, term sheets, non-disclosure or confidentiality agreements, letters, negotiations or other documents or agreements,whether written or oral, with respect to the subject matter hereof or thereof (including Agent’s proposal letter dated January24, 2019). (b)Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended,supplemented or modified except in accordance with the provisions of this Section 11.3(b). The Required Lenders and eachLoan Party party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Agent andthe Loan Parties party to the relevant Loan Document may, from time to time, (i) enter into written amendments,supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to thisAgreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties55US-DOCS\105484033.25 hereunder or thereunder or (ii) waive, on such terms and conditions as the Required Lenders or the Agent, as the case maybe, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any defaultor Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement ormodification shall (A) forgive the principal amount or extend the final scheduled date of maturity of any Loan, extend thescheduled date of any amortization payment in respect of any Term Loan, reduce the stated rate of any interest or feepayable hereunder) or extend the scheduled date of any payment thereof, in each case without the written consent of eachLender directly affected thereby; (B) eliminate or reduce the voting rights of any Lender under this Section 11.3(b) withoutthe written consent of such Lender; (C) reduce any percentage specified in the definition of Required Lenders, consent to theassignment or transfer by the Loan Parties of any of their rights and obligations under this Agreement and the other LoanDocuments, release all or substantially all of the Collateral or release a Loan Party from its obligations under the LoanDocuments, in each case without the written consent of all Lenders; or (D) amend, modify or waive any provision of Section11.18 without the written consent of the Agent. Any such waiver and any such amendment, supplement or modificationshall apply equally to each Lender and shall be binding upon the Loan Parties, the Lender, the Agent and all future holdersof the Loans.11.4No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting ofthis Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed asif drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party byvirtue of the authorship of any provisions of this Agreement.11.5No Waiver. The powers conferred upon Agent and Lender by this Agreement are solely to protect itsrights hereunder and under the other Loan Documents and its interest in the Collateral and shall not impose any duty uponAgent or Lender to exercise any such powers. No omission or delay by Agent or Lender at any time to enforce any right orremedy reserved to it, or to require performance of any of the terms, covenants or provisions hereof by the Loan Parties atany time designated, shall be a waiver of any such right or remedy to which Agent or Lender is entitled, nor shall it in anyway affect the right of Agent or Lender to enforce such provisions thereafter.11.6Survival. All agreements, representations and warranties contained in this Agreement and the otherLoan Documents or in any document delivered pursuant hereto or thereto shall be for the benefit of Agent and Lender andshall survive the execution and delivery of this Agreement. Section 6.3 shall survive the termination of this Agreement.11.7Successors and Assigns. The provisions of this Agreement and the other Loan Documents shall inureto the benefit of and be binding on each Loan Party and its permitted assigns (if any). No Loan Party shall assign itsobligations under this Agreement or any of the other Loan Documents without Agent’s express prior written consent, andany such attempted assignment shall be void and of no effect. Agent and Lender may assign, transfer or endorse its rightshereunder and under the other Loan Documents, without prior notice to the Loan Parties, and all of such rights shall inure tothe benefit of56US-DOCS\105484033.25 Agent’s and Lender’s successors and assigns; provided that, as long as no Event of Default has occurred and is continuing:(i) neither Agent nor any Lender may assign, transfer or endorse its rights hereunder or under the Loan Documents to anyparty that is a direct competitor of any Loan Party (as reasonably determined by Agent in consultation with the LoanParties), it being acknowledged that in all cases, an Affiliate of any Lender or Agent shall not be considered a directcompetitor for this purpose; (ii) Agent or such Lender shall give Parent notice of such assignment or transfer (along withconfirmation as to whether the assignee or transferee is a Qualifying Bank) at least ten (10) Business Days prior to suchassignment or transfer; (iii) Parent may make a written objection to Agent or such Lender prior to such assignment or transferbased on Parent’s reasonable belief that such assignment or transfer could reasonably be expected to violate the 10 Non-Bank Rule; and (iv) if such objection is made, such assignment or transfer shall be effected only with Parent’s consent, not tobe unreasonably withheld or delayed (it being unreasonable to withhold consent unless such assignment or transfer couldreasonably be expected to violate the 10 Non-Bank Rule, including cases where there is reasonable doubt or uncertaintywhether the confirmation of the assignee or transferee being a Qualifying Bank is correct or there is reasonable doubt oruncertainty whether the assignee or transferee could be regarded as several parties by the Swiss Federal TaxAdministration). Agent, acting solely for this purpose as an agent of the Loan Parties, shall maintain at one of its offices acopy of each sale or assignment of the Lender pursuant to this Section 11.7 and Section 11.14 delivered to it and a registerfor the recordation of the names and addresses of the Lenders and the Term Commitments of, and principal amounts (andstated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). Theentries in the Register shall be conclusive absent manifest error, and the Loan Parties, Agent and the Lender shall treat eachPerson whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of thisAgreement. The Register shall be available for inspection by the Loan Parties and any Lender, at any reasonable time andfrom time to time upon reasonable prior notice. The identity of each Lender (and in case the Lender is a Qualifying Bank therequired documentation to prove this qualification) is permitted to be disclosed to the tax authorities of Switzerland by therelevant Swiss Borrower. The parties agree that the foregoing is intended to ensure that the Loans are in “registered form”within the meaning of Section 5f.103-1(c) of the Treasury Regulations and Proposed Treasury Regulations Section 1.163-5(b) promulgated under the Code (or any amended or successor version) and shall be interpreted consistently therewith. 11.8Exposure Transfers. Subject to Section 11.7, no Lender shall enter into any arrangement with anotherperson under which such Lender substantially transfers its exposure under this Agreement to that other person, unless undersuch arrangement throughout the life of such arrangement:(a)relationship between the Lender and that other person is that of a debtor and creditor (including in thebankruptcy or similar event of the Lender or any Loan Party);(b)the other person will have no proprietary interest in the benefit of this Agreement or in any moniesreceived by the Lender under or in relation to this Agreement; and57US-DOCS\105484033.25 (c)the other person will under no circumstances (other than permitted transfers and assignments underSection 11.7) (y) be subrogated to, or substituted in respect of, the Lender’s claims under this Agreement; and (z) haveotherwise any contractual relationship with, or rights against, the Loan Parties under or in relation to this Agreement.11.9Governing Law. This Agreement and the other Loan Documents have been negotiated and deliveredto Agent and Lender in the State of California, and shall have been accepted by Agent and Lender in the State ofCalifornia. Payment to Agent and Lender by the Loan Parties of the Secured Obligations is due in the State ofCalifornia. This Agreement and the other Loan Documents (other than the Bermuda Security Documents, the EnglishSecurity Documents, the Swiss Security Documents and such other Loan Documents as expressly state the contrary) shall begoverned by, and construed and enforced in accordance with, the laws of the State of California, excluding conflict of lawsprinciples that would cause the application of laws of any other jurisdiction.11.10Consent to Jurisdiction and Venue. All judicial proceedings (to the extent that the referencerequirement of Section 11.11 is not applicable) arising in or under or related to this Agreement or any of the other LoanDocuments may be brought in any state or federal court located in the State of California. By execution and delivery of thisAgreement, each party hereto generally and unconditionally: (a) consents to nonexclusive personal jurisdiction in SantaClara County, State of California; (b) waives any objection as to jurisdiction or venue in Santa Clara County, State ofCalifornia; (c) agrees not to assert any defense based on lack of jurisdiction or venue in the aforesaid courts; and(d) irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement or the other LoanDocuments. Service of process on any party hereto in any action arising out of or relating to this Agreement shall beeffective if given in accordance with the requirements for notice set forth in Section 11.2, and shall be deemed effective andreceived as set forth in Section 11.2. Nothing herein shall affect the right to serve process in any other manner permitted bylaw or shall limit the right of either party to bring proceedings in the courts of any other jurisdiction.11.11Mutual Waiver of Jury Trial / Judicial Reference. (a)Because disputes arising in connection with complex financial transactions are most quickly andeconomically resolved by an experienced and expert Person and the parties wish applicable state and federal laws to apply(rather than arbitration rules), the parties desire that their disputes be resolved by a judge applying such applicablelaws. EACH OF THE LOAN PARTIES, AGENT AND LENDER SPECIFICALLY WAIVES ANY RIGHT IT MAYHAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRDPARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY THE LOAN PARTIESAGAINST AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE OR BY AGENT, LENDER OR THEIRRESPECTIVE ASSIGNEE AGAINST ANY LOAN PARTY. This waiver extends to all such Claims, including Claimsthat involve Persons other than Agent, the Loan Parties and Lender; Claims that arise out of or are in any way connected tothe relationship among the Loan Parties, Agent and Lender; and any Claims for damages, breach of contract, tort, specificperformance, or any equitable or legal relief of any kind, arising out of this Agreement or any other Loan Document. 