10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to          

Commission File Number 001-37785

Reata Pharmaceuticals, Inc.

(Exact name of Registrant as specified in its Charter)

Delaware	11-3651945
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5320 Legacy Drive Plano, Texas	75024
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (972) 865-2219

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, Par Value $0.001 Per Share	RETA	NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes  ☐    No  ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes ☒    No  ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Small reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒

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 and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of Class A Common Stock on The Nasdaq Stock Market on June 30, 2021, was $3,870,110,507.

The number of shares of Registrant’s Common Stock outstanding as of February 23, 2022 was 31,484,670 shares of Class A Common Stock and 4,919,249 shares of Class B Common Stock.

Portions of the Registrant’s Definitive Proxy Statement relating to the Annual Meeting of Stockholders, scheduled to be held on June 8, 2022, are incorporated by reference into Part III of this Report.

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Table of Contents

		Page
Cautionary Note Regarding Forward-Looking Statements		1
Risk Factor Summary		3
PART I
Item 1.	Business	7
Item 1A.	Risk Factors	58
Item 1B.	Unresolved Staff Comments	99
Item 2.	Properties	99
Item 3.	Legal Proceedings	99
Item 4.	Mine Safety Disclosures	99
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	100
Item 6.	Reserved	102
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	103
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	119
Item 8.	Financial Statements and Supplementary Data	119
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	119
Item 9A.	Controls and Procedures	119
Item 9B.	Other Information	122
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	122
PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	123
Item 11.	Executive Compensation	123
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	123
Item 13.	Certain Relationships and Related Transactions, and Director Independence	123
Item 14.	Principal Accounting Fees and Services	124
PART IV
Item 15.	Exhibits, Financial Statement Schedules	125
Item 16.	Form 10-K Summary	125

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties.  We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws.  In this Annual Report on Form 10-K, all statements, other than statements of historical or present facts, including statements regarding our future financial condition, future revenues, projected costs, prospects, business strategy, and plans and objectives of management for future operations, are forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as “believe,” “will,” “may,” “might,” “estimate,” “continue,” “anticipate,” “intend,” “target,” “project,” “model,” “should,” “would,” “plan,” “expect,” “predict,” “could,” “seek,” “goals,” “potential,”  and similar terms or expressions that concern our expectations, strategy, plans, or intentions.  These forward-looking statements include, but are not limited to, statements about:

• our expectations regarding the timing, costs, conduct, and outcome of our clinical trials, including statements regarding the timing of the initiation and availability of data from such trials;

• the timing and likelihood of regulatory filings and approvals for our product candidates;

• whether regulatory authorities determine that additional trials or data are necessary in order to accept a new drug application for review and/or approval;

• our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates;

• our plans to research, develop, and commercialize our product candidates;

• the manufacturing, supply, and commercialization of our product candidates, if approved;

• the rate and degree of market acceptance of our product candidates;

• our expectations regarding the potential market size and the size of the patient populations for our product candidates, if approved for commercial use, and the potential market opportunities for commercializing our product candidates;

• the success of competing therapies that are or may become available;

• our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates;

• the ability to license additional intellectual property relating to our product candidates and to comply with our existing license agreements;

• our ability to maintain and establish relationships with third parties, such as contract research organizations, contract manufacturing organizations, suppliers, and distributors;

• our ability to maintain and establish collaborators with development, regulatory, and commercialization expertise;

• our ability to attract and retain key scientific or management personnel;

• our ability to grow our organization and increase the size of our facilities to meet our anticipated growth;

• the accuracy of our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing;

• our expectations related to the use of our available cash;

• our ability to develop, acquire, and advance product candidates into, and successfully complete, clinical trials;

• the initiation, timing, progress, and results of future preclinical studies and clinical trials, and our research and development programs;

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• the impact of governmental laws and regulations and regulatory developments in the United States and foreign countries;

• developments and projections relating to our competitors and our industry; and

• the impact of the coronavirus disease (COVID-19) on our clinical trials, our supply chain, and our operations.

These forward-looking statements are not exhaustive.  Other sections of this Annual Report on Form 10-K include additional factors that could adversely affect our business and financial performance.  Moreover, we operate in a very competitive and rapidly changing environment.  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 effects of all factors 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, or implied by, any forward-looking statements.  Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part I, Item 1A. “Risk Factors” and elsewhere in this Annual Report on Form 10-K.  The following section summarizes the risk factors listed under Part I, Item 1A, “Risk Factors”.  Given these uncertainties, you should not place undue reliance on these forward-looking statements.

The forward-looking statements made in this Annual Report on Form 10-K are based on circumstances as of the date on which the statements are made.  Except as required by law, we undertake no obligation to update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise, or to conform these statements to actual results or to changes in our expectations.

This Annual Report on Form 10-K also contains estimates, projections, and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets and the incidence and prevalence of certain medical conditions.  Information based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances reflected in this information.  Unless otherwise expressly stated, we obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical, and general publications, government data, and similar sources.

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RISK FACTOR SUMMARY

Below is a summary of the material risk factors that make an investment in our Class A common stock speculative or risky.  This summary does not address all of the risks that we face.  Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found in Item 1A “Risk Factors” and should be carefully considered, together with other information in this Annual Report on Form 10-K before making investment decisions regarding our Class A common stock.

• We anticipate that we will continue to incur losses for the foreseeable future and may never achieve or sustain profitability.  We will require additional financings to fund our operations, but the terms of certain of our agreements may restrict our ability to pursue our business strategies or obtain such financing.  

• We are substantially dependent on the success of our lead product candidates, omaveloxolone and bardoxolone methyl (bardoxolone).

• The clinical and commercial success of omaveloxolone and bardoxolone will depend on a number of factors, many of which are beyond our control.

• The recent receipt of a complete response letter (CRL) from the United States Food and Drug Administration (FDA) with respect to the New Drug Application (NDA) for bardoxolone in patients with chronic kidney disease (CKD) caused by Alport syndrome puts our entire bardoxolone platform at risk; there is a high degree of risk that bardoxolone will not be approved for any indication in the United States or elsewhere.

• If our product candidates receive regulatory approval, we will be subject to ongoing regulatory requirements, and we may face future development, manufacturing, and regulatory difficulties.

• Success in earlier Phase 1 and 2 clinical trials may not be indicative of the results that may be obtained in larger registrational clinical trials, which may delay or prevent obtaining regulatory approval.

• We may face delays in completing our ongoing or planned clinical trials due to a number of factors, including failure to enroll a sufficient number of patients in our clinical trials in a timely manner, or these studies may not be completed at all.

• Our product candidates may cause or have attributed to them undesirable side effects or have other properties that delay or prevent their regulatory approval or limit their commercial potential.

• Clinical trials of our product candidates may not uncover all possible adverse events (AEs) that patients may experience.

• If we, our collaborators, or our third-party manufacturers cannot manufacture our product candidates or products at sufficient yields or quantities, we may experience delays in development, regulatory approval, and commercialization.

• Even if we are able to obtain regulatory approval of our product candidates, we cannot predict the labeling we will obtain, and it may be more narrow than originally sought.

• We have limited experience in submitting an NDA, a marketing authorization application (MAA), or other marketing applications and may be unable to do so efficiently or at all, for any product candidate we are developing or may develop in the future.

• If we or our collaborators are unable to establish sales, marketing, and distribution capabilities or enter into or maintain agreements with third parties to market and sell our product candidates, we may not be successful in commercializing our product candidates if and when they are approved.

• If the market opportunities for our product candidates are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer.

• We face substantial competition.  There is a possibility that our competitors may discover, develop, obtain regulatory approval of, and commercialize drugs before we do or develop drugs that are safer, more effective, or less costly.

• Our commercial success depends upon attaining significant market acceptance of our product candidates, if approved, among physicians, patients, third-party payors, and others in the health care community, which we may not be able to achieve.

• We may not be successful in our efforts to identify, license, discover, develop, or commercialize additional product candidates.

• Failure to obtain adequate coverage and reimbursement, or obtaining limited reimbursement, from third-party payors may render our products less attractive to patients and healthcare providers.

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• If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

• If we fail to maintain and establish collaborators with development, regulatory, and commercial expertise, it may disrupt our business, or we may not be able to capitalize on the development and commercialization of our current and future product candidates.

• If our third-party contractors, which conduct many aspects of our preclinical and clinical studies and our manufacturing activities for our product candidates, do not properly and successfully perform their obligations under our agreements with them, our ability to successfully obtain approval and provide sufficient quantities of product for our product candidates could suffer.

• Our product candidates and certain of the components of our product candidates are currently acquired from single-source suppliers and in most cases have been purchased without long-term supply agreements.  The loss of any of these suppliers, or their failure to supply us with supplies of sufficient quantity and quality to obtain and complete manufacture of drug substance or finished drug product of acceptable quality at an acceptable price, would materially and adversely affect our business.

• We rely on, but may not have, adequate protection of our proprietary technologies to compete effectively in our market.

• Confidentiality agreements with third-party contractors and collaborators may not prevent a competitor from discovering, misappropriating, or disclosing our trade secrets.

• We may not be able to effectively maintain our intellectual property position throughout the global market.

• If we do not obtain additional protection under the Hatch-Waxman Act and similar foreign legislation extending the terms of our patents and obtaining data exclusivity for our product candidates, our business may be materially harmed.

• If we fail to comply with our obligations in the agreements under which we license intellectual property and other rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.

• The regulatory approval process is highly uncertain, and we may not obtain regulatory approval for the commercialization of our product candidates.  Even if we believe our completed, current, or planned clinical trials are successful, regulatory authorities may not agree that they provide adequate data on safety or efficacy or may require that we conduct confirmatory clinical trials either prior to approval or after market approval.

• If our product candidates obtain marketing approval, we will be subject to more extensive healthcare laws, regulation, and enforcement, including recent U.S. healthcare reform and other changes, and our failure to comply with those laws could have a material adverse effect on our results of operations and financial condition.

• We are subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws, privacy, and anti-money laundering laws and regulations.  We can face criminal liability, fines, penalties, or other serious consequences for violations, which can harm our business.

• Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could result in significant liability for us and harm our reputation.

• We may encounter difficulties in managing our growth and expanding our operations successfully.

• If we fail to attract and retain certain senior management and key personnel, we may be unable to successfully develop our product candidates, conduct our clinical trials, and commercialize our product candidates.

• Our business and operations may be materially adversely affected in the event of computer system failures or security breaches.

• The COVID-19 outbreak has caused and could continue to cause disruptions in our business and operating results, including our clinical development and supply chain activities.

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DEFINED TERMS

Unless the context requires otherwise, references to “Reata,” “the Company,” “we,” “us,” or “our” in this 2021 Form 10-K refer to Reata Pharmaceuticals, Inc. and its subsidiaries.  We also have used several other terms in this 2021 Form 10-K, most of which are explained or defined below.

Abbreviated Term		Defined Term
2017 Tax Act		Tax Cuts and Jobs Act of 2017
3PLs		Third-party logistics providers
AbbVie		AbbVie Inc.
ACE		Angiotensin converting enzyme
ADL		Activities of Daily Living
ADPKD		Autosomal dominant polycystic kidney disease
AE		Adverse event
AIA		Leahy-Smith America Invents Act
ALS		Amyotrophic lateral sclerosis
ALT		Alanine
ANDA		Abbreviated new drug application
ARB		Angiotensin receptor blockers
ASC		Accounting Standards Codification
AST		aspartate aminotransferases
ASU		Accounting Standards Update
ATP		Adenosine triphosphate
bardoxolone		Bardoxolone methyl
BNP		Brain natriuretic peptide
BXLS		Blackstone Life Sciences, LLC
CARES Act	Coronavirus Aid, Relief, and Economic Security Act
CGIC	Clinical global impression of change
CGMP	Current good manufacturing practice
CKD	Chronic kidney disease
CMC	Chemistry manufacturing controls
CMO		Contract manufacturing organization
CMS		Center for Medicare and Medicaid Services
the Code		Internal Revenue Code of 1986, as amended
COSO framework		Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
CRL		Complete response letter
COVID-19	Coronavirus disease
CPA	Certified Public Accountant
Credits		Tax credits
CRO		Contract research organization
CTA		clinical trial application
CTD-PAH		Pulmonary arterial hypertension associated with connective tissue disease
CVD		Cardiovascular disease
Dartmouth		The Trustees of Dartmouth College
DOJ		United States Department of Justice
DPN		Diabetic peripheral neuropathy
DPNP		Diabetic peripheral neuropathic pain
DSCSA		Drug Supply Chain Security Act
DSMB		Data safety monitoring board
EC		European Commission
eGFR		Estimated glomerular filtration rate
EMA		European Medicines Agency
EPC		European Patent Convention
ESKD		End-stage kidney disease
EU		European Union
Exchange Act		Securities Exchange Act of 1934
FA		Friedreich’s ataxia
FARA		Friedreich’s Ataxia Research Alliance
FASB		Financial Accounting Standards Board
FCPA		Foreign Assets Controls, the United States Foreign Corrupt Practices Act of 1977
FDA		United States Food and Drug Administration
FFDCA		Federal Food, Drug, and Cosmetic Act
FFS		Fee-for-service
FSA		Flexible spending account
FSGS		Focal segmental glomerulosclerosis
GBM		Glomerular basement membrane
GCP		Good clinical practice
GDPR		General Data Protection Regulation
GFR		Glomerular filtration rate

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Abbreviated Term	Defined Term
GGT	Gamma-glutamyl transferase
GLP	Good laboratory practice
HDL	High-density lipoprotein
HHS	United States Department of Health and Human Services
HIPAA	Health Insurance Portability and Accountability Act of 1996
HITECH	Health Information Technology for Economic and Clinical Health Act
IgAN	IgA nephropathy
IND	Investigational new drug
IPO	Initial public offering
IPR	Inter partes review
IRB	Institutional review board
ITT	Intent to treat
Kyowa Kirin	Kyowa Kirin Co., Ltd. (formerly KHK or Kyowa Hakko Kirin Co., Ltd.)
LDL	Low-density lipoprotein
LOQ	List of Questions from the EMA
LTIP Plan	Second Amended and Restated Long Term Incentive Plan
MAA	Marketing Authorization Application
MAD	Multiple ascending dose
MD Anderson	The University of Texas MD Anderson Cancer Center
mFARS	Modified Friedreich’s Ataxia Rating Scale
MHLW	Ministry of Health, Labour and Welfare of Japan
MHRA	United Kingdom Medicines and Healthcare Products Regulatory Agency
MMRM	Mixed-model Repeated Measures
NCE	New chemical entity
NDA	New Drug Application
NIH	National Institute of Health
NOL	Net operating loss
PAH	Pulmonary arterial hypertension
PCAOB	Public Company Accounting Oversight Board
PD	Pharmacodynamic
PDMA	Prescription Drug Marketing Act
PDUFA	Prescription Drug User Fee Act
PGIC	Patient global impression of change
PK	Pharmacokinetic
PMDA	Pharmaceutical and Medical Devices Agency of Japan
PPACA	Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010
PREA	Pediatric Research Equity Act
PTAB	Patent Trial and Appeal Board
Registrational or pivotal trial	An adequate and well-controlled trial designed to be sufficient to apply for regulatory approval of a drug candidate, although notwithstanding the Company’s design a regulatory agency may determine that further clinical studies or data are required
REMS	Risk evaluation and mitigation strategy
ROS	Reactive oxygen species
RSU	Restricted stock units
SaaS	Software as a service
SAD	Single ascending dose
SAE	Serious adverse event
SAP	Statistical analysis plan
Sarbanes-Oxley Act	The Sarbanes-Oxley Act of 2002
SCA	Spinocerebellar ataxia
SEC	United States Securities and Exchange Commission
Securities Act	Securities Act of 1933
T2D	Type 2 diabetic
TGA	Australian Therapeutic Goods Administration
TEAE	Treatment-emergent adverse effect
T1D CKD	Type 1 diabetic CKD
T2D CKD	Type 2 diabetic CKD
UACR	Urinary albumin-to-creatinine ratio
ULN	Upper limit of normal
University of Kansas	University of Kansas and the University of Kansas Medical Center
USPTO	The United States Patent and Trademark Office

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PART I

Item 1. Business.

Overview

We are a clinical-stage biopharmaceutical company focused on identifying, developing, and commercializing innovative therapies that change patients’ lives for the better.  We concentrate on small-molecule therapeutics with novel mechanisms of action for the treatment of severe, life-threatening diseases with few or no approved therapies.  Our lead programs are omaveloxolone in a rare neurological disease called Friedreich’s ataxia (FA) and bardoxolone in rare forms of CKD.  Both of our lead product candidates activate the transcription factor Nrf2 to normalize mitochondrial function, restore redox balance, and resolve inflammation.  Because mitochondrial dysfunction, oxidative stress, and inflammation are features of many diseases, we believe omaveloxolone, bardoxolone, and our next-generation Nrf2 activators have many potential clinical applications. We possess exclusive, worldwide rights to develop, manufacture, and commercialize omaveloxolone, bardoxolone, and our next-generation Nrf2 activators, excluding certain Asian markets for bardoxolone in certain indications, which are licensed to Kyowa Kirin Co., Ltd. (Kyowa Kirin).   In addition, we are developing RTA 901, the lead product candidate from our Hsp90 modulator program, in neurological indications.  We are the exclusive licensee of RTA 901 and have worldwide commercial rights.

Programs in Neurological Diseases

Omaveloxolone for Friedreich’s Ataxia

FA is an inherited, debilitating, and degenerative neuromuscular disorder that is typically diagnosed during adolescence and can ultimately lead to premature death.  Patients with FA experience progressive loss of coordination, muscle weakness, and fatigue, which commonly progresses to motor incapacitation, wheelchair reliance, and eventually death.  Symptoms generally first occur in children, with patients requiring a wheelchair by their teens or early-20s and generally dying in their mid-30s.  FA affects approximately 5,000 children and adults in the United States and 22,000 individuals globally.  There are currently no approved therapies to treat FA.  The FDA and the European Commission (EC) have granted orphan drug designation to omaveloxolone for the treatment of FA.

In the third quarter of 2021, we completed our pre-NDA meeting with the FDA.  The purpose of the pre-NDA meeting was to discuss the content of Reata’s planned NDA submission for approval for omaveloxolone for the treatment of patients with FA.  On November 18, 2021, the FDA granted omaveloxolone Fast Track Designation for the treatment of FA, providing eligibility for FDA programs such as Priority Review and rolling submission of the NDA, if relevant criteria are met. The FDA granted our request for a rolling submission and in January 2022, we initiated rolling submission of our NDA which is expected to be completed by the end of the first quarter of 2022.  This NDA is supported by the efficacy and safety data from MOXIe Part 1, Part 2, and MOXIe Extension studies discussed below, which we believe provide sufficient evidence of safety and efficacy to support a standard (full) approval of the NDA.

Omaveloxolone for Other Neurological Indications

Based on our understanding of the pathophysiology of neurological diseases, characterized by mitochondrial dysfunction, inflammation, and oxidative stress, we believe omaveloxolone may be applicable to diseases such as progressive supranuclear palsy, Parkinson’s disease, frontotemporal dementia, Huntington’s disease, amyotrophic lateral sclerosis (ALS), Alzheimer’s disease, and epilepsy.  Consistent with this, we have observed promising activity of omaveloxolone and our other Nrf2 activators in preclinical models of many of these diseases.  We plan to pursue the development of omaveloxolone and our other Nrf2 activators for one or more of these diseases.

RTA 901 for Neurological Indications, Including Diabetic Peripheral Neuropathic Pain

We are developing RTA 901, the lead product candidate from our Hsp90 modulator program, in neurological indications.  We have observed favorable activity of RTA 901 in a range of preclinical models of neurological disease, including models of diabetic neuropathy, neuroinflammation, and neuropathic pain.  We have completed a Phase 1 trial to evaluate the safety, tolerability, and pharmacokinetic (PK) profile of RTA 901 administered orally, once-daily

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in healthy adult volunteers.  RTA 901 was well tolerated in both single and multiple ascending dose (SAD and MAD) studies across all dose groups with no safety signals, drug discontinuations, or serious adverse events (SAEs).  Additionally, we observed an acceptable PK profile with exposures greater than required for efficacy in preclinical animal models.  We plan to initiate additional Phase 1 studies to evaluate the PK and drug-drug interaction potential of RTA 901 in the first half of 2022 and a randomized, placebo-controlled Phase 2 study in diabetic peripheral neuropathic pain (DPNP) in the second half of 2022. We are the exclusive licensee of RTA 901 and have worldwide commercial rights.

Programs in Chronic Kidney Disease

We and our strategic collaborator are developing bardoxolone for the treatment of CKD in multiple indications, including CKD caused by Alport syndrome, autosomal dominant polycystic kidney disease (ADPKD), and type 1 and 2 diabetic CKD.  CKD is characterized by a progressive worsening in the rate at which the kidney filters waste products from the blood.  Declining kidney function leads to the buildup of high levels of waste products in the blood that cause the patient to suffer symptoms, such as nausea and fatigue, and develop complications including high blood pressure, anemia, weak bones, poor nutritional health, and nerve damage.

We received a CRL from the FDA in February 2022 with respect to its review of our NDA for bardoxolone in the treatment of patients with CKD caused by Alport syndrome.   The CRL indicated that the FDA cannot approve the NDA in its present form.  Based on its review, the FDA concluded that it does not believe the submitted data demonstrates that bardoxolone is effective in slowing the loss of kidney function in patients with Alport syndrome and reducing the risk of progression to kidney failure and has requested additional data to support the efficacy and safety of bardoxolone. Their conclusion was based on efficacy and safety concerns primarily set forth in the FDA’s briefing book and discussed at the Cardiovascular and Renal Drugs Advisory Committee meeting held on December 8, 2021.

The FDA stated that the issues could be resolved by providing evidence of effectiveness that includes evidence from an adequate and well-controlled study showing a clinically relevant effect on the rate of loss of kidney function in patients with Alport syndrome or, alternatively, an effect on a clinical outcome (i.e., an endpoint that captures how patients with Alport syndrome feel, function, or survive).  In addition, the FDA stated that we would need to address whether bardoxolone has a clinically relevant effect on the QT interval and show that the demonstrated clinical benefits of bardoxolone outweigh its risks.  The FDA welcomed continued discussion on the details of a path forward.  We plan to work closely with the FDA to bring this important medicine to patients in the US.

Bardoxolone for CKD Caused by Alport Syndrome

Alport syndrome is a rare, genetic form of CKD caused by mutations in the genes encoding type IV collagen, which is a major structural component of the glomerular basement membrane (GBM) in the kidney.  Patients with CKD caused by Alport syndrome experience a progressive worsening of the kidney’s capacity to filter waste products out of the blood, which can lead to end-stage kidney disease (ESKD) and the need for chronic dialysis treatment or a kidney transplant.  Alport syndrome affects both children and adults.  In patients with the most severe forms of the disease, approximately 50% progress to dialysis by age 25, 90% by age 40, and nearly 100% by age 60.  According to the Alport Syndrome Foundation, Alport syndrome affects approximately 30,000 to 60,000 people in the United States.  There are currently no approved therapies to treat CKD caused by Alport syndrome.

We completed the Phase 3 CARDINAL study in November 2020.  The study met its primary and key secondary endpoints at the end of Year 1, and on November 9, 2020, we announced that the Phase 3 CARDINAL study met its primary and key secondary endpoints at the end of Year 2.  Bardoxolone was generally reported to be well tolerated in this study, and the safety profile was similar to that observed in prior trials.  

On March 1, 2021, we submitted our NDA for bardoxolone for the treatment of CKD caused by Alport syndrome to the FDA.  On April 26, 2021, the FDA accepted for filing our NDA, set the Prescription Drug User Fee Act (PDUFA) date for February 25, 2022, and stated that the FDA also planned to hold an advisory committee meeting to discuss the application.  On December 8, 2021, the Cardiovascular and Renal Drugs Advisory Committee voted no on the question of whether the provided evidence demonstrated that bardoxolone is effective in slowing the progression of CKD in patients with Alport syndrome and that its benefits outweigh its risks.

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On February 25, 2022, we received a CRL from the FDA with respect to its review of our NDA for bardoxolone in the treatment of patients with CKD caused by Alport syndrome. We will continue to work with the FDA to confirm our next steps on our Alport syndrome program.

Regarding non-U.S. regulatory applications for bardoxolone in the treatment of patients with CKD caused by Alport syndrome, on October 28, 2021, we submitted an MAA to the European Medicines Agency (EMA), and on July 27, 2021, our strategic collaborator in CKD in Japan, Kyowa Kirin, submitted an NDA in Japan to the Ministry of Health, Labour and Welfare (MHLW).  Both applications are currently under review. The FDA and the EC have granted orphan drug designation to bardoxolone for the treatment of Alport syndrome.

We recently received the 120-day List of Questions (LOQ) from the EMA.  We are in the process of reviewing the questions and preparing our responses.  

Bardoxolone for Autosomal Dominant Polycystic Kidney Disease

ADPKD is a rare and serious hereditary form of CKD caused by a genetic defect in PKD1 or PKD2 genes leading to the formation of fluid-filled cysts in the kidneys and other organs.  Cyst growth can cause the kidneys to expand up to five to seven times their normal volume, leading to pain and progressive loss of kidney function.  ADPKD affects both men and women of all racial and ethnic groups and is the leading inheritable cause of kidney failure with an estimated diagnosed population of 140,000 patients in the United States.  Despite current standard of care treatment, an estimated 50% of ADPKD patients progress to ESKD and require dialysis or a kidney transplant by 60 years of age.   The FDA and the EC have granted orphan drug designation to bardoxolone for the treatment of ADPKD.

We are currently enrolling patients in FALCON, an international, multi-center, randomized, double-blind, placebo-controlled trial studying the safety and efficacy of bardoxolone in patients with ADPKD randomized one-to-one to active drug or placebo.  FALCON is enrolling patients in a broad range of ages, 18 to 70 years old, with an estimated glomerular filtration rate (eGFR) between 30 to 90 mL/min/1.73 m².  We recently filed a protocol amendment with the FDA and requested a Type A meeting to discuss the overall ADPKD development program including the recently submitted major protocol amendment.  The major protocol amendment changes include increases in the sample size from 550 to 850 patients, addition of adolescent (12 to 17 years) patients with ADPKD, removal of the off-treatment period (Week 48 – Week 52) during Year 1, change of the primary endpoint of off-treatment eGFR change from baseline at Week 52 (or 4 weeks after drug discontinuation in Year 1) to eGFR change from baseline at Week 108 (8 weeks after planned drug discontinuation at Week 100), addition of an exploratory endpoint of eGFR change from baseline at Week 112 (12 weeks after planned drug discontinuation at Week 100), and addition of a sub study with ambulatory blood pressure monitoring.

Pursuant to the protocol amendment, patients will be treated with bardoxolone or placebo for 100 weeks followed by a twelve-week withdrawal period.  The trial will remain blinded until study completion.  All patients will be asked to return at Week 108 independent of the time of study drug discontinuation.  In November 2021 we announced a plan to increase the FALCON sample size from 550 to 700 patients.  In order to maintain statistical power, with changes being made to the primary endpoint, the sample size has been increased from 550 to 850 patients in our recently submitted protocol amendment.  The secondary endpoint is the eGFR change from baseline at Week 100.  The statistical analysis plan (SAP), detailing the proposed analyses, has also been submitted.  More than 500 patients are currently enrolled in the study.

Bardoxolone in Patients with CKD at Risk of Rapid Progression

MERLIN was a proof of concept, multi-center, double-blind, placebo-controlled, Phase 2 trial to evaluate the safety and efficacy of bardoxolone in patient populations with CKD secondary to varying etiologies at risk of rapid progression.  MERLIN enrolled patients from ages 18 to 75 years old, with eGFR ≥ 20 to < 60 mL/min/1.73 m², and other risk factors for rapid progression of kidney disease.  Eighty-one patients were enrolled and randomized 1:1 to either bardoxolone or placebo.  The primary endpoint was the change in eGFR from baseline after 12 weeks of treatment, and the secondary endpoint was the change in eGFR from baseline after 12 weeks of treatment by CKD etiology.  MERLIN also incorporated an exploratory efficacy endpoint of change in eGFR from baseline at off-treatment Days 3, 7, 14, 21, 28, and 35 to examine the time period for resolution of the acute pharmacodynamic (PD) effects of bardoxolone.

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MERLIN met the primary endpoint at Week 12.  Treatment with bardoxolone resulted in a higher mean eGFR change from baseline compared to placebo, with a placebo-corrected statistically significant mean difference of 7.71 mL/min/1.73 m² (n=81, p < 0.0001, CI: 5.18, 10.24) at Week 12.  When eGFR data were broken down by different etiologies of CKD (secondary endpoint), mixed-model repeated measures (MMRM) analysis showed results favor bardoxolone over placebo in all subgroups.  

The change in eGFR in patients treated with bardoxolone was maximal in MERLIN at Week 8, two weeks after the last planned dose titration at Week 6.  Mean eGFR change from baseline began to decrease within three days after the planned cessation of treatment at Week 12.  A statistically significant difference in mean eGFR change from baseline was observed for the bardoxolone group compared to the placebo group through Day 14 off-treatment, with a placebo-corrected mean difference of 3.70 mL/min/1.73 m² (p = 0.0040, CI: 1.22, 6.18).  At Day 21 off-treatment and beyond, there was no significant placebo-corrected difference between the placebo and bardoxolone groups, suggesting the acute effects of bardoxolone had resolved by Day 21 off-treatment.   Consistent with previous studies, treatment with bardoxolone at doses up to 30 mg and for up to 12 weeks was generally safe and well tolerated.

The MERLIN data were submitted as an amendment to our NDA.  However, the FDA did not accept this amendment as a major amendment.  

Our Strategy

Our goal is to be a leader in the discovery, development, and commercialization of small-molecule therapies for the treatment of severe and life-threatening diseases.  Our strategy includes the following key components:

Programs in Neurological Diseases

• Complete the rolling submission of our NDA for omaveloxolone for the treatment of patients with FA by the end of the first quarter of 2022 and prepare for commercial launch in the United States;

• Continue the regulatory procedures and submissions required for filing an MAA with the EMA for approval of omaveloxolone for the treatment of patients with FA; and

• Initiate a phase 2 study of RTA 901 for the treatment of diabetic peripheral neuropathic pain in the second half of 2022.

Programs in Chronic Kidney Disease

• Continue our efforts with regulatory agencies around the world, seeking approval of bardoxolone for patients with Alport syndrome, specifically:

o We will continue to work with the FDA to confirm our next steps on our Alport syndrome program;

o We will continue to work with the EMA in their review of our MAA in the European Union (EU); and

o We will continue to support Kyowa Kirin with their discussions with the Pharmaceuticals and Medical Devices Agency of Japan (PMDA);

• Pursue development of bardoxolone for patients with ADPKD including:

o Meet with FDA to discuss the overall ADPKD development program including the recently submitted major protocol amendment; and

o Complete enrollment of the Phase 3 FALCON study;

• Continue to develop long-term safety data from patients in EAGLE, our open-label, extended access trial in patients with CKD caused by Alport syndrome who participated in the CARDINAL trial and patients with ADPKD who participated in the FALCON trial; and

• Based on the outcome of the AYAME and FALCON trials, and our discussions with the FDA regarding the bardoxolone program, we will decide future development plans for bardoxolone in additional forms

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of CKD. AYAME is a Phase 3 study for the treatment of diabetic kidney disease that is being conducted by our strategic collaborator, Kyowa Kirin, in Japan.

Other Clinical Programs

• Continue to advance next generation Nrf2 activators through preclinical studies into clinical development;

• Leverage our multiple technologies and relationships to discover new molecules and explore preclinical proof of concept; and

• Pursue business development opportunities to further expand our robust pipeline of drug candidates.

Our Pipeline

¹Rolling NDA submission initiated in the first quarter of 2022.  We expect to complete submission of the NDA by the end of the first quarter of 2022.

²DPNP: Diabetic peripheral neuropathic pain.

³On February 25, 2022, we received a CRL from the FDA.  We will continue to work with the FDA to confirm our next steps on our Alport syndrome program. MAA in EU is under review.

⁴AYAME study conducted in Japan by our strategic collaborator in CKD, Kyowa Kirin.  Kyowa Kirin expects the last patient out in the second half of 2022.  

⁵Based on the outcome of AYAME and FALCON trials, and our discussions with the FDA regarding the bardoxolone program, we will decide future development plans for bardoxolone in additional forms of CKD.

An In-Depth Review of Our Programs

Foundational Biology of Our Nrf2 Activators

Chronic, unresolved inflammation and impaired cellular metabolism are key features of many diseases.  Inflammation is an integral component of the normal immune response that occurs when cells encounter harmful stimuli, such as invading pathogens, damaged cells, or irritants.  During inflammation, cells activate inflammatory processes and complexes that increase the production of cytokines, which are proteins that recruit and activate immune cells.

Inflammation and mitochondrial metabolism are closely associated.  The mitochondria are often called the “powerhouses” of the cell as they produce the energy that the cell needs to function.  This energy is produced by converting fatty acids and glucose into adenosine triphosphate (ATP) by a process called oxidative phosphorylation.  During inflammation, mitochondrial metabolism is temporarily reprogrammed to suppress oxidative phosphorylation. Instead of primarily making ATP, the mitochondria divert fatty acids and glucose to increase the production of pro-inflammatory mediators.  During this reprogramming, the mitochondria release reactive oxygen species (ROS) that can directly attack pathogens and amplify the production of cytokines.

In a normal immune response, the resolution of inflammation begins after the harmful stimuli have been eliminated.  Nrf2 is a protein that plays a key role in the resolution of inflammation by regulating the expression of specific genes involved in mitochondrial metabolism, redox balance, and cytokine production.  When activated, Nrf2

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promotes the resolution of inflammation by restoring mitochondrial function, reducing oxidative stress, and inhibiting pro-inflammatory signaling.  In many chronic and genetic diseases, Nrf2 activity is suppressed, and the resolution of inflammation fails to occur or is inadequate, leading to persistent mitochondrial dysfunction, excess production of ROS, and production of cytokines.  These processes cause chronic inflammation, which can ultimately lead to tissue damage and loss of organ function.  

¹ Inflammation and mitochondrial metabolism are closely associated.  In many inflammatory diseases, mitochondrial metabolism becomes dysfunctional and is reprogrammed to suppress the production of ATP and increase the production of ROS.

² Once released from the mitochondria, ROS amplify pro-inflammatory signaling pathways, such as NF-κB, and increase the production of cytokines such as TNFα, IL-1β, TGFβ, and IL-6.  The persistent production of cytokines, impaired redox balance, and mitochondrial dysfunction contribute to chronic inflammation, which can ultimately lead to fibrosis and reduced organ function.

³ By binding to Keap1, omaveloxolone and bardoxolone stabilize Nrf2 and increase its activity.  Nrf2 is a transcription factor that plays a key role in the resolution of inflammation by regulating the expression of genes involved in mitochondrial metabolism, redox balance, and cytokine production.

⁴ Nrf2 activation normalizes mitochondrial metabolism and increases ATP production.  It also increases the expression of antioxidant enzymes and systems that work together to reduce the levels of ROS and restore redox balance.

⁵ By normalizing mitochondrial metabolism and restoring redox balance, Nrf2 inhibits pro-inflammatory signaling.  In addition, Nrf2 directly suppresses the expression of pro-inflammatory cytokine genes by inhibiting their transcription.

Omaveloxolone and bardoxolone are Nrf2 activators that selectively bind to Keap1, a protein that governs the activity of Nrf2 in response to cellular stress.  By binding to Keap1, omaveloxolone and bardoxolone stabilize Nrf2 and increase its activity.  Since mitochondrial dysfunction, oxidative stress, and inflammation are features of many diseases, Nrf2 activators, such as omaveloxolone, bardoxolone, and our next-generation Nrf2 activators, may have many potential clinical applications.  Omaveloxolone and bardoxolone have been extensively studied by many investigators.  Their tissue-protective and therapeutic effects have been observed in many preclinical models and are associated with meaningful improvements in hallmarks of disease progression, such as inflammation, tissue remodeling, and fibrosis.  Our Nrf2 activators are the subject of over 400 peer-reviewed publications and have been studied in over 50 preclinical animal models in which they have demonstrated anti-inflammatory, tissue-protective, or anti-fibrotic effects in the kidney, heart, brain, liver, lungs, vasculature, fat tissue, pancreas, bone marrow, intestines, eyes, spinal cord, prostate, inner ear, and skin.

Programs in Neurological Diseases

We are developing omaveloxolone for the treatment of patients with FA, an inherited, debilitating, and degenerative neuromuscular disorder that is usually diagnosed during adolescence and can ultimately lead to premature death.  Because mitochondrial dysfunction is a key feature of many neuromuscular diseases, we believe

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omaveloxolone may be broadly applicable to treat neurological diseases by activating Nrf2 to normalize and improve mitochondrial function and ATP production.  In January 2022, we initiated rolling submission of our NDA for omaveloxolone for the treatment of patients with FA.  We expect to complete the submission of the NDA by the end of the first quarter of 2022.  We plan to pursue the development of omaveloxolone and our other Nrf2 activators for one or more additional neurological diseases.