58US-DOCS\105484033.25 (b)If the waiver of jury trial set forth in Section 11.11(a) is ineffective or unenforceable, the parties agreethat all Claims shall be resolved by reference to a private judge sitting without a jury, pursuant to Code of Civil ProcedureSection 638, before a mutually acceptable referee or, if the parties cannot agree, a referee selected by the Presiding Judge ofthe Santa Clara County, California. Such proceeding shall be conducted in Santa Clara County, California, with Californiarules of evidence and discovery applicable to such proceeding.(c)In the event Claims are to be resolved by judicial reference, either party may seek from a court identifiedin Section 11.10, any prejudgment order, writ or other relief and have such prejudgment order, writ or other relief enforcedto the fullest extent permitted by law notwithstanding that all Claims are otherwise subject to resolution by judicial reference.11.12Professional Fees. Each Loan Party promises to pay Agent’s and Lender’s reasonable anddocumented out-of-pocket fees and expenses necessary to finalize the loan documentation, including but not limited toreasonable attorneys’ fees, UCC searches, filing costs, and other miscellaneous expenses. In addition, each Loan Partypromises to pay any and all reasonable and documented out-of-pocket attorneys’ and other professionals’ fees and expensesincurred by Agent and Lender after the Closing Date in connection with or related to: (a) the Loan; (b) the administration,collection, or enforcement of the Loan; (c) the amendment or modification of the Loan Documents; (d) any waiver, consent,release, or termination under the Loan Documents; (e) the protection, preservation, audit, field exam, sale, lease, liquidation,or disposition of Collateral or the exercise of remedies with respect to the Collateral; (f) any legal, litigation, administrative,arbitration, or out of court proceeding in connection with or related to the Loan Parties or the Collateral, and any appeal orreview thereof; and (g) any bankruptcy, restructuring, reorganization, assignment for the benefit of creditors, workout,foreclosure, or other action related to the Loan Parties, the Collateral, the Loan Documents, including representing Agent orLender in any adversary proceeding or contested matter commenced or continued by or on behalf of any LoanParty’s estate, and any appeal or review thereof.11.13Confidentiality. Agent and Lender acknowledge that certain items of Collateral and informationprovided to Agent and Lender by the Loan Parties are confidential and proprietary information of the Loan Parties, if and tothe extent such information either (x) is marked as confidential by the Loan Parties at the time of disclosure, or (y) shouldreasonably be understood to be confidential (the “Confidential Information”). Accordingly, Agent and Lender agree thatany Confidential Information it may obtain in the course of acquiring, administering, or perfecting Agent’s security interestin the Collateral shall not be disclosed to any other Person or entity in any manner whatsoever, in whole or in part, withoutthe prior written consent of the Loan Parties, except that Agent and Lender may disclose any such information: (a) to itsown directors, officers, employees, accountants, counsel and other professional advisors and to its Affiliates if Agent orLender in their sole discretion determines that any such party should have access to such information in connection withsuch party’s responsibilities in connection with the Loan or this Agreement and, provided that such recipient of suchConfidential Information either (i) agrees to be bound by the confidentiality provisions of59US-DOCS\105484033.25 this paragraph or (ii) is otherwise subject to confidentiality restrictions that reasonably protect against the disclosure ofConfidential Information; (b) if such information is generally available to the public; (c) if required or appropriate in anyreport, statement or testimony submitted to any governmental authority having or claiming to have jurisdiction over Agent orLender; (d) if required or appropriate in response to any summons or subpoena or in connection with any litigation, to theextent permitted or deemed advisable by Agent’s or Lender’s counsel; (e) to comply with any legal requirement or lawapplicable to Agent or Lender; (f) to the extent reasonably necessary in connection with the exercise of any right or remedyunder any Loan Document, including Agent’s sale, lease, or other disposition of Collateral after default; (g) to anyparticipant or assignee of Agent or Lender or any prospective participant or assignee; provided, that such participant orassignee or prospective participant or assignee agrees in writing to be bound by this Section prior to disclosure; or(h) otherwise with the prior consent of the Loan Parties; provided, that any disclosure made in violation of this Agreementshall not affect the obligations of the Loan Parties or any of their respective Affiliates.11.14 Assignment of Rights. Each Loan Party acknowledges and understands that Agent or Lender may,subject to Section 11.7, sell and assign all or part of its interest hereunder and under the Loan Documents to any Person orentity (an “Assignee”). After such assignment the term “Agent” or “Lender” as used in the Loan Documents shall mean andinclude such Assignee, and such Assignee shall be vested with all rights, powers and remedies of Agent and Lenderhereunder with respect to the interest so assigned; but with respect to any such interest not so transferred, Agent and Lendershall retain all rights, powers and remedies hereby given. No such assignment by Agent or Lender shall relieve any LoanParty of any of its obligations hereunder. Lender agrees that in the event of any transfer by it of the Note(s) (if any), it willendorse thereon a notation as to the portion of the principal of the Note(s), which shall have been paid at the time of suchtransfer and as to the date to which interest shall have been last paid thereon.11.15Revival of Secured Obligations. This Agreement and the Loan Documents shall remain in full forceand effect and continue to be effective if any petition is filed by or against any Loan Party for liquidation or reorganization, ifany Loan Party becomes insolvent or makes an assignment for the benefit of creditors, if a receiver or trustee is appointed forall or any significant part of any Loan Party’s assets, or if any payment or transfer of Collateral is recovered from Agent orLender. The Loan Documents and the Secured Obligations and Collateral security shall continue to be effective, or shall berevived or reinstated, as the case may be, if at any time payment and performance of the Secured Obligations or any transferof Collateral to Agent, or any part thereof is rescinded, avoided or avoidable, reduced in amount, or must otherwise berestored or returned by, or is recovered from, Agent, Lender or by any obligee of the Secured Obligations, whether as a“voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment, performance, or transfer ofCollateral had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, avoided, avoidable,restored, returned, or recovered, the Loan Documents and the Secured Obligations shall be deemed, without any furtheraction or documentation, to have been revived and reinstated except to the extent of the full, final, and indefeasible paymentto Agent or Lender in Cash.60US-DOCS\105484033.25 11.16Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto maybe executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which when sodelivered shall be deemed an original, but all of which counterparts shall constitute but one and the same instrument.11.17No Third Party Beneficiaries. No provisions of the Loan Documents are intended, nor will beinterpreted, to provide or create any third-party beneficiary rights or any other rights of any kind in any Person other thanAgent, Lender and the Loan Parties unless specifically provided otherwise herein, and, except as otherwise so provided, allprovisions of the Loan Documents will be personal and solely among Agent, the Lender and the Loan Parties.11.18Agency. (a)Lender hereby irrevocably appoints Hercules Capital, Inc. to act on its behalf as the Agent hereunderand under the other Loan Documents and authorizes the Agent to take such actions on its behalf and to exercise such powersas are delegated to the Agent by the terms hereof or thereof, together with such actions and powers as are reasonablyincidental thereto.(b)Lender agrees to indemnify the Agent in its capacity as such (to the extent not reimbursed by the LoanParties and without limiting the obligation of the Loan Parties to do so), according to its respective Term Commitmentpercentages (based upon the total outstanding Term Commitments) in effect on the date on which indemnification is soughtunder this Section 11.18, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses or disbursements of any kind whatsoever that may at any time be imposed on, incurred by or assertedagainst the Agent in any way relating to or arising out of, this Agreement, any of the other Loan Documents or anydocuments contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any actiontaken or omitted by the Agent under or in connection with any of the foregoing. The agreements in this Section shallsurvive the payment of the Loans and all other amounts payable hereunder.(c)Agent in Its Individual Capacity. The Person serving as the Agent hereunder shall have the same rightsand powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Agent andthe term “Lender” shall, unless otherwise expressly indicated or unless the context otherwise requires, include each suchPerson serving as Agent hereunder in its individual capacity.(d)Exculpatory Provisions. The Agent shall have no duties or obligations except those expressly set forthherein and in the other Loan Documents. Without limiting the generality of the foregoing, the Agent shall not:(i)be subject to any fiduciary or other implied duties, regardless of whether any default or anyEvent of Default has occurred and is continuing;61US-DOCS\105484033.25 (ii)have any duty to take any discretionary action or exercise any discretionary powers, exceptdiscretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Agent isrequired to exercise as directed in writing by the Lender, provided that the Agent shall not be required to take anyaction that, in its opinion or the opinion of its counsel, may expose the Agent to liability or that is contrary to anyLoan Document or applicable law; and(iii)except as expressly set forth herein and in the other Loan Documents, have any duty todisclose, and the Agent shall not be liable for the failure to disclose, any information relating to the Loan Parties orany of their respective Affiliates that is communicated to or obtained by any Person serving as the Agent or any ofits Affiliates in any capacity.(e)The Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the requestof the Lender or as the Agent shall believe in good faith shall be necessary, under the circumstances or (ii) in the absence ofits own gross negligence or willful misconduct.(f)The Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement,warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents ofany certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) theperformance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or theoccurrence of any default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of thisAgreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of anycondition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be deliveredto the Agent.(g)Reliance by Agent. Agent may rely, and shall be fully protected in acting, or refraining to act, upon,any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order, bond or other paper ordocument that it has no reason to believe to be other than genuine and to have been signed or presented by the proper partyor parties or, in the case of cables, telecopies and telexes, to have been sent by the proper party or parties. In the absence ofits gross negligence or willful misconduct, Agent may conclusively rely, as to the truth of the statements and the correctnessof the opinions expressed therein, upon any certificates or opinions furnished to Agent and conforming to the requirementsof the Loan Agreement or any of the other Loan Documents. Agent may consult with counsel, and any opinion or legaladvice of such counsel shall be full and complete authorization and protection in respect of any action taken, not taken orsuffered by Agent hereunder or under any Loan Documents in accordance therewith. Agent shall have the right at any timeto seek instructions concerning the administration of the Collateral from any court of competent jurisdiction. Agent shall notbe under any obligation to exercise any of the rights or powers granted to Agent by this Agreement and the other LoanDocuments at the request or direction of Lenders unless Agent shall have been provided by Lender with adequate securityand indemnity against the costs, expenses and liabilities that may be incurred by it in compliance with such request ordirection.62US-DOCS\105484033.25 11.19Publicity. None of the parties hereto nor any of its respective member businesses and Affiliates shall,without the other parties’ prior written consent (which shall not be unreasonably withheld or delayed), publicize or use (a)the other party’s name (including a brief description of the relationship among the parties hereto), logo or hyperlink to suchother parties’ web site, separately or together, in written and oral presentations, advertising, promotional and marketingmaterials, client lists, public relations materials or on its web site (together, the “Publicity Materials”); (b) the names ofofficers of such other parties in the Publicity Materials; and (c) such other parties’ name, trademarks, servicemarks in anynews or press release concerning such party; provided however, notwithstanding anything to the contrary herein, no suchconsent shall be required (i) to the extent necessary to comply with the requests of any regulators, legal requirements or lawsapplicable to such party, pursuant to any listing agreement with any national securities exchange (so long as such partyprovides prior notice to the other party hereto to the extent reasonably practicable) and (ii) to comply with Section 11.13.11.20Service of Process. Parent, Urovant England, Urovant Switzerland and each Subsidiary that isorganized outside of the United States of America shall appoint CT Corporation System, or other agent reasonablyacceptable to Agent, as its agent for the purpose of accepting service of any process in the United States of America,evidenced by a service of process letter in form and substance reasonably satisfactory to Agent (each, a “ProcessLetter”). Each Loan Party shall take all actions, including payment of fees to such agent, to ensure that each Process Letterremains effective at all times. 11.21Multiple Loan Parties.(a)Loan Party’s Agent. Each Loan Party hereby irrevocably appoints Parent as its agent, attorney-in-factand legal representative for all purposes, including requesting disbursement of the Term Loan and receiving accountstatements and other notices and communications to Loan Party (or any of them) from the Agent or any Lender. The Agentmay rely, and shall be fully protected in relying, on any request for the Term Loan, disbursement instruction, report,information or any other notice or communication made or given by Parent, whether in its own name or on behalf of one ormore of the other Loan Parties, and the Agent shall not have any obligation to make any inquiry or request any confirmationfrom or on behalf of any other Loan Party as to the binding effect on it of any such request, instruction, report, information,other notice or communication, nor shall the joint and several character of the Loan Parties’ obligations hereunder or anyother Loan Document be affected thereby.(b)Waivers. Each Loan Party hereby waives: (i) any right to require the Agent to institute suit against, orto exhaust its rights and remedies against, any other Loan Party or any other person, or to proceed against any property ofany kind which secures all or any part of the Secured Obligations, or to exercise any right of offset or other right with respectto any reserves, credits or deposit accounts held by or maintained with the Agent or any Indebtedness of the Agent or anyLender to any other Loan Party, or to exercise any other right or power, or pursue any other remedy the Agent or anyLender may have; (ii) any defense arising by reason of any disability or other defense of any other Loan Party or anyendorser, co-maker or other person, or by reason of the cessation from any cause63US-DOCS\105484033.25 whatsoever of any liability of any other Loan Party or any endorser, co-maker or other person, with respect to all or any partof the Secured Obligations, or by reason of any act or omission of the Agent or others which directly or indirectly results inthe discharge or release of any other Loan Party or any other person or any Secured Obligations or any security therefor,whether by operation of law or otherwise; (iii) any defense arising by reason of any failure of the Agent to obtain, perfect,maintain or keep in force any Lien on, any property of any Loan Party or any other person; (iv) any defense based upon orarising out of any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolutionproceeding commenced by or against any other Loan Party or any endorser, co-maker or other person, including withoutlimitation any discharge of, or bar against collecting, any of the Secured Obligations (including without limitation anyinterest thereon), in or as a result of any such proceeding. Until all of the Secured Obligations have been paid, performed,and discharged in full, nothing shall discharge or satisfy the liability of any Loan Party hereunder except the full performanceand payment of all of the Secured Obligations. If any claim is ever made upon the Agent for repayment or recovery of anyamount or amounts received by the Agent in payment of or on account of any of the Secured Obligations, because of anyclaim that any such payment constituted a preferential transfer or fraudulent conveyance, or for any other reason whatsoever,and the Agent repays all or part of said amount by reason of any judgment, decree or order of any court or administrativebody having jurisdiction over the Agent or any of its property, or by reason of any settlement or compromise of any suchclaim effected by the Agent with any such claimant (including without limitation the any other Loan Party), then and in anysuch event, each Loan Party agrees that any such judgment, decree, order, settlement and compromise shall be binding uponsuch Loan Party, notwithstanding any revocation or release of this Agreement or the cancellation of any note or otherinstrument evidencing any of the Secured Obligations, or any release of any of the Secured Obligations, and each LoanParty shall be and remain liable to the Agent and the Lenders under this Agreement for the amount so repaid or recovered, tothe same extent as if such amount had never originally been received by the Agent or any Lender, and the provisions of thissentence shall survive, and continue in effect, notwithstanding any revocation or release of this Agreement. Each LoanParty hereby expressly and unconditionally waives all rights of subrogation, reimbursement and indemnity of every kindagainst any other Loan Party, and all rights of recourse to any assets or property of any other Loan Party, and all rights toany collateral or security held for the payment and performance of any Secured Obligations, including (but not limited to)any of the foregoing rights which any Loan Party may have under any present or future document or agreement with anyother Loan Party or other person, and including (but not limited to) any of the foregoing rights which any Loan Party mayhave under any equitable doctrine of subrogation, implied contract, or unjust enrichment, or any other equitable or legaldoctrine.