We are also developing RTA 901 for the treatment of neurological diseases.  RTA 901 is a highly potent and selective C-terminal modulator of Hsp90, which has a critical role in mitochondrial function, protein folding, and inflammation.  RTA 901 has demonstrated profound efficacy in a wide range of animal models of neurological disease, including diabetic neuropathy, neuroinflammation, and neuropathic pain.  We plan to initiate a randomized, placebo-controlled Phase 2 study in DPNP in the second half of 2022.

Omaveloxolone in Patients with Friedreich’s Ataxia

We are developing omaveloxolone for the treatment of patients with FA.  Patients with FA experience progressive loss of coordination, muscle weakness, and fatigue, which commonly progresses to motor incapacitation and wheelchair reliance.  Based on literature and proprietary research, we believe FA affects approximately 5,000 children and adults in the United States and 22,000 individuals globally.  According to data provided by IQVIA in 2020, there are approximately 4,000 projected patients diagnosed with FA in the United States.  The FDA has granted Orphan Drug and Fast Track Designations to omaveloxolone for the treatment of FA.  The EC has granted Orphan Drug Designation in Europe to omaveloxolone for the treatment of FA.

Diagnosis of FA typically occurs by genetic testing, and approximately 75% of people in the United States with FA are diagnosed between six and 20 years of age.  Childhood-onset FA can occur as early as age five, is more common than later-onset FA, and normally involves more rapid disease progression.  Most FA patients have disease onset by approximately 13 to 15 years of age and, thereafter, have a mean duration until wheelchair use of 10 to 15 years.  The mean age of death for FA patients is 35 years.  Currently, there are no approved therapies for the treatment of FA.  Patients are usually given guidelines for certain lifestyle habits and are recommended to follow a diet that is low in iron and encouraged to take vitamins and supplements.

Initially we plan to concentrate our commercial efforts in the United States primarily in specialty clinics comprising eight FA Collaborative Clinical Research Network Sites in FA as disclosed by the Friedreich’s Ataxia Research Alliance (FARA), 22 ataxia clinics as disclosed by the National Ataxia Foundation, 225 Muscular Dystrophy Association centers as disclosed by the Muscular Dystrophy Association, and key neurology practices based on claims data.  If approved by regulatory authorities, omaveloxolone has the potential to be the first therapy for the treatment of FA.

Rationale for Development of Omaveloxolone in Friedreich’s Ataxia

FA is typically caused by a trinucleotide repeat expansion in the first intron of the frataxin gene, which encodes the mitochondrial protein frataxin.  Pathogenic repeat expansions can lead to impaired transcription and reduced frataxin expression, which can lead to mitochondrial iron overload and poor cellular iron regulation, increased sensitivity to oxidative stress, and impaired mitochondrial ATP production.  Because impaired ATP production in FA patients likely contributes to the progressive muscle weakness, decreased coordination, exercise intolerance, and fatigue observed in these patients, as well as other disease manifestations, we believe that omaveloxolone may be effective in treating this indication.

In FA patients, mitochondrial function is correlated with measures of neurologic function.  Further, data demonstrate that Nrf2 signaling is significantly impaired in FA patients, resulting in impairment of antioxidant defense mechanisms, while silencing of frataxin gene expression has been linked to decreases in expression of Nrf2.  Additionally, omaveloxolone has been shown in vitro to restore mitochondrial activity in fibroblasts isolated from FA patients.  Accordingly, we believe that Nrf2 activation by omaveloxolone may result in a clinical benefit to FA patients.

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MOXIe Part 2 Study Results

Part 2 of our Phase 2 trial, called MOXIe (MOXIe Part 2), was an international, multi-center, double-blind, placebo-controlled, randomized registrational study, that enrolled 103 patients with FA at 11 trial sites in the United States, Europe, and Australia.  MOXIe Part 2 is one of the largest global, interventional trials ever completed in FA.  Patients were randomized one-to-one to omaveloxolone or placebo.  MOXIe Part 2 was completed in October 2019. The primary analysis population included patients without pes cavus (n=82), a musculoskeletal foot deformity that may interfere with the patient’s ability to perform some components of the neurological exam used to score the primary endpoint of the study.  Safety analyses were evaluated in the all-randomized population (n=103).

The primary endpoint for the trial was the change in the Modified Friedreich’s Ataxia Rating Scale (mFARS) score for omaveloxolone relative to placebo after 48 weeks of treatment.  The mFARS is a physician-assessed neurological rating scale used to measure FA disease progression.  The FDA agreed that mFARS was an acceptable primary endpoint to evaluate the effect of omaveloxolone for the treatment of patients with FA.  Omaveloxolone treatment demonstrated statistically significant evidence of efficacy for the primary endpoint of the trial, producing a placebo-corrected -2.40 point mean improvement in mFARS (n=82; p=0.014).  Patients treated with omaveloxolone experienced a mean improvement in mFARS of -1.55 points from baseline, while patients treated with placebo experienced a mean worsening in mFARS of +0.85 points from baseline.

Further, the observed placebo-corrected improvements in mFARS were time-dependent, increasing over the course of treatment with the largest improvement observed after 48 weeks of treatment.  

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Omaveloxolone treatment also demonstrated statistically significant evidence of efficacy in mFARS at Week 48 when the pes cavus patients were included in the analysis (the all-randomized population).  In the all-randomized population, omaveloxolone treatment produced a statistically significant, placebo-corrected -1.93 point mean improvement in mFARS (n=103; p=0.034).  Omaveloxolone treatment also improved several secondary endpoints included in the trial.

An analysis of the change in mFARS from baseline demonstrated that patients in the omaveloxolone arm performed numerically better than placebo on all subsections of the mFARS exam.  Furthermore, omaveloxolone patients in subgroups that typically have a worse prognosis and progress faster, including patients with longer GAA1 repeats, patients with cardiomyopathy, non-ambulatory patients, and younger patients, on average, experienced a larger placebo-corrected improvement in mFARS compared to the study population as a whole.

Additionally, all secondary endpoints either favored the omaveloxolone arm or were neutral.  Patients on omaveloxolone experienced a nominal improvement in the Activities of Daily Living (ADL) questionnaire, with all nine questions favoring the omaveloxolone arm.  On average, ADL scores for patients on omaveloxolone did not change from baseline, while placebo-treated patients worsened.  Both patient global impression of change (PGIC) and clinical global impression of change (CGIC) numerically favored omaveloxolone, and improvement in PGIC correlated with the observed improvement in mFARS.

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Omaveloxolone was reported to be generally well-tolerated.  Four (8%) omaveloxolone patients and two (4%) placebo patients discontinued trial drug due to an AE.  The reported AEs were generally mild to moderate in intensity, and the most common AEs (i.e., reported in > 10% of omaveloxolone-treated patients) observed more frequently (>5% difference) in omaveloxolone compared to placebo were headache, nausea, increased aminotransferases, fatigue, abdominal pain, diarrhea, oropharyngeal pain, muscle spasms, back pain, and decreased appetite.  Increases in aminotransferases are a pharmacological effect of omaveloxolone, which increases production of aminotransferases in vitro, which we believe are related to restoration of mitochondrial function.  In MOXIe Part 2, the aminotransferase increases were associated with improvements (reductions) in total bilirubin and were not associated with any evidence of liver injury.  

In MOXIe Part 2, the overall rate of SAEs was low, with five patients in the omaveloxolone group and three patients in the placebo group reporting SAEs. No new safety signals were identified, and the reported SAEs were sporadic and generally expected in FA patients.  In the patients who reported SAEs while receiving omaveloxolone, none led to discontinuation.  Atrial fibrillation was balanced and reported in one omaveloxolone and one placebo patient.  One omaveloxolone patient reported anemia which was considered unrelated to omaveloxolone.  One omaveloxolone patient reported multiple SAEs, including viral upper respiratory tract infection and laryngitis, along with palpitations, non-cardiac chest pain, and sinus tachycardia.  While several of this patient’s SAEs were considered possibly related to omaveloxolone, no imbalances in infection or arrhythmia AEs were observed overall in the trial.

At a Type C meeting in August 2020, the FDA provided us guidance that, although it did not have concerns with the reliability of the mFARS primary endpoint results from MOXIe Part 2, it was not convinced that the results from MOXIe Part 2, as a single study, were sufficient to support approval.  We proposed the Baseline-Controlled Study to supplement the MOXIe Part 2 findings.

MOXIe Extension Study

The open-label MOXIe Extension trial is ongoing, with a total of 149 patients enrolled (57 patients from MOXIe Part 1 and 92 patients from MOXIe Part 2).  A total of 73 out of 75 (97%) patients without pes cavus who completed MOXIe Part 2 were enrolled in the MOXIe Extension, including 39 patients previously randomized to placebo (the placebo-to-omaveloxolone group) and 34 patients previously randomized to omaveloxolone (the omaveloxolone-to-omaveloxolone group).  Due to the COVID-19 pandemic, not all patients had mFARS assessments performed at each time point.

Baseline-Controlled Study Results

The Baseline-Controlled Study evaluated the efficacy of omaveloxolone treatment using a baseline-controlled analysis design in which patients serve as their own controls, and changes in mFARS during the pre-treatment period

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in either MOXIe Part 1 or Part 2 are compared to changes in mFARS during the treatment period in the MOXIe Extension.  Efficacy was assessed by comparing the annualized rate of change in mFARS during the pre-treatment period to the annualized rate of change in mFARS during the treatment period for patients who received approximately 48 weeks of omaveloxolone in the MOXIe Extension (the paired difference).  The primary analysis population included MOXIe Part 1 patients and Part 2 patients randomized to placebo without pes cavus who had an mFARS assessment at Week 48 of the MOXIe Extension.  The Baseline-Controlled Study demonstrated a statistically significant -3.76 point improvement (p=0.0022) for the primary endpoint of the paired difference in annualized mFARS slopes between the treatment and pre-treatment periods in the primary analysis population.  

These results were provided to the FDA, and after an internal review, the FDA concluded that it did not believe the results strengthened the results of MOXIe Part 2.  The FDA suggested an additional exploratory analysis to evaluate whether omaveloxolone treatment has an effect on disease course using patients randomized to placebo during MOXIe Part 2 who then went on study drug in the MOXIe Extension.  We refer to the additional analysis as the Delayed-Start Analysis.

Delayed-Start Analysis Results

The intent of the post-hoc Delayed-Start Analysis is to evaluate whether omaveloxolone has a persistent effect on FA disease course.  Conceptually, this analysis evaluates whether the treatment effect that was observed in the placebo-controlled MOXIe Part 2 study is maintained in the MOXIe Extension study when all patients are receiving omaveloxolone.  If the treatment effect is maintained between those originally randomized to placebo (the placebo-to-omaveloxolone group) versus those originally randomized to omaveloxolone (the omaveloxolone-to-omaveloxolone group), then it demonstrates evidence of a persistent effect on the course of the disease.  If the treatment effect is not maintained, and the patients originally randomized to placebo are able to achieve the same absolute response and “catch up” to the patients initially randomized to omaveloxolone, the results are consistent with a symptomatic treatment that does not affect the underlying course of the disease.

Two timepoints were used in the analysis.  The first timepoint was at Week 48, the final week of treatment in the placebo-controlled MOXIe Part 2 study.  The second timepoint was at Week 72 of the open-label MOXIe Extension in which all patients received omaveloxolone.  A non-inferiority test was used to evaluate if the difference in mFARS between groups observed at the first timepoint was maintained or non-inferior at the second timepoint.  The analysis methods, including the specified non-inferiority margin, were based on literature (Liu-Seifert, 2015a, 2015b).  A decrease in mFARS (i.e., negative change from baseline) shows improvement.  When comparing treatment groups using this methodology, maintaining a negative difference between treatment groups in mFARS is evidence of a persistent treatment effect.  

February 2021 Data Cut-Off (Used in Pre-NDA Briefing Documents)

The Delayed-Start Analysis used in Pre-NDA briefing documents submitted to the FDA was performed using data as of February 2021.  In this analysis, 50 out of 73 patients from MOXIe Part 2 without pes cavus who enrolled into MOXIe Extension had at least 72 weeks of exposure in MOXIe Extension.

The analysis demonstrated that the between-group difference in mFARS observed at the end of the placebo-controlled MOXIe Part 2 period (LS mean difference = -2.26 ± 1.03) was preserved at MOXIe Extension Week 72 in the delayed-start period (LS mean difference = -3.37 ± 1.51). Consistent with a persistent treatment effect on disease, the upper limit of the 90% CI for the difference estimate was less than zero (-0.362), meeting the threshold for demonstrating significant evidence of non-inferiority.

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Delayed-Start Analysis Primary Endpoint (Non-Inferiority Test)¹

	Placebo-Controlled Week 48 (Δ1)	Delayed-Start Week Ex. 72 (Δ2)
Difference (LS Mean ± SE)	-2.26 ± 1.03 p=0.029	-3.37 ± 1.51 p=0.026
Estimate = Δ2 – 0.5 × Δ1	-2.24 ± 1.47
Upper Limit of 1-sided 90% CI for Estimate	-0.362
1Non-Inferiorty test performed using a MMRM analysis with a Toeplitz covariance structure.

A longitudinal analysis used to calculate annualized slopes incorporating all available data from the MOXIe Extension showed similar slopes in mFARS for the placebo-to-omaveloxolone group (0.29 points per year) when compared to the omaveloxolone-to-omaveloxolone group (0.17 points per year) with no significant difference between slopes (p=0.85).  In MOXIe Extension, omaveloxolone-treated patients have been progressing at a rate that is >75% less than the approximately two points per year that patients progressed in a recent large natural history study (Patel, 2016).

MOXIe Extension Annualized mFARS Slope (± SE)

Omav-Omav (n=34)	Placebo-Omav (n=39)	Difference
0.17 ± 0.61	0.29 ± 0.68	-0.12 ± 0.62 p=0.85

The graphical representation of changes from baseline in mFARS for omaveloxolone and placebo groups shows the separation at the end of the placebo-controlled period is maintained in the open-label period at Extension Week 72.

Change from Baseline in mFARS (Patients without Pes Cavus)

¹Figure Notes: Data plotted are LS means mFARS change from baseline ± standard error estimated from an MMRM analysis using an unstructured covariance structure^.

Many of the visits at Week 48 and Week 72 of the MOXIe extension were scheduled during the initial peak of COVID-19 cases during Spring to Fall 2020. The mFARS assessment must be conducted in the clinic, and many in-clinic visits did not occur due to COVID-19 related travel restrictions and site closures during this period.  Apart from the data at MOXIe Extension Week 48, parallel trajectories were seen in LS Mean mFARS change from baseline between the placebo-to-omaveloxolone group and the omaveloxolone-to-omaveloxolone group in MOXIe Extension.

August 2021 Data Cut-Off (Used in Clinical Modules of NDA Submission)

The Delayed-Start Analysis used in clinical modules in our initial NDA rolling submission for omaveloxolone was updated as of August 2021.  In this updated analysis 58 of 73 patients from MOXIe Part 2 without pes cavus who

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enrolled into MOXIe Extension had at least 72 weeks of exposure in MOXIe Extension, and 28 of these patients had at least 120 weeks of exposure in the Moxie Extension.

Results of this analysis demonstrated that the between-group difference in mFARS observed at the end of the placebo-controlled MOXIe Part 2 period (least squares mean difference = -2.25 ± 1.07) was preserved at MOXIe Extension Week 72 in the delayed-start period (LS mean difference = -3.51 ± 1.45).  Consistent with a persistent treatment effect on disease, the upper limit of the 90% CI for the difference estimate was less than zero (-0.615), meeting the threshold for demonstrating significant evidence of non-inferiority.

Delayed-Start Analysis Primary Endpoint (Non-Inferiority Test)¹

	Placebo-Controlled Week 48 (Δ1)	Delayed-Start Week Ex. 72 (Δ2)
Difference (LS Mean ± SE)	-2.25 ± 1.07 p=0.037	-3.51 ± 1.45 p=0.016
Estimate = Δ2 – 0.5 × Δ1	-2.39 ± 1.38
Upper Limit of 1-sided 90% CI for Estimate	-0.615
1Non-Inferiorty test performed using a MMRM analysis with a Toeplitz covariance structure.

The graphical representation of changes from baseline in mFARS for omaveloxolone and placebo groups shows the separation at the end of the placebo-controlled period is maintained in the open-label period at Extension Week 72 and beyond.

Change from Baseline in mFARS (Patients without Pes Cavus)

Many of the visits at Week 48 and Week 72 of the MOXIe Extension were scheduled during the initial peak of COVID-19 cases during Spring to Fall 2020.  The mFARS assessment must be conducted in the clinic, and many in-clinic visits did not occur due to COVID-19 related travel restrictions and site closures during this period.  Apart from the data at MOXIe Extension Week 48, parallel trajectories were seen in LS Mean mFARS change from baseline between the placebo-to-omaveloxolone group and the omaveloxolone-to-omaveloxolone group in MOXIe Extension.

A longitudinal analysis was also performed to calculate annualized slopes incorporating all available data from the MOXIe Extension, which showed similar mean slopes in mFARS for the placebo-to-omaveloxolone group (0.45

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± 0.38 points per year) when compared to the omaveloxolone-to-omaveloxolone group (0.27 ± 0.59 points per year) with no significant difference between slopes (difference = -0.18 ± 0.67; p=0.79). In MOXIe Extension, omaveloxolone-treated patients have been progressing at a rate that is >75% less than the approximately two points per year that patients progressed in a recent large natural history study (Patel, 2016).

MOXIe Extension Annualized mFARS Slope (± SE)

Omav-Omav (n=34)	Placebo-Omav (n=39)	Difference
0.27 ± 0.59	0.45 ± 0.38	-0.18 ± 0.67 p=0.79

Natural History mFARS and MOXIe Extension mFARS Slope¹

¹A MMRM was used to fit change from baseline mFARS using all available data from MOXIe Extension through Extension Week 120 to estimate annualized slopes based on MOXIe Part 2 randomized treatment group. The slopes were calculated using a linear model with time, treatment, and the interaction of treatment and time as fixed factors.   Natural History mean change ± SE per year is based on Patel et. al. Ann. Clin. Transl. Neurol. 2016

Overall, these results from the Delayed-Start Analysis using two different data cut off dates indicate a persistent omaveloxolone treatment effect on the disease course of FA.  Patients who received omaveloxolone during the double-blind MOXIe Part 2 had a benefit that could not be achieved by patients initially randomized to placebo who began omaveloxolone one year later in MOXIe Extension.  Notably, patients previously randomized to omaveloxolone in MOXIe Part 2 continued to show mean mFARS values that were similar to their original baseline after over three years of treatment.

We believe that the results of the Delayed-Start Analysis provide evidence supporting the positive primary endpoint findings in MOXIe Part 2 and provide additional evidence of the effectiveness of omaveloxolone in FA.

Regulatory Interactions

A Delayed-Start Analysis using data from February 2021 was provided in the Type C briefing document submitted to the FDA in the second quarter of 2021.  These results, together with a conceptual proposal for a confirmatory study to support an accelerated approval pathway, were reviewed by the FDA prior to the scheduled Type C meeting. The FDA stated that, after their preliminary review of the briefing materials, the most appropriate format for discussion was a pre-NDA meeting. They also requested that we focus the new briefing materials on applicable pre-NDA topics.

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Based on the communication from the FDA, we requested a pre-NDA meeting.  In the third quarter of 2021 we completed our pre-NDA meeting with the FDA.  The purpose of the pre-NDA meeting was to discuss the content of Reata’s planned NDA submission including the nonclinical data and chemistry manufacturing controls (CMC) packages, data standard plan, and the overall content plan.

In the meeting, we stated that we believed that the MOXIe data, along with the Delayed-Start Analysis, would provide sufficient clinical data to support a full approval. The FDA stated that the proposed primary and supportive efficacy data appear reasonable, though the Delayed-Start Analysis was viewed as exploratory.  The FDA noted that the ability of the data to support full approval, and the adequacy of the data and the determination of which data may be supportive of efficacy, would be a matter of review.  In response to our other questions about the contents of the NDA, the FDA exercised its discretion based on the seriousness of the indication and unmet medical need, subject to review, to permit us to submit the results of certain clinical pharmacology and nonclinical studies after approval.  The additional studies include a thorough QT study with omaveloxolone, nonclinical metabolite toxicity studies, and six-month and two-year nonclinical carcinogenicity studies.  The need for a drug-drug interaction study with a moderate CYP3A inducer will be established upon review of the adequacy of our submitted physiological based PK model.

On November 18, 2021, the FDA granted omaveloxolone Fast Track Designation for the treatment of FA, providing eligibility for FDA programs such as Priority Review and rolling submission of the NDA, if relevant criteria are met. The FDA granted our request for a rolling submission and in January 2022, we initiated rolling submission of our NDA, which included the MOXIe Extension data from the cut-off of August 2021 that had not previously been provided to the FDA.  We expect to complete the submission of the NDA by the end of the first quarter of 2022.  This NDA is supported by the efficacy and safety data from MOXIe Part 1, Part 2, and MOXIe Extension studies as noted above.

We are continuing to complete the regulatory procedures and submissions required prior to filing a marketing application in Europe for approval for omaveloxolone for the treatment of patients with FA.  This includes securing agreement on our Pediatric Investigation Plan this year.

Potential Safety Review Topics

Below is a discussion of potential safety topics that may arise during NDA review and how we plan to respond. The safety topics of interest were closely monitored during the development program, and the findings are consistent with what would be expected based on the known pharmacological properties of omaveloxolone. This list is not comprehensive, and other matters may arise during the NDA review process.  

Aminotransferases

Omaveloxolone treatment has been shown to increase alanine (ALT) and aspartate aminotransferases (AST) levels in the serum, and we have been able to characterize this profile in non-clinical and clinical studies to differentiate it from drug-induced hepatotoxicity.

In MOXIe Part 2, increases in ALT, AST, and gamma-glutamyl transferase (GGT) levels that exceeded the upper limit of normal (ULN) occurred in a greater percentage of omaveloxolone-treated patients than placebo-treated patients. The increases were transient, occurred shortly after initiation of treatment, peaked approximately two to four weeks after treatment initiation, and trended downward while patients remained on the study drug. At the post-treatment visit (four weeks after stopping the study drug), aminotransferase levels generally decreased further and returned to near baseline levels. Moreover, aminotransferase increases were generally mild or moderate, and for most omaveloxolone-treated patients (68.6%), ALT and AST levels remained less than three times ULN.  Elevations in aminotransferases and GGT were not associated with elevations in total bilirubin and no cases meeting Hy’s law criteria have been reported with omaveloxolone treatment.

We have demonstrated that omaveloxolone pharmacologically induces gene expression of aminotransferases, including ALT and AST, which reflects metabolic adaptations coordinated by Nrf2, rather than liver toxicity (Lewis, 2021; Zhang, 2006).  Genetic manipulation of Nrf2 in animal models affects the expression and serum activity of ALT and AST, and treatment with omaveloxolone analogs increases ALT and AST expression in cultured cells and in vivo

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without any liver toxicity.  Additionally, omaveloxolone analogs are protective in multiple models of hepatotoxicity (e.g., acetaminophen, concanavalin A, aflatoxin, and carbon tetrachloride models).  

Weight Changes

Omaveloxolone treatment has been shown to reduce body weight in some patients, and we and our collaborators have been able to characterize the weight changes in nonclinical studies.

In MOXIe Part 2, a mean decrease of -1.35 ± 3.585 (SD) kg in weight relative to baseline was observed with omaveloxolone treatment over 48 weeks.  A similar trend of weight decrease has been observed in the patients during the Moxie Extension study.  Adolescent patients treated with omaveloxolone had mean changes in weight that were comparable to adult patients treated with placebo. Overall, there were no meaningful differences in weight loss by age, sex, geographic region, or baseline pes cavus status. In MOXIe Part 2, decreases in weight of at least 5% were observed more frequently in omaveloxolone-treated patients (34% of patients, n=17) than placebo-treated patients (19.2% of patients, n=10).  No patients discontinued treatment with omaveloxolone due to weight loss or appetite loss.  Adverse events of weight loss associated with omaveloxolone treatment were uncommon. Weight loss can be managed in clinical practice by optimizing nutrition, or if needed, temporary discontinuation of omaveloxolone.

The observed decreases in body weight have also been previously observed with an analog of omaveloxolone. Decreases in body weight with bardoxolone were accompanied by significant reductions in waist circumference and improved glycemic control. Multiple studies in nonclinical models of diabetes and obesity have demonstrated that omaveloxolone analogs reduce fatty acid synthesis and promote fatty acid oxidation, thereby providing substrates for energy production (Shin, 2009). These effects are dependent on the presence of Nrf2 and are associated with improved glucose tolerance and insulin sensitivity, reduced body fat, preservation of muscle mass, and increased metabolism and energy expenditure (Camer, 2015; Saha, 2010; Shin, 2009). The observed decreases in body weight may therefore be explained by Nrf2-dependent changes in lipid metabolism, fatty acid oxidation, and glycemic control that have been observed in animal studies with omaveloxolone and analogs.  

Cardiovascular Safety

Cardiovascular safety was evaluated because cardiomyopathy is the most common cause of death in patients with FA. In addition, adverse cardiovascular events were observed in a previous bardoxolone clinical trial in patients with type 2 diabetes mellitus and Stage 4 CKD. Of note, risk factors for these events were identified and used as population selection criteria to mitigate cardiovascular risks in patients in subsequent studies. The entry criteria in omaveloxolone clinical trials were designed to mitigate potential cardiovascular risk for participants, and signals for heart failure were closely monitored during the studies.

Adverse Events Related to Cardiovascular Safety

In MOXIe Part 2, the number of patients reporting cardiac disorder treatment-emergent AEs (TEAEs) was similar for omaveloxolone-treated and placebo-treated patients. There were no omaveloxolone-treated patients reporting vascular disorder AEs compared with three placebo-treated patients. All cardiac disorder and vascular disorder AEs were mild or moderate in severity.  Overall, no meaningful difference in cardiac AEs, including cardiac failure or fluid overload events was observed between omaveloxolone-treated and placebo-treated patients.

Blood Pressure (BP)

In MOXIe Part 2, on average, no changes from baseline in SBP or DBP were observed at Week 48 in patients randomized to omaveloxolone or placebo. The profile of blood pressure over time across other subgroups was similar to the changes described above.

Echocardiograms

In MOXIe Part 2, treatment with omaveloxolone did not result in meaningful changes in echocardiogram parameters relative to baseline or compared with placebo-treated patients.

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Electrocardiograms

In MOXIe Part 2, treatment with omaveloxolone did not show meaningful changes in ECG parameters relative to either baseline or compared with placebo-treated patients.  

Brain Natriuretic Peptide (BNP)

In MOXIe Part 2, mean (± SD) BNP was slightly higher in omaveloxolone-treated patients compared to placebo-treated patients at baseline (omaveloxolone = 31.8 ± 31.43; placebo = 18.3 ± 25.43).  Small increases in BNP were observed with omaveloxolone treatment relative to placebo in MOXIe Part 2, with mean values returning to near baseline after withdrawal of drug.  Mean (± SD) change from baseline at Week 48 was 6.8 ± 30.30 in omaveloxolone-treated patients compared to 1.0 ± 19.29 in placebo-treated patients.  Overall, mean BNP values in omaveloxolone-treated patients remained below the ULN (<100 pg/ml), and only 2 (3.9%) patients had BNP values that exceeded 200 pg/mL through Week 48.  No patients reported TEAEs for BNP elevations, and there was only one patient with a TEAE of N-terminal prohormone brain natriuretic peptide (NT-pro-BNP) increased.  In this patient, no changes to dosing were made, and the patient had a normal BNP value at the last on-treatment visit at Week 48.  There were no associated AEs of fluid overload or cardiac failure.

In patients experiencing weight loss from liraglutide treatment and bariatric surgery we observed modest increases in BNP.  Further, BNP elevations associated with liraglutide treatment were correlated with reductions in weight and fat mass in patients (Li, 2014).  BNP regulates energy expenditure by influencing several metabolic processes, such as triglyceride lipolysis in adipocytes, fatty acid oxidation by skeletal muscle, mitochondrial biogenesis, and mitochondrial respiration, which are all processes associated with Nrf2 activation (Coué, 2016; Engeli, 2012; Miyashita, 2009; Schlueter, 2014; Sengenès, 2002).  BNP overexpression is associated with protection from obesity and insulin resistance in animals fed a high-fat diet (Miyashita, 2009).  BNP levels are lower in patients with metabolic risk factors, including obesity, visceral fat, lipid profiles, metabolic syndrome, low physical activity level, insulin resistance, and chronic inflammation (Zois, 2014).  

We hypothesize that, like the modest increases observed in other forms of weight loss, the profile and magnitude of BNP increases observed with omaveloxolone treatment are due to reductions in weight and improvements in metabolic parameters.  Omaveloxolone and analogs are associated with improved glucose tolerance and insulin sensitivity, reduced body fat, preservation of muscle mass, and increased metabolism and energy expenditure (Camer, 2015; Saha, 2010a; Shin, 2009; Uruno, 2013). A high-fat-diet study in mice using omaveloxolone analogs demonstrated that decreased body weight gain caused by treatment with an omaveloxolone analog is associated with significantly increased cardiac BNP mRNA levels, along with protection from high‑fat diet-induced cardiac hypertrophy.

Lipids

In MOXIe Part 2, omaveloxolone-treated patients had a higher incidence of total cholesterol and low-density lipoprotein (LDL) cholesterol values above the ULN.  Patients treated with omaveloxolone showed increases in LDL cholesterol of approximately 20 mg/dL at Week 48 that returned to baseline after withdrawal of drug, while values for placebo-treated patients did not change notably. The mean LDL cholesterol values were below 120 mg/dL at all time points for omaveloxolone-treated patients.  Eight (19.0%) omaveloxolone-treated patients and 4 (9.1%) placebo-treated patients had increases in LDL cholesterol above the normal range while receiving treatment, indicating that increases in LDL cholesterol above the normal range occurred more frequently in omaveloxolone-treated patients. Omaveloxolone-treated adolescent patients showed smaller increases in LDL cholesterol at Week 48 than omaveloxolone-treated adult patients.  No notable change in mean very LDL cholesterol was seen over the treatment period in omaveloxolone-treated patients, nor was there a difference compared with placebo-treated patients.  

On average, patients treated with omaveloxolone showed a reduction in high-density lipoprotein (HDL) cholesterol of -5.43 mg/dL at Week 48 and a reduction of -2.5 mg/dL after the four-week off-treatment period.  Changes in HDL cholesterol below or above the normal range did not occur more frequently in omaveloxolone-treated patients.

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The effects of omaveloxolone and analogs on serum lipids have been investigated in nonclinical models and are associated with metabolic effects of omaveloxolone, including mobilization and metabolism of stored lipids resulting in decreased adiposity, increased mitochondrial function, and increased energy production. For example, treatment with an omaveloxolone analog in a mouse model of high-fat diet-induced obesity resulted in reduced body and adipose mass and decreased hepatic lipid accumulation, coupled with increases in energy expenditure. However, these mice also had minor increases in serum total, LDL, and HDL cholesterol. All of these changes were attenuated in Nrf2-null mice, suggesting that the broad effects on lipid homeostasis associated with treatment were due to activation of Nrf2 (Shin, 2009). Furthermore, in a mouse model of nonalcoholic steatohepatitis, a 3-week treatment with omaveloxolone decreased hepatic fat deposition, hepatocellular ballooning, inflammatory cell infiltration, and collagen deposition, along with improved glucose control and decreases in liver and serum triglycerides. These changes were associated with small but significant increases in LDL cholesterol with omaveloxolone treatment (Reisman, 2020). Collectively, these nonclinical results suggest that elevations in serum lipid parameters can occur despite overall improvement in lipid homeostasis and are related to activation of Nrf2.

Infections and Infestations

Infections and infestations were prespecified and evaluated because the anti-inflammatory effects associated with Nrf2 activation could possibly lead to a decreased immune response.  

In MOXIe Part 2, the number of patients with infections and infestation TEAE were balanced between omaveloxolone-treated patients and placebo-treated patients. None of the AEs were considered severe, and there was only 1 patient reporting two SAEs in the omaveloxolone group. The number of infection-related AEs was also similar across omaveloxolone and placebo groups in adolescent patients.  Furthermore, no meaningful differences in immune cell (eg, white blood cell, lymphocytes, monocytes, neutrophils, eosinophils, basophils) counts were seen between omaveloxolone- and placebo-treated patients.

Omaveloxolone for Other Neurological Indications

Omaveloxolone is a promising platform molecule.  Because mitochondrial dysfunction is a key feature of many neurological and neuromuscular diseases, we believe omaveloxolone may be broadly applicable to treat such diseases by activating Nrf2 to normalize and improve mitochondrial function and ATP production.

Based on our understanding of the pathophysiology of neurological diseases, characterized by mitochondrial dysfunction, inflammation, and oxidative stress, we believe omaveloxolone may be applicable to diseases such as progressive supranuclear palsy, Parkinson’s disease, frontotemporal dementia, Huntington’s disease, ALS, Alzheimer’s disease, and epilepsy.  Consistent with this, we have observed promising activity of omaveloxolone and our other Nrf2 activators in preclinical models of many of these diseases.

Our Nrf2 activators reduced seizure frequency in refractory, progressive epilepsy models and restored mitochondrial function in patient biopsy samples and preclinical models of FA, ALS, familial and sporadic Parkinson’s disease, and frontotemporal dementia.  In clinical trials, improvements in neuromuscular function have been observed in FA patients treated with omaveloxolone as assessed by mFARS, and improvements in mitochondrial function, as measured by reductions in blood lactate and heart rate, have been observed in patients with primary mitochondrial disease.  Accordingly, we believe that omaveloxolone has the potential to treat a number of neurological and neuromuscular diseases that currently have few or no effective therapies, and we plan to pursue the development of omaveloxolone and our other Nrf2 activators for one or more of these diseases.

RTA 901 in Neurological Diseases

RTA 901 is the lead product candidate from our Hsp90 modulator program, which includes highly potent and selective C-terminal modulators of Hsp90.  We have observed favorable activity of RTA 901 in a range of preclinical models of neurological disease, including models of diabetic neuropathy, neuroinflammation, and neuropathic pain.

Historically, other companies have explored N-terminal Hsp90 inhibitors for cancer therapeutics; however, this approach has been associated with multiple adverse effects including peripheral neuropathy and ocular toxicity.  Binding at the C-terminus of Hsp90 leads to increased transcription of Hsp70, a cytoprotective and molecular

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chaperone gene, which facilitates cell survival in response to stress without the deleterious activities of N-terminal inhibition.

In preclinical rodent disease models, we observed that RTA 901 administered orally once-daily rescued existing nerve function, restored thermal and mechanical sensitivity, and improved nerve conductance velocity and mitochondrial function.  These effects are dose-dependent, reversible, and HSP70-dependent.

We completed a Phase 1 SAD/MAD trial of oral, once-daily RTA 901 in healthy adult volunteers to evaluate the safety, tolerability, and PK profile.  The PK was approximately dose-proportional up to the highest doses evaluated with a half-life ranging from two to nine hours.  Human exposures easily exceeded the exposures necessary for efficacy in multiple animal models.  No safety or tolerability concerns were reported.  We plan to initiate additional Phase 1 studies to evaluate the PK and drug-drug interaction potential of RTA 901 in the first half of 2022 and a randomized, placebo-controlled Phase 2 study in DPNP in the second half of 2022.

There are about four million patients with moderate to severe DPNP in the United States, and about two million adult patients diagnosed with DPNP seek treatment annually.

We are the exclusive licensee of RTA 901 and have worldwide commercial rights.

Programs in Chronic Kidney Disease

We and our strategic collaborator are developing bardoxolone for the treatment of CKD in multiple indications, including CKD caused by Alport syndrome, ADPKD, and type 1 and 2 diabetic CKD.  We received a CRL from the FDA in February 2022 with respect to its review of our NDA for bardoxolone in the treatment of patients with CKD caused by Alport syndrome.  We will continue to work with the FDA to confirm our next steps on our Alport syndrome program. Kyowa Kirin, our strategic collaborator in CKD, is currently conducting its registrational AYAME trial of bardoxolone in diabetic (types 1 and 2) CKD in Japan.  Kyowa Kirin expects last patient out in the second half of 2022.