(c)Consents. Each Loan Party hereby consents and agrees that, without notice to or by any Loan Partyand without affecting or impairing in any way the obligations or liability of any Loan Party hereunder, the Agent may, fromtime to time before or after revocation of this Agreement, do any one or more of the following in its sole and absolutediscretion: (i) accept partial payments of, compromise or settle, renew, extend the time for the payment, discharge, orperformance of, refuse to enforce, and release all or any parties to, any or all of the Obligations; (ii) grant any otherindulgence to any Loan Party or any64US-DOCS\105484033.25 other Person in respect of any or all of the Secured Obligations or any other matter; (iii) accept, release, waive, surrender,enforce, exchange, modify, impair, or extend the time for the performance, discharge, or payment of, any and all property ofany kind securing any or all of the Secured Obligations or any guaranty of any or all of the Secured Obligations, or onwhich the Agent at any time may have a Lien, or refuse to enforce its rights or make any compromise or settlement oragreement therefor in respect of any or all of such property; (iv) substitute or add, or take any action or omit to take anyaction which results in the release of, any one or more other Loan Parties or any endorsers of all or any part of the SecuredObligations, including, without limitation one or more parties to this Agreement, regardless of any destruction or impairmentof any right of contribution or other right of any Loan Party; (v) apply any sums received from any other Loan Party, anyguarantor, endorser, or co-signer, or from the disposition of any Collateral or security, to any Indebtedness whatsoeverowing from such person or secured by such Collateral or security, in such manner and order as the Agent determines in itssole discretion, and regardless of whether such Indebtedness is part of the Secured Obligations, is secured, or is due andpayable. Each Loan Party consents and agrees that the Agent shall be under no obligation to marshal any assets in favor ofany Loan Party, or against or in payment of any or all of the Secured Obligations. Each Loan Party further consents andagrees that the Agent shall have no duties or responsibilities whatsoever with respect to any property securing any or all ofthe Secured Obligations. Without limiting the generality of the foregoing, the Agent shall have no obligation to monitor,verify, audit, examine, or obtain or maintain any insurance with respect to, any property securing any or all of the SecuredObligations.(d)Independent Liability. Each Loan Party hereby agrees that one or more successive or concurrentactions may be brought hereon against such Loan Party, in the same action in which any other Loan Party may be sued or inseparate actions, as often as deemed advisable by Agent. Each Loan Party is fully aware of the financial condition of eachother Loan Party and is executing and delivering this Agreement based solely upon its own independent investigation of allmatters pertinent hereto, and such Loan Party is not relying in any manner upon any representation or statement of the Agentor any Lender with respect thereto. Each Loan Party represents and warrants that it is in a position to obtain, and each LoanParty hereby assumes full responsibility for obtaining, any additional information concerning any other Loan Party’sfinancial condition and any other matter pertinent hereto as such Loan Party may desire, and such Loan Party is not relyingupon or expecting the Agent to furnish to it any information now or hereafter in the Agent’s possession concerning the sameor any other matter.(e)Subordination. All Indebtedness of a Loan Party or any Subsidiary of a Loan Party now or hereafterarising held by another Loan Party or Subsidiary of a Loan Party is subordinated to the Secured Obligations and the LoanParty holding the Indebtedness shall take all actions reasonably requested by Agent to effect, to enforce and to give notice ofsuch subordination, or if the Indebtedness is held by a Subsidiary of a Loan Party, such Loan Party shall take all actionsreasonably requested by Agent to cause the Subsidiary to effect, to enforce and to give notice of such subordination.65US-DOCS\105484033.25 11.22Swiss Limitation. Notwithstanding anything to the contrary in this Agreement and the other LoanDocuments, the obligations of Urovant Switzerland or any other Loan Party incorporated in Switzerland (collectively, the“Swiss Borrower”) and the rights of Agent and Lender under this Agreement and the other Loan Documents are subject tothe following limitations:(a)If and to the extent a guarantee or security interest granted or any other obligations assumed by a SwissBorrower under this Agreement and the other Loan Documents guarantees or secures obligations of its (direct or indirect)parent company (upstream security) or its sister companies (cross-stream security) (the “Upstream or Cross-Stream SecuredObligations”) and if and to the extent using the proceeds from the enforcement of such guarantee, security interest or otherobligation to discharge the Upstream or Cross-Stream Secured Obligations would constitute a repayment of capital(Einlagerückgewähr/Kapitalrückzahlung), a violation of the legally protected reserves (gesetzlich geschützte Reserven) orthe payment of a (constructive) dividend (Gewinnausschüttung) under Swiss corporate law, the proceeds from theenforcement of such guarantee, security interest or other obligation to be used to discharge the Upstream or Cross-StreamSecured Obligations shall be limited to the maximum amount of that Swiss Borrower’s freely disposable shareholder orquotaholder equity at the time of enforcement (the “Maximum Amount”); provided that such limitation is required under theapplicable law at that time; provided, further, that such limitation shall not free the Swiss Borrower from its obligations inexcess of the Maximum Amount, but merely postpone the performance date of those obligations until such time or times asperformance is again permitted under then applicable law. This Maximum Amount of freely disposable shareholder orquotaholder equity shall be determined in accordance with Swiss law and applicable Swiss accounting principles, and, if andto the extent required by applicable Swiss law, shall be confirmed by the auditors of the Swiss Borrower on the basis of aninterim audited balance sheet as of that time.(b)In respect of Upstream or Cross-Stream Secured Obligations, the Swiss Borrower shall, as concerns theproceeds resulting from the enforcement of the guarantee or security interest granted or other obligations assumed under thisAgreement and the other Loan Documents, if and to the extent required by applicable law in force at the relevant time:(i)procure that such enforcement proceeds can be used to discharge Upstream or Cross-StreamSecured Obligations without deduction of Swiss Withholding Tax by discharging the liability to such tax bynotification pursuant to applicable law rather than payment of the tax;(ii)if the notification procedure pursuant to sub-paragraph (i) above does not apply, deduct theSwiss Withholding Tax at such rate (currently thirty-five percent (35%) at the date of this Agreement) as is inforce from time to time from any such enforcement proceeds used to discharge Upstream or Cross-Stream SecuredObligations, and pay, without delay, any such taxes deducted to the Swiss Federal Tax Administration;66US-DOCS\105484033.25 (iii)notify the Agent that such notification or, as the case may be, deduction has been made, andprovide the Agent with evidence that such a notification of the Swiss Federal Tax Administration has been madeor, as the case may be, such taxes deducted have been paid to the Swiss Federal Tax Administration; and(iv)in the case of a deduction of Swiss Withholding Tax, use its best efforts to ensure that anyperson, which is entitled to a full or partial refund of the Swiss Withholding Tax deducted from such enforcementproceeds, will, as soon as possible after such deduction,1.request a refund of the Swiss Withholding Tax under applicable law (including tax treaties),and2.pay to the Agent upon receipt any amount so refunded.(c)The Swiss Borrower shall promptly take and promptly cause to be taken any action, including thefollowing:(i)the passing of any shareholders’ or quotaholders’ resolutions, as may be the case, to approvethe use of the enforcement proceeds, which may be required as a matter of Swiss mandatory law in force at thetime of the enforcement of the security interest in order to allow a prompt use of the enforcement proceeds;(ii)preparation of up-to-date audited balance sheet of the Swiss Borrower;(iii)confirmation of the auditors of the Swiss Borrower that the relevant amount represents theMaximum Amount;(iv)to conversion of restricted reserves into profits and reserves freely available for thedistribution as dividends (to the extent permitted by mandatory Swiss law);(v)to the extent permitted by applicable law, Swiss accounting standards, write-up or realize anyof its assets that are shown in its balance sheet with a book value that is significantly lower than the market valueof the assets, in case of realization, however, only if such assets are not necessary for the Swiss Borrower’sbusiness (nicht betriebsnotwendig); and(vi)all such other measures necessary to allow the Swiss Borrower to use enforcement proceedsas agreed hereunder with a minimum of limitations.(SIGNATURES TO FOLLOW) 67US-DOCS\105484033.25 IN WITNESS WHEREOF, Loan Parties, Agent and Lender have duly executed and delivered this Loan and SecurityAgreement as of the day and year first above written. BORROWERS:UROVANT SCIENCES LTD.Signature: /s/ Keith A. KatkinPrint Name: Keith A. KatkinTitle: Principal Executive Officer UROVANT HOLDINGS LIMITEDSignature: /s/ Jason ReaderPrint Name: Jason ReaderTitle: Director UROVANT SCIENCES GMBHSignature: /s/ Sascha BucherPrint Name: Sascha BucherTitle: Managing Director GUARANTOR:UROVANT SCIENCES, INC.Signature: /s/ Keith A. KatkinPrint Name: Keith A. KatkinTitle: Chief Executive Officer US-DOCS\105484033.25 Accepted in Palo Alto, California: AGENT:HERCULES CAPITAL, INC.Signature: /s/ Zhuo HuangPrint Name: Zhuo HuangTitle: Associate General Counsel LENDER:HERCULES CAPITAL, INC.Signature: /s/ Zhuo HuangPrint Name: Zhuo HuangTitle: Associate General Counsel US-DOCS\105484033.25 Table of Exhibits and Schedules Exhibit B: Term Note Exhibit F: Compliance Certificate Exhibit G: Joinder Agreement Schedule 1.1 Commitments US-DOCS\105484033.25 EXHIBIT BSECURED TERM PROMISSORY NOTE[THIS NOTE WAS ISSUED WITH “ORIGINAL ISSUE DISCOUNT” WITHIN THE MEANING OF SECTION 1272, ETSEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. UPON WRITTEN REQUEST, BORROWERWILL PROVIDE TO ANY HOLDER OF THE NOTE (1) THE ISSUE PRICE AND DATE OF THE NOTE, (2) THEAMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE ORIGINAL YIELD TO MATURITY OFTHE NOTE. SUCH REQUEST SHOULD BE SENT TO BORROWER AT [INSERT BORROWER ADDRESS].] $[ ],000,000Advance Date: ___ __, 20[ ] Maturity Date: ___ __, 20[ ] FOR VALUE RECEIVED, Urovant Sciences Ltd., an exempted company limited by shares and organized under the lawsof Bermuda, Urovant Holdings Limited, a private limited company organized under the laws of England and Wales, and UrovantSciences GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) incorporated and organized under the laws ofSwitzerland, for themselves and each of their Subsidiaries that has delivered a Joinder Agreement pursuant to Section 7.13(collectively, the “Borrowers”) hereby promise to pay to Hercules Capital, Inc., a Maryland corporation, or its registered assigns (the“Lender”) at 400 Hamilton Avenue, Suite 310, Palo Alto, CA 94301 or such other place of payment as the holder of this SecuredTerm Promissory Note (this “Promissory Note”) may specify from time to time in writing, in lawful money of the United States ofAmerica, the principal amount of [ ● ] Dollars ($[ ● ]) or such other principal amount as Lender has advanced to the Borrowers,together with interest at a rate as set forth in Section 2.2(c) of the Loan Agreement based upon a year consisting of 360 days, withinterest computed daily based on the actual number of days in each month. This Promissory Note is the Note referred to in, and is executed and delivered in connection with, that certain Loan andSecurity Agreement dated as of February 20, 2019, by and among the Borrowers, the Guarantor, Hercules Capital, Inc., a Marylandcorporation (the “Agent”) and the several banks and other financial institutions or entities from time to time party thereto as lender (asthe same may from time to time be amended, modified or supplemented in accordance with its terms, the “Loan Agreement”), and isentitled to the benefit and security of the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement), towhich reference is made for a statement of all of the terms and conditions thereof. All payments shall be made in accordance with theLoan Agreement. All terms defined in the Loan Agreement shall have the same definitions when used herein, unless otherwisedefined herein. An Event of Default under the Loan Agreement shall constitute a default under this Promissory Note. Each Borrower waives presentment and demand for payment, notice of dishonor, protest and notice of protest under theUCC or any applicable law. Each Borrower agrees to make all payments under this Promissory Note without setoff, recoupment ordeduction and regardless of any counterclaim or defense. This Promissory Note has been negotiated and delivered to Lender and ispayable in the State of California. This Promissory Note shall be governed by and construed and enforced in accordance with, thelaws of the State of California, excluding any conflicts of law rules or principles that would cause the application of the laws of anyother jurisdiction. US-DOCS\105484033.25 BORROWERS: UROVANT SCIENCES LTD. Signature: Print Name: Title: UROVANT HOLDINGS LIMITED Signature: Print Name: Title: UROVANT SCIENCES GMBH Signature: Print Name: Title: US-DOCS\105484033.25 EXHIBIT FCOMPLIANCE CERTIFICATEHercules Capital, Inc. (as “Agent”)400 Hamilton Avenue, Suite 310Palo Alto, CA 94301Reference is made to that certain Loan and Security Agreement dated as of February 20, 2019 and the Loan Documents (asdefined therein) entered into in connection with such Loan and Security Agreement all as may be amended from time to time(hereinafter referred to collectively as the “Loan Agreement”) by and among Hercules Capital, Inc. (the “Agent”), the several banksand other financial institutions or entities from time to time party thereto (collectively, the “Lender”) and Hercules Capital, Inc., asagent for the Lender (the “Agent”) and Urovant Sciences Ltd. (the “Company”), as Borrower, and each other Borrower and Guarantorparty thereto. All capitalized terms not defined herein shall have the same meaning as defined in the Loan Agreement.The undersigned is an Officer of the Company, knowledgeable of all Company financial matters, and is authorized toprovide certification of information regarding the Company; hereby certifies, in such capacity, that in accordance with the terms andconditions of the Loan Agreement, except as set forth below, (i) each Loan Party is in compliance for the period ending ___________of all covenants, conditions and terms and (ii) hereby reaffirms that all representations and warranties contained therein are true andcorrect in all material respects on and as of the date of this Compliance Certificate with the same effect as though made on and as ofsuch date, except to the extent such representations and warranties expressly relate to an earlier date. The undersigned further certifiesthe attached financial statements are prepared in accordance with GAAP (except for the absence of footnotes with respect to unauditedfinancial statement and subject to normal year end adjustments) and are consistent from one period to the next except as explainedbelow.REPORTING REQUIREMENTREQUIREDCHECK IFATTACHEDMonthly ReportingMonthly within 30 days (10 days for limited deliverableswhere an Event of Default has occurred and iscontinuing) Interim Financial StatementsQuarterly within 45 days Audited Financial StatementsFYE within 90 days FINANCIAL COVENANTSTo the extent applicable, the undersigned hereby confirms that the Loan Parties is in compliance with Sections 7.20 (as applicable,attached as Schedule A hereto are the required calculations supporting this certification(s)) as of the date first set forth above. US-DOCS\105484033.25 ACCOUNTSThe undersigned hereby also confirms the below disclosed accounts represent all depository accounts and securities accounts presentlyopen in the name of each Loan Party or Subsidiary, as applicable. DepositoryAC #FinancialInstitutionAccountType(Depository /Securities)Last MonthEndingAccountBalancePurpose ofAccountLOAN PARTYName/Address: 1 2 3 4 5 6 7 LOAN PARTY/SUBSIDIARYName/Address 1 2 3 4 5 6 7 US-DOCS\105484033.25 DISCLOSURE UPDATESANY CHANGES SINCELAST COMPLIANCECERTIFICATE?ATTACHMENTSEVIDENCING SUCHUPDATE: Corporate Status (Exhibit C tothe Disclosure Letter)Yes No[ ● ] Laws (Schedule 5.6 to theDisclosure Letter)Yes No[ ● ] Intellectual Property Claims(Schedule 5.9 to the DisclosureLetter)Yes No[ ● ] Material breach by any thirdparty of Intellectual Propertycontract, license or agreement(Section 5.9 of Loan Agreement)Yes No[ ● ] EXCEPTIONS: [ ● ] Very Truly Yours, UROVANT SCIENCES LTD. Signature: Print Name: Title: US-DOCS\105484033.25 Schedule A to Compliance CertificateIf: A.the Clinical Milestone has not been achieved by June 30, 2019; and B.either i.the Approval Milestone has not been achieved; or ii.the Specified Prepayment has not been paid by June 30, 2019; and C.the Parent’s Market Capitalization is not greater than $500,000,000; then 1)Sum of Cash held by a Loan Party subject to an Account ControlAgreement in favor of Agent:$__________________2)Is Unrestricted Cash (line (1)) greater than or equal to$10,000,000?YES – In compliance NO – Not in compliance2)Sum of the Loan Parties’ accounts payable under GAAP not paidafter the later of:(a) 120th day following the invoice date for such accountpayable; or(b) the earlier of (i) the 30th day following the date of actualreceipt of any Loan Party of the invoice for such account payableand (ii) the 150th day following the invoice date for such accountpayable$__________________ US-DOCS\105484033.25 If: A.any Tranche 2 Advance and/or Tranche 3 Advance is made; and B.both (i) September 30, 2019 has passed and (ii) the Parent’s Market Capitalization is less than or equal to $500,000,000for a period of 3 consecutive trading days; and C.the Approval Milestone has not yet been achieved; then 1)Sum of Cash held by a Loan Party subject to an Account Control Agreement in favor ofAgent:$__________________2)Is Unrestricted Cash (line (1)) greater than or equal to $20,000,000?YES – In compliance NO – Not in compliance2)Sum of the Loan Parties’ accounts payable under GAAP not paidafter the later of:(a) 120th day following the invoice date for such account payable; or(b) the earlier of (i) the 30th day following the date of actualreceipt of any Loan Party of the invoice for such account payableand (ii) the 150th day following the invoice date for such account payable$__________________ US-DOCS\105484033.25 EXHIBIT GFORM OF JOINDER AGREEMENTThis Joinder Agreement (the “Joinder Agreement”) is made and dated as of [ ], 20[ ], and is entered into by andbetween__________________, a ____________ corporation (“Subsidiary”), and HERCULES CAPITAL, INC., a Marylandcorporation (as “Agent”). RECITALSA.Subsidiary’s Affiliate, Urovant Sciences Ltd. (“Company”) has entered/desires to enter into that certain Loan and SecurityAgreement dated as of February 20, 2019, with Company, each other Borrower (as defined in the Loan Agreement) and Guarantor (asdefined in the Loan Agreement), the several banks and other financial institutions or entities from time to time party thereto as lender(collectively, the “Lender”) and the Agent, as such agreement may be amended, restated or modified (the “Loan Agreement”), togetherwith the other agreements executed and delivered in connection therewith;B.Subsidiary acknowledges and agrees that it will benefit both directly and indirectly from Company’s execution ofthe Loan Agreement and the other agreements executed and delivered in connection therewith;AGREEMENTNOW THEREFORE, Subsidiary and Agent agree as follows:1.The recitals set forth above are incorporated into and made part of this Joinder Agreement. Capitalized terms not definedherein shall have the meaning provided in the Loan Agreement.2.By signing this Joinder Agreement, Subsidiary shall be bound by the terms and conditions of the Loan Agreement the sameas if it were a Borrower (as defined in the Loan Agreement) under the Loan Agreement, mutatis mutandis, providedhowever, that (a) with respect to (i) Section 5.1 of the Loan Agreement, Subsidiary represents that it is an entity dulyorganized, legally existing and in good standing under the laws of [ ], (b) neither Agent nor Lender shall have anyduties, responsibilities or obligations to Subsidiary arising under or related to the Loan Agreement or the other LoanDocuments, (c) that if Subsidiary is covered by Company’s insurance, Subsidiary