CKD is characterized by a progressive worsening in the rate at which the kidney filters waste products from the blood, called the glomerular filtration rate (GFR).  eGFR is an estimate of GFR that nephrologists use to track the decline in kidney function and progression of CKD.  When GFR gets too low, patients develop ESKD and require dialysis or a kidney transplant to survive.  Declining kidney function leads to the buildup of high levels of waste products in the blood that causes the patient to suffer symptoms, such as nausea and fatigue, and to develop complications including high blood pressure, anemia, weak bones, poor nutritional health, and nerve damage.  Normal individuals have an eGFR of approximately 120 mL/min/1.73 m².  When eGFR declines to approximately 15 mL/min/1.73 m² or below, patients generally develop ESKD and require dialysis or a kidney transplant to survive.

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Dialysis leads to a reduced quality of life, and most patients must spend several hours at a dialysis clinic, three times a week, for the remainder of their lives.  These patients may suffer side effects due to dialysis.  Dialysis also increases the likelihood of serious and life-threatening complications, such as cardiovascular disease (CVD).  The five-year survival rate for hemodialysis patients is approximately 45%.  As per the 2021 Annual Data Report published by the United States Renal Data System, the number of patients with ESKD in the United States has nearly doubled in the last two decades, comprising an estimated 783,000 patients as of 2019.  Approximately 30% of these patients suffer from a rare form of CKD.  In 2019, total Medicare fee-for-service (FFS) spending for all beneficiaries who had CKD was over $124 billion, of which $51 billion was spent on patients with ESKD. In 2018, the total Medicare FFS spending for all beneficiaries who had CKD was about $117 billion, representing an increase of about 6% in expenditure in 2019.

Rationale for the Development of Bardoxolone for the Treatment of CKD

Inflammatory processes initiated by a variety of pathogenic stimuli, including diabetes, systemic hypertension, IgA deposition, and genetic mutations, drive declining kidney function.  At the molecular level, these pathogenic stimuli activate pro-inflammatory signaling pathways that normally detect cellular damage or pathogens.  These signals induce mitochondrial dysfunction in which production of ATP is impaired in favor of production of pro-inflammatory mitochondrial ROS.  ROS production activates pro-inflammatory signaling complexes, including NF-κB, to produce TNFα, IL-6, IL-1, IFNγ, angiotensin II, and other cytokines that initiate inflammatory pathways in glomerular endothelial cells, mesangial cells, and podocytes, while also recruiting activated macrophages and other inflammatory effector cells to the renal interstitium.  At the physiological level, chronic activation of pro-inflammatory pathways in these kidney cells promotes GFR loss.

Bardoxolone suppresses inflammatory pathways that contribute to kidney function loss by increasing Nrf2 activity.  Nrf2 has been shown to protect the kidney in preclinical studies that are the subject of many peer-reviewed manuscripts. We believe that by promoting the Nrf2-dependent resolution of inflammation and rescue of mitochondrial dysfunction, bardoxolone treatment addresses a final common pathway of kidney function loss triggered by a variety of insults and improves kidney function by increasing the effective glomerular filtration surface area, reducing inflammation, and preventing fibrosis.

Bardoxolone in Patients with CKD Caused by Alport Syndrome

Based on the results of our Phase 3 CARDINAL clinical trial, on March 1, 2021, we submitted our NDA for bardoxolone for the treatment of CKD caused by Alport syndrome to the FDA.  On April 26, 2021, the FDA accepted for filing our NDA, set the PDUFA date for February 25, 2022, and stated that the FDA also planned to hold an advisory committee meeting to discuss the application.  On December 8, 2021, the Cardiovascular and Renal Drugs Advisory Committee voted no on the question of whether the provided evidence demonstrated that bardoxolone is effective in slowing the progression of CKD in patients with Alport syndrome and that its benefits outweigh its risks.

On February 25, 2022, we received a CRL from the FDA with respect to its review of our NDA for bardoxolone in the treatment of patients with CKD caused by Alport syndrome.  We will continue to work with the FDA to confirm our next steps on our Alport syndrome program.

Regarding non-U.S. regulatory applications for bardoxolone in the treatment of patients with CKD caused by Alport syndrome, on October 28, 2021, we submitted an MAA to the EMA and on July 27, 2021, our strategic collaborator in CKD in Japan, Kyowa Kirin, submitted an NDA in Japan to the MHLW.  Both applications are currently under review.

We recently received the 120-day LOQ from the EMA.  We are in the process of reviewing the questions and preparing our responses.  

Overview of Alport Syndrome

Alport syndrome is a rare, genetic form of CKD caused by mutations in the genes encoding type IV collagen, which is a major structural component of the GBM in the kidney.  The kidneys of patients with Alport syndrome progressively lose the capacity to filter waste products out of the blood, which can lead to ESKD and the need for

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chronic dialysis treatment or a kidney transplant.  Alport syndrome affects both children and adults and can manifest as early as the first decade of life and causes average annual declines in eGFR of approximately four to five mL/min/1.73 m².  In patients with the most severe forms of the disease, approximately 50% progress to dialysis by age 25, 90% by age 40, and nearly 100% by age 60.  There are currently no approved therapies to treat CKD caused by Alport syndrome.

The Alport Syndrome Foundation estimates that Alport syndrome affects approximately 30,000 to 60,000 people in the United States.  According to data provided by IQVIA in 2020, there are approximately 14,000 projected patients diagnosed with Alport syndrome in all stages of CKD in the United States.  However, recent literature suggests that a large number of patients with Alport syndrome are either undiagnosed or mis-diagnosed with other forms of CKD.  

Clinical Updates in Alport Syndrome

On November 9, 2020, we announced that the Phase 3 CARDINAL study met its primary and key secondary endpoints at the end of Year 2.  The Phase 3 portion of CARDINAL was an international, multi-center, double-blind, placebo-controlled, randomized registrational trial that enrolled 157 patients with CKD caused by Alport syndrome at approximately 50 study sites in the United States, Europe, Japan, and Australia.  Patients were randomized one-to-one   to bardoxolone or placebo.  At Week 100, in the intent to treat (ITT) population, which included eGFR values for patients who either remained on or discontinued study drug, patients treated with bardoxolone had a statistically significant improvement compared to placebo in mean change from baseline in eGFR of 7.7 mL/min/1.73 m² (p=0.0005).  At Week 104 (four weeks after last dose in second year of treatment), patients in the ITT population treated with bardoxolone had a statistically significant improvement compared to placebo in mean change from baseline in eGFR of 4.3 mL/min/1.73 m² (p=0.023).

Bardoxolone was generally reported to be well tolerated in this study, and the safety profile was similar to that observed in prior trials.  Eight patients (10%) receiving bardoxolone and 15 patients (19%) receiving placebo experienced a treatment-emergent SAE.  No SAEs were reported in pediatric patients treated with bardoxolone.  No fluid overload SAEs or major adverse cardiac events were reported in patients treated with bardoxolone.  The reported AEs were generally mild to moderate in severity, and the most common AEs observed more frequently in patients treated with bardoxolone compared to patients treated with placebo were muscle spasms and increases in aminotransferases, which are thought to be associated with the pharmacology of the drug.

Additionally, on November 9, 2020, we reported results from the long-term extension EAGLE study.  EAGLE is an international, multi-center, open-label, extended access trial evaluating the longer-term safety and tolerability of bardoxolone in patients with CKD caused by Alport syndrome who participated in the CARDINAL trial or patients with ADPKD who participated in the FALCON trial.  The change from baseline in eGFR was assessed for the 14 patients with Alport syndrome who were treated with bardoxolone for three years (two years in CARDINAL and one year in EAGLE), with four-week off-treatment periods occurring at Weeks 48 and 100.  Bardoxolone treatment resulted in a mean increase from baseline in eGFR of 11.5 mL/min/1.73 m² at Year 1, 13.3 mL/min/1.73 m² at Year 2, and 11.0 mL/min/1.73 m² at Year 3.

In February 2022, we provided the FDA with an update on results from patients with CKD caused by Alport syndrome in the ongoing EAGLE trial.  Mean increases in eGFR were observed at Week 12, Week 24, and Week 48 relative to Day 0 (before treatment) in EAGLE in patients who previously received placebo and initiated treatment with bardoxolone in EAGLE. Patients who previously received bardoxolone for two years in CARDINAL experienced similar mean increases in eGFR at all timepoints.

For the 37 patients randomized to bardoxolone in CARDINAL who completed 48 weeks in EAGLE (bardoxolone-to-bardoxolone group), bardoxolone treatment resulted in a mean change from baseline in eGFR (relative to original CARDINAL baseline) of 9.2 mL/min/1.73 m² at Year 1, 7.8 mL/min/1.73 m² at Year 2, and 6.7 mL/min/1.73 m² at Year 3.  

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A subset of patients (n=18) completed 96 weeks of treatment in EAGLE, which amounts to approximately four years of total treatment, and had a mean ± standard error change from baseline eGFR in CARDINAL of 5.5 ± 3.5 mL/min/1.73 m².  This sustained improvement of kidney function is notable when compared to the CARDINAL study population’s expected yearly eGFR decline of 5.1 mL/min/1.73 m², which was calculated based on five-year historical eGFR data collected before patients entered the study.  No new safety findings have been observed in EAGLE extension study.

Bardoxolone in Patients with CKD Caused by Autosomal Dominant Polycystic Kidney Disease

ADPKD is a rare and serious hereditary form of CKD caused by a genetic defect in PKD1 or PKD2 genes leading to the formation of fluid-filled cysts in the kidneys and other organs.  Cyst growth can cause the kidneys to expand up to five to seven times their normal volume, leading to pain and progressive loss of kidney function.  Inflammation appears to play a role in cyst growth and is associated with disease progression in ADPKD.

ADPKD affects both men and women of all racial and ethnic groups and is the leading inheritable cause of kidney failure with an estimated diagnosed population of 140,000 patients and an estimated prevalent population of 400,000 patients in the United States.  Despite current standard-of-care treatment, an estimated 50% of ADPKD patients progress to ESKD and require dialysis or a kidney transplant by 60 years of age.  The only therapy currently approved for ADPKD is JYNARQUE® (tolvaptan), developed by Otsuka Pharmaceuticals Co., Ltd., which was approved in the United States in 2018 to slow kidney function decline in adults at risk of rapidly progressing ADPKD.

In ADPKD, inflammation and mitochondrial dysfunction, processes known to be suppressed by Nrf2 activation, drive cysts growth in the kidney tubules.  We have shown in preclinical cellular models that in primary and immortalized ADPKD cyst-derived cells, bardoxolone induces expression of Nrf2 target genes, reduces levels of MCP-1 (marker of inflammation), increases total cellular glutathione levels, reduces ROS levels, and improves mitochondrial function.  Bardoxolone also reduces cyst formation in a cell-based cystogenesis model.  These results suggest that activation of Nrf2 by bardoxolone may have the potential to improve the molecular features that are hallmarks of ADPKD.

We are currently enrolling patients in FALCON, an international, multi-center, randomized, double-blind, placebo-controlled trial studying the safety and efficacy of bardoxolone in patients with ADPKD randomized one-to-one to active drug or placebo.  FALCON is enrolling patients in a broad range of ages, 18 to 70 years old, with an eGFR between 30 to 90 mL/min/1.73 m².  We recently filed a protocol amendment with the FDA and requested a Type A meeting to discuss the overall ADPKD development program including the recently submitted major protocol amendment.  The major protocol amendment changes include increases in the sample size from 550 to 850 patients, addition of adolescent (12 to 17 years) patients with ADPKD, removal of the off-treatment period (Week 48 – Week 52) during Year 1, change of the primary endpoint of off-treatment eGFR change from baseline at Week 52 (or four weeks after drug discontinuation in Year 1) to eGFR change from baseline at Week 108 (eight weeks after planned drug discontinuation at Week 100), addition of an exploratory endpoint of eGFR change from baseline at Week 112

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(12 weeks after planned drug discontinuation at Week 100), and addition of a sub study with ambulatory blood pressure monitoring.  

Pursuant to the protocol amendment, patients will be treated with bardoxolone or placebo for 100 weeks followed by a twelve-week withdrawal period.  The trial will remain blinded until study completion.  All patients will be asked to return at Week 108 independent of the time of study drug discontinuation.  In November 2021, we announced a plan to increase the FALCON sample size from 550 to 700 patients.  In order to maintain power, with changes in the primary endpoint, the sample size is increased from 550 to 850 patients in our recently submitted protocol amendment.  The secondary endpoint is the eGFR change from baseline at Week 100.  The SAP, detailing the proposed analyses, has also been submitted.  More than 500 patients are currently enrolled in the study.

Bardoxolone in CKD Patients at Risk of Rapid Progression

MERLIN was a proof of concept, multi-center, double-blind, placebo-controlled, Phase 2 trial to evaluate the safety and efficacy of bardoxolone in patient populations with CKD secondary to varying etiologies at risk of rapid progression.  MERLIN enrolled patients from ages 18 to 75 years old, with eGFR ≥ 20 to < 60 mL/min/1.73 m², and other risk factors for rapid progression of kidney disease.  Eighty-one patients were enrolled and randomized one-to-one to either bardoxolone or placebo.  The primary endpoint was the change in eGFR from baseline after 12 weeks of treatment, and the secondary endpoint was the change in eGFR from baseline after 12 weeks of treatment by CKD etiology.  MERLIN also incorporated an exploratory efficacy endpoint of change in eGFR from baseline at off-treatment Days 3, 7, 14, 21, 28, and 35 to examine the time period for resolution of the acute PD effect of bardoxolone.

MERLIN met the primary endpoint at Week 12.  Treatment with bardoxolone resulted in a higher mean eGFR change from baseline compared to placebo, with a placebo-corrected statistically significant mean difference of 7.71 mL/min/1.73 m² (n=81, p < 0.0001, CI: 5.18, 10.24) at Week 12.  When eGFR data were broken down by different etiologies of CKD, MMRM analysis results favored bardoxolone over placebo in all subgroups.  A similar magnitude of eGFR change compared to placebo was observed in patients with diabetic CKD (placebo-corrected difference: 7.51 mL/min/1.73 m²; n=33; p=0.0010), and in patients with CKD caused by various other etiologies (placebo-corrected difference: 7.61 mL/min/1.73 m²; n=28; p=0.0009).  We observed that patients with CKD at risk of rapid progression caused by hypertension also showed a nominal but not statistically significant mean change from baseline compared to placebo, with a placebo-corrected mean difference of 6.35 mL/min/1.73 m² in eGFR (n=20; p=0.1482).

The change in eGFR in patients treated with bardoxolone was maximal in MERLIN at Week 8, two weeks after the last planned dose titration at Week 6.  Mean eGFR change from baseline began to decrease within three days after the planned cessation of treatment at Week 12.  The maximum decrease in off-treatment eGFR change from baseline occurred 21 days after the last dose.  Overlapping confidence intervals support consistency in the change from baseline for Days 14, 21, 28, and 35 off-treatment.  A statistically significant difference in mean eGFR change from baseline was observed for the bardoxolone group compared to the placebo group through Day 14 off-treatment, with a placebo-corrected mean difference of 3.70 mL/min/1.73 m² (p = 0.0040, CI: 1.22, 6.18).  At Day 21, off treatment and beyond, there was no significant placebo-corrected difference between the placebo and bardoxolone groups, suggesting the acute effects of bardoxolone had resolved by Day 21 off-treatment.

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Consistent with previous studies, treatment with bardoxolone at doses up to 30 mg and for up to 12 weeks was generally safe and well tolerated.  Furthermore, there was no imbalance in cases of volume overload and were no cases of congestive heart failure or increases in blood pressure noted in the bardoxolone group.  There were no clinically meaningful overall trends in laboratory values or electrocardiograms, and there were no deaths in this study.

Four out of 81 patients had SAEs (one in the placebo group and three in the bardoxolone group), none of which were assessed as related to study treatment.  Most TEAEs were mild to moderate in severity.  As reported in other clinical trials with bardoxolone, muscle spasms were the most commonly reported TEAE and were equivalent in frequency between the placebo and bardoxolone groups.  Five patients in the bardoxolone group had dose de-escalations or delays in dose-escalation due to TEAEs.  No placebo patients and seven out of 39 (17.9%) bardoxolone patients discontinued study treatment before Week 12. Reasons included AEs (four patients), non-compliance with study treatment (two patients), and withdrawal by patient (one patient).

As observed in previous studies increases in aminotransferases were transient, asymptomatic and were not associated with any evidence of liver injury.  Increases with aminotransferases were not associated with increases in total bilirubin and no patient met Hy’s Law criteria.  Mean decreases from baseline in weight were observed in patients treated with bardoxolone.  Treatment with bardoxolone resulted in increases in urinary albumin-to-creatinine ratio (UACR) over the course of eight weeks, plateauing through Week 12. UACR trended back towards baseline during the off-treatment period.  When adjusted for eGFR, ratios of eGFR to UACR were unchanged, suggesting that increases in UACR are attributed to the increases in eGFR observed with bardoxolone.

The MERLIN data were submitted as an amendment to our NDA. However, the FDA did not accept this amendment as a major amendment.  

Bardoxolone in Patients with Rare Forms of CKD

PHOENIX was a Phase 2, open-label, multi-center trial evaluating the safety and efficacy of bardoxolone in patients with ADPKD, IgA nephropathy (IgAN), type 1 diabetic CKD (T1D CKD), or focal segmental glomerulosclerosis (FSGS) completed in 2019.  In each of these cohorts, bardoxolone treated patients experienced a statistically significant increase from baseline in mean eGFR after 12 weeks of treatment. Based on the outcome of AYAME and FALCON trials, and our discussions with the FDA regarding the bardoxolone program, we will decide

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future development plans for bardoxolone in patients with additional forms of CKD including patients at risk of rapid progression.

AYAME Trial in Diabetic CKD Conducted by Kyowa Kirin

Upon completion of the Phase 2 TSUBAKI study, Kyowa Kirin’s clinical study of bardoxolone in patients with Stage 3 and 4 diabetic CKD in Japan, and after discussions with the PMDA, Kyowa Kirin initiated a Phase 3 outcomes trial called AYAME in patients with Stage 3 or 4 diabetic CKD in Japan.  The primary endpoint is time to onset of a ≥ 30% decrease in eGFR from baseline or ESKD.  The secondary endpoints are time to onset of a ≥ 40% decrease in eGFR from baseline or ESKD, time to onset of a ≥ 53% decrease in eGFR from baseline or ESKD, time to onset of ESKD, and change in eGFR from baseline at each evaluation time point.  Kyowa Kirin completed patient enrollment in AYAME in June 2019 and expects the last patient out in the second half of 2022.

RTA 1700 Series

In addition to our lead programs, we are developing a proprietary series of RORγt inhibitors for the potential treatment of a broad range of autoimmune, inflammatory, and fibrotic diseases.  We conducted a Phase 1 trial to evaluate the safety, tolerability, and PK profile of RTA 1701 in healthy adult volunteers.  RTA 1701 had no safety concerns, was well tolerated, and we observed an acceptable PK profile.  Plasma concentrations were achieved that are associated with efficacy in preclinical models of autoimmune disease.  Due to RTA 1701’s ADME (absorption, distribution, metabolism, and excretion) properties and the potential for drug-drug interactions at clinically relevant concentrations, we have discontinued the development of RTA 1701 and are proceeding with the development of follow-on molecules in the 1700 series.  We remain committed to developing RORγt inhibitors for the treatment of autoimmune, inflammatory, and fibrotic diseases.  We retain all rights to our RORγt inhibitors, which are not subject to any existing commercial collaborations.

Manufacture and Supply

We rely on multiple third-party manufacturers for the manufacture of our product candidates for preclinical and clinical testing, as well as for planned commercial manufacture if our product candidates receive marketing approval.  We believe there are reliable sources for all of the materials required for the manufacture of our product candidates.  Our third-party manufacturing strategy enables us to efficiently direct financial resources to the research, development, and commercialization of product candidates rather than diverting resources to internally develop manufacturing facilities.  We source our materials (whether they are of natural or chemical origin) globally, utilizing a network of qualified, established third-party vendors.  Prior to commercialization, it is common that a product candidate’s supply chain contains single-sourced suppliers.  Second source supplier identification and implementation strategies, as well as inventory safety stock, are used to mitigate supply chain risks at the appropriate stage of product development.  As our product candidates advance through development, we expect to enter into commercial supply agreements with key suppliers and manufacturers and continue to strategically build inventory and redundancy in suppliers, as appropriate, to fulfill and secure the ongoing and planned preclinical, clinical, and, if our product candidates are approved for marketing, commercial supply needs for us and our collaborators.

Manufacturing Preparations for Omaveloxolone in Neurological Diseases

Our manufacturing and quality teams are in place for the current stage of program development with plans to grow as needed to support future commercial supply and distribution of omaveloxolone.  We are on track for planned clinical drug supplies, with a supply chain strategy to adequately support potential future clinical and commercial demand.  We have completed registration batches for drug substance and drug product.  In addition, we believe the synthesis from regulatory starting material to drug substance can be manufactured at scale, resulting in a commercially competitive cost of goods. 

Manufacturing Preparations for Bardoxolone in Rare CKD

Our manufacturing and quality teams are in place for the current stage of program development with plans to grow as needed to support commercial supply and distribution of bardoxolone.  We have completed process validation

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batches for drug substance and drug product.  In addition, we believe that the synthesis from regulatory starting material to drug substance can be manufactured at scale, resulting in a commercially competitive cost of goods.

Sales and Marketing

We are in the process of building the commercial infrastructure in the United States necessary to effectively support the commercialization of our product candidates, if and when we receive regulatory approval of such product candidates in the United States.  

Outside of the United States, where appropriate and depending on the terms of our contractual arrangements, we plan, either alone, or with new collaboration partners, to commercialize our products.  Our strategic collaborator Kyowa Kirin has all rights to commercialize bardoxolone in its territories.  We are refining our strategy and market assessments with respect to a potential launch in the EU, and we plan to continue to evaluate market opportunities for our products in other global markets.

Commercial infrastructure for orphan products typically consists of a targeted, specialty sales force that calls on a limited and focused group of physicians and personnel involved in sales management, internal sales support, marketing, patient access, and distribution.  One challenge unique to rare-disease commercialization is patient identification due to the very small and sometimes heterogeneous disease populations.  Our management team is experienced in maximizing patient identification for both clinical development and commercialization purposes in rare diseases.

Additional capabilities important to the orphan marketplace include the management of key accounts such as managed care organizations, specialty pharmacies, and government accounts.  To develop the appropriate commercial infrastructure, we will have to invest significant amounts of financial and management resources, some of which will be committed prior to any confirmation that any of our product candidates will be approved.

Sales and Marketing Preparations for Omaveloxolone in FA

Commercial launch preparation will advance with regulatory progress.   Our ability to launch omaveloxolone is dependent on the successful filing and defense of an NDA and MAA and approval by the FDA and EMA, respectively.  We have hired commercial leadership and will build the teams, infrastructure, systems, and processes necessary for the launch of omaveloxolone.  This will include sales, marketing, market access, patient support, and distribution.  Additionally, we plan to expand quality and compliance functions to support commercialization.

Sales and Marketing Preparations for Bardoxolone in Rare CKD

We have paused our commercial planning efforts until we have a clear regulatory path forward for bardoxolone in rare CKD.  Our ability to launch bardoxolone is dependent on the acceptance and successful defense of an NDA and MAA and approval by the FDA and EMA, respectively.  If our commercial planning efforts resume, we have plans to establish a distribution network that would enable us to deliver product across Europe with a small initial footprint.  

Medical Affairs

In neurological disease, we are continuing our efforts to educate physicians on the hallmarks of FA and the differentiating symptoms that discriminate patients with FA from patients with similar neurological diseases. Our medical affairs activities in the United States for bardoxolone in our CKD program have been paused.  Our KIDneyCode™ genetic testing program has been terminated.

Competition

The development and commercialization of new pharmaceutical products is highly competitive.  Our future commercial success depends on our ability to achieve and maintain a competitive advantage.  We are aware of several

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advanced drug development programs in FA for which we are developing omaveloxolone, in DPNP for which we are developing RTA 901, and in CKD for which we are developing bardoxolone.

Omaveloxolone in Friedreich’s Ataxia

There are currently no therapies approved for FA.  If omaveloxolone is approved for the treatment of FA, it has the potential to be the first treatment on the market for this indication, but it currently faces pipeline competition.  Pipeline competition for this orphan disease results in competition for patient recruitment as well as investigators’ time and resources.

We are aware of only one program, vatiquinone from PTC Therapeutics Inc., in Phase 3 stage of development.  Additionally, competitor product candidates MIN-102 from Minoryx Therapeutics, MIB-626 from MetroBiotech, LLC, JOTROL (JOT-101) from Jupiter Neurosciences, Inc., and elamipretide from Stealth BioTherapeutics Corp. are in Phase 2 clinical development for FA. We are aware of only one program, CTI-1601 from Larimar Therapeutics, Inc., in Phase 1 clinical development. In addition, Biohaven Pharmaceutical Holding Company Ltd.’s Troriluzole is in Phase 3 development for the treatment of patients with Spinocerebellar ataxia (SCA).  Biohaven has expressed an intention to explore the development of Troriluzole for other ataxias, which may include FA pending the outcome of the ongoing clinical studies in SCA.  If approved and launched commercially, omaveloxolone may face competition from these product candidates.  Some of these product candidates may enter the market prior to omaveloxolone, and some of these product candidates could limit the market or level of reimbursement available for omaveloxolone if it is commercialized.

RTA 901 in Diabetic Peripheral Neuropathic Pain

Currently, there are four drugs and two devices that are approved for treatment of DPNP in the United States including Lyrica®, Cymbalta®, Nucynta®, an opioid, and Qutenza®, a capsaicin patch applied once every three months. Intellis^TM and Vanta^TM by Medtronic Plc. and Senza® by Nevro Corp. are two implantable spinal cord stimulation systems approved for treatment of chronic pain associated with diabetic peripheral neuropathy (DPN). Tarlige® by Daiichi Sankyo Company Ltd. is a gabapentinoid that is approved for DPNP in Japan. In addition, current treatment guidelines from the American Diabetes Association and the American Academy of Neurology also recommend the off-label use of gabapentin and tricyclic antidepressants.

We are aware of multiple drugs in advanced clinical development for DPNP including Engenesis (VM202) by Helixmith Co. in Phase 3, HSK-16149 by Sichuan Haisco Pharmaceutical Co. in Phase 2/3 (China), and 16 additional programs in Phase 2 clinical trials including LX9211 by Lexicon Pharmaceuticals Inc., MEDI7352 by AstraZeneca Plc, Elismetrep (MT8554) by Mitsubishi Tanabe Pharma (Europe), PGDN-20WS by Pure Green Pharmaceuticals, YJ-001 by Zhejiang Pharmaceutical (China), BAY2395840 by Bayer, LY3016859, LY3526318, and LY3556050 by Eli Lilly and Company, ETX-810 by Eliem Therapeutics Inc., Pirenzepine (WST-057) by WinSanTor Inc., NRD135S.E1 by Novaremed AG, NYX-2925 by Aptinyx Inc., Ricolinostat by Regenacy Pharmaceuticals, GRC 17536 by Glenmark Pharmaceuticals Ltd., and CNTX-6016 by Centrexion Therapeutics. AT-001 by Applied Therapeutics Inc. is also being investigated for DPN in a sub-study of a Phase 3 program in Diabetic Cardiomyopathy.

Bardoxolone in CKD

Currently, there are no approved therapies for CKD caused by Alport syndrome, and patients are commonly treated off-label with angiotensin converting enzyme (ACE) inhibitors or angiotensin 2 receptor blockers (ARBs).  If bardoxolone is approved and launched commercially for patients with CKD caused by Alport syndrome, it may face market competition.  We are aware of at least three therapies for the treatment of Alport syndrome currently in Phase 2 of clinical development including an injectable product candidate, lademirsen (RG-012) from Sanofi S.A, atrasentan in patients with one of several forms of CKD including Alport syndrome from Chinook Therapeutics Inc., and sparsentan in pediatric patients with proteinuric glomerular diseases including Alport syndrome from Travere Therapeutics Inc.

Currently, there is one drug specifically approved and multiple therapies in late-stage clinical development for the treatment of patients with ADPKD.  In 2018, Otsuka Pharmaceuticals Co., Ltd. received approval by the FDA to

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market JYNARQUE® to slow kidney function decline in adults at risk of rapidly progressing ADPKD.  We are aware of one program in Phase 3 stage of development which is Palladio Biosciences’ study of lixivaptan for treating patients with ADPKD.  Other products under clinical development for ADPKD include GLPG2737 by Galapagos NV in Phase 2, Tesevatinib by Kadmon, a Sanofi company, in Phase 2, Xrx-008 by Xortx Therapeutics Inc. in Phase 2, and AL01211 by Acelink Therapeutics in Phase 1.

We are also aware of multiple drugs that are either approved or in clinical development programs in Type 2 diabetic CKD (T2D CKD), hypertensive, and other forms of CKD.  These include the SGLT2 inhibitors, Jardiance® and Farxiga® developed by Boehringer Ingelheim and Eli Lilly and Company, and by AstraZeneca, respectively which are in development for patients with CKD with and without T2D.  In April 2021, Farxiga® received FDA approval to reduce the risk of sustained eGFR decline, ESKD, cardiovascular death, and hospitalization for heart failure in adults with chronic kidney disease at risk of progression. AstraZeneca has not said whether any patients with CKD caused by Alport syndrome were enrolled in the DAPA-CKD trial; however, the trial did enroll patients with IgAN and other forms of glomerulonephritis.  The DAPA-CKD study excluded patients with ADPKD and T1D CKD.  Farxiga® may be used to treat patients with CKD due to rare and common forms of CKD including Alport syndrome.  Additionally, Jardiance® is currently being tested in EMPA-KIDNEY, a Phase 3 trial in patients with various forms of CKD, excluding ADPKD and T1D CKD.  Results from the EMPA-KIDNEY trial are expected in the fourth quarter of 2022.  Additionally, Bayer Healthcare, in November 2021, announced the initiation of the FIONA Phase 3 study to investigate finerenone for the treatment of pediatric patients with CKD and severely increased proteinuria.  The study may enroll patients with Alport syndrome or ADPKD. Kerendia® (finerenone) received FDA approval in July 2021 to reduce the risk of sustained eGFR decline, ESKD, cardiovascular death, non-fatal myocardial infarction, and hospitalization for heart failure in adult patients with T2D CKD.

Collaborations

Kyowa Kirin Agreement

In December 2009, we entered into an agreement with Kyowa Kirin, under which we provided Kyowa Kirin the right to develop and commercialize bardoxolone for renal, cardiovascular, diabetes, and certain related metabolic indications in Japan, China (including Hong Kong and Macao), South Korea, Taiwan, Thailand, Singapore, Philippines, Malaysia, Indonesia, Brunei, Vietnam, Laos, Myanmar, and Cambodia (the Kyowa Kirin Agreement).  These indications include, among others, CKD.  Total consideration under this agreement could reach $272.0 million in upfront and milestone payments, of which we have received $85.0 million.  Additionally, Kyowa Kirin is required to pay us royalties on net sales of licensed product sold by Kyowa Kirin, its affiliates, and sublicensees in its territory ranging from the low teens to the low 20% range depending on the country of sale and the amount of annual net sales.

Kyowa Kirin is obligated to use commercially reasonable efforts to conduct all preclinical and clinical activities necessary for the commercialization of licensed products in each country in the licensed territory.  Under this agreement, we are obligated to use commercially reasonable efforts to supply Kyowa Kirin with clinical supply of licensed product required for Kyowa Kirin’s development in the licensed territory, and we are obligated to negotiate and execute commercial supply agreements with Kyowa Kirin.  Also, Kyowa Kirin has allowed us to conduct clinical activities in certain rare forms of kidney disease in Japan and has reimbursed us the majority of the costs for CARDINAL in Japan and is assuming some of the costs of patients in Japan for the FALCON trial. In addition, Kyowa Kirin is the in-country caretaker for FALCON in Japan.

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The Kyowa Kirin Agreement will terminate automatically when the royalty term expires in all of Kyowa Kirin’s territory.  A royalty term expires in a country on the later of the expiration of all patents in such country or ten years after the first commercial sale in such country.  Either party may terminate the agreement upon the other party’s bankruptcy or insolvency or uncured material breach.  Additionally, Kyowa Kirin may terminate the agreement at will upon advance written notice.  In the event of any termination of the agreement by us for Kyowa Kirin’s uncured breach, bankruptcy, or insolvency or by Kyowa Kirin at will, Kyowa Kirin will transfer and assign to us the regulatory filings for bardoxolone and will license to us the relevant trademarks used with the products in their respective territories.

Amended and Restated License Agreement with AbbVie

In September 2010, we entered into a license agreement with AbbVie (the AbbVie License Agreement), under which we provided AbbVie the exclusive right to develop and commercialize bardoxolone or other molecules for renal, metabolic, and cardiovascular indications, including CKD, in all other countries outside the United States not previously licensed to Kyowa Kirin under the Kyowa Kirin Agreement.  

In December 2011, we entered into a collaboration agreement with AbbVie (the Collaboration Agreement) under which we provided AbbVie the right to jointly research, develop, and commercialize all second- and later-generation Nrf2 activators, including omaveloxolone, for all indications other than renal, cardiovascular, and metabolic indications.

In October 2019, we entered into an Amended and Restated License Agreement with AbbVie (the Reacquisition Agreement), under which we reacquired the development, manufacturing, and commercialization rights concerning our proprietary Nrf2 activator product platform originally licensed to AbbVie under the AbbVie License Agreement and the Collaboration Agreement.  Under the Reacquisition Agreement, the AbbVie License Agreement and the Collaboration Agreement were amended, resulting in AbbVie granting its exclusive sublicenses back to us, such that we reacquired the worldwide rights to bardoxolone, excluding certain Asian countries previously licensed to Kyowa Kirin, and the worldwide rights to omaveloxolone and the second-generation activators.  In exchange for such rights, we agreed to pay AbbVie a total of $330.0 million, all of which has subsequently been paid.  In addition, AbbVie will receive an escalating, low single-digit royalty on worldwide net sales, on a product-by-product basis, of omaveloxolone and certain next-generation Nrf2 activators.  AbbVie will not receive royalties on bardoxolone sales.  By reacquiring our rights, we were relieved from our obligations under the AbbVie License Agreement and the Collaboration Agreement.

As a result of the $330.0 million having been paid to AbbVie, the licenses granted to AbbVie and the sublicenses granted to us with respect to omaveloxolone and bardoxolone and certain next-generation Nrf2 activators have terminated, with all rights reverting to us.

Development and Commercialization Funding Agreement with Blackstone Life Sciences

On June 24, 2020, we closed a Development and Commercialization Funding Agreement (the Development Agreement) with an affiliate of Blackstone Life Sciences, LLC (BXLS) that provides funding for the development and commercialization of bardoxolone for the treatment of CKD caused by Alport syndrome, ADPKD, and certain other rare CKD indications.  The Development Agreement includes a $300.0 million payment by the Blackstone affiliate in return for various percentage royalty payments on worldwide net sales of bardoxolone by Reata and its licensees, other than Kyowa Kirin.  The royalty percentage will initially be in the mid-single digits and in future years can vary between higher-mid single digit percentages to low-single digit percentages depending on various milestones, including indication approval dates, cumulative royalty payments, and cumulative net sales.  Pursuant to the Development Agreement, we have granted BXLS a security interest in substantially all of our assets.  In addition, concurrent with the Development Agreement, we entered into a common stock purchase agreement (the Purchase Agreement) with affiliates of BXLS to sell an aggregate of 340,793 shares of the Company’s Class A common stock at $146.72 per share for a total of $50.0 million.

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Government Regulation

The clinical testing, manufacturing, labeling, storage, distribution, record keeping, advertising, promotion, import, export, and marketing, among other things, of our product candidates are subject to extensive regulation by governmental authorities in the United States and other countries.  The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local, and foreign statutes and regulations require the expenditure of substantial time and financial resources in the ordinary course of our business, principally in our research and development expenses.  Failure to comply with the applicable requirements at any time during the product development process, approval process, or after approval may subject an applicant and sponsor to a variety of administrative or judicial sanctions, including refusal by the applicable regulatory authority to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and other types of letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by the FDA and the United States Department of Justice (DOJ) or other governmental entities.

United States Product Approval Process

In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (FFDCA).  Pharmaceutical products are also subject to regulation by other governmental agencies, such as, but not limited to, the Federal Trade Commission, the Office of Inspector General of the United States Department of Health and Human Services, the Consumer Product Safety Commission, the EPA, and the DOJ.  The steps required before a drug may be approved for marketing in the United States generally include:

• Preclinical laboratory tests and animal tests conducted under good laboratory practice (GLPs);

• The submission to the FDA of an investigational new drug (IND) application for human clinical testing, which must become effective before any human clinical trial commences;

• Approval by an institutional review board (IRB) or ethics committee representing each clinical site before each clinical trial may be initiated;

• Adequate and well-controlled human clinical trials to establish the safety and efficacy of the product and conducted in accordance with good clinical practice (GCPs);

• The submission to the FDA of an NDA for the applicable small molecule drug product;

• FDA acceptance, review, and approval of the NDA (including the product labeling and package insert); and

• Satisfactory completion of an FDA inspection of the manufacturing facilities at which the product is made to assess compliance with current good manufacturing practice (CGMPs).