shall not be required to maintain separateinsurance or comply with the provisions of Sections 6.1 and 6.2 of the Loan Agreement, and (d) that as long as Companysatisfies the requirements of Section 7.1 of the Loan Agreement, Subsidiary shall not have to provide Agent separateFinancial Statements. To the extent that Agent or Lender has any duties, responsibilities or obligations arising under orrelated to the Loan Agreement or the other Loan Documents, those duties, responsibilities or obligations shall flow only toCompany and not to Subsidiary or any other Person or entity. By way of example (and not an exclusive list): (i) Agent’sproviding notice to Company in accordance with the Loan Agreement or as otherwise agreed among Company, Agent andLender shall be deemed provided to Subsidiary; (ii) a Lender’s providing an Advance to Company shall be deemed anAdvance to Subsidiary; and (iii) Subsidiary shall have no right to request an Advance or make any other demand on Lender. US-DOCS\105484033.25 3.Subsidiary agrees not to certificate its equity securities without Agent’s prior written consent, which consent may beconditioned on the delivery of such equity securities to Agent in order to perfect Agent’s security interest in such equitysecurities.4.Subsidiary acknowledges that it benefits, both directly and indirectly, from the Loan Agreement, and hereby waives, foritself and on behalf on any and all successors in interest (including without limitation any assignee for the benefit ofcreditors, receiver, bankruptcy trustee or itself as debtor-in-possession under any bankruptcy proceeding) to the fullest extentprovided by law, any and all claims, rights or defenses to the enforcement of this Joinder Agreement on the basis that (a) itfailed to receive adequate consideration for the execution and delivery of this Joinder Agreement or (b) its obligations underthis Joinder Agreement are avoidable as a fraudulent conveyance.5.As security for the prompt, complete and indefeasible payment when due (whether on the payment dates or otherwise) of allthe Secured Obligations, Subsidiary grants to Agent a security interest in all of Subsidiary’s right, title, and interest in and tothe Collateral. SUBSIDIARY:_____________________________________________. By: Name: Title: Address: Telephone: email: AGENT:HERCULES CAPITAL, INC.By: Name: Title: Address:400 Hamilton Ave., Suite 310Palo Alto, CA 94301email: legal@herculestech.comTelephone: 650-289-3060 US-DOCS\105484033.25 EXHIBIT IFORM OF WARRANT(see attached) US-DOCS\105484033.25 SCHEDULE 1.1COMMITMENTS LENDERTRANCHETERMCOMMITMENTHMRC Treaty Passport schemereference number andjurisdiction of tax residence(if applicable) Hercules Capital, Inc.Tranche 1$15,000,00013/H/370777/DTTP United StatesHercules Capital, Inc.Tranche 2$30,000,00013/H/370777/DTTP United StatesHercules Capital, Inc.Tranche 3$15,000,00013/H/370777/DTTP United StatesHercules Capital, Inc.Tranche 4$40,000,000 *13/H/370777/DTTP United StatesTOTALCOMMITMENTS $100,000,000 * * Funding of Tranche 4 is subject to approval by Lenders’ investment committee in its sole and unfettered discretion. US-DOCS\105484033.25 Exhibit 10.24UNCONDITIONAL SECURED GUARANTYThis UNCONDITIONAL SECURED GUARANTY (this “Guaranty”) is entered into as of February 20, 2019, by UrovantSciences, Inc., a Delaware corporation (“Guarantor”) in favor of Hercules Capital, Inc., a Maryland corporation, in its capacity asadministrative agent and collateral agent for itself and the Lender (as defined below) (together with its successors and assigns in suchcapacity, “Agent”, and together with the Lender, collectively, “Secured Parties” and each a “Secured Party”).For and in consideration of all extensions of credit, loans and other financial accommodations provided by the Lender toUrovant Sciences Ltd., an exempted company organized under the laws of Bermuda (“Parent”), Urovant Holdings Limited, a privatelimited company organized under the laws of England and Wales (“Urovant England”) and Urovant Sciences GmbH, a companyorganized under the laws of Switzerland (“Urovant Switzerland”, and together with Parent, Urovant England, and the other borrowersparty to the Loan Agreement from time to time, collectively referred to as “Borrowers” and each, a “Borrower”), which loans were andwill be made pursuant to a Loan and Security Agreement among Borrowers, the several banks and other financial institutions orentities from time to time parties thereto (the “Lender”) and Agent, in its capacity as administrative agent and collateral agent for itselfand the Lender, dated as of the date hereof (as amended, restated, or otherwise modified from time to time, the “Loan Agreement”),Guarantor hereby unconditionally and irrevocably guarantees the prompt and complete payment of all Secured Obligations andBorrowers’ performance of the Loan Agreement and the other Loan Documents according to their terms. Capitalized terms used butnot otherwise defined herein shall have the meanings given them under the Loan Agreement.SECTION 1 – GUARANTEE1.1If any Borrower does not pay when due, whether at scheduled maturity or on any date of a requiredprepayment or by acceleration, demand or otherwise, any Secured Obligations now or hereafter existing under or in respect of theLoan Documents (including, without limitation, any extensions, modifications, substitutions, amendments or renewals of any or all ofthe foregoing Secured Obligations), whether direct or indirect, absolute or contingent, and whether for principal, interest, premiums,fees, indemnities, contract causes of action, costs, expenses or otherwise, Guarantor shall upon demand by Agent immediately pay toAgent for the benefit of the Lender such Secured Obligations (“Guarantor Obligations”), and pay all costs and expenses as requiredunder Section 6.1. This Guaranty is a guaranty of payment when due and not of collectability.1.2The obligations hereunder are independent of the obligations of Borrowers, and a separate action oractions may be brought and prosecuted against Guarantor whether action is brought against any Borrower or whether any Borrower bejoined in any such action or actions. Guarantor waives the benefit of any statute of limitations affecting its liability hereunder or theenforcement thereof. Guarantor’s liability under this Guaranty is not conditioned or contingent upon the genuineness, validity,regularity or enforceability of the Loan Documents. US-DOCS\105488239.7 1.3Agent’s right to (a) renew, extend or otherwise change the terms of the Loan Documents or any partthereof, (b) take security for the payment due under this Guaranty or the Loan Documents, (c) exchange, enforce, waive or release anysuch security, and (d) apply any security and direct its sale as Agent, in its discretion, chooses, shall not affect the Guarantor’sobligations or liability hereunder.1.4Guarantor waives any right to require Agent or any Lender to (a) proceed against any Borrower or anyother Person; (b) proceed against or exhaust any security held from any Borrower or any other Person; or (c) pursue any other remedyin a Secured Party’s power whatsoever. A Secured Party may, at its election, exercise, decline or fail to exercise, any right or remedyit may have against any Borrower or any security held by the Secured Party, including without limitation the right to foreclose uponany such security by judicial or nonjudicial sale, without affecting or impairing in any way the liability of Guarantorhereunder. Guarantor waives any defense arising by reason of any disability or other defense of any Borrower or any other guarantor,or by reason of the cessation from any cause whatsoever of the liability of any Borrower or any other guarantor other than payment infull of the Secured Obligations (other than inchoate indemnity obligations). Guarantor waives any setoff, defense or counterclaim thatany Borrower may have against a Secured Party, other than payment in full of the Secured Obligations (other than inchoate indemnityobligations). Guarantor waives any defense arising out of the absence, impairment or loss of any right of reimbursement orsubrogation or any other rights against any Borrower. Until all of the Secured Obligations (other than inchoate indemnity obligationsfor which no claim has been asserted) have been paid in full, (d) Guarantor shall have no right of subrogation or reimbursement forclaims arising out of or in connection with this Guaranty, (e) Guarantor shall have no right of contribution or other rights against anyBorrower in connection with the Secured Obligations, (f) Guarantor waives any right to enforce any remedy that a Secured Party nowhas or may hereafter have against any Borrower, and (g) Guarantor waives all rights to participate in any security now or hereafter heldby a Secured Party. Guarantor waives all presentments, demands for performance, notices of nonperformance, protests, notices ofprotest, notices of dishonor and notices of acceptance of this Guaranty and of the existence, creation or incurrence of new or additionalIndebtedness. Guarantor assumes the responsibility for being and keeping itself informed of the financial condition of each Borrowerand of all other circumstances bearing upon the risk of nonpayment of any Indebtedness or nonperformance of any obligation of eachBorrower, warrants to Agent that it will keep so informed, and agrees that absent a request for particular information by Guarantor,Agent shall have no duty to advise Guarantor of information known to Agent regarding such condition or any suchcircumstances. Guarantor waives the benefits of California Civil Code sections 2809, 2810, 2819, 2845, 2847, 2848, 2849, 2850,2899 and 3433.1.5If any Borrower becomes insolvent, is adjudicated bankrupt or files a petition for reorganization,arrangement, composition or similar relief under any present or future provision of the United States Bankruptcy Code orreorganization or insolvency laws of any applicable jurisdiction, or if such a petition is filed against any Borrower, and in any suchproceeding some or all of any Indebtedness or obligations under the Loan Agreement are terminated or rejected or any obligation ofany Borrower is modified or abrogated, or if any Borrower’s obligations are otherwise avoided for any reason, Guarantor agrees thatGuarantor’s liability hereunder shall not thereby be affected or modified and such liability shall continue in full force and effect as if nosuch action or proceeding had occurred until payment in full of the Secured Obligations (other than inchoate indemnityobligations). This Guaranty shall continue to be effective or be reinstated, as the case may be, if any payment must be returned by aSecured Party upon the insolvency, bankruptcy or reorganization of a Borrower or any other guarantor or otherwise, as though suchpayment had not been made until payment in full of the Secured Obligations and Guarantor Obligations (in each case, other thaninchoate indemnity obligations).2US-DOCS\105488239.7 1.6Any Indebtedness of a Borrower now or hereafter held by Guarantor or any Subsidiary of Guarantor ishereby subordinated to any Indebtedness of a Borrower to any Secured Party; and such Indebtedness of a Borrower to Guarantor or toany Subsidiary of Guarantor shall be collected, enforced and received by Guarantor (or Guarantor shall cause such Subsidiary tocollect, enforce and receive, as applicable) as trustee for the Secured Party and, except to the extent such Indebtedness is permitted tobe paid to Guarantor under the Loan Agreement, be paid over to Agent on account of the Indebtedness of such Borrower to theSecured Party but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.SECTION 2 – GRANT OF SECURITY INTEREST 2.1Guarantor hereby grants Agent, for the ratable benefit of the Lender, to secure the payment andperformance in full of all of the Guarantor Obligations, a continuing security interest in, and pledges to Agent, for the ratable benefit ofthe Lender, the following personal property whether now owned or hereafter acquired (collectively, the “UCC Collateral”): (a)Receivables; (b) Equipment; (c) Fixtures; (d) General Intangibles (other than Intellectual Property); (e) Inventory; (f) InvestmentProperty; (g) Deposit Accounts; (h) Cash; (i) Goods; and (j) all other tangible and intangible personal property (other than IntellectualProperty) of Guarantor whether now or hereafter owned or existing, leased, consigned by or to, or acquired by, Guarantor andwherever located, and any of Guarantor’s property in the possession or under the control of Agent; and, to the extent not otherwiseincluded, all Proceeds of each of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and productsof each of the foregoing; provided, however, that the UCC Collateral shall include all Accounts and General Intangibles that consist ofrights to payment and proceeds from the sale, licensing or disposition of all or any part, or rights in, the Intellectual Property (the“Rights to Payment”). Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy Court) holds that a securityinterest in the underlying Intellectual Property is necessary to have a security interest in the Rights to Payment, then the UCC Collateralshall automatically, and effective as of the date of this Guaranty, include the Intellectual Property to the extent necessary to permitperfection of Agent’s security interest in the Rights to Payment.2.2Notwithstanding the broad grant of the security interest set forth in Section 2.1, above, the UCCCollateral shall not include (i) nonassignable licenses or contracts, which by their terms require the consent of the licensor thereof oranother party (but only to the extent such prohibition on transfer is enforceable under applicable law, including, without limitation,Sections 9406, 9407 and 9408 of the UCC) or (ii) any Excluded Accounts.2.3If this Guaranty is terminated, Agent’s Lien in the UCC Collateral shall continue until the SecuredObligations and the Guarantor Obligations (in each case, other than inchoate indemnity obligations) are repaid in full in cash. At suchtime, the UCC Collateral shall be released from the Liens created hereby, this Guaranty and all obligations (other than those expresslystated to survive such termination) of the Agent and Guarantor hereunder shall terminate. Agent shall execute such documents, returnany UCC Collateral held by Agent hereunder and take such other steps as are reasonably necessary to accomplish the foregoing, all atthe Guarantor’s sole cost and expense.3US-DOCS\105488239.7 2.4Guarantor hereby authorizes Agent to file financing statements or take any other action required toperfect Agent’s security interests in the UCC Collateral, without notice to Guarantor, with all appropriate jurisdictions to perfect orprotect Agent’s interest or rights under the Guaranty.SECTION 3 – REPRESENTATIONS AND WARRANTIES3.1Guarantor hereby represents and warrants to Agent on the date of this Guaranty and on each date thatany representations are repeated under the Loan Agreement that:(a)The representations and warranties set forth in Section 5 of the Loan Agreement as theyrelate to such Guarantor or to the Loan Documents to which such Guarantor is a party, each of which is hereby incorporated herein byreference, are true and correct, in all material respects, except for representations and warranties that are qualified as to “materiality”,“Material Adverse Effect” or similar language, in which case such representations and warranties shall be true and correct (after givingeffect to any such qualification therein) in all respects as of such date, in each case unless expressly stated to relate to a specific earlierdate, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date, and theAgent shall be entitled to rely on each of such representations and warranties as if they were fully set forth herein, provided that eachreference in each such representation and warranty to any Borrower’s knowledge shall, for the purposes of this Section 3.1(a), bedeemed to be a reference to such Guarantor’s knowledge; and(b)the pledge, grant of a security interest in, and delivery of the UCC Collateral pursuant to thisGuaranty, will create a valid first priority Lien (subject only to Permitted Liens) on and in the UCC Collateral, and the proceedsthereof, securing the payment of the Guarantor Obligations.SECTION 4 – COVENANTS4.1Guarantor shall execute any further instruments and take further action as Agent or any Lenderreasonably requests to perfect or continue Agent’s Lien in the UCC Collateral or to effect the purposes of this Guaranty.SECTION 5 – EVENTS OF DEFAULT5.1Upon the occurrence and during the continuation of an Event of Default, Agent shall have all of therights of a secured party under the UCC with respect to the UCC Collateral. Guarantor’s obligations hereunder are not limited to theUCC Collateral or any exercise by Agent of rights and remedies against the same, and Agent may pursue any other available rightsand remedies against Guarantor, whether hereunder, at law or otherwise, without resort to the UCC Collateral if Agent deems it in itsbest interests and the best interests of the Lender to do so.4US-DOCS\105488239.7 5.2During the existence and continuation of an Event of Default,(a)Agent may, to the extent permitted by applicable law, at its election, apply, set off, collect orsell in one or more sales, or take such steps as may be necessary to liquidate and reduce to cash in the hands of Agent in whole or inpart, with or without any previous demands or demand of performance or notice or advertisement, the whole or any part of the UCCCollateral in such order as Agent may elect, and any such sale may be made either at public or private sale at its place of business orelsewhere, either for cash or upon credit or for future delivery. Agent may be the purchaser of any or all UCC Collateral so sold andhold the same thereafter in its own right free from any claim of Guarantor or right of redemption. To the extent permitted by applicablelaw, demands of performance, notices of sale, advertisements and presence of property at sale are hereby waived. Any sale hereundermay be conducted by any officer or agent of Agent; and(b)Agent shall have all of the rights of a secured party under the UCC with respect to the UCCCollateral. Guarantor’s obligations hereunder are not limited to the UCC Collateral or any exercise by Agent of rights and remediesagainst the same, and Agent may pursue any other available rights and remedies against any Guarantor, whether hereunder, at law orotherwise, without resort to the UCC Collateral if Agent deems it in its best interests and the best interests of the Lender to do so.5.3During the existence and continuation of an Event of Default, the proceeds of the sale of any of theUCC Collateral and all sums received or collected by Agent from or on account of such UCC Collateral under Section 5.2 shall beapplied by Agent to the payment of expenses incurred or paid by Agent in connection with any sale, transfer or delivery of the UCCCollateral, to the payment of any other costs, charges, attorneys’ fees or expenses mentioned herein, and to the payment of the SecuredObligations or any part hereof, all in such order and manner as Agent in its discretion may determine. 5.4Upon the transfer by Agent and/or the Lender of all or any part of the Secured Obligations andGuarantor Obligations pursuant to the terms of the Loan Agreement and this Guaranty, respectively, Agent and/or the Lender maytransfer all or any part of the UCC Collateral to the transferee of the Secured Obligations and shall be fully discharged thereafter fromall liability and responsibility with respect to such UCC Collateral so transferred, and the transferee shall be vested with all the rightsand powers of Agent and/or the Lender hereunder with respect to such UCC Collateral so transferred; but with respect to any UCCCollateral not so transferred, the Secured Party shall retain all rights and powers hereby given.SECTION 6 – MISCELLANEOUS6.1Guarantor agrees to pay reasonable attorneys’ fees and all other costs and expenses which may beincurred by any Secured Party in the enforcement of this Guaranty or any other Loan Document. This Guaranty is in addition to theguaranties of any other guarantors of the Secured Obligations.5US-DOCS\105488239.7 6.2Governing Law. This Guaranty has been negotiated and delivered to Agent in the State of California,and shall have been accepted by Agent in the State of California. Payment to Agent and Lender by Guarantor of the GuarantorObligations is due in the State of California. This Guaranty shall be governed by, and construed and enforced in accordance with, thelaws of the State of California, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.6.3Consent to Jurisdiction and Venue. All judicial proceedings (to the extent that the referencerequirement of Section 6.4 is not applicable) arising in or under or related to this Guaranty may be brought in any state or federal courtlocated in the State of California. By execution and delivery of this Guaranty, each party hereto generally and unconditionally: (a)consents to nonexclusive personal jurisdiction in Santa Clara County, State of California; (b) waives any objection as to jurisdiction orvenue in Santa Clara County, State of California; (c) agrees not to assert any defense based on lack of jurisdiction or venue in theaforesaid courts; and (d) irrevocably agrees to be bound by any judgment rendered thereby in connection with this Guaranty. Serviceof process on any party hereto in any action arising out of or relating to this Guaranty shall be effective if given in accordance with therequirements for notice set forth in Section 6.6, and shall be deemed effective and received as set forth in Section 6.6. Nothing hereinshall affect the right to serve process in any other manner permitted by law or shall limit the right of either party to bring proceedings inthe courts of any other jurisdiction.6.4Mutual Waiver of Jury Trial / Judicial Reference. 