The testing and approval process requires substantial time, effort, and financial resources, and the receipt and timing of any approval is uncertain.

Preclinical studies include laboratory evaluations and animal studies to assess the potential safety and efficacy of the product candidate.  Preclinical studies must be conducted in compliance with FDA regulations regarding GLPs.  The results of the preclinical studies, together with manufacturing information and analytical data, are submitted to the FDA as part of the IND, which includes a protocol detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated if the clinical trial lends itself to an efficacy determination.  The IND will become effective automatically 30 days after receipt by the FDA, unless the FDA raises concerns or questions about the conduct of the studies as outlined in the IND prior to that time.  In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can proceed.  The IND must become effective before clinical trials may be commenced.

Clinical trials involve the administration of the product candidates to healthy human volunteers or patients with the disease to be treated under the supervision of a qualified principal investigator.  Clinical trials must be conducted under the supervision of one or more qualified principal investigators in accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial, and in

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accordance with protocols detailing the objectives of the applicable phase of the trial, dosing procedures, research subject selection and exclusion criteria, and the safety and effectiveness criteria to be evaluated.  Progress reports detailing the status of clinical trials must be submitted to the FDA annually.  Sponsors must also report in a timely manner to the FDA SAEs and unexpected AEs, any clinically important increase in the rate of serious suspected AEs over that listed in the protocol or investigator’s brochure, or any findings from other studies or tests that suggest a significant risk in humans exposed to the product candidate.  Further, the protocol for each clinical trial must be reviewed and approved by an IRB, either centrally or individually at each institution at which the clinical trial will be conducted.  The IRB will consider, among other things, ethical factors, the safety of human subjects, and the possible liability of the institution.

Clinical trials are typically conducted in three sequential phases prior to approval, but the phases may overlap or be combined and different studies may be initiated with the same drug candidate within the same phase of development in similar or different patient populations.  These phases generally include the following:

Phase 1.  Phase 1 clinical trials represent the initial introduction of a product candidate into human subjects, frequently healthy volunteers.  In Phase 1, the product candidate is usually tested for PD and PK properties such as safety (including AEs), dosage tolerability, absorption, distribution, metabolism, and excretion.

Phase 2.  Phase 2 clinical trials usually involve a limited patient population to (1) preliminarily evaluate the efficacy of the product candidate for specific indications, (2) determine dosage tolerability and optimal dosage, and (3) identify possible adverse effects and safety risks.

Phase 3.  If a product candidate is found to be potentially effective and to have an acceptable safety profile in Phase 2 trials, the clinical trial program may be expanded to Phase 3 clinical trials to further evaluate clinical efficacy, optimal dosage, and safety within an expanded patient population at geographically dispersed clinical trial sites.

Phase 4.  Phase 4 clinical trials may be conducted after approval to gain additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations, or when otherwise requested by the FDA in the form of post-market requirements or commitments.  Failure to promptly conduct any required Phase 4 clinical trials could result in withdrawal of approval.

The manufacturer of an investigational drug in a Phase 2 or Phase 3 clinical trial for a serious or life-threatening disease is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for expanded access.

A pivotal trial is an adequate and well-controlled clinical trial that permits the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for labeling of the drug.  In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of the drug.  A single Phase 3 trial may be sufficient in rare instances, including (1) where the trial is a large multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity, or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (2) in conjunction with confirmatory evidence.  The FDA may accept results from Phase 2 trials as pivotal if the trial design provides a well-controlled and reliable assessment of clinical benefit, particularly in situations where there is an unmet medical need and the results are sufficiently robust.

The FDA, the IRB, or the clinical trial sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.  Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board (DSMB) or committee.  This group determines whether or not a trial may move forward at designated check points based on access to certain data from the trial.  A clinical trial sponsor may also suspend or terminate a clinical trial based on evolving business objectives or competitive climate.

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The clinical trial process can take three to ten years or more to complete, and there can be no assurance that the data collected will support FDA approval or licensure of the product.

The results of preclinical studies and clinical trials, together with detailed information on the manufacture, composition, and quality of the product candidate, are submitted to the FDA in the form of an NDA requesting approval to market the product.  The application must be accompanied by a significant user fee payment, currently approximately $3.1 million for fiscal year 2022.  The FDA has substantial discretion in the approval process and may refuse to accept any application or decide that the data are insufficient for approval and require additional preclinical, clinical, or other studies.

Review of Application

Once the NDA submission has been accepted for filing, which occurs, if at all, 60 days after submission, the FDA informs the applicant of the specific date by which the FDA intends to complete its review.  This is typically 12 months from the date of submission.  The review process is often extended by the FDA as a result of submission of additional information, sometimes at the FDA’s request, during the review.  The FDA reviews NDAs to determine, among other things, whether the proposed product is safe and effective for its intended use and whether the product is being manufactured in accordance with CGMP to assure and preserve the product’s identity, strength, quality, and purity.  Before approving an NDA, the FDA may inspect the facilities at which the product is manufactured and will not approve the product unless the manufacturing facility complies with CGMPs.  The FDA will also inspect clinical trial sites for integrity of data supporting safety and efficacy.  During the approval process, the FDA also will determine whether a risk evaluation and mitigation strategy (REMS) is necessary to assure the safe use of the product.  If the FDA concludes a REMS is needed, the sponsor of the application must submit a proposed REMS; the FDA will not approve the application without an approved REMS, if required.  A REMS can substantially increase the costs of obtaining approval.  The FDA may also convene an advisory committee of external experts to provide input on certain review issues relating to risk, benefit, and interpretation of clinical trial data.  The FDA may delay approval of an NDA if applicable regulatory criteria are not satisfied or the FDA requires additional testing or information.  The FDA may require post-marketing testing and surveillance to monitor safety or efficacy of a product.  The FDA will issue either an approval of the NDA or a CRL detailing the deficiencies and information required for reconsideration of the application.

Disclosure of Clinical Trial Information

Sponsors of clinical trials of FDA regulated products are required to register and disclose certain clinical trial information.  Information related to the product, patient population, phase of investigation, trial sites and investigators, and other aspects of the clinical trial is then made public as part of the registration.  Sponsors are also obligated to discuss the results of their clinical trials after completion.  Disclosure of the results of these trials can be delayed in certain circumstances for up to two years after the date of completion of the trial.  Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.

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The Orphan Drug Act

Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition—generally a disease or condition that affects fewer than 200,000 individuals in the United States.  Orphan drug designation must be requested before submitting an NDA.  After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA.  Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.  The first NDA applicant to receive FDA approval for a particular active ingredient to treat a particular disease with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that product, for that indication.  During the seven-year exclusivity period, the FDA may not approve any other applications to market the same drug for the same disease, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.  Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition.  Among the other benefits of orphan drug designation are tax credits (Credits) for certain research and a waiver of the NDA application user fee.

Pediatric Exclusivity and Pediatric Use

Under the Best Pharmaceuticals for Children Act, certain drugs may obtain an additional six months of exclusivity in an indication, if the sponsor submits information requested in writing by the FDA in what is known as a Written Request, relating to the use of the active moiety of the drug in children.  The FDA may not issue a Written Request for studies on unapproved or approved indications where it determines that information relating to the use of a drug in a pediatric population, or part of the pediatric population, may not produce health benefits in that population.

To receive the six-month pediatric market exclusivity, a sponsor would have to receive a Written Request from the FDA and conduct the requested studies in accordance with a written agreement with the FDA.  If there is no written agreement, studies would be conducted in accordance with commonly accepted scientific principles, and reports submitted of those studies.  A Written Request may include studies for indications that are not currently in the labeling if the FDA determines that such information will benefit the public health.  The FDA will accept the reports upon its determination that the studies were conducted in accordance with and are responsive to the original Written Request, agreement, or commonly accepted scientific principles, as appropriate, and that the reports comply with the FDA’s filing requirements.

In addition, the Pediatric Research Equity Act (PREA) requires a sponsor to conduct pediatric studies for most drugs, for a new active ingredient, new indication, new dosage form, new dosing regimen, or new route of administration.  Under PREA, original NDAs and supplements thereto must contain a pediatric assessment unless the sponsor has received a deferral or waiver.  The required assessment must include the evaluation of the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective.  The FDA, on its own initiative or at the request of the sponsor, may defer pediatric trial requirements for some or all of the pediatric subpopulations.  A deferral may be granted by the FDA if it believes that additional safety or effectiveness data in the adult population need to be collected before the pediatric studies begin.  The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep a deferral current, or fails to submit a request for approval of a pediatric formulation.  Unless otherwise required by regulation, PREA generally does not apply to a drug for an indication for which orphan designation has been granted with the exception of orphan-designated drugs if the drug is a molecularly targeted cancer product intended for the treatment of an adult cancer and is directed at a molecular target that the FDA has determined is substantially relevant to the growth or progression of a pediatric cancer.

Breakthrough Therapy Designation

The FDA is required to expedite the development and review of the application for approval of drugs that are intended to treat a serious or life-threatening disease or condition where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.  Under the breakthrough therapy program, the sponsor of a new drug candidate may request that the FDA designate the drug candidate for a specific indication as a breakthrough therapy concurrent with, or after, the filing of

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the IND for the drug candidate.  The FDA must determine if the drug candidate qualifies for breakthrough therapy designation within 60 days of receipt of the sponsor’s request.

Fast Track Designation, Accelerated Approval, and Priority Review

A sponsor may seek approval of its product candidate under programs designed to accelerate the FDA’s review and approval of NDAs.  For example, Fast Track Designation may be granted to a drug intended for treatment of a serious or life-threatening disease or condition that has potential to address unmet medical needs for the disease or condition.  The key benefits of Fast Track Designation are more frequent interactions with the FDA and rolling review (submission of portions of an application before the complete marketing application is submitted).

Under the Fast Track and accelerated approval programs, the FDA may approve an NDA on the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.  Post-marketing studies or completion of ongoing studies after marketing approval are required to verify the drug’s clinical benefit in relationship to the surrogate endpoint or ultimate outcome in relationship to the clinical benefit.

Based on results of the Phase 3 clinical trial(s) submitted in an NDA, upon the request of an applicant, the FDA may grant the NDA a Priority Review designation, which sets the target date for FDA action on the application at eight months after the NDA submission.  Priority Review is granted where there is evidence that the proposed product would be a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of a serious condition.  If criteria are not met for Priority Review, the application is subject to the standard FDA review period of twelve months after NDA submission.  Priority Review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval.

Post-Approval Requirements

Even after approval, drugs manufactured or distributed pursuant to FDA approvals are subject to continuous regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product distribution, advertising and promotion, and reporting of adverse experiences with the product.  After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval.  There also are continuing annual user fee requirements for any marketed products.

The FDA may impose a number of post-approval requirements as a condition of approval of an NDA.  For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

In addition, entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with CGMP requirements.  Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented.  FDA regulations also require investigation and correction of any deviations from CGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use.  Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain CGMP compliance.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.  Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may also result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new

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safety risks; or imposition of distribution or other restrictions under a REMS program.  Other potential consequences include, among other things:

• Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market, or voluntary product recalls;

• Fines, untitled and warning letters, or holds on post-approval clinical trials;

• Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals;

• Product seizure or detention or refusal to permit the import or export of products; and

• Injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates marketing, labeling, advertising, and promotion of drug products that are placed on the market.  Drugs may be promoted only for the approved indications and in a manner consistent with the provisions of the approved labeling.  The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

Prescription Drug Marketing Act (PDMA) and Drug Supply Chain Security Act (DSCSA)

The distribution of pharmaceutical products is subject to the PDMA, which regulates the distribution of drugs and drug samples at the federal level and sets minimum standards for the registration and regulation of drug distributors at the state level.  Under the PDMA and state law, states require the registration of manufacturers and distributors who provide pharmaceuticals in that state.  It also requires state licensing of manufacturers and distributors that ship pharmaceuticals into the state even if such manufacturers or distributors have no place of business within the state.  The PDMA and state laws impose requirements and limitations on drug sampling to ensure accountability in the distribution of samples.  The PDMA sets forth civil and criminal penalties for violations of these and other provisions.

The DSCSA, signed into law on November 27, 2013, imposes new obligations on manufacturers of prescription finished pharmaceutical drug products, among others, related to product tracking and tracing, identification, verification, illegitimate production notification, and other elements.  Among the requirements of this federal law, manufacturers are required to provide certain information regarding the drug product to entities to which product ownership is transferred, label drug product with a product identifier (i.e., serialization) in order to establish an electronic interoperable prescription product system to identify and trace certain prescription drugs distributed in the United States, and keep certain records regarding the drug product.  Further, under the DSCSA, manufacturers have drug product investigation, quarantine, disposition, and notification responsibilities related to counterfeit, illegitimate, diverted, stolen, and intentionally adulterated products, as well as products that are the subject of fraudulent transactions or which are otherwise unfit for distribution such that they would be reasonably likely to result in serious health consequences or death.  These requirements are being phased in over a ten-year period, and some requirements are already in effect.  The DSCSA replaced the prior drug “pedigree” requirements under the PDMA and preempts existing state drug pedigree laws and regulations.  The DSCSA also establishes new requirements for the licensing of wholesale distributors and third-party logistics providers (3PLs).  These licensing requirements preempt states from imposing licensing requirements that are inconsistent with, less stringent than, directly related to, or otherwise encompassed by standards established by the FDA pursuant to the DSCSA.  Until the FDA promulgates regulations to address the DSCSA’s new national licensing standards for wholesalers, current state licensing requirements typically remain in effect, although the DSCSA expressly preempts those state statutes and regulations that require 3PLs to maintain wholesale drug distributor licenses. The FDA published its Proposed Rule on February 4, 2020, titled “National Standards for the Licensure of Wholesale Drug Distributors and Third-Party Logistics Providers.” When finalized, the rule establishes among other things a national licensing standard for wholesale drug distributors and 3PLs.  It is difficult to predict when FDA will publish the final rule.  Once the final rule is published, the licensing standards will take effect one year after publication for 3PLs and two years after publication for wholesale drug distributors.

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Federal and State Fraud and Abuse and Data Privacy and Security and Transparency Laws and Regulations

In addition to FDA restrictions on marketing of pharmaceutical products, federal and state healthcare laws and regulations restrict certain business practices in the biopharmaceutical industry.  These laws include, but are not limited to, anti-kickback, false claims, data privacy and security, and transparency statutes and regulations.

The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, to induce, or in return for, purchasing, leasing, ordering, recommending, or arranging for the purchase, lease, or order of any good, facility, item, or service reimbursable under Medicare, Medicaid, or other federal healthcare programs.  The term “remuneration” has been broadly interpreted to include anything of value, including, for example, gifts, discounts, the furnishing of supplies or equipment, credit arrangements, payments of cash, waivers of payment, ownership interests, and providing anything at less than its fair market value.  The federal Anti-Kickback Statute has been interpreted to apply to certain arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, and formulary managers on the other.  Although there are a number of statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly, and our practices may not in all cases meet all of the criteria for a statutory exception or safe harbor protection.  Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases, or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor.  Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the federal Anti-Kickback Statute.  Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances.  Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated.  The intent standard under the federal Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (PPACA) to a lower intent standard such that a person or entity no longer needs to have actual knowledge of this statute or the specific intent to violate it to have committed a violation.  In addition, the PPACA codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act (discussed below).  Further, civil monetary penalties statutes impose penalties against any person or entity who, among other things, is determined to have presented or caused to be presented 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 or fraudulent.

The federal false claims laws, including the federal civil False Claims Act, prohibit, among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval to the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.  As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” for money or property presented to the United States government.  Recently, several pharmaceutical and other healthcare companies have been prosecuted under these laws for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal healthcare programs for the product.  Other pharmaceutical companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of the product for unapproved, and thus non-reimbursable, uses.  Health Insurance Portability and Accountability Act of 1996 (HIPAA) created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing, or covering up a material fact, or making any materially false, fictitious, or fraudulent statement in connection with the delivery of, or payment for, healthcare benefits, items, or services.  Like the federal Anti-Kickback Statute, the PPACA amended the intent standard for certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

In addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business.  HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), and its implementing regulations, imposes certain requirements on certain types of entities relating to the privacy, security, and transmission of individually identifiable health information.  Among other things, HITECH made HIPAA’s security standards directly applicable to business associates—independent

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contractors or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity.  HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions.  In addition, state laws govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Additionally, the federal Physician Payments Sunshine Act, and its implementing regulations, require that certain manufacturers of drugs, devices, biologicals, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) annually report information to the Center for Medicare and Medicaid Services (CMS) related to certain payments or other transfers of value made or distributed to physicians, physician assistants, certain types of advanced practice nurses, and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and certain ownership and investment interests held by physicians and their immediate family members.  This information is made publicly available on a searchable website.

Also, many states have similar healthcare statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.  Some states require the posting of information relating to clinical trials.  Other states require the reporting of expenses relating to the marketing and promotion of drug products and the reporting of gifts and payments to individual healthcare practitioners in these states.  Other states prohibit various marketing-related activities, such as the provision of certain kinds of gifts or meals.  Still other states require the reporting of certain pricing information, including information pertaining to and justification of price increases.  In addition, states such as California, Connecticut, Nevada, and Massachusetts require pharmaceutical companies to implement compliance programs and/or marketing codes. If our operations are found to be in violation of any of the health regulatory laws described above or any other laws that apply to us, we may be subject to penalties, including potentially significant criminal, civil, and administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion of products from reimbursement under government programs, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.  To the extent that any of our products will be sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws, and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.

Pharmaceutical Coverage, Pricing, and Reimbursement

In both domestic and foreign markets, our sales of any approved products will depend in part on the availability of coverage and adequate reimbursement from third-party payors.  Third-party payors include government health administrative authorities, managed care providers, private health insurers, and other organizations.  Patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely 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 and reimbursement is adequate to cover a significant portion of the cost of our products.  Sales of our products will therefore depend substantially, both domestically and abroad, on the extent to which the costs of our products will be paid by third-party payors.  These third-party payors are increasingly focused on containing healthcare costs by challenging the price and examining the cost-effectiveness of medical products and services.  Significant uncertainty thus exists as to the coverage and reimbursement status of newly approved healthcare product candidates.  The market for our products and product candidates for which we may receive regulatory approval will depend significantly on access to third-party payors’ drug formularies or lists of medications for which third-party payors provide coverage and reimbursement.  The industry competition to be included in such formularies often leads to downward pricing pressures on pharmaceutical companies.  Also, third-party payors may refuse to include a particular branded drug in their formularies or otherwise restrict patient access to a branded drug when a less costly generic equivalent or other alternative is available.

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Because each third-party payor individually approves coverage and reimbursement levels, obtaining coverage and adequate reimbursement is a time-consuming, costly, and sometimes unpredictable process.  We may be required to provide scientific and clinical support for the use of any product to each third-party payor separately with no assurance that approval would be obtained, and we may need to conduct expensive pharmacoeconomic studies to demonstrate the cost-effectiveness of our products.  This process could delay the market acceptance of any product and could have a negative effect on our future revenue and operating results.  We cannot be certain that our products and our product candidates will be considered cost-effective.  Because coverage and reimbursement determinations are made on a payor-by-payor basis, obtaining acceptable coverage and reimbursement from one payor does not guarantee that we will obtain similar acceptable coverage or reimbursement from another payor.  If we are unable to obtain coverage of, and adequate reimbursement and payment levels for, our product candidates from third-party payors, physicians may limit how much or under what circumstances they will prescribe or administer them and patients may decline to purchase them.  This in turn could affect our ability to successfully commercialize our products and adversely affect our profitability, results of operations, financial condition, and future success.

In addition, in many foreign countries, particularly EU member states and China, the pricing of prescription drugs is subject to government control.  In some non-U.S. jurisdictions, the proposed pricing for a drug must be approved before it may be lawfully marketed.  The requirements governing drug pricing vary widely from country to country.  For example, EU member states have options to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.  A member state may approve a specific price for the medicinal product, or it may instead adopt a system of direct or indirect controls on the total cost of a medicinal product placed on its market.  We may face competition for our product candidates from lower-priced products in foreign countries that have placed price controls on pharmaceutical products.  In addition, there may be importation of foreign products that compete with our own products, which could adversely affect our profitability.

Healthcare Reform

In the United States and foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system that could affect our future results of operations as we begin to commercialize our products.  In particular, there have been and continue to be a number of initiatives at the United States federal and state level that seek to reduce healthcare costs.  The Biden Administration has indicated an intent to address prescription drug pricing and recent Congressional hearings have brought increased public attention to the costs of prescription drugs.  

Furthermore, political, economic, and regulatory influences are subjecting the healthcare industry in the United States to fundamental change.  Initiatives to reduce the federal budget and debt and to reform healthcare coverage are increasing cost-containment efforts.  We anticipate that Congress, state legislatures, and the private sector will continue to review and assess alternative healthcare benefits, controls on healthcare spending through limitations on the growth of private health insurance premiums and Medicare and Medicaid spending, the creation of large insurance purchasing groups, price controls on pharmaceuticals, limitations on rebate payments by drug manufacturers, and other fundamental changes to the healthcare delivery system.  Any proposed or actual changes could limit or eliminate our spending on development projects and affect our ultimate profitability.  For example, in March 2010, the PPACA was signed into law.  Among other cost containment measures, the PPACA expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program, imposed a significant annual, nondeductible fee on companies that manufacture or import certain branded prescription drug products, and enacted substantial provisions affecting compliance, which may affect our business practices with healthcare practitioners. In the future, there may continue to be additional proposals relating to the reform of the United States healthcare system, some of which could further limit the prices we are able to charge or the amounts of reimbursement available for our products, or which could otherwise affect our commercial operations and ability to be profitable. For example, on September 9, 2021, the Biden administration published a wide-ranging list of policy proposals, most of which would need to be carried out by Congress, to reduce drug prices and drug payment.  The Department of Health and Human Services’(HHS) plan includes, among other reform measures, proposals to lower prescription drug prices, including by allowing Medicare to negotiate prices and disincentivizing price increases, and to support market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase price transparency. Many similar proposals, including the plans to give Medicare Part D authority to negotiate drug prices, require drug manufacturers to pay rebates on drugs whose prices increase greater than the rate of inflation, and cap out-of-pocket costs, have already been included in policy

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statements and legislation currently being considered by Congress.  It is unclear to what extent these and other statutory, regulatory, and administrative initiatives will be enacted and implemented.  If future legislation were to impose direct governmental price controls and access restrictions, it could have a significant adverse effect on our business.  Managed care organizations, as well as Medicaid and other government agencies, continue to seek price discounts.  Some states have implemented, and other states are considering, price controls or patient access constraints under the Medicaid program, and some states are considering price-control regimes that would apply to broader segments of their populations that are not Medicaid-eligible.

More recently, the Tax Cuts and Jobs Act of 2017 (2017 Tax Act) was signed into law, which eliminated certain requirements of the PPACA, including the individual mandate.  On June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the PPACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. Thus, the PPACA will remain in effect in its current form. It is possible that the PPACA will be subject to judicial or Congressional challenges in the future. It is uncertain how any such challenges and the healthcare measures of the Biden administration will impact the PPACA.  There is uncertainty with respect to the impact these changes, if any, may have, and any changes likely will take time to unfold.

In addition, on August 2, 2011, the Budget Control Act of 2011 was enacted and created measures for spending reductions by Congress.  A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the fiscal years 2012 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.  These reductions included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic.  The Medicare reductions will phase back in starting with a 1% reduction in effect from April 1, 2022 to June 30, 2022 before increasing to the full 2% reduction.  Also, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several types of health care providers.  Further, former President Trump and President Biden both issued Executive Orders intended to favor government procurement from domestic manufacturers.

Due to the volatility in the current economic and market dynamics, we are unable to predict the effect of any unforeseen or unknown legislative, regulatory, payor, or policy actions, which may include cost containment and healthcare reform measures.  Such policy actions could have a material adverse effect on our profitability.

New Legislation and Regulations

From time to time, legislation is drafted, introduced, and passed in Congress that could significantly change the statutory provisions governing the testing, approval, manufacturing, and marketing of products regulated by the FDA.  For example, the 21^st Century Cures Act, which was enacted on December 13, 2016, contained a number of provisions related to the development of drug and biological products, including provisions intended to encourage the modernization of clinical trial design and support broader use of tools like biomarkers and methods to collect patient experience data.  While the 21^st Century Cures Act is intended to make drug and biological product development less time-consuming and less costly, it does not change the scientific/medical standard for approval or the quality or quantity of evidence necessary to support approval.  In addition, the Food and Drug Administration Act of 2017 reauthorized and amended several drug provisions that were scheduled to sunset, such as the prescription drug user fee provisions, and made other changes to the FFDCA, including provisions related to development of pediatric drugs and access to generic drugs.  In addition to new legislation, FDA regulations and policies are often revised or interpreted by the agency in ways that may significantly affect our business and our products.  It is impossible to predict whether further legislative changes will be enacted or whether FDA regulations, guidance, policies, or interpretations changed or what the effect of such changes, if any, may be.

Foreign Regulation

We are planning on seeking approval for our product candidates in Europe, Japan, and other countries.  To market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety, and efficacy that govern, among other things, clinical trials, manufacturing, marketing authorization, commercial sales, and distribution of our products.  

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Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by the comparable foreign regulatory authorities before we could commence clinical trials or marketing of the product in foreign countries and jurisdictions.  Although many of the issues discussed above with respect to the United States apply similarly in the context of other countries in which we may seek approval, the approval process varies among countries and jurisdictions and can involve different amounts of product testing and additional administrative review periods.  For example, in the EU, a sponsor must submit a clinical trial application (CTA), much like an IND, prior to the commencement of human clinical trials and receive authorization from the relevant authorities. The new EU Regulation on Clinical Trials, which became applicable on January 31, 2022, imposes additional requirements in relation to human clinical trials.

For other countries outside of the EU, such as the countries in Eastern Europe, Latin America, or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing, and reimbursement vary from country to country.  The time required to obtain approval in other countries and jurisdictions might differ from or be longer than that required to obtain FDA approval.  Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively affect the regulatory approval process in other countries.

In the EU, a company may submit an MAA either under a centralized, decentralized, mutual recognition or national procedure.  The centralized procedure is compulsory for medicinal products that (1) are derived from biotechnology processes, (2) contain a new active substance for certain specific indications, (3) are orphan medicinal products or (4) are advanced therapy medicinal products, such as gene or cell therapy medicines; and optional for certain other medicinal products for example because they involve a new active substance or are highly innovative.  Under the centralized procedure, a marketing application is submitted to the EMA where it will be evaluated by the Committee for Medicinal Products for Human Use and a favorable opinion typically results in the grant by the EC of a single marketing authorization that is valid for all EU member states within 67 days of receipt of the opinion.  The initial marketing authorization is valid for five years, but once renewed is usually valid for an unlimited period.  The decentralized procedure provides for approval of a new medicinal product by one or more “concerned” member states based on an assessment of an application performed by one member state, known as the “reference” member state.  Under the decentralized approval procedure, an applicant submits an application, or dossier, and related materials to the reference member state and concerned member states.  The reference member state prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application.  Within 90 days of receiving the reference member state's assessment report, each concerned member state must decide whether to approve the assessment report and related materials.  If a member state does not recognize the marketing authorization, the disputed points are eventually referred to the EC, whose decision is binding on all member states. The mutual-recognition procedure enables a company to seek recognition of a marketing authorization granted in one member state in other EU member states. The national procedure allows a company to apply for a national marketing authorization in a single EU country under its national authorization procedures.

Our clinical trial programs and research collaborations may implicate international data protection laws, including the General Data Protection Regulation (GDPR) in the EU.  The GDPR became effective on May 25, 2018 and governs the collections and use of personal data in the EU.  The GDPR, which is wide-ranging in scope, imposes several obligations and restrictions concerning the consent of the individuals to whom the personal data relates, the information provided to the individuals, the transfer of personal data out of the EU, data breach notifications, security and confidentiality of the personal data, the use of third-party processors in connection with the processing of the personal data, and imposition of substantial potential fines for breaches of the data protection obligations.  

United States Patent Term Restoration and Regulatory Exclusivity for Approved Products

The Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act, permits a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process.  The patent term restoration period is generally one-half the time between the effective date of an initial IND and the submission date of an NDA, plus the time between the submission date of the NDA and the approval of that product candidate application.  Patent term restoration cannot, however, extend the remaining term of a patent beyond a total of 14 years from the product’s approval date.  In addition, only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent.  The United States Patent and Trademark Office (USPTO), in consultation with the FDA, reviews and approves applications for any patent term extension or

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restoration.  In the future, we expect to apply for restoration of patent term for patents relating to each of our product candidates to add patent life beyond the current expiration date of such patents, depending on the length of the clinical trials and other factors involved in the filing of the relevant NDA.

Market exclusivity provisions under the FFDCA can also delay the submission or the approval of certain applications of companies seeking to reference another company’s NDA.  For example, the Hatch-Waxman Act provides a five-year period of exclusivity to any approved NDA for a product containing a new chemical entity (NCE), never previously approved by FDA either alone or in combination with another active moiety.  No application or an abbreviated new drug application (ANDA) that references the NDA for the NCE may be submitted during the five-year exclusivity period, except that such applications may be submitted after four years if they contain a certification of patent invalidity or non-infringement of the patents listed with the FDA for the innovator NDA.

Foreign Country Data Exclusivity

The EU also provides opportunities for additional market exclusivity.  For example, in the EU, upon receiving marketing authorization, an NCE generally receives eight years of data exclusivity and an additional two years of market exclusivity.  If granted, data exclusivity prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic application.  During the additional two-year period of market exclusivity, a generic marketing authorization can be submitted, and the innovator’s data may be referenced, but no generic product can be marketed until the expiration of the market exclusivity.

Intellectual Property

Our success depends in part upon our ability to obtain and maintain patent and other intellectual property protection for our product candidates including patents claiming compositions of matter, therapeutic uses, distinct forms of specific compounds, formulations, manufacturing methods, and uses in specific indications and patient populations.  We are actively engaged in research to further develop and maintain our competitive position and may rely in part on trade secrets, proprietary know-how, and continuous technological innovation to support and enhance our competitive position.

We seek to protect and strengthen our proprietary position by, among other methods, filing United States and foreign patent applications related to our proprietary technologies, inventions, and any improvements that we consider important to the development and implementation of our business and strategy.  Our ability to maintain and solidify our proprietary position for our products and technologies will depend, in part, on our success in obtaining and enforcing valid patent claims.  Additionally, we may benefit from a variety of regulatory frameworks in the United States, Europe, Japan, China, and other territories that provide periods of non-patent-based exclusivity for qualifying drug products.  See “Business—Government Regulation—United States Patent Term Restoration and Regulatory Exclusivity for Approved Products.”

We cannot ensure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications that may be filed by us in the future, nor can we ensure that any of our existing or subsequently granted patents will be useful in protecting our drug candidates, technological innovations, or processes.  Additionally, any existing or subsequently granted patents may be challenged, invalidated, circumvented, or infringed.  We cannot guarantee that our intellectual property rights or proprietary position will be sufficient to permit us to take advantage of current market trends or otherwise to provide or protect competitive advantages.  Furthermore, our competitors may be able to independently develop and commercialize similar products, or may be able to duplicate our technologies, business model, or strategy, without infringing our patents or otherwise using our intellectual property.

Our patent estate (patents and patent applications owned by or exclusively licensed to Reata), on a worldwide basis, encompasses more than 900 granted patents and more than 260 pending patent applications, including more than 550 granted patents and more than 160 pending patent applications related to omaveloxolone, RTA 901, bardoxolone, and the RTA 1700 class of compounds.  More than 200 granted patents and more than 50 pending applications claim additional structural classes of Nrf2 activators, providing further protection for the franchise and a potential source of additional development candidates.  Four issued United States patents, more than ten issued foreign patents, and several pending United States and foreign patent applications contain composition of matter claims to

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RTA 901 and related compounds. The RTA 1700 class of compounds is covered by more than 40 granted United States and foreign patents and several pending applications.

Fundamental composition of matter patents and applications claiming omaveloxolone have an expiration date in 2033.  These patents and applications also contain claims to therapeutic uses of omaveloxolone.  The fundamental United States composition of matter patent claiming RTA 901, and its foreign equivalents, have an expiration date in 2033.  Our later-expiring granted patents with claims to compositions of matter for bardoxolone, including patents claiming the commercial form, have an expiration date of 2029 in the United States and 2028 elsewhere.  The patent that covers specific formulations of bardoxolone, including the commercial formulation, has an expiration date of 2030.  Other granted patents and pending patent applications relating to specific uses of bardoxolone, including the treatment of CVD and CKD, have expiration dates ranging from 2029 to 2034.  Patents and pending applications covering the RTA 1700 class of compounds, including composition of matter claims and method of use claims, have expiration dates ranging from 2031 to 2037.

The protection afforded by any particular patent depends upon many factors, including the type of patent, scope of coverage encompassed by the granted claims, availability of extensions of patent term, availability of legal remedies in the particular territory in which the patent is granted, and success of any challenges to the patent, if asserted.  Changes in either patent laws or in the interpretation of patent laws in the United States and other countries could diminish our ability to protect our inventions and to enforce our intellectual property rights.  Accordingly, we cannot predict with certainty the enforceability of any granted patent claims or of any claims that may be granted from our patent applications.

The biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other intellectual property rights.  Our ability to maintain and solidify our proprietary position for our products and core technologies will depend on our success in obtaining effective claims and enforcing those claims once granted.  We have in the past been involved in various administrative proceedings with respect to our patents and patent applications and may, as a result of our extensive portfolio, be involved in such proceedings in the future.  Additionally, in the future, we may claim that a third party infringes our intellectual property, or a third party may claim that we infringe its intellectual property or that our intellectual property is invalid or unenforceable.  In any of the administrative proceedings or in litigation, we may incur significant expenses, damages, attorneys’ fees, costs of proceedings, and experts’ fees, and management and employees may be required to spend significant time in connection with these actions.

Because of the extensive time required for clinical development and regulatory review of a product candidate we may develop, it is possible that any patent related to our product candidates may expire before any of our product candidates can be commercialized or may remain in force for only a short period of time following commercialization, thereby reducing the advantage afforded by any such patent.

The patent positions for our most advanced programs are summarized below.

Omaveloxolone Patent Portfolio

Omaveloxolone is protected by three families of patents.  The first, filed in April 2009, contains composition of matter claims that encompass omaveloxolone and many related compounds.  This family includes five issued United States patents and a number of granted patents in foreign jurisdictions including Canada, China, Eurasia, Europe, Japan, and Mexico.  Additional United States and foreign applications from this family are pending.  The second family, filed in April 2013, is specifically focused on omaveloxolone and includes composition of matter claims and method of use claims.  The initial United States patent from this family was issued on March 31, 2015.  The issued claims include composition of matter claims to omaveloxolone without regard to morphic form, claims to several distinct morphic forms of omaveloxolone, including the form used in oral dosing formulations, and claims to various methods of therapeutic use.  A first continuation application has also issued, and a second continuation application is pending.  Foreign equivalents of the original United States application have been filed in Europe, Canada, Mexico, Japan, China, and more than 20 other territories.  The European application has granted and has been validated in multiple EPC member states.  In addition, a divisional application has also been granted in Europe.  The Japanese and Chinese applications have also granted.  A third patent family, filed by AbbVie in April 2014 and being assigned to us under the Reacquisition Agreement, claims additional morphic forms of omaveloxolone.

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The most relevant granted United States patents with claims covering omaveloxolone are listed below, along with their projected expiration dates.  As discussed below for bardoxolone, if omaveloxolone is approved for marketing in the United States, we may be eligible for term extension under the Hatch-Waxman Act for a granted United States patent containing claims covering omaveloxolone.  Similar term extensions may be available in Europe, Japan, and certain other foreign jurisdictions.  The amount of any such term extension, and the identity of the patent to which it would apply, depend upon several factors including the duration of the development program and the date of marketing approval.  See “Government Regulation—United States Patent Term Restoration and Regulatory Exclusivity for Approved Products.”