6.4.1Because disputes arising in connection with complex financial transactions are mostquickly and economically resolved by an experienced and expert Person and the parties wish applicable state and federal laws to apply(rather than arbitration rules), the parties desire that their disputes be resolved by a judge applying such applicable laws. EACH OFGUARANTOR AND AGENT SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANYCAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM(COLLECTIVELY, “CLAIMS”) ASSERTED BY GUARANTOR AGAINST AGENT, LENDER OR THEIR RESPECTIVEASSIGNEE OR BY AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE AGAINST GUARANTOR. This waiverextends to all such Claims, including Claims that involve Persons other than Agent, Borrowers, Guarantor and Lender; Claims thatarise out of or are in any way connected to the relationship among Borrowers, Guarantor, Agent and Lender; and any Claims fordamages, breach of contract, tort, specific performance, or any equitable or legal relief of any kind, arising out of this Guaranty. 6.4.2If the waiver of jury trial set forth in Section 6.4.1 is ineffective or unenforceable, theparties agree that all Claims shall be resolved by reference to a private judge sitting without a jury, pursuant to Code of Civil ProcedureSection 638, before a mutually acceptable referee or, if the parties cannot agree, a referee selected by the Presiding Judge of the SantaClara County, California. Such proceeding shall be conducted in Santa Clara County, California, with California rules of evidenceand discovery applicable to such proceeding. 6US-DOCS\105488239.7 6.4.3In the event Claims are to be resolved by judicial reference, either party may seek from acourt identified in Section 6.3, any prejudgment order, writ or other relief and have such prejudgment order, writ or other reliefenforced to the fullest extent permitted by law notwithstanding that all Claims are otherwise subject to resolution by judicial reference.6.5Continuing Guaranty; Successors and Assigns. This Guaranty is a continuing guaranty and shall(a) remain in full force and effect until the payment in full in cash of the Secured Obligations and Guarantor Obligations (in each case,other than inchoate indemnity obligations), (b) be binding upon each Guarantor, its successors and permitted assigns and (c) inure tothe benefit of and be enforceable by the Secured Parties and their successors, permitted transferees and permitted assigns. Withoutlimiting the generality of clause (c) of the immediately preceding sentence, any Secured Party may assign or otherwise transfer all orany portion of its rights and obligations under the Loan Agreement (including, without limitation, all or any portion of its TermCommitment, the Loan owing to it and any promissory note(s) held by it) to any other Person, and such other Person shall thereuponbecome vested with all the benefits in respect thereof granted to such Secured Party herein or otherwise, in each case as and to theextent provided in and permitted by Section 11.7 of the Loan Agreement. Guarantor may not transfer, pledge or assign this Guarantyor any rights or obligations under it without Agent’s prior written consent. 6.6Notice. Any notice required to be given hereunder shall be in the manner specified in Section 11 of theLoan Agreement, and to the address listed on the signature page(s) hereto.6.7Severability of Provisions. Each provision of this Guaranty is severable from every other provision indetermining the enforceability of any provision.6.8Correction of this Guaranty. Agent may correct patent errors and fill in any blanks in this Guarantyconsistent with the agreement of the parties.6.9Amendments in Writing; Integration. No amendment, modification, termination or waiver of anyprovision of this Guaranty, no approval or consent thereunder, or any consent to any departure by Guarantor or any of its Subsidiariestherefrom, shall in any event be effective unless the same shall be in writing and signed by Guarantor and Agent. This Guarantyrepresents the entire agreement about this subject matter and supersedes prior negotiations or agreements with respect to such subjectmatter. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matterof this Guaranty merge into this Guaranty.6.10Counterparts. This Guaranty may be executed in any number of counterparts and by different partieson separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute oneGuaranty. Delivery of an executed counterpart of a signature page of this Guaranty by facsimile, portable document format (.pdf) orother electronic transmission will be as effective as delivery of a manually executed counterpart hereof.7US-DOCS\105488239.7 6.11Survival. All covenants, representations and warranties made in this Guaranty continue in full forceand effect until this Guaranty has terminated pursuant to its terms and all Secured Obligations and Guarantor Obligations (in each case,other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of thisGuaranty) have been satisfied. So long as Borrowers and Guarantor have satisfied the Secured Obligations and GuarantorObligations, respectively (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive thetermination of this Guaranty), this Guaranty shall be deemed terminated, subject to Section 1.5. Those obligations that are expresslyspecified in this Guaranty as surviving this Guaranty’s termination shall continue to survive notwithstanding this Guaranty’stermination.[Signature begins on next page.] 8US-DOCS\105488239.7 IN WITNESS WHEREOF, the undersigned Guarantor has executed this Unconditional Secured Guaranty as ofthe day and year first above written. Guarantor: UROVANT SCIENCES, INC. By: /s/ Keith A. KatkinName: Keith A. KatkinTitle: Chief Executive Officer Address: Urovant Sciences, Inc.Attention: Bryan E. Smith, General Counsel5151 California Avenue, Suite 250Irvine, California 92617 Agent: HERCULES CAPITAL, INC. By: /s/ Zhuo HuangName: Zhuo HuangTitle: Associate General Counsel Address: HERCULES CAPITAL, INC.Legal DepartmentAttention: Chief Legal Officer, Kristen C. Kosofsky400 Hamilton Avenue, Suite 310Palo Alto, CA 94301 [Signature Page to Unconditional Secured Guaranty (Urovant/Hercules)]Exhibit 21.1Urovant Sciences Ltd.List of Subsidiaries Subsidiary JurisdictionUrovant Sciences, Inc. DelawareUrovant Treasury Holdings, Inc. DelawareUrovant Sciences Treasury, Inc. DelawareUrovant Holdings Limited United KingdomUrovant Sciences GmbH Switzerland Exhibit 23.1Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the following the Registration Statements:(1)Registration Statement (Form S-8 No. 333-227593) pertaining to the Urovant Sciences Ltd. 2017 Equity Incentive Plan, as amended and restated,(2)Registration Statement (Form S-8 No. 333-228386) pertaining to the Urovant Sciences Ltd. 2017 Equity Incentive Plan, as amended and restated;of our report dated June 14, 2019, with respect to the consolidated financial statements of Urovant Sciences Ltd. included in this Annual Report (Form 10-K)of Urovant Sciences Ltd. for the year ended March 31, 2019./s/ Ernst & Young LLPIrvine, CaliforniaJune 14, 2019Exhibit 31.1CERTIFICATION PURSUANT TORULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Keith A. Katkin, certify that:1.I have reviewed this Annual Report on Form 10-K of Urovant Sciences Ltd.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared; (b)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; and (c)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting. Date: June 14, 2019 By:/s/ Keith A. Katkin Keith A. Katkin Principal Executive Officer Exhibit 31.2CERTIFICATION PURSUANT TORULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Christine G. Ocampo, certify that:1.I have reviewed this Annual Report on Form 10-K of Urovant Sciences Ltd.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared; (b)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; and (c)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting. Date: June 14, 2019 By:/s/ Christine G. Ocampo Christine G. Ocampo Principal Financial and 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 on Form 10-K of Urovant Sciences Ltd. (the “Company”) for the period ended March 31, 2019 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Keith A. Katkin, Principal Executive Officer of the Company,hereby certifies, pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18U.S.C. Section 1350, that to the best of his knowledge: (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of theCompany. Date: June 14, 2019 By: /s/ Keith A. Katkin Keith A. Katkin Principal Executive Officer This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or afterthe date of the Form 10-K), irrespective of any general incorporation language contained in such filing.  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 on Form 10-K of Urovant Sciences Ltd. (the “Company”) for the period ended March 31, 2019 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), the undersigned, Christine G. Ocampo, Principal Financial and Accounting Officer ofthe Company, hereby certifies, pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”), and 18 U.S.C. Section 1350, that to the best of her knowledge: (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of theCompany. Date: June 14, 2019 By: /s/ Christine G. Ocampo Christine G. Ocampo Principal Financial and Accounting Officer This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or afterthe date of the Form 10-K), irrespective of any general incorporation language contained in such filing. 

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