Patent Number	Title	Projected Expiration
8,124,799	Antioxidant Inflammation Modulators: Oleanolic Acid Derivatives with Amino and Other Modifications at C-17	December 3, 2029
8,440,854	Antioxidant Inflammation Modulators: Oleanolic Acid Derivatives with Amino and Other Modifications at C-17	April 20, 2029
9,670,147	Antioxidant Inflammation Modulators: Oleanolic Acid Derivatives with Amino and Other Modifications at C-17	April 20, 2029
8,993,640	2,2-Difluoropropionamide Derivatives of Bardoxolone Methyl, Polymorphic Forms and Methods of Use Thereof	April 24, 2033
9,701,709	2,2-Difluoropropionamide Derivatives of Bardoxolone Methyl, Polymorphic Forms and Methods of Use Thereof	April 24, 2033
9,856,286	2,2-Difluoropropionamide Derivatives of Bardoxolone Methyl, Polymorphic Forms and Methods of Use Thereof	April 24, 2034

RTA 901 Patent Portfolio

RTA 901 is protected by a family of patents and applications based on the Patent Cooperation Treaty application filed in 2013.  Patents from this family have been granted in the United States, Australia, Canada, China, Eurasia, Europe, Japan, Korea, Mexico, and New Zealand.  Applications are pending in Europe, China, Mexico, and several other countries.  Patents are granted on three United States continuation applications, while a fourth United States continuation application is pending.  Patented and pending claims in this family include composition of matter claims that specifically cover RTA 901 regardless of form, and other claims that cover related compounds.  Patents from this family will expire in 2033 unless extended.  A second family of patents, filed in 2019 in more than 20 territories, provides additional composition of matter protection for RTA 901.  Patents from this family will expire in 2039 unless extended.  Details of the issued United States patent are shown below.

Patent Number	Title	Projected Expiration
9,422,320	C-Terminal Hsp90 Inhibitors	February 8, 2033
10,030,041	C-Terminal Hsp90 Inhibitors	February 8, 2033
10,590,157	C-Terminal Hsp90 Inhibitors	February 8, 2033
10,882,881	C-Terminal Hsp90 Inhibitors	February 8, 2033
10,717,755	Co-crystal Forms of a Novobiocin Analog and Proline	February 1, 2039

Bardoxolone Patent Portfolio

Our bardoxolone patent portfolio includes seven families of granted United States patents, some with related applications pending, and three additional families of pending United States patent applications.  Granted and pending claims offer various forms of protection for bardoxolone including claims to compositions of matter, pharmaceutical compositions, specific forms (such as crystalline and non-crystalline forms), specific formulations, and methods for treating a variety of diseases, including CVD and CKD, using bardoxolone or its analogs.  These United States patents and applications, and their foreign equivalents, are described in more detail below.

Two families of composition of matter patents contain claims that cover bardoxolone.  The original patent family containing claims to bardoxolone and related compounds was filed in 1999 and exclusively licensed to Reata in 2004 (see “Business—Intellectual Property—Licenses”).  Exclusive of any patent term extension, one granted United States

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patent from this family containing claims covering bardoxolone has an expiration date in 2022.  Corresponding patents granted in Canada, Europe (validated in multiple European Patent Convention (EPC) member states), and Japan expired in 2019.  Exclusive of any patent term extension, the granted United States patents containing claims covering specific forms of bardoxolone, including the commercial form, are due to expire in 2028 or 2029.  Two corresponding regional patents have been granted in Europe and each is validated in multiple EPC member states.  Additional corresponding patents have been granted in Japan, China, Canada, and several other countries, and related applications provide broad international protection in additional territories worldwide.  Exclusive of any patent term extension, these granted foreign patents and pending patent applications, if granted, are due to expire in 2028.

In some cases, United States patents claiming bardoxolone have longer terms than the corresponding foreign patents.  This results from the USPTO’s grant of patent term adjustments to offset examination delays originating at the USPTO.  Analogous adjustments are generally not available under foreign patent laws.  If bardoxolone is approved for marketing in the United States, under the Hatch-Waxman Act we may be eligible for up to five years patent term extension for a granted United States patent containing claims covering bardoxolone.  Unlike patent term adjustments, similar term extensions may be available in Europe, Japan, Australia, and certain other foreign jurisdictions.  The amount of any such term extension, and the identity of the patent to which it would apply, depend upon several factors including the duration of the development program and the date of marketing approval.  See “Business—Government Regulation—United States Patent Term Restoration and Regulatory Exclusivity for Approved Products.”

We also own or exclusively license various United States and foreign granted patents and pending patent applications containing claims covering formulations of bardoxolone, including the planned commercial formulation, and methods of using bardoxolone for the treatment of multiple diseases including PH, pulmonary arterial hypertension (PAH), endothelial dysfunction (an essential component of many cardiovascular disorders including PAH), CVD, CKD, Alport syndrome, metabolic disorders, and obesity.

The most relevant granted United States patents with composition of matter or method of use claims covering bardoxolone are listed below, along with their projected expiration dates exclusive of any patent term extension.

Patent Number	Title	Projected Expiration
7,863,327	Therapeutic Compounds and Methods of Use	April 15, 2022
8,088,824	Forms of CDDO Methyl Ester	October 19, 2029
8,309,601	Forms of CDDO Methyl Ester	August 13, 2028
8,633,243	Forms of CDDO Methyl Ester	August 13, 2028
8,129,429	Synthetic triterpenoids and methods of use in the treatment of disease	February 22, 2030
9,757,359	Synthetic triterpenoids and methods of use in the treatment of disease	January 12, 2029
10,953,020	Methods of Treating Alport Syndrome Using Bardoxolone Methyl or Analogs Thereof	November 8, 2037

Trade Secrets and Know-How

Certain aspects of our activities, such as our research and manufacturing efforts, rely in part on proprietary know-how or trade secrets.  Because we may employ third-party contractors to conduct certain aspects of those activities and because we collaborate with various organizations and academic institutions on the advancement of our technology platform, we must at times share trade secrets with them.  We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements, or other similar agreements with our collaborators, advisors, employees, and consultants prior to beginning research or disclosing proprietary information.  These agreements typically limit the rights of the third parties to use or disclose our confidential information, such as trade secrets.  Despite these contractual provisions, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.  Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business.  We also seek to preserve the

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integrity and confidentiality of our proprietary technology and processes by maintaining physical security of our premises and physical and electronic security of our information technology systems.

Licenses

2014 University of Kansas License

In September 2014, we entered into two exclusive, worldwide license agreements with KU Center for Technology Commercialization, Inc., the manager of intellectual property owned by University of Kansas and the University of Kansas Medical Center (the University of Kansas), to compounds claimed in certain patents and patent applications either owned exclusively by the University of Kansas, including RTA 901, or owned jointly by the University of Kansas and the National Institutes of Health (the NIH) that act as small molecule modulators of heat shock protein activity and responses in all human and veterinary therapeutic and diagnostic uses.

Under the terms of these licenses, we paid the University of Kansas initial licensing fees and reimbursed University of Kansas for past patent expenses incurred.  Under each agreement, we are required to pay annual license maintenance fees, are obligated to spend a specified threshold for sponsored research to be performed by the University of Kansas, and are obligated to pay University of Kansas development and regulatory milestone payments for each of the first two products and sales milestone payments only on the first product developed.  Under each agreement the University of Kansas is entitled to receive from us a portion of any sublicensing revenue we receive from sublicenses that we grant under the licensed technology at a percentage ranging from the low single digits to the low thirties depending on the stage of development at the time the sublicense is granted.  Under each agreement, the University of Kansas is entitled to receive royalties on net sales of licensed products sold by us, our affiliates, and our sublicensees at a percentage ranging in the low single digits depending on the type of licensed product, subject to minimum annual royalties.  To date, we have made $0.7 million in development and sublicense payments under these licenses.  Under each license agreement we are obligated to use commercially reasonable efforts to develop, manufacture, and market at least one licensed compound.  Additionally, under each license agreement, the University of Kansas retains limited rights related to research and educational use of these compounds, and the United States government also retains certain limited rights related to these compounds arising from federal funding of the research that led to their discovery.  Under one agreement, the NIH retained limited rights related to research and educational use of compounds claimed in patents that name NIH as an assignee.  In July 2020, Reata voluntarily terminated the license that involved both the University of Kansas and NIH.  This license did not involve any patents that claim compounds in development by Reata or under consideration for development.  The remaining license, which exclusively involves the University of Kansas as the licensor (the KU license), includes patents that claim RTA 901 and potential back-up or follow-on compounds, and remains in full force and effect.

The KU license is effective on a per-country basis until the later of: (i) the last expiration of a claim in a licensed patent that covers the licensed product in such country; (ii) ten years from first commercial sale of a licensed product in such country; or (iii) the expiration of any period of regulatory exclusivity for a licensed product that bars the entry of generic competitors in such country.

The KU license can be terminated by the University of Kansas if we fail to make required payments or reports, fail to use commercially reasonable efforts to commercialize a licensed product, file for bankruptcy or become insolvent, enter into receivership or a composition with creditors, or fail to perform certain other obligations including the achievement of certain developmental milestones within specified time limits, and we fail to cure any such breach within 30 days of receiving a notice of default from the licensors.

2004 Dartmouth and MD Anderson License

In 2004, we entered into an agreement with the Board of Regents of The University of Texas System in which we obtained from the Trustees of Dartmouth College (Dartmouth) and The University of Texas MD Anderson Cancer Center (MD Anderson), an exclusive, sublicenseable, worldwide license to compounds, including bardoxolone, and claims in certain patents and patent applications, along with associated know-how, to manufacture, have manufactured, use and sell defined licensed products for use within the field of human therapeutic and diagnostic uses, research reagents, and veterinary uses.  Dartmouth and MD Anderson retain certain limited rights related to academic research and educational use of these compounds, and the United States government retains certain limited rights.

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Under the terms of this license, we paid an initial licensing fee and sunk-in patent costs and are required to pay annual license maintenance fees.  In addition, the license requires us to pay certain development milestone payments depending on the licensed indication, a portion of sublicensing revenue received by us from sublicenses that we grant under the licensed technology at percentages between mid-teen digits and low-single digits, and royalties in the low single digits on net sales of licensed products by us, our affiliates, and our sublicensees subject to specified annual minimums.  To date, we have made $27.2 million in development and sublicense payments under the license.

We have a continuing obligation to use best efforts to commercialize the licensed technology.  The license is effective until the last expiration of a claim in a licensed patent that covers the licensed product or 20 years if no licensed patent covers the licensed product.  The license can be terminated by the licensors for our material breach subject to a specified notice and cure period based on the nature of the breach, if we become insolvent or enter bankruptcy or receivership proceedings, if we fail to provide satisfactory evidence that we are exercising best efforts to commercialize a licensed invention, or if two payments are late or unpaid within a twelve-month period.  Upon any termination of the license, we grant licensors a non-exclusive, sublicenseable license to any improvements that we make to the licensed technology, including those that we license from third parties, subject to a mutually agreed royalty.

2012 Amendment to the 2004 Dartmouth and MD Anderson License

In July 2012, the parties executed an amendment to the 2004 license.  This amendment provides, among other terms, that we will pay to the licensors a low single-digit royalty on net sales of certain Nrf2 activator compounds covered by the Collaboration Agreement, including omaveloxolone, that are claimed in certain patents and patent applications that are wholly owned by or assigned to us as identified in the Collaboration Agreement.

2021 Amendment to the 2004 Dartmouth and MD Anderson License

In August 2021, the parties executed an amendment to the 2004 license.  This amendment, among other terms, provides consent to an internal restructuring by the Company of certain of its intellectual property rights, facilitates the potential monetization by Dartmouth of its rights to royalties under the 2004 license, clarifies the applicability of certain running royalty payment obligations with respect to certain compounds, and specifies the dispute resolution procedure regarding a dispute between the Company and Licensors as to whether the Company is obligated under the 2012 amendment to the 2004 license to pay licensors a low single-digit royalty on sales of products containing bardoxolone.

2009 Dartmouth License

In 2009, we entered into an agreement with Dartmouth, pursuant to which Dartmouth granted us an exclusive, worldwide, sublicenseable license to Dartmouth’s rights in patents and patent applications jointly owned by us and Dartmouth claiming the use of bardoxolone and related compounds in the treatment of renal, cardiovascular, and certain metabolic diseases, along with associated know-how, to make, have made, use and sell defined licensed products in the licensed field.  Dartmouth retains certain limited rights related to academic research and educational use of these compounds.

Under the terms of this license, we paid to Dartmouth an initial licensing fee, and we are required to pay annual maintenance fees and payments associated with the achievement of certain development and aggregate sales milestones.  In addition, Dartmouth is entitled to receive from us a portion of our sublicensing revenue from sublicenses that we grant under the licensed technology at a percentage in the low single digits and royalties in the low single digits on net sales of licensed products by us, our affiliates, and our sublicensees.  To date, we have made $11.3 million in development and sublicense payments under the license.

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We are obligated to exert commercially reasonable efforts to develop and commercialize and effectively manufacture and market licensed products, including, targeting certain development milestones specified in the agreement.

The license is effective until the last valid claim of the licensed patents in the territory expires.  Each party has the right to terminate the license for the other party’s material breach, subject to a specified notice and cure period.  The license terminates automatically in the event that we become insolvent, make an assignment for the benefit of creditors, or file for bankruptcy.

2021 Amendment to the 2009 Dartmouth License

In August 2021, the parties executed an amendment to the 2009 license.  This amendment, among other terms, provides consent to an internal restructuring by the Company of certain of its intellectual property rights, facilitates the potential monetization by Dartmouth of its rights to royalties under the 2009 license, clarifies that there is no minimum royalty provision, and adds provisions regarding the defense of certain patent rights.

 Third-Party Filings

United States and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing products.  Because patent applications can take many years to issue, there may be currently pending applications unknown to us that, if granted, could pose an infringement risk with respect to our use of our product candidates or proprietary technologies.

If a third party claims that we infringe its intellectual property rights, we may face a number of issues, including but not limited to litigation expenses, substantial damages, attorney fees, injunction, royalty payments, cross-licensing of our patents, redesign of our products or processes, and related fees and costs.

We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights alleging that our products, product candidates, and proprietary technologies infringe their intellectual property rights.  If one of these patents were to be found to cover our products, product candidates, proprietary technologies, or their uses, we could be required to pay damages and could be restricted from commercializing our products, product candidates, or using our proprietary technologies unless we obtain a license to the patent.  A license may not be available to us on acceptable terms, if at all.  In addition, during litigation, the patent holder might obtain a preliminary injunction or other equitable right, which could prohibit us from making, using or selling our products, technologies, or methods.

Human Capital Management

As of December 31, 2021, we had 346 full-time and three part-time employees. 67 of our employees hold Ph.D. or M.D. degrees, with 241 employees engaged in research and development activities.  None of our employees is represented by a labor union, and none of our employees has entered into a collective bargaining agreement with us.  We consider our overall employee relations to be good.

Diversity and inclusion

We are committed to creating and maintaining a diverse and inclusive work force.  We believe our company is stronger because of the variety of our employees’ experiences and backgrounds.

COVID-19 employee safety and benefits

When COVID-19 emerged as a global pandemic in the first quarter of, 2020, Reata was quick to respond and was an early adopter of a work-from-home policy, with the exception of the laboratory that continued to operate throughout under strict safety protocols.  For all remote employees, we provided appropriate workstation equipment as well as training and resources to support employees’ mental and emotional wellbeing.  In the second quarter of 2021, Reata relaxed its policy and permitted employees to return to the office if requested.  Although the Omicron

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variant has temporarily caused us to restrict office attendance, employees have typically agreed to a modified work schedule with management with approximately 100 employees attending the office on a regular basis.  Since the onset of the pandemic, we have continued to provide full pay and benefits to employees unable to work due to illness from COVID-19, as well as those managing childcare issues or caring for ill family members.

Community engagement, social and relationship capital

Although the pandemic has significantly impacted our ability to conduct in-person community activities, we have continued to support the North Texas community as much as practical.  Our two key initiatives in 2021 were teams assisting the North Texas Food Bank in packaging up food for local families in need, and employees across the organization supported the Salvation Army Angel Tree Program.  With a planned gradual return to the office in mid-2022, Reata plans to expand its volunteering program to support the local community as it recovers from the economic and social challenges created by the pandemic.

Compensation and benefits, health and wellness

We strive to provide competitive compensation and benefit programs that help meet the varying needs of our employees.  Our competitive total rewards package includes market competitive salaries, performance related bonuses, and a long-term incentive program that provides all employees the opportunity to benefit from equity ownership through annual grants in Reata restricted stock units (RSUs) and stock options. Given the highly competitive market we are experiencing, Reata conducts regular market assessments and in 2021 made a number of compensation adjustments to attract and retain talent.

Reata provides comprehensive benefit offerings, including health insurance, dental, vision, and a number of optional benefits.  Reata also offers a childcare Flexible Spending Account (FSA) and contributes into a healthcare FSA or a Health Savings Account.  Reata also offers a 401(k) plan with an employer match. In 2021, Reata expanded its family leave program to provide up to nine weeks paid leave for an expectant mother and two weeks paid leave for a father/domestic partner.

Growth and development

Reata’s revised grade structure provides a foundation for career development.  Coupled with career guides, employees will be able to identify potential career paths within the organization and understand what personal development initiatives they should adopt to improve career advancement opportunities.  Reata utilizes an online performance management process that aligns employee goals with those of their respective function and the broader organization.  Tuition reimbursement is also made available to employees wishing to pursue additional qualifications.

Communications and engagement

We employ a variety of tools to facilitate open and direct communications across our organization.  These include open forums with executives, townhall meetings, social events, and opportunities to participate in cross-functional teams and committees.  Since the onset of the pandemic, we have adapted these forums to allow for virtual connection.  We refine our employee programs through employee engagement surveys as well as follow up pulse surveys.  The executive leadership team reviews annual survey results and ensures action plans are implemented to further increase employee engagement.

Conduct and ethics

Our board of directors and senior management strongly support a no-tolerance stance for workplace harassment, biases, and unethical behavior.  All employees are required to undertake annual training and abide by, review, and confirm compliance with, among other policies, our Code of Ethics and Business Conduct policy, Healthcare Compliance policies, and preventing harassment in the workplace policies.

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Executive Officers and Directors

The following table sets forth certain information with respect to our executive officers and directors:

Name	Position
J. Warren Huff	Chief Executive Officer and Chairman of the Board of Directors
Manmeet S. Soni	Chief Operating Officer, Chief Financial Officer, and President
Colin Meyer, M.D.	Chief Innovation Officer and Executive Vice President
Dawn C. Bir	Chief Commercial Officer and Executive Vice President
Michael D. Wortley	Chief Legal Officer and Executive Vice President
Samina Khan, M.D.	Chief Medical Officer and Senior Vice President
Andrea L. Loewen	Senior Vice President, Global Regulatory Affairs
Martin W. Edwards, M.D. (2)(3)(4)	Director
William D. McClellan, Jr. (1)(2)(5)	Director
R. Kent McGaughy, Jr. (2)(4)(5)	Director
Jack B. Nielsen (2)(3)	Director
William E. Rose (1)(2)	Director
Christy J. Oliger (1) (3) (5)	Director
Shamim Ruff (1)(3)(4)	Director

(1) Member of the audit committee.

(2) Member of the compensation committee.

(3) Member of the nominating and corporate governance committee.

(4) Member of regulatory committee

(5) Member of commercial committee

Executive Officers

J. Warren Huff is the Chairman and Chief Executive Officer of Reata. He has served as our sole Chief Executive Officer and as Chairman of the Board since our founding in 2002 and as our President until February 2022. Prior to founding Reata, Mr. Huff served as Chief Executive Officer in a number of biotechnology and information technology start-up enterprises. Mr. Huff started his career as an attorney with Johnson & Gibbs, P.C., where he was a partner and Chairman of the Corporate Securities Practice. Mr. Huff received a B.B.A. magna cum laude from the University of Texas at Austin and a J.D. from Southern Methodist University.

Manmeet S. Soni is Reata’s President, Chief Operating Officer and Chief Financial Officer and oversees manufacturing, quality assurance, global alliances, program management, business development, corporate strategy, finance, accounting, treasury, tax, corporate communications, investor relations and information technology.  He joined Reata in August 2019 as Chief Financial Officer, Executive Vice President, and assumed the additional role of Chief Operating Officer in June 2020.  In February 2022, Mr. Soni was promoted to President. Prior to joining Reata, Mr. Soni served as Senior Vice President and Chief Financial Officer of Alnylam Pharmaceuticals, Inc. from May 2017 until August 2019.  From March 2016 to February 2017, Mr. Soni served as the Executive Vice President, Chief Financial Officer and Treasurer of ARIAD Pharmaceuticals, Inc., a publicly held biopharmaceutical company, when ARIAD was acquired by Takeda Pharmaceutical Company Limited.  Mr. Soni continued as an employee of ARIAD through May 2017.  Previously, Mr. Soni served as Chief Financial Officer and Treasurer of Pharmacyclics, Inc., a publicly held biopharmaceutical company, until its acquisition by AbbVie in 2015.  Prior to joining Pharmacyclics, Mr. Soni worked at ZELTIQ Aesthetics Inc., a publicly held medical technology company as corporate controller.  Prior to ZELTIQ, Mr. Soni worked at PricewaterhouseCoopers in their Life Science and Venture Capital Group.  Mr. Soni currently serves as a member of the board of directors of Pulse Biosciences, Inc., and Summit Therapeutics plc, and previously served as a member of the board of directors of Arena Pharmaceuticals, Inc., each of which is a publicly traded company.  Mr. Soni graduated from Hansraj College at Delhi University in India.  He is a certified public accountant (CPA) and Chartered Accountant from the Institute of Chartered Accountants of India.

Colin J. Meyer, M.D. joined Reata as one of our first employees in 2003, served as Chief Medical Officer until July 2020 and was appointed Chief Research and Development Officer in July 2020.  Beginning in February 2022, his title was changed to Chief Innovation Officer to reflect his focus on providing strategic input on our portfolio of potential products, including indication expansion of our clinical programs, early-stage development and identifying

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new technology platforms, as well as supporting our regulatory submissions. Dr. Meyer received a B.S. in chemistry with specialization in biochemistry and a B.A. in biology from the University of Virginia.  He received an M.D. from the University of Texas Southwestern Medical School and an M.B.A. from Southern Methodist University Cox School of Business.

Dawn C. Bir joined Reata as Chief Commercial Officer in September 2016 to develop and oversee marketing, market access, sales, training and commercial operations.  Prior to joining Reata, Ms. Bir most recently served as Vice President of Sales with Pharmacyclics, LLC. From February 2013 to September 2016, she built and led their first hematology national sales organization of sales representatives, division managers and regional sales directors responsible for the launch of IMBRUVICA® in the United States and Puerto Rico.  From October 2011 to February 2013, Ms. Bir served as Vice President Sales & Marketing with McKesson US Pharmaceutical, SKY Pharmaceuticals and RxPak. Prior thereto, she held positions of increasing responsibility within McKesson Corporation, Genentech, Inc. and Bristol-Myers Squibb Company.  She currently serves as a member of the board of directors of Geron Corporation, a publicly traded clinical stage pharmaceutical company.  Ms. Bir holds a B.S. in Biology from Binghamton University.

Michael D. Wortley joined Reata as Chief Legal Officer in April 2015. Prior to joining Reata, Mr. Wortley was an attorney at Vinson & Elkins L.L.P. from 1995 to March 2015, serving in various capacities, including Chief Operating Partner of the firm and Managing Partner of the Dallas office, and, prior to 1995, at Johnson & Wortley, P.C., serving as Chairman of the Board and President.  He currently serves as a member of the board of directors of Pioneer Natural Resources Company, a publicly traded company.  Mr. Wortley earned a B.A. in Political Science from Southern Methodist University, a master’s degree in Regional Planning from the University of North Carolina at Chapel Hill and a J.D. from Southern Methodist University Dedman School of Law.

Samina Khan, M.D. joined Reata as Chief Medical Officer in July 2020.  Prior to joining Reata, she served as Clinical Development Team Lead at Mitsubishi Tanabe Pharma America, Inc. from May 2017 to July 2020.  From March 2015 to April 2017, Dr. Khan served as Vice President, Clinical Development at Quark Pharmaceuticals, Inc.  Prior to March 2015, Dr. Khan served in leadership positions at Abbott Laboratories and AbbVie Inc.  Dr. Khan attended Fatima Jinnah Medical University. She completed her residency and fellowship at Tufts Medical Center program and served as an Assistant Professor of Medicine at Tufts University School of Medicine.  She also received post-graduate training in rheumatology/immunology.  Dr. Khan received an M.P.H. from Harvard Medical School of Public Health and an M.B.A. from Brandeis University.

Andrea L. Loewen joined Reata in February 2020 and serves as the Senior Vice President, Global Regulatory Affairs.  She has more than 30 years of regulatory experience in drug development and commercial life cycle management primarily working in neurology, oncology, metabolic, renal, and rare diseases.  Prior to joining Reata, Ms. Loewen served as Vice President, Global Regulatory Affairs and Quality at Retrophin (now Travere Therapeutics) from 2017 to 2020.  In this role she helped to develop multiple late-stage rare disease programs, including negotiating several phase 3 studies with global health authorities in renal and neurology indications, and managed global life cycle management and label expansion for several marketed drugs.  Prior to this, Ms. Loewen served as Vice President, Regulatory Affairs and Quality at Vital Therapies from 2013 to 2017.  Ms. Loewen started her career at Baxter Healthcare and has held increasing management roles in Regulatory Affairs including a 10-year tenure at Biogen and serving as Head of Global Regulatory Affairs at Shire Pharmaceuticals.  Ms. Loewen earned a Bachelor’s degree in Biology from Gustavus Adolphus College and a Master’s degree from Pepperdine University.

Non-Employee Directors

Dr. Martin W. Edwards has served as a member of the Board since August 2020. Since 2003, until his retirement in September 2020, Dr. Edwards held various positions at Novo Holdings A/S, a life sciences investment firm, and most recently as a part-time Senior Partner. Earlier in his career, he was Corporate VP and Global Head of Drug Development for Novo Nordisk A/S, where he led all aspects of pre-clinical and clinical drug development. Dr. Edwards currently serves as a member of the board of directors of public biotech companies Kalvista Pharmaceuticals, Inc., Verona Pharma plc, Inozyme Pharma, Inc., and Morphic Holding, Inc., as well as a private biotech company. Dr. Edwards previously served as a member of the board of directors of CoLucid Pharmaceuticals, Inc., a publicly traded company. Dr. Edwards qualified in physiology and medicine at the University of Manchester. Dr. Edwards was elected a Member of the Royal College of Physicians, a Member with distinction of the Royal College of General

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Practitioners, and a Fellow of the Faculty of Pharmaceutical Medicine, and holds an M.B.A. from the University of Warwick.

William D. McClellan, Jr. has served as a member of the Board since March 2017. Mr. McClellan has served as the Chief Financial Officer of Aerin Medical Inc. since January 2018. Mr. McClellan, is a financial management consultant to healthcare and life sciences companies, serving as the managing member of Goodwater Consulting, LLC since March 2017. From June 2004 until June 2016, Mr. McClellan, was the Chief Financial Officer and Executive Vice President, Finance at On-X Life Technologies Holdings, Inc. Prior to June 2004, Mr. McClellan, held financial and accounting positions at various healthcare and other companies and was a CPA serving as an auditor with PricewaterhouseCoopers for nine years. He currently serves on the board of directors of Apollo Endosurgery, Inc., a publicly traded company, and chairs its audit committee. Mr. McClellan received a B.B.A. in accounting from Abilene Christian University and is a CPA.

R. Kent McGaughy, Jr. has served as a member of the Board since December 2004. Mr. McGaughy has been a partner in CPMG, Inc. since 2005.  Prior to joining CPMG’s predecessor, Cardinal Investment Company, Inc., in 1997, he worked in mergers and acquisitions at Simmons & Company International.  He currently serves on the boards of Apollo Endosurgery, Inc. and Instil Bio, Inc., each of which is a publicly traded company, and several private companies.  Mr. McGaughy received his B.A. from The University of Texas (summa cum laude and member of Phi Beta Kappa) and his M.B.A. from Harvard Business School.

Jack B. Nielsen has served as a member of the Board since June 2006. Mr. Nielsen has served as a Managing Director at Vivo Capital LLC, a healthcare focused investment firm, since August 2017, and previously served as a consultant from March 2017 to July 2017. From 2001 to February 2017, Mr. Nielsen was with the Novo A/S (Novozymes) organization and its venture activities in several roles, most recently as a Senior Partner based in Copenhagen, Denmark. From 2006 to 2012, Mr. Nielsen was a Partner at Novo Ventures (US) Inc. in San Francisco, where he established the office which provides certain consultancy services to Novo A/S. He currently serves as a member of the board of directors of public biotech companies Aligos Therapeutics, Inc., ALX Oncology Holdings Inc., Harmony Biosciences Holdings, Inc., Instil Bio, Inc., and IO Biotech, Inc. Mr. Nielsen in the past has served as a member of the board of Akebia Therapeutics, Inc., Apollo Endosurgery, Inc., Crinetics Pharmaceuticals, Inc., and Merus, N.V., each of which is a publicly-traded company. He is currently a member of the board of directors of a number of private companies. Mr. Nielsen received an M.Sc. in Chemical Engineering from the Technical University of Denmark, and a Masters in Management of Technology from Center for Technology, Economics and Management, Technical University of Denmark.

William E. Rose has served as a member of the Board since February 2016. Mr. Rose is the President of Montrose Capital, Inc. Prior to joining Montrose, Mr. Rose was associated with HBK Capital Management from 1991 until 2012, serving in various capacities, including Co-Chief Investment Officer. He currently serves as a member of the Investment Committee for the Dallas Museum of Art. Mr. Rose received a B.A. in Political Science from Duke University in 1989.

Christy J. Oliger has served as a member of the Board since April 2021. Ms. Oliger brings nearly 30 years of experience in the biopharmaceutical industry, serving in various commercial roles at Genentech, Inc. and Roche Holding AG from January 2000 until her retirement in July 2020, and at Schering-Plough Corporation from September 1992 until December 1999. Most recently, Ms. Oliger served as Senior Vice President, Oncology Business Unit Head, at Genentech, Inc. During her tenure at Genentech, Inc., Ms. Oliger held senior leadership roles across a variety of therapeutic areas, including oncology, neurology, rare diseases, respiratory, dermatology and immunology in hospital and specialty settings. She currently serves as a member of the board of directors of Karyopharm Therapeutics Inc., Replimune Group Inc., and Sierra Oncology, Inc., each of which is a publicly traded pharmaceutical company. Ms. Oliger received a B.A. in Economics from the University of California at Santa Barbara.

Shamim Ruff has served as a member of the Board since April 2021. Ms. Ruff brings over 30 years of experience in the biopharmaceutical industry, serving in various regulatory roles. Ms. Ruff has served as Chief Regulatory Affairs Officer and Senior Vice President, Head of Quality Assurance, at Stoke Therapeutics, Inc. since December 2018. From January 2013 to May 2018, Ms. Ruff served in various roles at Sarepta Therapeutics, Inc., including as Chief Regulatory Officer and Senior Vice President, Quality, from December 2015 to May 2018. Prior to her time at Sarepta Therapeutics, Inc, Ms. Ruff served in increasing senior regulatory roles at Sanofi, Amgen Inc., Abbott Laboratories,

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and AstraZeneca PLC. Ms. Ruff holds a bachelor’s degree in Chemistry and Biology from the University of Leicester, UK, and a master’s degree in Analytical Chemistry from the University of Loughborough, UK. Additionally, she is a Chartered Chemist and Member of the Royal Society of Chemistry.

Corporate Information

We were formed in Delaware in 2002 and maintain our principal corporate offices at 5320 Legacy Dr., Plano, Texas 75024.  Our Class A common stock is listed on The Nasdaq Global Market and is traded under the symbol “RETA.”  Our telephone number is 972-865-2219 and our internet website address is www.reatapharma.com.  We make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the United States Securities and Exchange Commission (SEC).  In addition to the reports filed or furnished with the SEC, we publicly disclose information from time to time in our press releases, at annual meetings of stockholders, in publicly accessible conferences and investor presentations, and through our website (principally in our “Investors & News” page).  References to our website in this Annual Report on Form 10-K are provided as a convenience and do not constitute, and should not be deemed, an incorporation by reference of the information contained on, or available through, the website, and such information should not be considered part of this Annual Report on Form 10-K.

Item 1A. Risk Factors.

Investing in our Class A common stock involves a high degree of risk.  You should carefully consider the risks described below, as well as the other information in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes and Part II, Item 7 entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in any documents incorporated in this Annual Report on Form 10-K by reference, before deciding whether to invest in our Class A common stock.  The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations, and growth prospects.  In such an event, the market price of our Class A common stock could decline, and you may lose all or part of your investment.  Although we have discussed all known material risks, the risks described below are not the only ones that we may face.  Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also impair our business operations.  Certain statements below are forward-looking statements.  See also “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factor Summary” in this Annual Report on Form 10-K.

Risks Related to Our Financial Condition

We have incurred significant losses since our inception.  We anticipate that we will continue to incur losses for the foreseeable future and may never achieve or sustain profitability.  We will require additional financings to fund our operations.

We are a biopharmaceutical company with our lead product candidates, omaveloxolone and bardoxolone, in clinical development.  Pharmaceutical product development is a highly risky undertaking.  To date, we have focused our efforts and most of our resources on developing our lead product candidates and on our earlier pipeline assets.  We are not profitable and have only had net income in the year ended December 31, 2014, due to recognition of collaboration revenue.  Furthermore, other than in the years ended December 31, 2009, 2010, and 2012, due to cash received from our collaborations with AbbVie and Kyowa Kirin, we have had negative cash flows from operations in each year since our inception.  We have not generated any revenue based on product sales to date.  We continue to incur significant research and development and other expenses related to our ongoing operations.  For the years ended December 31, 2021, 2020, and 2019, our net loss was $297.4 million, $247.8 million, and $290.2 million, respectively.  As of December 31, 2021, we had an accumulated deficit of $1,255.6 million and capital resources consisting of cash and cash equivalents of $590.3 million.  Despite the potential to receive development cost sharing, milestone, and other payments from Kyowa Kirin, we anticipate that we will continue to incur losses for the foreseeable future, and we anticipate these losses will increase as we continue our development of, seek regulatory approval for, and potentially commercialize our product candidates.  If we do not successfully develop and obtain regulatory approval for our existing or any future product candidates and effectively manufacture, market, and sell any products that are

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approved, we may never generate product sales.  Even if we do generate product sales, we may never achieve or sustain profitability.  Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital.  Our failure to become and remain profitable could depress the market price of our Class A common stock and could impair our ability to raise capital, expand our business, diversify our product offerings, or continue our operations.

We believe that we will continue to expend substantial resources for the foreseeable future as we continue development and expand our clinical development efforts of our product candidates, seek regulatory approval and prepare for the commercialization of our product candidates, and pursue the development of additional molecules and treatment of additional indications.  These expenditures will include costs associated with research and development, conducting preclinical studies and clinical trials, seeking regulatory approvals in various jurisdictions, manufacturing and supplying products and product candidates for ourselves and our collaborators, and hiring personnel to prepare for commercialization of our product candidates.  The outcome of any clinical trial or regulatory approval process is highly uncertain, and we are unable to fully estimate the actual costs necessary to successfully complete the development and regulatory approval process, or the likelihood of success, for our product candidates in development and any future product candidates.  Our operating plans or third-party collaborations may change as a result of many factors, which are discussed in more detail below, and other factors that may not currently be known to us, and we therefore may need to seek additional funds sooner than planned through public or private offerings of securities, debt financings, royalty sales, collaboration arrangements, or other sources.  Such financings may result in dilution to stockholders, imposition of debt covenants and repayment obligations, or other restrictions that may adversely affect our business.  We may seek additional capital due to favorable market conditions or strategic considerations even if we currently believe that we have sufficient funds for our current or future operating plans.

Our future funding requirements will depend on many factors, including, but not limited to:

• the rate of progress in the development of and the conduct of clinical trials with respect to our product candidates;

• the costs of development efforts, including the conduct of clinical trials with respect to our lead product candidates, including the degree of participation by our collaborators;

• the costs to initiate and continue research and preclinical and clinical development efforts for any future product candidates;

• the costs associated with identifying additional product candidates;

• the costs necessary to obtain regulatory approvals, if any, for our product candidates in the United States and other jurisdictions, and the costs of post-marketing studies that could be required by regulatory authorities in jurisdictions where approval is obtained;

• the continuation of our existing third-party collaborations and entry into new third-party collaborations;

• the time and unreimbursed costs necessary to commercialize products in territories where our product candidates may be approved for sale;

• the revenue, if any, from any future sales of our products, if approved, as well as revenue earned from profit share, royalties, and milestones;

• the level of reimbursement or third-party payor pricing available to our products, if approved;

• the costs of obtaining third-party suppliers of our product candidates and products, if any, manufactured in accordance with regulatory requirements;

• the costs associated with being a public company;

• the costs to grow our organization and increase the size of our facilities to meet our anticipated growth; and

• the costs we incur in the filing, prosecution, maintenance, and defense of our patent portfolio and other intellectual property rights.

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Additional funds may not be available when we require them or on terms that are acceptable to us.  If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce, or terminate our research and development efforts or other operations or activities that may be necessary to commercialize our product candidates.

In connection with the Development Agreement, upon approval of bardoxolone in the United States or certain specified European countries, we agreed to make royalty payments on our world-wide net sales, excluding net sales made by Kyowa Kirin, to BXLS.  We granted BXLS a security interest in substantially all of our assets.  The Development Agreement also contains negative covenants that may restrict our ability to pursue our business strategies, including, among other things, to obtain additional financing or reasonable terms for additional financing.  

In June 2020, we entered into the Development Agreement pursuant to which BXLS paid us a $300 million development payment in exchange for our agreement to make payments to BXLS equal to various single-digit percentages of world-wide net sales of bardoxolone by us and any of our licensees, excluding net sales made by Kyowa Kirin.  Subject to approval of bardoxolone for the treatment of CKD caused by Alport syndrome or ADPKD in the United States or certain specified European countries, and BXLS not having achieved a certain internal rate of return on its investment, we are obligated to make certain minimum cumulative payment amounts in 2025 through 2033, but only until BXLS has achieved the internal rate of return target, after which the minimum payment obligations no longer apply.  

BXLS was granted a security interest in substantially all of our assets. The Development Agreement also contains negative covenants that restrict us from (a) granting liens on certain of our assets, including liens on the bardoxolone intellectual property collateral, except for certain permitted liens, (b) incurring indebtedness, except for certain permitted indebtedness which will include certain secured indebtedness, and (c) entering into development or commercialization license transactions with respect to bardoxolone in the United States, France, Germany, Italy, Spain, or the United Kingdom, except that we are permitted to enter into any such development or commercialization license transactions freely with certain pharmaceutical companies, including those companies that have annual sales in excess of an agreed threshold.  These restrictions could inhibit our ability to pursue our business strategies and may limit our ability to, among other things, incur indebtedness, encumber assets, dispose assets, complete mergers or acquisitions, pay dividends or make other distributions to holders of our capital stock, make specified investments, and engage in transactions with our affiliates.  If we default under our obligations under the Development Agreement, we will be obligated to pay BXLS liquidated damage payments in excess of the development payment paid by BXLS.

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Risks Related to the Development and Commercialization of Our Product Candidates

We are substantially dependent on the success of our lead product candidates, omaveloxolone and bardoxolone.  We have received a CRL from the FDA with respect to its review of our NDA for bardoxolone in the treatment of patients with CKD caused by Alport syndrome.

To date, we have invested a substantial portion of our efforts and financial resources in the research and development of omaveloxolone and bardoxolone, which are currently our lead product candidates.  These are our lead product candidates that have advanced into registrational clinical development, but there can be no assurance that further clinical trials will not be required, or that regulatory delays will not be incurred.  It could be years before the trials required for their approval are completed, if ever.  We recently received a CRL from the FDA with respect to its review of our NDA for bardoxolone in the treatment of patients with CKD caused by Alport syndrome.  We will continue to work with the FDA to confirm our next steps on our Alport syndrome program. There is a high degree of risk that other regulatory agencies, such as the EMA, may be influenced by the CRL from the FDA and the negative vote at the Advisory Committee meeting for bardoxolone in patients with CKD caused by Alport syndrome. However, in any event, the development program for bardoxolone has been substantially delayed, and there is a high degree of risk that bardoxolone will not be approved in the future for any indication in the United States or elsewhere.  Furthermore, these negative outcomes regarding bardoxolone may cause the FDA and regulators in other jurisdictions, such as the EMA, to be skeptical in their future review of other drug products which we develop and for which we submit for approval. Our other clinical and preclinical programs are less advanced in development and may never enter into registrational clinical trials.  Although we believe that Nrf2 activators have many potential clinical applications, we may fail to pursue successful indications and may miss opportunities for development in other indications as a result of limited resources.  We also may fail to focus our efforts by attempting to develop single product candidates in multiple indications and formulations without success.

Our near-term prospects are dependent upon successful interactions with global regulatory authorities and on successful commercialization of omaveloxolone and bardoxolone.  We may need to complete additional or larger and more extensive controlled clinical trials to validate the results observed in clinical trials to date to continue further development and seek regulatory approval of these product candidates.  We have announced positive results from our MOXIe trial of omaveloxolone in patients with FA.  We began submitting an NDA for omaveloxolone in patients with FA in January 2022 and plan to complete the submission by the end of the first quarter of 2022.  However, there can be no assurance that the NDA will be accepted by the FDA, or, if accepted, that the NDA will be approved by the FDA.  Furthermore, there is a risk that the FDA will not agree that the data submitted in the NDA support full approval of the NDA; in this event, the FDA could determine that the data support accelerated approval under Subpart H or do not support any type of approval.  An accelerated approval would require that we agree to conduct a post-approval confirmatory clinical trial. In addition, although there may be many potentially promising indications beyond those we are currently investigating, we are still exploring indications for which further development of, and investment for, our lead product candidates may be appropriate.  Accordingly, the costs and time to complete development and the related risks are currently unknown.

The clinical and commercial success of omaveloxolone and bardoxolone will depend on a number of factors, many of which are beyond our control.

The clinical and commercial success of omaveloxolone and bardoxolone will depend on a number of factors, including the following, many of which are beyond our control:

• the timely initiation, continuation, and completion of our Phase 2 and Phase 3 clinical trials for omaveloxolone and bardoxolone, which will depend substantially upon requirements for such trials imposed by the FDA and other regulatory agencies and bodies;

• our ability to demonstrate the safety and efficacy of our product candidates to the satisfaction of the relevant regulatory authorities;

• whether the FDA or other regulatory authorities will accept NDAs for approval of our product candidates;

• whether we are required by the FDA or other regulatory authorities to conduct additional clinical trials, and the scope and nature of such clinical trials, prior to approval to market our products;

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• the timely receipt of necessary marketing approvals from the FDA and foreign regulatory authorities, including pricing and reimbursement determinations;

• the ability to successfully commercialize our product candidates for marketing and sale, if approved by the FDA or foreign regulatory authorities, whether alone or in collaboration with others;

• our ability and the ability of third-party manufacturers to manufacture the quantities of our product candidates with quality attributes necessary to meet regulatory requirements and at a scale and yield sufficient to meet anticipated demand at a cost that allows us to achieve profitability;

• our success in educating health care providers and patients about the benefits, risks, administration, and use of our product candidates, if approved;

• acceptance of our product candidates, if approved, as safe and effective by patients and the healthcare community;

• the achievement and maintenance of compliance with all regulatory requirements applicable to our product candidates, our third-party manufacturers, and our internal operations;

• the maintenance of an acceptable safety profile of our products, if any, following any approval;

• the availability, perceived advantages, relative cost, relative safety, and relative efficacy of alternative and competitive treatments;

• our ability to provide approved product with a convenient and patient-friendly capsule configuration;

• our ability to successfully enforce our intellectual property rights for our product candidates and against the products of potential competitors; and

• our ability to avoid or succeed in third-party patent interference or patent infringement claims.

We cannot assure you that we will ever be able to achieve profitability through the sale of, or royalties from, our product candidates.  If we or our collaborators are not successful in obtaining approval for and commercializing our product candidates, or are delayed in completing those efforts, our business and operations would be adversely affected.

If our product candidates receive regulatory approval, we will be subject to additional, ongoing regulatory requirements and we may face future development, manufacturing, and regulatory difficulties.

Our product candidates, if approved, will also be subject to ongoing regulatory requirements for labeling, packaging, storage, advertising, promotion, sampling, record-keeping, submission of safety and other post-market approval information, importation, and exportation.  In addition, approved products, manufacturers, and manufacturers’ facilities are required to comply with extensive FDA, EMA, United Kingdom Medicines and Healthcare Products Regulatory Agency (MHRA), PMDA, and Australian Therapeutic Goods Administration (TGA) requirements and the requirements of other similar agencies, including ensuring that quality control and manufacturing procedures conform to CGMP requirements.  As such, we and our potential future contract manufacturers will be subject to continual review and periodic inspections to assess compliance with CGMPs.  Accordingly, we and others with whom we work will be required to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality control.  We will also be required to report certain adverse reactions and production problems, if any, to the FDA, EMA, MHRA, PMDA, TGA, and other similar agencies and to comply with certain requirements concerning advertising and promotion for our product candidates.  Promotional communications with respect to prescription drugs also are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved labeling.  Accordingly, once approved, we may not promote our products, if any, for indications or uses for which they are not approved.

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If a regulatory agency discovers previously unknown problems with a product, such as AEs of unanticipated severity or frequency or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing, or labeling of a product, it may impose restrictions on that product or us, including requiring withdrawal of the product from the market.  If our product candidates or manufacturers fail to comply with applicable regulatory requirements, a regulatory agency may:

• issue warning letters or untitled letters;

• request voluntary product recalls;

• mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;

• require us or our potential future collaborators to enter into a consent decree or obtain a permanent injunction against us or our potential future collaborators, which can include shutdown of manufacturing facilities, imposition of fines, reimbursements for inspection costs, taking of specific actions by required due dates, and penalties for noncompliance;

• impose other administrative or judicial civil or criminal penalties or pursue criminal prosecution;

• withdraw regulatory approval;

• refuse to approve pending applications or supplements to approved applications filed by us or by our collaborators or potential collaborators;

• impose restrictions on operations, including costly new manufacturing requirements; or

• seize or detain products.

Success in earlier Phase 1 and 2 clinical trials may not be indicative of the results that may be obtained in larger registrational clinical trials, which may delay or prevent obtaining regulatory approval.

Clinical development is expensive and can take many years to complete, and its outcome is inherently uncertain.  Failure can occur at any time during the clinical trial process.  Success in preclinical studies and early clinical trials may not be predictive of results in larger clinical trials, and successful results from early or small clinical trials may not be replicated or show as favorable an outcome in larger clinical trials, even if successful.  For example, we have previously endeavored to develop bardoxolone for the treatment of T2D CKD.  While bardoxolone appeared to be safe and effective throughout Phase 2 clinical development for kidney disease, we encountered heart failure related to fluid overload during the pivotal Phase 3 trial, known as BEACON, that resulted in the termination of the T2D CKD program.  Heart failure appeared to occur at a very low rate in only a particular type of patient studied during BEACON, which was not observed during Phase 2.  Our other Phase 2 clinical programs with omaveloxolone and bardoxolone have involved a relatively small number of patients exposed for a relatively short period of time compared to the Phase 3 clinical trials that we may need to conduct.  Accordingly, the Phase 2 clinical trials that we have conducted may not have uncovered safety issues, even if they exist.  The biochemical pathways that we believe are affected by omaveloxolone and bardoxolone are implicated in a variety of biological processes and disease conditions, and it is possible that the use of our product candidates to treat larger numbers of patients will demonstrate unanticipated AEs, including possible drug-drug interactions, which may negatively affect their safety profile.

We initiated the rolling submission of an NDA for omaveloxolone in patients with FA in January 2022 and plan to complete the submission by the end of the first quarter of 2022. There can be no assurance that the FDA will accept the NDA for filing or that the NDA will be approved.  The FDA had originally indicated that we must conduct another clinical trial of omaveloxolone in patients with FA prior to seeking approval, prior to indicating thereafter that an NDA filing would be an acceptable next step in the regulatory process. However, there can be no assurance that the FDA will not determine that another clinical trial must be conducted.  Furthermore, the FDA could determine that an accelerated approval regulatory pathway for omaveloxolone in patients with FA is the most appropriate approval pathway, which will require us to conduct another clinical trial as a post-marketing requirement. The results of this trial may not be sufficient to support or maintain approval of omaveloxolone for treatment of patients with FA.  

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Preliminary discussions with the EMA indicated that additional nonclinical or clinical studies may be required in advance of a MAA for FA in the EU.  We have had limited or no discussions of these trial data with other global regulatory health authorities, and these regulatory bodies may not concur that these studies would be adequate to support a marketing application or that the benefits would translate to approvable trial endpoints or be reflected on our product label.

In addition, we cannot assure that any potential advantages that we believe bardoxolone may have for our current clinical programs will be substantiated by each of our registrational clinical trials or that we will be able to include a discussion of any advantages in our labeling should we obtain approval.  We cannot assure that our previous data in our Phase 2 and Phase 3 trials and our trials in T2D CKD may predict effects in our registrational trial in patients with CKD caused by ADPKD or other forms of CKD.  Additionally, we have discussed CKD caused by Alport syndrome trial data with the FDA, EMA and the PMDA and ADPKD trial data with the FDA.  Discussions with the FDA of the two-year results of our CARDINAL Phase 3 trial in patients with CKD caused by Alport syndrome will continue after our receipt in February 2022 of a CRL from the FDA in connection with the FDA’s review of the NDA for bardoxolone in patients with CKD caused by Alport syndrome.  The EMA is reviewing our MAA for CKD caused by Alport syndrome in the EU.  We have had limited or no discussions of these trial data with other global regulatory health authorities, and these regulatory bodies may not concur that these studies would be adequate to support a marketing application or that the benefits would translate to approvable trial endpoints or be reflected on our product label.

Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development, or after achieving positive results in pivotal trials, and we have had, and may face, similar setbacks.  In addition, the patient populations under investigation with omaveloxolone and bardoxolone have many co-morbidities that may cause severe illness or death, which may be attributed to omaveloxolone and bardoxolone in a manner that negatively affects the safety profile of our product candidate.  If the results of our ongoing or future clinical trials for omaveloxolone and bardoxolone are inconclusive with respect to efficacy, if we do not meet our clinical endpoints with statistical significance, or if there are unanticipated safety concerns or AEs that emerge during clinical trials, we may be prevented from or delayed in obtaining marketing approval, and even if we obtain marketing approval, any sales may suffer.

We may face delays in completing our ongoing or planned clinical trials due to a number of factors, including failure to enroll sufficient number of patients in our clinical trials in a timely manner, or these studies may not be completed at all.

Clinical trials can be delayed, suspended, or terminated for a variety of reasons, including delay or failure to:

• reach timely agreement on acceptable terms with prospective contract research organization (CROs) and clinical trial sites;

• manufacture sufficient quantities of product candidate with acceptable quality attributes for use in clinical trials;

• obtain required regulatory or IRB approval or guidance;

• maintain clinical sites in compliance with clinical trial protocols and GCP;

• initiate or add a sufficient number of clinical trial sites;

• recruit, enroll, and retain patients through the completion of the trial; and

• address any physician or patient safety concerns that arise during the course of the trial.

We experienced trial enrollment delays in our Phase 3 ADPKD trial, and a termination of a Phase 3 trial in pulmonary arterial hypertension associated with connective tissue disease (CTD-PAH), due to the COVID-19 pandemic.

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We recently have experienced and may continue to experience slowing of patient enrollment or higher patient discontinuations in our ongoing Phase 3 FALCON study and long-term extension EAGLE study, due to the safety concerns raised during the FDA Advisory Committee Meeting and based on the CRL received for our NDA for bardoxolone for the treatment of patients with CKD caused by Alport Syndrome.

In addition, we could encounter delays if a clinical trial is suspended or terminated by us, by the relevant IRBs at the sites at which such studies are being conducted, or by the FDA or other regulatory authorities.  A suspension or termination of clinical trials, including imposition of a clinical hold, may result from any number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities, unforeseen safety issues or adverse side effects, changes in laws or regulations, or a principal investigator’s determination that an SAE could be related to our product candidates.  Any delays in completing our clinical trials will increase the costs of the trial, delay or prevent the product candidate’s development and approval, and jeopardize our ability to commence marketing and generate revenue.  Any of these occurrences may materially and adversely harm our business and operations and prospects.

Identifying and qualifying patients to participate in clinical trials of our product candidates is critical to our success.  The timing of our clinical trials depends on the rate at which we can recruit and enroll patients in testing our product candidates.  Patients may be unwilling to participate in clinical trials of our product candidates for a variety of reasons, some of which may be beyond our control, including:

• severity of the disease under investigation;

• real or perceived availability of alternative treatments;

• size and nature of the patient population;

• eligibility criteria for and design of the trial in question;

• perceived risks and benefits of the product candidate under study;

• ongoing clinical trials of potentially competitive agents;

• physicians’ and patients’ perceptions as to the potential advantages of our product candidates being studied in relation to available therapies or other products under development;

• our CROs’ and our trial sites’ efforts to facilitate timely enrollment in clinical trials;

• patient referral practices of physicians; and

• the need to monitor patients and collect patient data adequately during and after treatment.

Patients may be unwilling to participate in our clinical trials for bardoxolone due to the SAEs or AEs we previously detected in a subset of patients with advanced T2D CKD, and patients currently controlling their disease with standard of care may be reluctant to participate in a clinical trial with an investigational drug.  Likewise, patients may be unwilling to participate in our clinical trials for omaveloxolone and bardoxolone due to unforeseen factors beyond our control.  Most of the conditions that we are studying are rare diseases, and enrollment in clinical trials may be limited by the lack of suitable patients with these diseases.  We may not be able to successfully initiate or continue clinical trials if we cannot rapidly enroll a sufficient number of eligible patients to participate in the clinical trials required by regulatory agencies.  If we have difficulty enrolling a sufficient number of patients to conduct our clinical trials as planned, we may need to delay, limit, or terminate on-going or planned clinical trials, any of which could have a material adverse effect on our business and prospects.

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Our product candidates may cause or have attributed to them undesirable side effects or have other properties that delay or prevent their regulatory approval or limit their commercial potential.

Undesirable side effects caused by our product candidates or that may be identified as related to our product candidates by investigators conducting our clinical trials or even related to competing products in development that utilize a similar mechanism of action or act through a similar biological disease pathway could cause us or regulatory authorities to interrupt, delay, or halt clinical trials and could result in the delay or denial of regulatory approval by the FDA or other regulatory authorities and potential product liability claims.  AEs and SAEs that emerge during treatment with our product candidates or other compounds acting through similar biological pathways may be deemed to be related to our product candidate.  This may require longer and more extensive Phase 3 clinical development, or regulatory authorities may increase the amount of data and information required to approve, market, or maintain our product candidates and could result in negative labeling or a restrictive REMS.  This may also result in an inability to obtain approval of our product candidates.

The occurrence of any or all of these events may cause the development of our product candidates to be delayed or terminated, which could materially and adversely affect our business and prospects.  Our product candidates have in the past and may in the future be deemed to cause AEs and SAEs.

Clinical trials of our product candidates may not uncover all possible AEs that patients may experience.

Clinical trials are conducted in representative samples of the potential patient population, which may have significant variability.  By design, clinical trials are based on a limited number of subjects and are of limited duration of exposure to the product, to determine whether the product candidate demonstrates the substantial evidence of efficacy and safety necessary to obtain regulatory approval.  As with the results of any statistical sampling, we cannot be sure that all side effects of our product candidates may be uncovered.  It may be the case that only with a significantly larger number of patients exposed to the product candidate for a longer duration may a more complete safety profile be identified.  Further, even larger clinical trials may not identify rare SAEs, and the duration of such studies may not be sufficient to identify when those events may occur.  Other products have been approved by the regulatory authorities for which safety concerns have been uncovered following approval.  Such safety concerns have led to labeling changes, restrictions on distribution through use of a REMS, or withdrawal of products from the market, and any of our product candidates may be subject to similar risks.

Although to date we have not seen evidence of significant safety concerns with our product candidates in the patient populations currently undergoing clinical trials with omaveloxolone and bardoxolone beyond those seen in BEACON, patients treated with our products, if approved, may experience previously unreported adverse reactions, and it is possible that the FDA or other regulatory authorities may ask for additional safety data as a condition of, or in connection with, our efforts to obtain approval of our product candidates.  If safety problems occur or are identified after our products, if any, reach the market, we may make the decision or be required by regulatory authorities to amend the labeling of our products, recall our products, or even withdraw approval for our products.

If we, our collaborators, or our third-party manufacturers cannot manufacture our product candidates or products at sufficient yields and quantities, we may experience delays in development, regulatory approval, and commercialization.

Completion of our clinical trials and commercialization of our product candidates require access to, or development of, facilities to manufacture our product candidates at sufficient quality, yields, and at commercial scale.  We have limited direct experience in manufacturing, or managing third parties in manufacturing, certain types of our product candidates in the volumes that are expected to be necessary to support commercialization.  Our efforts to establish these capabilities may not meet our requirements as to scale-up, timeliness, yield, cost, or quality in compliance with CGMP.  Our clinical trials must be conducted with product candidates produced under applicable CGMP regulations.  Failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.  We, our collaborators, or our experienced third-party manufacturers may encounter difficulties in production, which may include but are not limited to:

• costs and challenges associated with scale-up and attaining sufficient manufacturing yields;

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• supply chain issues, including the timely availability and shelf-life requirements of raw materials and supplies and the lack of redundant and backup suppliers;

• quality control and assurance;

• shortages of qualified personnel and capital required to manufacture large quantities of product;

• competing capacity needs at contract manufacturing organizations (CMOs) supporting product development as quantities for supply increase;

• establishment of commercial supply capacity through binding supply agreements;

• compliance with regulatory requirements that vary in each country where a product might be sold;

• capacity limitations and scheduling availability in contracted facilities; and

• natural disasters, cyberattacks, adverse geo-political events, pandemics, or other force majeure events that affect facilities and possibly limit production or loss of product inventory maintained in third-party storage facilities.

Even if we are able to obtain regulatory approval of our product candidates, we cannot predict the labeling we will obtain, and it may be more narrow than originally sought.

Although we are conducting one registrational trial and have completed pivotal trials in patients with Alport syndrome caused by CKD and FA, specific labeling language has not yet been discussed with regulatory authorities.  For both omaveloxolone and bardoxolone, regulatory approvals, if obtained at all, may include very narrowly-defined indications for which these products may be marketed, since this limitation is a common outcome of health authority review and approval processes.  Alternatively, the specific labeling language could highlight real or potential perceived risks that could limit the use of the product candidates in the marketplace or require a REMS.  These labeling limitations may be driven by either preclinical or clinical outcomes, some of which may not yet have been observed in our early studies.  Such limitations or warnings may affect our ability to successfully commercialize our products.  Due to the rarity of the diseases for which our product candidates are targeted, a narrower than expected indication or other restrictions in labeling could significantly affect our ability to generate revenue.

Other than the recent submission of an NDA with the FDA and an MAA with the EMA for bardoxolone in patients with CKD caused by Alport syndrome, and our current rolling submission of an NDA with the FDA for omaveloxolone in patients with FA, we have never submitted an NDA, MAA, or other marketing applications and may be unable to do so efficiently or at all for omaveloxolone, bardoxolone, or any product candidate we are developing or may develop in the future.

We have conducted, or are currently conducting, Phase 2 and Phase 3 trials for omaveloxolone and bardoxolone, and we may need to conduct additional Phase 2 trials before initiating additional Phase 3 clinical trials with omaveloxolone and bardoxolone.  The conduct of Phase 3 trials and the submission of an NDA, MAA, or other marketing application is a complicated process.  We have limited experience in preparing, submitting, and prosecuting regulatory filings, and, other than the recent submission of an NDA with the FDA and an MAA with the EMA for bardoxolone in patients with CKD caused by Alport syndrome, and our current rolling submission of an NDA with the FDA for omaveloxolone in patients with FA, we have not previously submitted an NDA, MAA, or other marketing application.  Consequently, we may be unable to successfully and efficiently execute and complete necessary clinical trials and other requirements in a way that leads to the submission of an NDA, MAA, or other marketing application and approval of any product candidate we are developing.  We may require more time and incur greater costs than our competitors and may not succeed in obtaining regulatory approvals of product candidates that we develop.  Risks related to the successful execution of our trials or successful filing of the NDA exist not only because of the complexity of the process, but also because of our lack of previous experience as an organization.

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If we or our collaborators are unable to establish sales, marketing, and distribution capabilities or enter into or maintain agreements with third parties to market and sell our product candidates, we may not be successful in commercializing our product candidates if and when they are approved.

We do not have a sales or fully-developed marketing infrastructure and have no experience in the sales, marketing, or distribution of pharmaceutical products in any country.  To achieve commercial success for any product for which we obtain marketing approval, we will need to establish sales and increase marketing capabilities or make and maintain our existing arrangements with third parties to perform these services at a level sufficient to support our commercialization efforts.

To the extent that we would undertake sales and marketing of any of our products directly, there are risks involved with establishing our own sales, marketing, and distribution capabilities.  Factors that may inhibit our efforts to commercialize our products, if any, 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 persuade adequate numbers of physicians to prescribe any future products;

• our inability to effectively manage geographically dispersed sales and marketing teams;

• the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and

• unforeseen costs and expenses associated with creating an independent sales and marketing organization.

With respect to bardoxolone, we are currently dependent in certain territories on the commercialization capabilities of our collaborator, Kyowa Kirin.  If Kyowa Kirin were to fail to devote the necessary resources and attention to sell and market our products, or in any way be unsuccessful in commercializing our products, if any, in their territories, our business and financial condition would suffer.

If the market opportunities for our product candidates are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer.  Because the target patient populations of our product candidates are small, we must be able to successfully identify patients and acquire a significant market share to achieve profitability and growth.

We focus our research and product development on treatments for rare and ultra-rare diseases.  Given the small number of patients who have the diseases that we are targeting, our profitability and growth depend on successfully identifying patients with these rare and ultra-rare diseases.  Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, are based on our beliefs and internal estimates.  These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, and market research, and may prove to be incorrect.  Further, new studies may change the estimated incidence or prevalence of these diseases, and, as a result, the number of patients with these diseases may turn out to be lower than expected.  Our effort to identify patients with diseases we seek to treat is in early stages, and we cannot accurately predict the number of patients for whom treatment might be possible.  Additionally, the potentially addressable patient population for each of our product candidates may be limited or may not be amenable to treatment with our product candidates, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect our results of operations and our business.  Finally, even if we obtain significant market share for our product candidates, because the potential target populations are very small, we may never achieve profitability despite obtaining such significant market share.

We face substantial competition.  There is a possibility that our competitors may discover, develop, obtain regulatory approval of, and commercialize drugs before we do, or develop drugs that are safer, more effective, or less costly.

The development and commercialization of new pharmaceutical products is highly competitive.  Our future success depends on our ability to achieve and maintain a competitive advantage with respect to the development and

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commercialization of our product candidates.  Our objective is to discover, develop, and commercialize new products with superior efficacy, convenience, tolerability, and safety in areas with unmet medical need.  Our current development programs are intended to either significantly complement existing therapies or serve disease states for which there are no satisfactory existing products.  However, we expect that in some cases, the products that we commercialize, if any, may compete with existing or future products of companies that have large, established commercial organizations. 

For our development program in FA, if omaveloxolone is approved and launched commercially it may face market competition.  Although there are no currently approved therapies for this condition, there are several competitors who purport to be developing products in this space.  

We are aware of only one program, vatiquinone from PTC Therapeutics Inc., in Phase 3 stage of development.  Additionally, competitor product candidates MIN-102 from Minoryx Therapeutics, MIB-626 from MetroBiotech, LLC, JOTROL (JOT-101) from Jupiter Neurosciences, Inc., and elamipretide from Stealth BioTherapeutics Corp. are in Phase 2 clinical development for FA. We are aware of only one program, CTI-1601 from Larimar Therapeutics, Inc., in Phase 1 clinical development. In addition, Biohaven Pharmaceutical Holding Company Ltd.’s Troriluzole is in Phase 3 development for the treatment of patients with SCA.  Biohaven has expressed an intention to explore the development of Troriluzole for other ataxias, which may include FA pending the outcome of the ongoing clinical studies in SCA.  If approved and launched commercially, omaveloxolone may face competition from these product candidates.  Some of these product candidates may enter the market prior to omaveloxolone, and some of these product candidates could limit the market or level of reimbursement available for omaveloxolone if it is commercialized.

RTA 901 may face similar competitive risks as omaveloxolone.  We are aware of other HSP90 inhibitors being developed for neurological indications, including arimoclomol and PU-AD by Orphazyme AS and Samus Therapeutics Inc, respectively.  If approved and launched commercially, RTA 901 may face competition by these product candidates.  Some of these product candidates may enter the market prior to RTA 901 and some of these product candidates could limit the market or level of reimbursement available for RTA 901 if they are commercialized. We plan to develop RTA 901 for patients with DPNP.  Currently, there are four drugs and two devices that are approved for treatment of DPNP in the United States including Lyrica®, Cymbalta®, Nucynta®, an opioid, and Qutenza®, a capsaicin patch applied once every three months. Intellis^TM and Vanta^TM by Medtronic Plc. and Senza® by Nevro Corp. are two implantable spinal cord stimulation systems approved for treatment of chronic pain associated with DPN. Tarlige® by Daiichi Sankyo Company Ltd. is a gabapentinoid that is approved for DPNP in Japan. In addition, current treatment guidelines from the American Diabetes Association and the American Academy of Neurology also recommend the off-label use of gabapentin and tricyclic antidepressants.

We are aware of multiple drugs in advanced clinical development for DPNP including Engenesis (VM202) by Helixmith Co. in Phase 3, HSK-16149 by Sichuan Haisco Pharmaceutical Co. in Phase 2/3 (China), and 16 additional programs in Phase 2 clinical trials including LX9211 by Lexicon Pharmaceuticals Inc., MEDI7352 by AstraZeneca Plc, Elismetrep (MT8554) by Mitsubishi Tanabe Pharma (Europe), PGDN-20WS by Pure Green Pharmaceuticals, YJ-001 by Zhejiang Pharmaceutical (China), BAY2395840 by Bayer, LY3016859, LY3526318, and LY3556050 by Eli Lilly and Company, ETX-810 by Eliem Therapeutics Inc., Pirenzepine (WST-057) by WinSanTor Inc., NRD135S.E1 by Novaremed AG, NYX-2925 by Aptinyx Inc., Ricolinostat by Regenacy Pharmaceuticals, GRC 17536 by Glenmark Pharmaceuticals Ltd., and CNTX-6016 by Centrexion Therapeutics. AT-001 by Applied Therapeutics Inc. is also being investigated for DPN in a sub-study of a Phase 3 program in Diabetic Cardiomyopathy.

If bardoxolone is approved and launched commercially for patients with CKD caused by Alport syndrome, it may face market competition.  Currently, there are no approved therapies for CKD caused by Alport syndrome, and patients are commonly treated off-label with ACE inhibitors or ARBs.  We are aware of at least three therapies for the treatment of Alport syndrome currently in Phase 2 of clinical development including an injectable product candidate, lademirsen (RG-012) from Sanofi S.A, atrasentan in patients with one of several forms of CKD including Alport syndrome from Chinook Therapeutics Inc., and sparsentan in pediatric patients with proteinuric glomerular diseases including Alport syndrome from Travere Therapeutics Inc.

If bardoxolone is approved and launched commercially for patients with ADPKD, it would launch into a landscape with at least one approved product and multiple products in clinical development.  In 2018, Otsuka

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Pharmaceuticals Co., Ltd. received approval by the FDA to market JYNARQUE® to slow kidney function decline in adults at risk of rapidly progressing ADPKD.  We are aware of one program in Phase 3 stage of development which is Palladio Biosciences’ study of lixivaptan for treating patients with ADPKD. Other products under clinical development for ADPKD include GLPG2737 by Galapagos NV in Phase 2, Tesevatinib by Kadmon, a Sanofi company, in Phase 2, Xrx-008 by Xortx Therapeutics Inc. in Phase 2, and AL01211 by Acelink Therapeutics in Phase 1.

We are also aware of multiple drugs that are either approved or in clinical development programs in T2D CKD, hypertensive, and other forms of CKD.  These include the SGLT2 inhibitors, Jardiance® and Farxiga® developed by Boehringer Ingelheim and Eli Lilly and Company, and by AstraZeneca, respectively which are in development for patients with CKD with and without T2D.  In April 2021, Farxiga® received FDA approval to reduce the risk of sustained eGFR decline, ESKD, cardiovascular death, and hospitalization for heart failure in adults with chronic kidney disease at risk of progression. AstraZeneca has not said whether any patients with CKD caused by Alport syndrome were enrolled in the DAPA-CKD trial; however, the trial did enroll patients with IgAN and other forms of glomerulonephritis.  The DAPA-CKD study excluded patients with ADPKD and T1D CKD.  Farxiga® may be used to treat patients with CKD due to rare and common forms of CKD including Alport syndrome.  Additionally, Jardiance® is currently being tested in EMPA-KIDNEY, a Phase 3 trial in patients with various forms of CKD, excluding ADPKD and T1D CKD.  Results from the EMPA-KIDNEY trial are expected in the fourth quarter of 2022. Additionally, Bayer Healthcare, in November 2021, announced the initiation of the FIONA Phase 3 study to investigate finerenone for the treatment of pediatric patients with CKD and severely increased proteinuria.  The study may enroll patients with Alport syndrome or ADPKD. Kerendia® (finerenone) received FDA approval in July 2021 to reduce the risk of sustained eGFR decline, ESKD, cardiovascular death, non-fatal myocardial infarction, and hospitalization for heart failure in adult patients with T2D CKD.

The success of any of these potential competitive products may negatively affect the development and potential for success of our product candidates.  In addition, any competitive products that are on the market or in development may compete with our product candidates for patient recruitment and enrollment for clinical trials or may force us to add or change our clinical trial comparators, whether placebo or active, to compare our product candidates against another drug, which may be the new standard of care.

Moreover, many of our competitors have significantly greater resources than we do.  Large pharmaceutical companies, in particular, have extensive experience in product development, including clinical testing, obtaining regulatory approvals, recruiting patients, manufacturing pharmaceutical products, and commercialization.  Such large and established companies compete aggressively to maintain their market shares.  In particular, these companies have greater experience and expertise in securing reimbursement, government contracts, and relationships with key opinion leaders; conducting testing and clinical trials; obtaining and maintaining regulatory approvals and distribution relationships to market products; and marketing approved products.  These companies also have significantly greater research and marketing capabilities than we do and may also have products that have been approved or are in later stages of development.  If we and our collaborators are not able to compete effectively against existing and potential competitors, our business and financial condition may be materially and adversely affected.

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Our commercial success depends upon attaining significant market acceptance of our product candidates, if approved, among physicians, patients, third-party payors, and others in the health care community.

Even if we obtain marketing approval for our product candidates, these product candidates may not gain market acceptance among physicians, third-party payors, patients, and others in the health care community.  Market acceptance of any approved product depends on a number of other factors, including:

• the clinical indications for which the product is approved and the labeling required by regulatory authorities for use with the product, including any warnings, testing, and other qualifying criteria for patient use, that may be required in the labeling;

• acceptance by physicians and patients of the product as a safe and effective treatment and the willingness of physicians to prescribe new therapies and of the target patient population to try new therapies;

• the cost, safety, efficacy, and convenience of treatment in relation to alternative treatments;

• the completion of any genetic tests that are required by the product labeling or third-party payors and formulary committees;

• the restrictions on the use of our products together with other medications, if any;

• the availability of adequate coverage and adequate reimbursement or pricing by third-party payors and government authorities; and

• the effectiveness of our sales and marketing efforts.

Failure to gain market acceptance of our product candidates, if approved, may adversely affect our business and financial condition.

We may not be successful in our efforts to identify, license, discover, develop, or commercialize additional product candidates.

Although a substantial amount of our effort will focus on the continued clinical testing, potential approval, and commercialization of our existing product candidates, the success of our business also depends upon our ability to identify, license, discover, develop, or commercialize additional product candidates.  Research programs to identify new product candidates require substantial technical, financial, and human resources.  We may focus our efforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful.  Our research programs or licensing efforts may fail to yield additional product candidates for clinical development and commercialization for a number of reasons, including but not limited to the following:

• our research or business development methodology or search criteria and process may be unsuccessful in identifying potential product candidates;

• we may not be able or willing to assemble sufficient resources to acquire, discover, or develop additional product candidates;

• our product candidates may not succeed in preclinical or clinical testing;

• our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval;

• competitors may develop alternatives that render our product candidates obsolete or less attractive;

• product candidates we develop may be covered by third parties’ patents or other exclusive rights;

• the market for a product candidate may change during our program so that such a product may become unreasonable to continue to develop;

• a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and

• a product candidate may not be accepted as safe and effective by patients, the medical community, or third-party payors.

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If any of these events occur, we may be forced to abandon our development efforts for a program or programs, or we may not be able to identify, license, discover, develop, or commercialize additional product candidates, which would have a material adverse effect on our business and could potentially cause us to cease operations.

It is difficult to predict the reimbursement or insurance coverage of our products, if approved.  Failure to obtain adequate coverage and reimbursement, or obtaining limited reimbursement, from third-party payors may render our products less attractive to patients and healthcare providers.

Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we obtain regulatory approval.  Market acceptance and sales of any approved products will depend significantly on obtaining adequate coverage and sufficient reimbursement of our products by third-party payors and may be affected by existing and future healthcare reform measures or the prices of related products for which third-party reimbursement applies.  Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a product is:

• a covered benefit under its health plan;

• safe, effective, and medically necessary;

• appropriate for the specific patient, including requiring genetic testing;

• cost-effective; and

• neither experimental nor investigational.

Obtaining coverage and reimbursement approval for a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide supporting scientific, clinical, and cost-effectiveness data for the use of our products to the third-party payor, which we may not be able to provide.  Furthermore, the reimbursement policies of third-party payors may significantly change in a manner that renders our clinical data insufficient for adequate reimbursement or otherwise limits the successful marketing of our products.  Moreover, the process for determining whether a third-party payor will provide coverage for a drug product may be separate from the process for setting the price of a drug product or for establishing the reimbursement rate that such payor will pay for the drug product.  Even if we obtain coverage for our product candidates, third-party payors may not establish adequate reimbursement amounts, which may reduce the demand for, or the price of, our products, if any.  Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product.  If coverage and reimbursement are not available or are available only to limited levels, we may not be able to commercialize certain of our products, if any.  Payors may also add additional requirements, including genetic testing and requiring less expensive generic therapy first.  New laws may be enacted or regulations may be promulgated in the United States that decrease the price at which products, if approved, are sold.  For example, there have been proposals to allow Medicare to negotiate drug prices, allow drugs approved for sale in the United States to be purchased in Canada, and price certain drugs based on the average price of the drug in certain European countries.

In countries outside of the United States, price controls may limit the price at which products, if approved, are sold.  For example, reference pricing is often used by various EU member states.  Parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices.  In some countries, we or our collaborators may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our product candidates to other available products to obtain or maintain reimbursement or pricing approval.  Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries.  If reimbursement of our products, if any, is unavailable or limited in scope or amount, or if pricing is set at unacceptable levels, we or our collaborators may elect not to commercialize our products, if any, in such countries, and our business and financial condition could be adversely affected.

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The continuing efforts of the government, insurance companies, managed care organizations, and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect:

• the demand for any products that may be approved for sale;

• the price and profitability of our products;

• coverage and reimbursement applicable to our products;

• the ability to successfully position and market any approved product; and

• the taxes applicable to our pharmaceutical product revenue.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

We face an inherent risk of product liability as a result of the clinical testing, manufacturing, and commercialization of our product candidates.  Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in a product, negligence, strict liability, or breach of warranty.  Claims could also be asserted under state consumer protection acts.  If we are unable to obtain insurance coverage at levels that are appropriate to maintain our business and operations, or if we are unable to successfully defend ourselves against product liability claims, we may incur substantial liabilities or otherwise cease operations.  Product liability claims may result in:

• termination of further development of unapproved product candidates or significantly reduced demand for any approved products;

• material costs and expenses to defend the related litigation;

• a diversion of time and resources across the entire organization, including our executive management;

• voluntary product recalls, withdrawals, or labeling restrictions;

• termination of our collaboration relationships or disputes with our collaborators; and

• reputational damage negatively affecting our other product candidates in development.

We maintain product liability insurance in a customary amount for the stage of development of our product candidates.  We have product liability and clinical trial insurance in amounts that we believe are adequate to cover this risk.  The amount of such insurance coverage may not be adequate, we may be unable to maintain such insurance, or we may not be able to obtain additional or replacement insurance at a reasonable cost, if at all.  Although we believe that we have sufficient coverage based on the advice of our third-party advisors, there can be no assurance that such levels will be sufficient for our needs.  Moreover, our insurance policies have various exclusions, and we may be in a dispute with our carrier as to the extent and nature of our coverage, including whether we are covered under the applicable product liability policy.  If we are not able to ensure coverage or are required to pay substantial amounts to settle or otherwise contest the claims for product liability, our business and operations would be negatively affected.

Risks Related to Our Reliance on Third Parties

We may seek collaborations with third parties, in addition to our collaboration with Kyowa Kirin, with development, regulatory, and commercial expertise for our current and future product candidates.  If we fail to maintain or establish such collaborations, or such collaborations are not successful, it may disrupt our business or we may not be able to capitalize on the development and commercialization of our current and future product candidates.

We have entered into the Kyowa Kirin Agreement with respect to the development and commercialization by Kyowa Kirin of bardoxolone for renal, cardiovascular, diabetes, and certain related metabolic indications in certain territories in Asia.  If Kyowa Kirin were to elect not to participate in the development and commercialization of all of our bardoxolone indications or to determine that their collaboration with us is no longer a strategic priority, were unable to perform their obligations under the Kyowa Kirin Agreement, or if a successor were to reduce their level of commitment to their collaboration with us, our ability to develop and commercialize our product candidates could

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suffer.  In addition, our Kyowa Kirin collaboration is, and any future collaboration may be, exclusive and preclude us from entering into additional collaboration agreements with other parties in the area or field of exclusivity.  Also, when we reacquired our development, manufacturing, and commercialization rights to bardoxolone, omaveloxolone, and other Nrf2 activators from AbbVie in October 2019, we agreed not to enter into licensing agreements with respect to bardoxolone in AbbVie’s former territory for a period of time, with certain exceptions.  Kyowa Kirin has allowed us to make regulatory filings and conduct clinical trials in its exclusive territory in order to generate clinical trial data that we may use in connection with seeking approval of our product candidates in the United States.  There can be no assurance that one or more of these authorizations will not be withdrawn.

Our collaboration with Kyowa Kirin and potential other third parties for bardoxolone requires cooperation between the parties, and failure to do so can negatively affect the development and commercialization of certain of our product candidates.  Multi-party decision-making is complex and involves significant time and effort.  There can be no assurance that we and our collaborators will cooperate or reach consensus.  Any disputes or lack of cooperation with our collaborators may negatively affect the timing or success of our planned clinical trials or commercialization plans.

If we fail to establish and maintain, or are prohibited from establishing, strategic collaborations related to our product candidates, we could bear all of the risk and costs related to the development and commercialization of any such product candidate, and we may need to seek additional financing, hire additional employees, and otherwise develop expertise at our cost.  This in turn may negatively affect the development of our other product candidates as we direct resources to our most advanced product candidates.

We rely on third parties to conduct most of our preclinical studies and clinical trials for our product candidates, and if our third-party contractors do not properly and successfully perform their obligations under our agreements with them, we may not be able to obtain or may be delayed in receiving regulatory approvals for our product candidates.

We rely heavily on universities, hospitals, and other institutions and third parties, including the principal investigators and their staff, to carry out our preclinical studies and clinical trials in accordance with our protocols and designs.  We also rely on a number of third-party CROs to assist in undertaking, managing, monitoring, and executing our ongoing clinical trials.  We expect to continue to rely on CROs, clinical data management organizations, medical institutions, and clinical investigators to conduct our development efforts in the future, including our Phase 3 development programs.  We compete with many other companies for the resources of these third parties, and large pharmaceutical companies often have significantly more extensive agreements and relationships with such third-party providers, and such providers may prioritize the requirements of such large pharmaceutical companies over ours.  The third parties upon whom we rely may terminate their engagements with us at any time, or we may terminate the engagements, which may cause delay in the development and commercialization of our product candidates.  If any such third party terminates its engagement with us or fails to perform as agreed or if we terminate the engagement, we may be required to enter into alternative arrangements, or perform various functions ourselves, which could result in significant cost and delay to our product development program.  Moreover, our agreements with such third parties generally do not provide assurances regarding employee turnover and availability, which may cause interruptions in the research on our product candidates by such third parties.

While our reliance on these third parties for certain development and management activities will reduce our control over these activities, it will not relieve us of our responsibilities.  For example, the FDA and foreign regulatory authorities require compliance with regulations and standards, including GCP requirements, for designing, conducting, monitoring, recording, analyzing, and reporting the results of clinical trials to ensure that the data and results from studies are credible and accurate and that the rights, integrity, and confidentiality of trial participants are protected.  Although we rely on third parties to conduct our clinical trials, we are responsible for ensuring that each of these clinical trials is conducted in accordance with its general investigational plan and protocol under legal and regulatory requirements.  Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, principal investigators, and trial sites.  If we or any of our CROs fail to comply with applicable GCP requirements, the clinical data generated in our clinical trials may be deemed unreliable, and the FDA or other regulatory authorities may require us to perform additional clinical trials prior to any marketing approval, if granted.

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We cannot assure that, upon inspection by a regulatory authority, such regulatory authority will determine that any of our clinical trials complies with GCP requirements.  Similarly, we rely on certain CROs that conduct nonclinical studies, some of which must be conducted in compliance with GLP requirements for designing, conducting, monitoring, recording, analyzing, and reporting the results of such studies.  If we or any of the CROs that perform nonclinical studies for us fail to comply with applicable GLP requirements, the data generated in those studies may be deemed unreliable, and the FDA or other regulatory authorities may require us to repeat or to perform additional studies before an IND application becomes effective or prior to any marketing approval, if granted.

If CROs and other third parties do not successfully carry out their duties under their agreements with us, if the quality or accuracy of the data they obtain is compromised due to their failure to adhere to trial protocols or to regulatory requirements, or if they otherwise fail to comply with regulations and trial protocols or meet expected standards or deadlines, the studies of our product candidates may not meet regulatory requirements.  If studies do not meet regulatory requirements or if these third parties need to be replaced, the development of our product candidates may be delayed, suspended, or terminated, or the results may not be acceptable.  If any of these events occur, we may not be able to obtain regulatory approval of our product candidates on a timely basis, at a reasonable cost, or at all.

We currently rely, and expect to continue to rely, on third parties to conduct many aspects of our product candidate manufacturing activities, and for potential commercial product manufacturing.  Our business could be harmed if those third parties fail to provide us with sufficient quantities of product or fail to do so at acceptable quality levels or prices.

We do not own any facility that may be used to conduct clinical-scale manufacturing and processing, so we must rely on collaborators and outside vendors to manufacture supplies and process our product candidates.  Outside of scale-up and validation activities, we have not yet routinely caused our product candidates to be manufactured or processed at a commercial scale and/or frequency and may not be able to do so for any of our product candidates.  In addition, our anticipated reliance on a limited number of third-party manufacturers exposes us to certain risks.

If a replacement contractor is needed, we may be unable to identify manufacturers, especially with acceptable terms, because the number of potential manufacturers is limited.  Additionally, the FDA or an equivalent foreign regulatory agency must evaluate any replacement contractor added after initial approval, and we must demonstrate comparability of product produced at any new manufacturer added after completion of Phase 3 clinical trials or initial product approval.  This process would require additional development work, testing, and compliance inspections.  A new manufacturer would also have to be educated in, or develop substantially equivalent processes for, production of our product candidates and products, if any.

Our third-party manufacturers might be unable to timely formulate and manufacture our product candidates or produce the quantity and quality required to meet our clinical and commercial needs, if any.  Contract manufacturers may not be able to execute our manufacturing procedures and other logistical support requirements appropriately.  Our contract manufacturers may not perform as agreed, may not devote sufficient resources to our product candidates, or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store, and distribute our products.

Manufacturers are subject to ongoing periodic unannounced inspection by the FDA or corresponding agencies in other geographic locations, to ensure strict compliance with CGMP and other government regulations and corresponding foreign standards.  Although we do not have control over third-party manufacturers’ compliance with these regulations and standards, we are ultimately responsible for ensuring that our product candidates are manufactured in accordance with CGMP.

Failure of any third-party manufacturer to maintain compliance with applicable laws and regulations could result in sanctions by the FDA, including request for a voluntary recall, warning letter, seizure of products, injunctions prohibiting some or all further sales and/or recalling product on the market, possible consent decree imposing substantial fines, preclusion of government contracts, import alerts, and criminal liability.  In addition, failure of a third-party manufacturer for a product undergoing review by the FDA to maintain an acceptable CGMP compliance status could result in a decision by the FDA not to approve a pending NDA.  Similar actions may be taken by foreign regulatory authorities.

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We may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates and products, if any.  Our third-party manufacturers could misappropriate our proprietary technology, including our trade secrets and know-how.

Our third-party manufacturers could breach or terminate their agreements with us in a manner or at a time that may negatively affect our planned development and commercialization activities or the timelines for the achievement of development and commercialization activities.

Raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier, may not be available or may not be suitable or acceptable for use due to material or component defects.  Our contract manufacturers and critical reagent suppliers may be subject to inclement weather, as well as natural or man-made disasters.  Disruptions to the operations of our third-party manufacturers or suppliers unrelated to our product candidates could occur, including the bankruptcy of a manufacturer or supplier or a catastrophic event or another type of force majeure event affecting a manufacturer or supplier.

Each of the risks discussed could delay our clinical trials, the approval of any of our product candidates by the FDA or foreign regulatory authorities, or the commercialization of our product candidates, and could result in higher costs or deprive us of potential product revenue.  In addition, we will rely on third parties to perform release tests on our product candidates prior to delivery to patients.  If these tests are not appropriately done and test data are not reliable, patients could be put at risk of serious harm, and the FDA or foreign regulatory authorities could place significant restrictions on our company until deficiencies are remedied to their satisfaction.

Our product candidates and certain of the components of our product candidates are currently acquired from single-source suppliers and have been purchased without long-term supply agreements.  The loss of any of these suppliers, or their failure to supply us with supplies of sufficient quantity and quality to obtain and complete manufacture of drug substance or finished drug product of acceptable quality at an acceptable price, would materially and adversely affect our business.

In most cases, we do not have long-term agreements with suppliers of drug substance, a drug product intermediate, or final drug product candidates.  Additionally, we do not have long-term agreements with suppliers of certain components of our product candidates.  To date, we primarily have used purchase orders for the supply of key materials that we use in our product candidates.  We may be unable to enter into long-term commercial supply arrangements with our vendors or to do so on commercially reasonable terms, which could have a material adverse effect upon our business.  In addition, we rely on our contract manufacturers to purchase from third-party suppliers some of the materials necessary to produce our product candidates.  In certain instances, we do not have direct control over the acquisition of those materials by our contract manufacturers.  Moreover, we do not have any long-term agreements for the commercial production of those materials.  If a key supplier became unable to supply a key intermediate, the drug substance, or a key component, the lead time required to reinitiate supply source from the alternative suppliers presents risk of delay and potential shortages of supply of our product candidates.  The logistics of our product candidate supply chains, which includes shipment of non-FDA regulated materials and intermediates from countries such as China, Japan, and Spain, adds additional time and risk to the manufacture of our product candidates.

Risks Related to Our Intellectual Property

We rely on, and may not have, adequate protection of our proprietary technologies to compete effectively in our market.

We rely upon a combination of intellectual property rights, patents, trademarks, trade secrets, and contractual arrangements to protect the intellectual property related to our technologies.  We will only be able to protect our products and proprietary information and technology by preventing unauthorized use by third parties to the extent that our patents, trademarks, trade secrets, and contractual position allow us to do so.  Any disclosure to or misappropriation by third parties of our trade secrets or confidential information could compromise our competitive position.  Moreover, we may in the future be involved in legal or administrative proceedings involving our intellectual property that are initiated by us or by third parties.  As our product candidates continue in development, third parties may infringe or misappropriate, or attempt to challenge the validity and enforceability of, our patents, trademarks,

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trade secrets, and proprietary information and technologies.  In addition, third parties may accuse our product candidates of infringement of third-party intellectual property.  Any of these proceedings could result in significant costs and commitment of management time and attention.

We also may in the future be involved in initiating legal or administrative proceedings involving our intellectual property and the product candidates of our competitors.  These proceedings can result in significant costs and commitment of management time and attention, and there can be no assurance that our efforts would be successful in preventing or limiting the ability of our competitors to market competing products.

Composition-of-matter patents relating to the active pharmaceutical ingredient are generally considered to be the strongest form of patent protection for pharmaceutical products, as such patents provide protection not limited to a particular method of use or formulation.  Method-of-use patents protect the use of a product for the specified purpose(s) or indication(s), and do not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method.  Omaveloxolone, RTA 901, and bardoxolone are protected by granted United States and foreign patents claiming compositions of matter and methods of use.  The RTA 1700 class of compounds is protected by granted United States and foreign patents claiming compositions of matter.  Each compound is the subject of pending United States and foreign patent applications claiming compositions of matter or methods of use.  We rely on a combination of these and other types of patents to protect our product candidates, and there can be no assurance that our intellectual property will create and sustain the competitive position of our product candidates.  We may choose not to file patent applications to protect certain technologies and may also choose to allow certain patents or patent applications to lapse or expire based on cost-benefit considerations.

Pharmaceutical product patents involve highly complex legal and scientific questions, which can result in uncertainties.  For example, patent laws vary from country to country and may change over time.  In addition, the interpretation of patent law by the court systems in a country may change over time.  This variability adds uncertainty with respect to the validity and enforceability of our patents and the likelihood that our patent applications will result in granted patents.  Pending patent applications that we own or license, and new applications filed by us or our licensors, may fail to result in issued patents.  Third parties may challenge the validity or enforceability of our issued patents or patents resulting from our pending or future applications, which may result in such patents being narrowed, invalidated, or held unenforceable.  Even if our patents and patent applications are not challenged by third parties, those patents and patent applications may not prevent others from designing around our claims and may not otherwise adequately protect our product candidates.  If the breadth or strength of protection provided by the patents and patent applications that we hold with respect to our product candidates is threatened, then competitors with significantly greater resources could threaten our ability to commercialize our product candidates.  

Discoveries are generally published in the scientific literature well after their actual development.  Patent applications in the United States and other countries are typically not published until 18 months after filing and in some cases are never published.  Therefore, we cannot be certain that we or our licensors were the first to make the inventions claimed in our owned and licensed patents or patent applications, or that we or our licensors were the first to file for patent protection covering such inventions.  Subject to meeting other requirements for patentability, for United States patent applications filed prior to March 16, 2013, the first to invent the claimed invention is entitled to receive patent protection for that invention, while outside the United States the first to file a patent application encompassing the invention is entitled to patent protection for the invention.  

The United States subsequently implemented a “first inventor to file” system under the Leahy-Smith America Invents Act (AIA), effective March 16, 2013.  Effects of this system and other elements of the AIA are evolving, especially as the federal courts develop a body of case law around the statutory provisions of the AIA.  Creating further uncertainty, such provisions include procedures for challenging issued patents and pending patent applications.  We may become involved in opposition, inter partes review (IPR), or interference proceedings challenging our patents and patent applications or the patents and patent applications of others; the outcomes of any such proceedings are highly uncertain.  For example, an unfavorable outcome could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology and compete directly with us, or result in our inability to manufacture, develop, or commercialize our product candidates without infringing the patent rights of others.

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In addition to the protection afforded by patents, we seek to rely on trade secret protection and confidentiality agreements to protect proprietary know-how, information, or technology that is not covered by our patents.  Although our agreements require all of our employees to assign their inventions to us, and we require all of our employees, consultants, advisors, and any third parties who have access to our trade secrets, proprietary know-how, and other confidential information and technology to enter into appropriate confidentiality agreements, we cannot be certain that our trade secrets, proprietary know-how, and other confidential information and technology will not be subject to unauthorized disclosure or that our competitors will not otherwise gain access to or independently develop substantially equivalent trade secrets, proprietary know-how, and other information and technology.  Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States.  As a result, we may encounter significant problems in protecting and defending our intellectual property globally.  If we are unable to prevent unauthorized disclosure of our intellectual property related to our product candidates and technology to third parties, we may not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business and operations.

We may be involved in intellectual property disputes with third parties and competitors that could be costly and time consuming and negatively affect our competitive position.

Our commercial success may depend on our avoiding infringement of the patents and other proprietary rights of third parties as well as on enforcing our patents and other proprietary rights against third parties.  Pharmaceutical and biotechnology intellectual property disputes are characterized by complex, lengthy, and expensive litigation over patents and other intellectual property rights.  We may initiate, become a party to, or be threatened with future litigation or other proceedings regarding intellectual property rights with respect to our product candidates and competing products.

As our product candidates advance toward commercialization, we or our collaborators may be subject to intellectual property infringement or misappropriation claims from third parties.  We attempt to ensure that our product candidates do not infringe third-party patents and other proprietary rights.  However, the patent landscape in competitive product areas is highly complex, and there may be patents of third parties of which we are unaware that may result in claims of infringement.  Accordingly, there can be no assurance that our product candidates do not infringe proprietary rights of third parties, and parties making claims against us may seek and obtain injunctive or other equitable relief, which could potentially block further efforts to develop and commercialize our product candidates.  Any litigation involving defense against claims of infringement, regardless of the merit of such claims, would involve substantial litigation expense and would be a substantial diversion of management time.

If we succeed in commercializing one or more of our product candidates under United States law, the approved product would likely be considered a NCE and, if so, would benefit from a period of data exclusivity in which no competitor could receive marketing approval for a product containing the same active pharmaceutical ingredient.  Similar laws provide various periods of data exclusivity for new chemical entities in Europe and certain other foreign jurisdictions.  Once the applicable period of regulatory exclusivity has expired, competitors may seek to market generic versions of our products even though issued patents protecting those products are still in force.  In the event that a generic competitor seeks such approval, it may be necessary for us to take legal action to enforce our patents.  In addition, the generic competitor may seek to invalidate our patents or to obtain a ruling of non-infringement in a court proceeding or by challenging our patents through interference, reexamination, IPR, and post-grant review proceedings before the USPTO or through other comparable proceedings, such as oppositions or invalidation proceedings, before foreign patent offices.  Any such resulting litigation or administrative proceedings would involve substantial expense, would be a substantial diversion of management time, and could create uncertainty regarding future sales of our products.  Findings of invalidity or non-infringement with respect to our patents could have a material adverse effect on our business.  Moreover, third parties, including generic competitors or others, may initiate judicial or administrative proceedings in the United States and foreign jurisdictions to challenge our patents from time to time, which could have a material adverse effect on our business.

We may consider initiating administrative proceedings and other means for challenging third-party patents and patent applications.  Third parties may also challenge our patents and patent applications, through interference, reexamination, IPR, and post-grant review proceedings before the USPTO, or through other comparable proceedings, such as oppositions or invalidation proceedings, before foreign patent offices.  An unfavorable outcome in any such challenge could result in loss of patent protection for our technology or require us to cease using the related technology

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and to attempt to license rights to it from the prevailing third party, which may not be available on commercially reasonable terms, if at all, in which case our business could be harmed.  Even if we are successful, participation in administrative proceedings before the USPTO or a foreign patent office may result in substantial costs and time on the part of our management and other employees.

Furthermore, there is a risk that any public announcements concerning the existence, status, or outcomes of intellectual property litigation or administrative proceedings may adversely affect the price of our stock.  If securities analysts or our investors interpret such existence, status, or outcomes as negative or otherwise creating uncertainty, our Class A common stock price may be adversely affected.

Our reliance on third parties and our agreements with collaborators require us to share our trade secrets.  Confidentiality agreements may not prevent a competitor from discovering, misappropriating, or disclosing them.

Our reliance on third-party contractors to develop and manufacture our product candidates is based upon agreements that limit the rights of the third parties to use or disclose our confidential information, including our trade secrets and know-how.  Despite the contractual provisions, the need to share trade secrets and other confidential information increases the risk that such trade secrets and information are disclosed or used, even if unintentionally, in violation of these agreements.  In the highly competitive markets in which our product candidates are expected to compete, protecting our trade secrets, including our strategies for addressing competing products, is imperative, and any unauthorized use or disclosure could impair our competitive position and may have a material adverse effect on our business and operations.

In addition, our collaborators are larger, more complex organizations than ours, and the risk of inadvertent disclosure of our proprietary information may be increased despite their internal procedures and the contractual obligations in place with our collaborators.  Despite our efforts to protect our trade secrets and other confidential information, a competitor’s discovery of such trade secrets and information could impair our competitive position and have a material adverse effect on our business.

We may be subject to claims asserting that our employees, consultants, or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property.

Although we try to ensure that our employees, consultants, and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these individuals or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer.  Litigation may be necessary to defend against these claims.  If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.  Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to our business.

In addition, while we require our employees or contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own.  The assignment of intellectual property rights may not be self-executing or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.

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We have an extensive worldwide patent portfolio.  The cost of maintaining our patent protection is high and requires continuous review and compliance.  We may not be able to effectively maintain our intellectual property position throughout the global market.

The USPTO and foreign patent offices require maintenance fees and payments as well as continued compliance with procedural and documentary requirements.  Non-compliance may result in abandonment or lapse of the subject patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.  Non-compliance may result in reduced royalty payments for lack of patent coverage in a particular jurisdiction from our collaborators or may result in increased competition, either of which could have a material adverse effect on our business.

We have made, and will continue to make, certain strategic decisions in balancing costs and the potential protection afforded by the patent laws of certain countries.  As a result, we may not be able to prevent third parties from practicing our inventions in all countries throughout the world or from selling or importing products made using our inventions in and into the United States or other countries.  Third parties may use our technologies in territories in which we have not obtained patent protection to develop their own products and, further, may infringe our patents in territories which provide ineffective or inadequate enforcement mechanisms, even if we have patent protection.  Such third-party products may compete with our product candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

The laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the United States, and we may encounter significant problems in securing and defending our intellectual property rights outside the United States.

Many companies have encountered significant problems in protecting and defending intellectual property rights in certain countries.  The legal systems of certain countries, particularly certain developing countries, do not always favor the enforcement of patents, trade secrets, and other intellectual property rights, particularly those relating to pharmaceutical products, which could make it difficult for us to stop infringement of our patents, misappropriation of our trade secrets, or marketing of competing products in violation of our proprietary rights.  Proceedings to enforce our intellectual property rights in foreign countries could result in substantial costs, divert our efforts and attention from other aspects of our business, and put our patents in these territories at risk of being invalidated or interpreted narrowly, or our patent applications at risk of not being granted, and could provoke third parties to assert claims against us.  We may not prevail in all legal or other proceedings that we may initiate and, if we were to prevail, the damages or other remedies awarded, if any, may not be commercially meaningful.  Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Intellectual property rights do not prevent all potential threats to competitive advantages we may have.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and intellectual property rights may not adequately protect our business or permit us to maintain our competitive advantage.

The following examples are illustrative:

• Others may be able to make compounds that are the same as or similar to our current or future product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed;

• We or any of our licensors or collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;

• We or any of our licensors or collaborators 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 intellectual property rights;

• The prosecution of our pending patent applications may not result in granted patents;

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• Granted patents that we own or have licensed may not cover our products or may be held not infringed, invalid, or unenforceable, as a result of legal challenges by our competitors;

• With respect to granted patents that we own or have licensed, especially patents that we either acquire or in-license, if certain information was withheld from or misrepresented to the patent examiner, such patents might be held to be unenforceable;

• Patent protection on our product candidates may expire before we are able to develop and commercialize the product or before we are able to recover our investment in the product;

• Our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for such activities, as well as in countries in which we do not have patent rights, and may then use the information learned from such activities to develop competitive products for sale in markets where we intend to market our product candidates;

• We may not develop additional proprietary technologies that are patentable;

• The patents of others may have a material adverse effect on our business; and

• We may choose not to file a patent application for certain technologies, trade secrets, or know-how, and a third party may subsequently file a patent covering such intellectual property.

Additionally, competitors could enter the market with generic versions of our product candidates, which may adversely affect sales of our product candidates, if approved.  Under the Hatch-Waxman Act, a pharmaceutical manufacturer may submit an ANDA seeking approval of a generic copy of an approved innovator product.  A manufacturer may also submit an NDA under Section 505(b)(2) of the FFDCA that references the FDA’s finding of safety and effectiveness of a previously approved drug.  An NDA product submitted under Section 505(b)(2) (a 505(b)(2) NDA) may be a new or improved version of the original innovator product.  Innovative small molecule drugs may be eligible for certain periods of regulatory exclusivity (e.g., five years for new chemical entities, three years for changes to an approved drug requiring a new clinical trial, and seven years for orphan drugs), which precludes FDA approval of, or in some circumstances, the FDA filing and review of, an ANDA or 505(b)(2) NDA relying on the FDA’s finding of safety and effectiveness for the innovative drug.  In addition to the benefits of regulatory exclusivity, an innovator NDA holder may have patents claiming the active ingredient, product formulation, or an approved use of the drug, which would be listed with the product in the FDA publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” also known as the Orange Book.  If there are patents listed in the Orange Book, a generic applicant that seeks to market its product before expiration of the patents listed in the Orange Book must include in the ANDA or 505(b)(2) NDA what is known as a “Paragraph IV certification,” challenging the validity or enforceability of, or claiming non-infringement of, the listed patent or patents.  Notice of the certification must also be given to the innovator and, if within 45 days of receiving notice the innovator sues to protect its patents, approval of the ANDA will be stayed for 30 months or a longer or shorter period determined by the court.

Innovator pharmaceutical patents are particularly vulnerable in the complex milieu of administrative, regulatory, and legal challenges.  Specifically, a patent that might become or already is the subject of litigation related to Paragraph IV certification can be challenged by any party, such as a generic competitor, at the USPTO in an IPR.  If an IPR is instituted by the Patent Trial and Appeal Board (PTAB) at the USPTO, a court could stay the litigation pending a decision by the USPTO in the IPR because the decision could affect substantive and procedural aspects at trial.  Under these circumstances, however, and some litigation to date indicates, a court may decline to toll the 30-month stay for ANDA approval when staying the litigation.  Thus, for instance, a decision by the PTAB not reversed on any appeal and invalidating all relevant claims of a patent-in-suit, could prompt a generic competitor to motion for lifting of the litigation stay, and thereafter motion for summary judgement in the litigation before expiration of the 30-month stay.

Accordingly, if our product candidates are approved, competitors could file ANDAs for generic versions of our product candidates that reference our product candidates.  If there are patents listed for our product candidates in the Orange Book, those ANDAs and 505(b)(2) NDAs would be required to include a certification as to each listed patent indicating whether the ANDA applicant does or does not intend to challenge the patent.  We cannot predict whether any patents issuing from our pending patent applications will be eligible for listing in the Orange Book, how any

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generic competitor would address such patents, whether we would sue on any such patents, or the outcome of any such suit.

We may not be successful in securing or maintaining proprietary patent protection for products and technologies we develop or license.  Moreover, if any patents that are granted and listed in the Orange Book are successfully challenged by way of a Paragraph IV certification and subsequent litigation, the affected product could more immediately face generic competition and its sales would likely decline materially.  Should sales decline, we may have to write off a portion or all of the intangible assets associated with the affected product and our results of operations and cash flows could be materially and adversely affected.

We will need to obtain approval of any proposed product names, and any failure or delay associated with such approval may adversely affect our business.

Any proprietary name or trademark we intend to use for our product candidates will require approval from the FDA, and similar health authorities outside the United States, regardless of whether we have secured a formal trademark registration from the USPTO.  The FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names.  The FDA may also object to a product name if it believes the name inappropriately implies certain medical claims or contributes to an overstatement of efficacy.  If the FDA objects to any product names we propose, which we have experienced, we will be required to adopt an alternative name for our product candidates.  If we adopt an alternative name, we would lose the benefit of our existing trademark applications for such product candidate and may be required to expend significant additional resources in an effort to identify a suitable product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties, and be acceptable to the FDA.  We may be unable to build a successful brand identity for a new trademark in a timely manner or at all, which would limit our ability to commercialize our product candidates.

If we do not obtain additional protection under the Hatch-Waxman Act and similar foreign legislation extending the terms of our patents and obtaining data exclusivity for our product candidates, our business may be materially harmed.

Depending upon the timing, duration, and specifics of FDA regulatory approval for our product candidates, one or more of our United States patents may be eligible for limited patent term extension under the Hatch-Waxman Act.  The Hatch-Waxman Act permits a patent term extension of up to five years as compensation for patent term lost during product development and the FDA regulatory review process.  Patent term extension, however, is limited to a maximum of five years and cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval by the FDA.  In addition, only one patent applicable to an approved product is eligible for the extension.  

The application for patent term extension is subject to approval by the USPTO, in conjunction with the FDA.  It takes at least six months to obtain approval of the application for patent term extension.  We may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements.  Moreover, the applicable time period or the scope of patent protection afforded could be less than we request.  If we are unable to obtain patent term extension or restoration or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product will be shortened, our competitors may obtain earlier approval of competing products, and our ability to generate revenue could be materially adversely affected.

If we fail to comply with our obligations in the agreements under which we license intellectual property and other rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.  

We are a party to intellectual property license agreements that are important to our business and expect to enter into additional license agreements in the future.  Our existing license agreements impose, and we expect that future license agreements will impose, various diligence, milestone payment, royalty, and other obligations on us.  If we fail to comply with our obligations under these agreements, or we are subject to a bankruptcy, we may be required to make certain payments to the licensor, we may lose the exclusivity of our license, or the licensor may have the right to

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terminate the license, in which event we would not be able to develop or market products covered by the license.  Additionally, the milestone and other payments associated with these licenses will make it less profitable for us to develop our drug candidates.  See “Business—Intellectual Property—Licenses” for a description of our license agreements with Dartmouth, MD Anderson, and the University of Kansas, which include descriptions of the termination provisions of these agreements.  We currently have a dispute with MD Anderson and Dartmouth regarding whether, under the 2012 amendment to the 2004 license agreement, we are obligated to pay them a low single-digit royalty on sales of products containing bardoxolone.  If the dispute is resolved in favor of MD Anderson and Dartmouth and a product containing bardoxolone is approved for sale, then we will incur additional royalty, which would have a negative impact on our operating results.  Disputes may arise regarding intellectual property subject to a licensing agreement, including but not limited to:

• the scope of rights granted under the license agreement and other interpretation-related issues;

• the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

• the sublicensing of patent and other rights;

• our diligence obligations under the license agreement and what activities satisfy those diligence obligations;

• the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our collaborators; and

• the priority of invention of patented technology.

If disputes over intellectual property and other rights that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.

Risks Related to Government Regulation

The regulatory approval process is highly uncertain, and we may not obtain regulatory approval for the commercialization of our product candidates.  Even if we believe our completed, current, or planned clinical trials are successful, regulatory authorities may not agree that they provide adequate data on safety or efficacy or may require that we conduct confirmatory clinical trials either prior to approval or after market approval.

The time required to obtain approval, if any, by the FDA and comparable foreign regulatory authorities is unpredictable, but typically takes many years following the commencement of preclinical studies and clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities.  In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.  With the exception of an NDA filed with the FDA and an MAA filed with the EMA for bardoxolone in patients with CKD caused by Alport syndrome, and our current rolling submission of an NDA with the FDA for omaveloxolone in patients with FA, we have not submitted an NDA or obtained regulatory approval for any product candidate, and it is possible that none of our current or future product candidates we may discover, in-license, or acquire and seek to develop in the future will ever obtain regulatory approval.   Our recent receipt of a CRL from the FDA with respect to the NDA for bardoxolone in patients with CKD caused by Alport syndrome puts our entire bardoxolone platform at a high degree of risk; there can be no assurance that bardoxolone will be approved for any indication.

Our product candidates could be delayed in receiving or fail to receive regulatory approval from the FDA or other regulatory authorities for many reasons, including:

• inadequate design or implementation of our clinical trials;

• failure to demonstrate to the satisfaction of regulatory authorities that a product candidate is safe and effective for its proposed indication;

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• failure of clinical trials to meet the level of statistical or clinical significance required for approval;

• failure to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

• FDA refusal to accept efficacy results from clinical trial sites outside the United States where the standard of care is potentially different from that in the United States;

• the insufficiency of data collected from preclinical studies and clinical trials of our present or future product candidates to support the submission and filing of an NDA or other submission or to obtain regulatory approval;

• inadequate manufacturing processes or facilities of third-party manufacturers with whom we contract for clinical and commercial supplies;

• internal FDA delays in the scheduling and conducting of on-site regulatory inspections due to pandemic-related circumstances (e.g., travel restrictions) or other federal, state, or local restrictions;

• changes in the approval policies or regulations that render our preclinical and clinical data insufficient for approval;

• the CROs that conduct clinical trials on our behalf may take actions outside of our control that materially adversely affect our clinical trials;

• collaborators may not perform or complete their activities contributing to our development programs in a timely manner or at all; or

• one or more SAEs may be related or possibly related to one of our product candidates, and any such determination may adversely affect our ability to obtain regulatory approval, whether or not the determination is correct.

The FDA or other regulatory authorities may require more information, including additional preclinical, clinical, nonclinical, or CMC data, to support approval, which may delay or prevent approval and our commercialization plans, or we may decide to abandon the development program altogether.  In addition, future shutdowns of the United States federal government may result in delays in the review or approval, if any, of our NDAs.  Even if we do obtain regulatory approval, our product candidates may be approved for fewer or more limited indications than we request, approval may be contingent on the performance of costly post-marketing clinical trials, or approval may require labeling that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.  In addition, if our product candidates produce undesirable side effects or safety issues, the FDA may require the establishment of a REMS, or other regulatory authorities may require the establishment of a similar strategy, that may restrict distribution of our approved products, if any, and impose burdensome implementation requirements on us.  Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.

Even if we believe our completed, current, or planned clinical trials are successful, regulatory authorities may not agree that our completed clinical trials provide adequate data on safety or efficacy, which was the case in connection with the FDA’s issuance of a CRL regarding our NDA for bardoxolone in patients with CKD caused by Alport syndrome.  In addition, the FDA originally concluded that the results of our MOXIe Phase 2 clinical trial, while positive, were not sufficient to support approval of omaveloxolone for the treatment of patients with FA.  Consequently, the FDA advised us that we needed to conduct a second clinical trial prior to submitting an NDA, prior to subsequently agreeing that we could proceed with the filing of an NDA for omaveloxolone in patients with FA.  Certain of our Phase 3 clinical trials have been or may be designed to permit us to file an application for accelerated approval based on positive interim data.  Even if we believe the interim data will support an application for accelerated approval, the regulatory authorities may not agree, which could delay approval.  Approval by one regulatory authority does not ensure approval by any other regulatory authority.  However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others.  We may not be able to submit for regulatory approvals, and even if we submit, the applications may not be filed by the FDA or comparable regulatory agency, and we may not receive the necessary approvals to commercialize our product candidates in any market.

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We may be unable to obtain orphan drug designations for some of our product candidates or to maintain the benefits associated with orphan drug designation status, including market exclusivity, which may cause our revenue, if any, to be reduced.

Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan drugs.  Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States when there is no reasonable expectation that the cost of developing and making available the drug in the United States will be recovered from sales in the United States for that drug.  Orphan drug designation must be requested before submitting an NDA.  In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages, and user-fee waivers.  After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA.  Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.  In the EU, the EMA’s Committee for Orphan Medicinal Products may grant orphan drug designation to promote the development of products that are intended for the diagnosis, prevention, or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the EU community.  Additionally, designation is granted for products intended for the diagnosis, prevention, or treatment of a life-threatening, seriously debilitating, or serious and chronic condition and when, without incentives, it is unlikely that sales of the drug in the EU would be sufficient to justify the necessary investment in developing the drug or biological product.  In the EU, orphan drug designation provides a range of potential incentives for medicines that have been granted an orphan designation by the EC, including protocol assistance, access to the centralized authorization procedure, ten years of market exclusivity, and fee reductions.

If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same drug for the same indication for seven years, except in limited circumstances such as a showing of clinical superiority to the product with orphan product exclusivity or if the FDA finds that the holder of the orphan product exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated.  A product may obtain orphan drug exclusivity for each indication that has been designated upon approval of the indication, subject to the qualifications above.  Any orphan drug exclusivity granted for second or subsequent indications applies only to those subsequent indications and does not block approval of a product for the first indication once the initial period of exclusivity has expired.  Moreover, even if one of our drug candidates receives orphan product exclusivity, the FDA can still approve other drugs that have a different active ingredient for use in treating the same indication or disease.

We have received orphan drug designation by the FDA for bardoxolone for the treatment of CKD caused by Alport syndrome and ADPKD.  We have also received orphan drug designation in Europe for bardoxolone for the treatment of Alport syndrome.  We have also received orphan drug designation by the FDA and in Europe for omaveloxolone for the treatment of FA.  We may seek orphan drug designation in the United States and Europe for some of our other product candidates in specific orphan indications in which there is a medically plausible basis for the use of these products, including other rare kidney diseases.  In the future, exclusive marketing rights in the United States, if granted, may be limited if we seek approval for an indication broader than the orphan drug designated indication and may be lost if the FDA later determines that the request for the orphan drug designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.  In addition, although we have sought or intend to seek orphan drug designation, we may never receive approval for such designations.

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If our product candidates obtain marketing approval, we will be subject to more extensive healthcare laws, regulation, and enforcement, including United States healthcare reform and other changes, and our failure to comply with those laws could have a material adverse effect on our results of operations and financial condition.

If we obtain approval for any of our product candidates, the regulatory requirements applicable to our operations, in particular our sales and marketing efforts, will increase significantly with respect to our operations.  Also, the potential for civil and criminal enforcement by the federal government and the states and foreign governments will increase with respect to the conduct of our business.  The laws that may affect our operations in the United States, currently and in the future, include, without limitation:

• the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering, or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;

• federal civil and criminal false claims laws and civil monetary penalty laws, including the civil False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims that are false or fraudulent to the federal government;

• HIPAA, which created additional federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;

• HIPAA, as amended by HITECH, and its implementing regulations, which imposes certain requirements, including mandatory contractual terms, on certain types of entities, relating to the privacy, security, and transmission of individually identifiable health information;

• the federal legislation commonly referred to as the Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies to report annually to the CMS information related to payments and other transfers of value to physicians, physician assistants, certain types of advanced practice nurses, and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members;

• federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and

• state law equivalents of each of the above federal laws, such as the federal Anti-Kickback Statute and false claims laws, that may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government, or which otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information relating to drug price increases; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of health information and genetic information in certain circumstances, many of which differ from each other and from HIPAA in significant ways, thus complicating compliance efforts.

Our clinical trial programs and research collaborations may implicate international data protection laws, including the GDPR in the EU.  The GDPR became effective on May 25, 2018 and governs the collections and use of personal data in the EU.  The GDPR, which is wide-ranging in scope, imposes several obligations and restrictions concerning the consent of the individuals to whom the personal data relates, the information provided to the individuals, the transfer of personal data out of the EU, data breach notifications, security and confidentiality of the personal data, the use of third-party processors in connection with the processing of the personal data, and imposition of substantial potential fines or penalties for breaches or noncompliance of the data protection obligations.  Data protection authorities from the different EU member states may interpret the GDPR and national laws differently and impose additional requirements, which add to the complexity of processing personal data in the EU.  Guidance on implementation and compliance practices are often updated or otherwise revised.  Complying with varying jurisdictional requirements could increase the costs and complexity of compliance, including the new risk of substantial financial penalties for data breach or improper processing of personal data under the GDPR.  Failure by

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our collaborators to comply with the GDPR on the transfer of personal data outside of the EU into the United States may result in the imposition of criminal and administrative sanctions on such collaborators, which could adversely affect our business and could create liability for us.

The scope of these laws and our lack of experience in establishing the compliance programs necessary to comply with this complex and evolving regulatory environment increase the risks that we may violate the applicable laws and regulations.  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 civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, the exclusion from participation in federal and state healthcare programs, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, and imprisonment, any of which could materially adversely affect our ability to operate our business and our financial results.

The full effect of recent United States healthcare reform and other changes in the healthcare industry, laws, and regulations and in healthcare spending is currently unknown, and the reform and other changes may adversely affect our business model.

The commercial potential for our approved products, if any, could be affected by changes in healthcare spending and policy in the United States and abroad.  We operate in a highly regulated industry.  New laws, regulations, or judicial decisions or new interpretations of existing laws, regulations, or decisions, related to healthcare availability, the method of delivery, or payment for healthcare products and services could adversely affect our business, operations, and financial condition.

For example, the PPACA was enacted in 2010 with a goal, among others, of reducing the cost of healthcare and substantially changing the way healthcare is financed by both government and private insurers.  The PPACA, among other things, expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program, imposed a significant annual, nondeductible fee on companies that manufacture or import certain branded prescription drug products, and enacted substantial provisions affecting compliance, which may affect our business practices with healthcare practitioners. In addition, other legislative changes have been proposed and adopted in the United States since the PPACA was enacted.  On August 2, 2011, the Budget Control Act of 2011 created measures for spending reductions by Congress.  A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the fiscal years 2012 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.  This includes aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic.  The Medicare reductions phase back in starting with a 1% reduction in effect from April 1, 2022 through June 30, 2022 before increasing to the full 2% reduction.  Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several types of health care providers.

In addition, the Biden Administration has indicated an intent to address prescription drug pricing and recent Congressional hearings have brought increased public attention to the costs of prescription drugs. For example, on September 9, 2021, the Biden administration published a wide-ranging list of policy proposals, most of which would need to be carried out by Congress, to reduce drug prices and drug payment. The HHS plan includes, among other reform measures, proposals to lower prescription drug prices, including by allowing Medicare to negotiate prices and disincentivizing price increases, and to support market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase price transparency. Many similar proposals, including the plans to give Medicare Part D authority to negotiate drug prices, require drug manufacturers to pay rebates on drugs whose prices increase greater than the rate of inflation, and cap out-of-pocket costs, have already been included in policy statements and legislation currently being considered by Congress.  It is unclear to what extent these and other statutory, regulatory, and administrative initiatives will be enacted and implemented, and to what extent these or any future legislation or regulations by the Biden administration will have on our business or future product candidates. In addition, former President Trump and President Biden both issued Executive Orders intended to favor government procurement from domestic manufacturers.  These actions and the uncertainty about the future of the PPACA and healthcare laws are

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likely to continue the downward pressure on pharmaceutical pricing and increase our regulatory burdens and operating costs.  

It is likely that federal and state legislatures within the United States and foreign governments will continue to consider changes to existing healthcare legislation.  For example, the PPACA has faced ongoing legal challenges, including litigation seeking to invalidate some of or all of the law or the manner in which it has been implemented.  More recently, the 2017 Tax Act was signed into law, which eliminated certain requirements of the PPACA, including the individual mandate.  On June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the PPACA is unconstitutional in its entirety because the individual mandate was repealed by Congress. Thus, the PPACA will remain in effect in its current form. We cannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified.  In addition, our development and commercialization activities could be harmed or delayed by a shutdown of the U.S. government, including the FDA.  For example, a prolonged shutdown may significantly delay the FDA’s ability to timely review and process any submissions we have filed or may file or cause other regulatory delays, which could materially and adversely affect our business.  The continuing efforts of the government, insurance companies, managed care organizations, and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect:

• the demand for any products that may be approved for sale;

• the price and profitability of our products;

• coverage and reimbursement applicable to our products;

• the ability to successfully position and market any approved product; and

• the taxes applicable to our pharmaceutical product revenue.

We are subject to United States and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws, and anti-money laundering laws and regulations.  Compliance with these legal standards could impair our ability to compete in domestic and international markets.  We can face criminal liability, fines, penalties, or other serious consequences for violations, which can harm our business.

We are subject to export control and import laws and regulations, including the United States Export Administration Regulations, United States Customs regulations, various economic and trade sanctions regulations administered by the United States Treasury Department’s Office of Foreign Assets Controls, the United States Foreign Corrupt Practices Act of 1977, as amended (FCPA), the United States domestic bribery statute contained in 18 U.S.C. § 201, the United States Travel Act, the USA PATRIOT Act, and other state and national anti-bribery and anti-money laundering laws in the countries in which we conduct activities.  Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors, and other collaborators from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector.  We may engage third parties for clinical trials outside of the United States to sell our products abroad once we enter a commercialization phase and/or to obtain necessary permits, licenses, patent registrations, and other regulatory approvals.  We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations.  We can be held liable for the corrupt or other illegal activities of our employees, agents, contractors, and other collaborators, even if we do not explicitly authorize or have actual knowledge of such activities.  Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences.

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Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could result in significant liability for us and harm our reputation.

We are exposed to the risk of employee fraud or other misconduct, including intentional failures to comply with FDA regulations or similar regulations of comparable foreign regulatory authorities, provide accurate information to the FDA or comparable foreign regulatory authorities, comply with manufacturing standards we have established, comply with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, comply with the FCPA and other anti-bribery laws, report financial information or data accurately, or disclose unauthorized activities to us.  Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions, delays in clinical trials, or serious harm to our reputation.  We have adopted a code of conduct for our directors, officers, and employees (the Code of Ethics and Business Conduct), but it is not always possible to identify and deter employee misconduct.  The precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.  If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could harm our business, results of operations, financial condition, and cash flows, including through the imposition of significant fines or other sanctions.

Risks Related to Our International Operations

A variety of risks associated with operating our business internationally could materially adversely affect our business.

We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we and any potential collaborators in those jurisdictions will be subject to additional risks related to operating in foreign countries, including:

• different regulatory requirements for drug approvals in foreign countries;

• price controls on our drug products;

• different standards of care in various countries that could complicate the evaluation of our product candidates;

• different United States and foreign drug import and export rules;

• reduced protection for intellectual property rights in certain countries;

• unexpected changes in tariffs, trade barriers, and regulatory requirements;

• different reimbursement systems and different competitive drugs indicated to treat the indications for which our product candidates are being developed;

• 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;

• compliance with the FCPA and other anti-corruption and anti-bribery laws;

• foreign taxes, including withholding of payroll taxes;

• foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

• workforce uncertainty in countries where labor unrest is more common than in the United States;

• production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

• potential liability resulting from development work conducted by foreign distributors;

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• business interruptions resulting from natural disasters or geopolitical actions, including war and terrorism, public health crises such as pandemics or epidemics, or systems failure including cybersecurity breaches; and

• compliance with evolving and expansive international data privacy laws, such as the EU GDPR.

For example, the U.K. has voluntarily departed from the EU, commonly referred to as “Brexit.”  We do not know to what extent Brexit will impact the business and regulatory environment in the U.K., the EU, or other countries.  Changes impacting our ability to conduct business in the U.K., or other EU countries, or changes to the regulatory regime in those countries, may impact certain portions of our research and general business operations in the U.K. and the EU.

Risks Related to the Operation of Our Business

We may encounter difficulties in managing our growth and expanding our operations successfully.

As we seek to advance our product candidates through clinical trials and, if approved, through commercialization, we will need to expand our development, regulatory, quality assurance, manufacturing, commercialization, compliance, and administration capabilities or contract with third parties to provide these capabilities for us.  As our operations expand, we expect that we will need to increase the responsibilities on members of management and manage any future growth effectively.  Our failure to effectively manage our growth in this regard could prevent us from successfully implementing our strategy and maintaining the confidence of investors in our company.

If we fail to attract and retain senior management and key personnel, in particular our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, and Chief Innovation Officer, we may be unable to successfully develop our product candidates, conduct our clinical trials, and commercialize our product candidates.

We are highly dependent on our Chief Executive Officer, Warren Huff, our Chief Operating Officer and Chief Financial Officer, Manmeet Soni, and our Chief Innovation Officer, Colin Meyer.  The loss of the services of Mr. Huff, Mr. Soni, or Dr. Meyer could significantly negatively affect the development and commercialization of our product candidates, our existing collaborative relationships, and our ability to successfully implement our business strategy.

Recruiting and retaining qualified commercial, development, scientific, clinical, and manufacturing personnel is and will continue to be critical to our success.  Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of, and commercialize product candidates.  We may be unable to hire, train, retain, or motivate these key personnel on acceptable terms given the intense competition among numerous companies for similar personnel.  This may be particularly the case in the Dallas area, which does not possess as large a talent base of pharmaceutical professionals as that found in some other areas of the country.

If we are unable to continue to attract and retain personnel with the quality and experience applicable to our product candidates, our ability to pursue our strategy will be limited and our business and operations would be adversely affected.

Risks Related to Our Class A Common Stock

The dual class structure of our common stock and the existing ownership of capital stock by our executive officers and directors, together with their respective affiliates, have the effect of concentrating the voting power of our common stock and will limit your control over matters subject to stockholder approval.

Each share of Class A common stock is entitled to one vote per share, and each share of Class B common stock is entitled to three votes per share.  As of February 23, 2022, our executive officers and directors, together with their respective affiliates, collectively owned shares representing approximately 98.3% of our total Class B common stock, including shares subject to outstanding options that are exercisable within 60 days of such date, and approximately

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13.6% of our total Class A common stock, including shares subject to outstanding options that are exercisable and shares that will be settled upon the vesting of RSUs within 60 days of such date.  Because of the greater number of votes per share attributed to our Class B common stock, our executive officers and directors, together with their respective affiliates, collectively beneficially own shares representing approximately 46.8% of the voting power of our outstanding capital stock.

Accordingly, these stockholders will be able to exert effective control over our management and affairs and over matters requiring stockholder approval, including the election of our board of directors and approval of significant corporate transactions.  The interests of those stockholders may differ from those of other stockholders, and they may vote their shares in a way that is contrary to the way other stockholders vote their shares.  This concentration of ownership could have the effect of entrenching our management or the board of directors, delaying or preventing a change in our control, or otherwise discouraging a potential acquirer from attempting to obtain control of us, which in turn could have a material adverse effect on the market value of our Class A common stock.  Future transfers by holders of Class B common stock will generally result in those shares converting on a 1 for 1 basis to Class A common stock, which will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long-term, which may include our executive officers, directors, and affiliates.

Because we do not intend to declare cash dividends on our shares of common stock in the foreseeable future, stockholders must rely on appreciation of the value of our common stock for any return on their investment.

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 in the foreseeable future.  As a result, we expect that only appreciation of the price of our Class A common stock, if any, will provide a return to holders of our Class A common stock for the foreseeable future.

Our ability to use net operating losses and research and development credits to offset future taxable income may be subject to certain limitations.

In general, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the Code), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses (NOLs) or Credits, to offset future taxable income or taxes.  For these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders or groups of stockholders who owns at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points over its lowest ownership percentage within a specified testing period.  Our existing NOLs or Credits may be subject to substantial limitations arising from previous ownership changes, and if we undergo an ownership change, our ability to utilize NOLs or Credits could be further limited by Sections 382 and 383 of the Code.  In addition, future changes in our stock ownership, many of which are outside of our control, could result in an ownership change under Sections 382 and 383 of the Code.  Our NOLs or Credits may also be impaired under state law.  Accordingly, we may not be able to utilize a material portion of our NOLs or Credits.  Furthermore, our ability to utilize our NOLs or Credits is conditioned upon our attaining profitability and generating United States federal and state taxable income.  As described above under “Risk Factors—Risks Related to our Financial Condition,” we have incurred significant net losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future; and, therefore, we do not know whether or when we will generate the United States federal or state taxable income necessary to utilize our NOL or credit carryforwards that are subject to limitation by Sections 382 and 383 of the Code.

The market price of our Class A common stock may be highly volatile, which may materially and adversely affect the value of your investment in our Class A common stock.

Although our Class A common stock is listed on The Nasdaq Global Market, an active trading market for our Class A common stock may not be sustained, and you may not be able to sell your shares quickly.

In November 2019, we closed a follow-on underwritten public offering of 2,760,000 shares of our Class A common stock at $183.00 per share.  In December 2020, we closed a follow-on underwritten public offering of 2,000,000 shares of our Class A common stock at $140.85 per share.  Since our initial public offering (IPO) in May

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2016 through February 23, 2022, our closing stock price has reached a low of $13.07 and a high of $247.74.  Between January 1, 2021, and December 31, 2021, the closing price of shares of our Class A common stock declined by $94.92 per share.

In general, pharmaceutical, biotechnology, and other life sciences company stocks have been highly volatile in the current market.  The volatility of pharmaceutical, biotechnology, and other life sciences company stocks is sometimes unrelated to the operating performance of particular companies, and stocks often respond to trends and perceptions rather than financial performance.  In particular, the market price of shares of our Class A common stock could be subject to wide fluctuations in response to the following factors:

• results of clinical trials of our product candidates;

• the timing of the release of results of and regulatory updates regarding our clinical trials, which we experienced in December 2021 in connection with the negative vote by the FDA’s advisory committee on bardoxolone in patients with chronic kidney disease caused by Alport syndrome;

• the level of expenses related to any of our product candidates or clinical development programs;

• results of clinical trials of our competitors’ products;

• safety issues with respect to our product candidates or our competitors’ products;

• regulatory actions with respect to our product candidates and any approved products or our competitors’ products;

• fluctuations in our financial condition and operating results;

• adverse developments concerning our third-party collaborations and our manufacturers;

• the termination of a third-party collaboration, significant difficulties with an established collaboration, or the inability to establish additional collaborations;

• the publication of research reports by securities analysts about us or our competitors or our industry or negative recommendations or withdrawal of research coverage by securities analysts;

• the inability to obtain adequate product supply for any approved drug product or the inability to do so at acceptable prices;

• disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;

• the ineffectiveness of our internal controls;

• our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market;

• additions and departures of key personnel;

• announced strategic decisions by us or our competitors;

• changes in legislation or other regulatory developments affecting our product candidates or our industry;

• fluctuations in the valuation of the pharmaceutical industry and particular companies perceived by investors to be comparable to us;

• sales of our Class A common stock or Class B common stock by us, our insiders, or our other stockholders;

• speculation in the press or investment community, including about merger or acquisition activity;

• announcement or expectation of additional financing efforts;

• announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;

• changes in accounting principles;

• terrorist acts, acts of war, or periods of widespread civil unrest;

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• natural disasters such as earthquakes and other calamities;

• public health epidemics;

• changes in market conditions for pharmaceutical stocks;

• changes in general market and economic conditions; and

• the other factors described in this “Risk Factors” section.

As a result of fluctuations caused by these and other factors, comparisons of our operating results across different periods may not be accurate indicators of our future performance.  Any variances that we report in the future may differ from the expectations of market analysts and investors, which could cause the price of our Class A common stock to fluctuate significantly.  Moreover, securities class action litigation has often been initiated against companies following periods of volatility in their stock price, particularly companies in the life sciences industry such as us.  This type of litigation could result in substantial costs and divert our management’s attention and resources and could also require us to make substantial payments to satisfy judgments or to settle litigation.  This could have a material, adverse effect on our business, financial condition and results of operations.  See Note 15, Commitments and Contingencies-Bardoxolone Securities Litigation of Notes to Consolidated Financial Statements for a description of our securities litigation.

If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.

The trading market for our Class A common stock is influenced by the research and reports that industry or securities analysts publish about us or our business.  If one or more of the analysts who cover us downgrade our stock, our stock price would likely decline.  If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

A significant portion of our total outstanding shares may be sold, which could cause the market price of our Class A common stock to drop significantly and impede our ability to raise future capital, even if our business is doing well.

As of February 23, 2022, we have 4,919,249 shares of Class B common stock outstanding representing 13.5% of our outstanding shares of common stock, all of which are currently restricted as a result of securities laws, but may be converted into shares of Class A common stock and sold, subject to any applicable volume limitations under federal securities laws with respect to affiliate sales, in the near future.  

Additionally, our Seventh Amended and Restated Registration Rights Agreement dated as of November 10, 2010, entered into with certain of our investors in connection with our Series A through H preferred stock financings, provides certain registration rights for 4,423,719 shares of Class B common stock and 1,898,576 shares of Class A common stock as of February 23, 2022.  Once we register these shares, they can be freely sold in the public market.

In addition, as of February 23, 2022, there are approximately 5,623,581 and 1,280,306 shares subject to outstanding options to purchase, and RSUs representing, shares of Class B and Class A common stock, respectively, that will become eligible for sale in the public market to the extent permitted by any applicable vesting requirements and Rule 144 under the Securities Act.  We have registered all shares of Class A common stock or Class B common stock that we issue under our employee benefit plans, including our Second Amended and Restated Long Term Incentive Plan (the LTIP Plan).  Once they are issued in accordance with the terms of the plans, they can be freely sold in the public market upon issuance, subject to the restrictions imposed on our affiliates under Rule 144 and, in the case of Class B common stock, conversion to Class A common stock.  

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Sales of a substantial number of shares of our Class A common stock in the public market, or the market perception that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A common stock. If the market price of our Class A common stock is low, we may not be able to raise additional equity in amounts sufficient to fund our business plans or we may issue significant additional shares to raise funds, resulting in significant dilution to our stockholders.

General Risk Factors

If we fail to comply with United States and certain foreign government laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.

We are subject to numerous environmental, health, and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment, and disposal of hazardous materials and wastes.  Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials, and also produce hazardous waste products.  We contract with third parties for the disposal of these materials and wastes, but we cannot eliminate the risk of contamination or injury from these materials.  In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources.  We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.  We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous, or radioactive materials.

In addition, we may incur substantial costs to comply with current or future environmental, health, and safety laws and regulations applicable to our operations in the United States and foreign countries.  These current or future laws and regulations may impair our research, development, or manufacturing efforts.  

We are also subject to regulation by various United States federal, state, and local laws and foreign government laws, including employment and labor laws, tax laws, and other regulations.  Our failure to comply with these laws and regulations also may result in substantial fines, penalties, or other sanctions.

Our business and operations may be materially adversely affected in the event of computer system failures or security breaches.

Despite the implementation of security measures, our internal computer systems, and those of our CROs, manufacturers, suppliers, and other third parties, including, but not limited to, software as a service (SaaS) providers on which we rely, are vulnerable to damage from computer viruses, unauthorized access, cyber-attacks, natural disasters, fire, terrorism, war, and telecommunication and electrical failures.  If such an event were to occur and interrupt our operations, it could result in a material disruption of our drug development programs.  For example, the loss of clinical trial data from ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.  To the extent that any disruption or security breach results in a loss of or damage to our data or applications, loss of trade secrets, or inappropriate disclosure of confidential or proprietary information, including protected health information or personal data of employees or former employees, access issues to our clinical data, or disruption of the manufacturing process, we could incur liability, remediation costs, and increased cybersecurity protection costs, the further development of our drug candidates could be delayed, and we may be subject to regulatory actions, including fines or other penalties. We may also be vulnerable to cyber-attacks by hackers or other malfeasance.  This type of breach of our cybersecurity may compromise our confidential information and/or our financial information and adversely affect our business or result in legal proceedings.  Further, these cybersecurity breaches may inflict reputational harm upon us that may result in decreased market value and erode public trust.

We are increasingly dependent upon technology systems and data to operate our business.  Our ability to effectively manage our business depends on the security, reliability, and availability of our technology systems and data.  Cyber-attacks are increasing in their frequency, sophistication, and intensity, while also becoming increasingly difficult to detect.  They are often carried out by motivated, well-resourced, skilled, and persistent actors, including nation states, organized crime groups, “hacktivists”, and employees or contractors acting with malicious intent.  Cyber-attacks could include the deployment of harmful malware and key loggers, ransomware, a denial-of-service attack, a

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malicious website, the use of social engineering, impersonation, telephony and/or e-mail spear phishing, and other means to compromise the confidentiality, integrity, and availability of our technology systems, data, and other corporate information assets.  E-mail fraud, including various types of business email compromise, may cause payments or information to be transmitted to unintended recipients.  Cyber-attacks could also include supply chain attacks, which could cause delays in the manufacturing of our products or products produced for contract manufacturing.  While we have not experienced a system failure, accident, cyber-attack or security breach that has resulted in a material loss of assets or operational capabilities to date, there can be no assurance that our efforts will prevent additional future cyber-attacks and/or security breaches in our systems that could materially and adversely affect our business, assets, or operations, even as we continue to strengthen the security posture of our infrastructure, systems, and corporate cybersecurity training.  In addition, our liability insurance is not sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related incidents.

The occurrence of natural disasters, including a tornado, an earthquake, fire, or any other catastrophic event, could disrupt our operations or the operations of third parties who provide vital support functions to us, which could have a material adverse effect on our business, results of operations, and financial condition.

We and the third-party service providers on which we depend for various support functions, such as data storage, are vulnerable to damage from catastrophic events, such as power loss, natural disasters, terrorism, and similar unforeseen events beyond our control.  Our corporate offices and other facilities are located in the Dallas area, which in the past has experienced damaging storms including tornadoes.  Despite having mechanisms in place to ensure system redundancy, resiliency, and data and system backups, natural disasters could severely disrupt our operations and have a material adverse effect on our business, results of operations, financial condition, and prospects.

If a natural disaster, power outage, or other event occurred that prevented us from using all or a significant portion of our offices or other facilities, damaged critical infrastructure such as our data storage facilities, financial systems, or manufacturing resource planning and quality systems, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.  The disaster recovery and business continuity plans that we have in place, including those of our third-party SaaS service providers, currently are limited and are unlikely to prove adequate in the event of a serious disaster or similar event.  We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business.

Furthermore, catastrophic events, such as power loss, natural disasters, terrorism, public health crises such as pandemics or epidemics, and similar unforeseen events beyond our control, could adversely affect our employees and our clinical study operations, including forcing us to stop a trial and start over.  Additionally, parties in our supply chain may be operating from single sites, increasing their vulnerability to such events.  If such an event were to affect our employees, our clinical study operations, or our supply chain, it could have a material adverse effect on our business, results of operations, and financial condition.

The COVID-19 outbreak has caused and could continue to cause disruptions in our business and operating results, including our clinical development activities.

The pandemic resulting from the global outbreak of COVID-19 has had and could continue to have a negative impact on our business and operating results.  Although no longer in place, we implemented work-from-home measures and additional safety protocols to protect employees and the broader community and to ensure business continuity in the early stage of the pandemic.  We limited on-site staff to only those required to execute their job responsibilities, including limiting in-person meetings and travel. We may need to reinstate these measures if there are additional major outbreaks of COVID-19 in the future.

We conduct clinical studies in many countries around the world that are being impacted by the COVID-19 pandemic.  Regulatory agencies, governments, and health care providers have implemented restrictive measures, including but not limited to “shelter-in-place” orders, travel restrictions, and business closures, designed to reduce potential exposure to the virus, particularly for patients at increased risk of severe illness.  For each clinical development program, we are working with health care providers to implement changes that mitigate risk to patients; comply with regulatory, institutional, and government guidance; and maintain the integrity of our ongoing clinical studies.  These concerns led us to pause enrollment in our FALCON trial, which has subsequently resumed enrollment,

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to stop our CATALYST and RANGER trials, and to adapt procedures for our remaining ongoing trials to address restrictions on travel and concerns for patient safety.  For example, we implemented the use of at-home visits as an alternative to in-clinic visits when necessary to collect blood draws and to assess patient safety and arranged for home delivery of the study drug to patients.

As the global outbreak of COVID-19 continues to rapidly evolve, the duration and ultimate impact of COVID-19 on our business is highly uncertain and subject to change.  At this time, we do not believe that the COVID-19 pandemic will have a significant impact on our ability to conduct our operations.  Should the COVID-19 outbreak cause further or extended disruptions at our clinical trial sites or safety concerns regarding our patients, our clinical development activities could be more significantly affected.  In addition, our ability to obtain raw materials, supplies, and component parts necessary to manufacture clinical supplies, our ability to deliver clinical drug to our patients in our clinical trials, and our ability to establish commercial supply capacity may be negatively impacted.  To date, the COVID-19 outbreak has neither impeded our CMOs’ ability to conduct their business, nor our ability to execute our third-party manufacturing strategy, but it has modified the way that we interact with and provide oversight to our third-party vendors.  On-site visits for critical activities are conducted when allowable by vendor procedures, and local, state, federal, and international laws, as well as routine virtual oversight through various technology platforms.  In some instances, we have had to conduct vendor audits virtually, which could result in our inability to identify material issues at a vendor’s site.  Since the COVID-19 outbreak is fluid, there is no guarantee that our manufacturing strategy will not be negatively impacted by how the outbreak evolves over time.  The outbreak could cause health concerns with our personnel, including our executives, which could lead to reductions in the efficiency of our operations.  The outbreak has caused and could continue to cause significant disruption of global financial markets, which may reduce our ability to access capital, which would negatively affect our liquidity.  While we will continue to develop plans to help mitigate the potential negative impact of a continued or expanded COVID-19 outbreak, and any future pandemic, on our business and operating results, our efforts may not prevent our business from being adversely affected.  

We incur significant costs as a result of operating as a public company, and we devote substantial resources to public company compliance programs.

As a public company, we incur significant legal, insurance, accounting, and other expenses.  The Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of The Nasdaq Global Market, and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.  We have invested, and will continue to invest, in resources to comply with laws, regulations, and standards, and this investment will result in increased general and administrative expenses and may divert management’s time and attention from product development activities.  If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies, regulatory authorities may initiate legal proceedings against us and our business may be harmed.  As a public company, it is more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.  These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.  We cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

Specifically, to comply with the requirements of being a public company, we are undertaking various actions, including implementing new internal controls and procedures and hiring new accounting or internal audit staff.  The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal control over financial reporting.  We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file with the SEC is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.  Any failure to develop or maintain effective controls could adversely affect the results of periodic management evaluations.  In the event that we are not able to demonstrate compliance with the Sarbanes-Oxley Act, that our internal control over financial reporting is perceived as inadequate, or that we are unable to produce timely or accurate financial statements, investors may lose confidence in our operating results and the price of our Class A common stock could decline.  In addition, if we are unable to continue to meet these requirements, we

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may not be able to remain listed on The Nasdaq Global Market and could be subject to fines, sanctions, and other regulatory action, and potentially civil litigation.

The Sarbanes-Oxley Act requires, among other things, that we assess the effectiveness of our internal control over financial reporting annually and disclosure controls and procedures quarterly.  In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.  This assessment includes the disclosure of any material weaknesses in our internal control over financial reporting identified by our management or our independent registered public accounting firm.  To achieve compliance with Section 404 within the prescribed period, we continue to dedicate internal resources and utilize outside consultants and continue to execute a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting.  If material weaknesses are identified in the future or we are not able to comply with the requirements of Section 404 in a timely manner, our reported financial results could be materially misstated, we could receive an adverse opinion regarding our internal controls over financial reporting from our accounting firm, if and when required, and we could be subject to investigations or sanctions by regulatory authorities, which would require additional financial and management resources, which could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.  We cannot assure you that there will not be material weaknesses or significant deficiencies in our disclosure controls or our internal controls over financial reporting in the future.

We may engage in future acquisitions that could disrupt our business, cause dilution to our stockholders, and harm our business, results of operations, financial condition, and cash flows and future prospects.

While we have no specific plans to acquire any other businesses, we may, in the future, make acquisitions of, or investments in, companies that we believe have products or capabilities that are a strategic or commercial fit with our present or future product candidates and business or otherwise offer opportunities for our company.  In connection with these acquisitions or investments, we may:

• issue stock that would dilute our existing stockholders’ percentage of ownership;

• incur debt and assume liabilities; and

• incur amortization expenses related to intangible assets or incur large and immediate write-offs.

We may not be able to complete acquisitions on favorable terms, if at all.  If we do complete an acquisition, we cannot assure you that it will ultimately strengthen our competitive position or that it will be viewed positively by customers, financial markets, or investors.  Furthermore, future acquisitions could pose numerous additional risks to our operations, including:

• problems integrating the purchased business, products or technologies, or employees or other assets of the acquisition target;

• increases to our expenses;

• disclosed or undisclosed liabilities of the acquired asset or company;

• diversion of management’s attention from their day-to-day responsibilities;

• reprioritization of our development programs and even cessation of development and commercialization of our current product candidates;

• harm to our operating results or financial condition;

• entrance into markets in which we have limited or no prior experience; and

• potential loss of key employees, particularly those of the acquired entity.

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We may not be able to complete any acquisitions or effectively integrate the operations, products, or personnel gained through any such acquisition.

Provisions in our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current directors or management.

Our amended and restated certificate of incorporation and second amended and restated bylaws contain provisions that may have the effect of discouraging, delaying, or preventing a change in control or changes in our management.  These provisions could also limit the price that investors might be willing to pay in the future for shares of our Class A common stock, thereby depressing its market price.  In addition, because our board of directors is responsible for appointing the members of our executive management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.  Among other things, these provisions:

• provide for a dual class common stock structure, as a result of which our current Class B common stock holders, who also own a substantial number of shares of Class A common stock, will have control over matters requiring stockholder approval, including significant corporate transactions such as a merger;

• authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock;

• create a classified board of directors whose members serve staggered three-year terms;

• specify that special meetings of our stockholders can be called only by our board of directors pursuant to a resolution adopted by a majority of the total number of directors;

• prohibit stockholder action by written consent;

• establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;

• provide that our directors may be removed prior to the end of their term only for cause;

• provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;

• require a supermajority vote of the holders of our common stock or the majority vote of our board of directors to amend our bylaws; and

• require a supermajority vote of the holders of our common stock to amend the classification of our board of directors into three classes and to amend certain other provisions of our amended and restated certificate of incorporation.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.

Moreover, because we are incorporated in Delaware, we are governed by certain anti-takeover provisions under Delaware law which may discourage, delay, or prevent someone from acquiring us or merging with us whether or not it is desired by or beneficial to our stockholders.  We are subject to the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who acquires in excess of 15% of our outstanding voting power without the prior approval of our board of directors from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting power, unless the merger or combination is approved in a prescribed manner.

Any provision of our amended and restated certificate of incorporation, our second amended and restated bylaws, or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity

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for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.

Our amended and restated certificate of incorporation designates the state or federal courts located in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the state and federal courts located in the State of Delaware will be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or (4) any other action asserting a claim against us that is governed by the internal affairs doctrine including any action to interpret, apply, or enforce our amended and restated certificate of incorporation or our amended and restated bylaws.  Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above.  This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and employees.  Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our principal executive offices are located in Plano, Texas, where we lease approximately 122,000 square feet of office space.  This lease expires in August 2022.  We also lease approximately 34,890 square feet of additional office and laboratory space in Irving, Texas.  This lease expires in October 2024, with an option to extend for a fixed twelve-month period.  In October 2019, we entered into a lease agreement with TC Legacy Land Venture, LLC (the 2019 Lease Agreement), to lease a single-tenant and build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas with an initial lease term of 16 years beginning in June 2022 with an option to renew up to ten years.  However, we have paused our buildout of the build-to-suit building and are seeking tenants for some or all of that space. We believe that our facilities are adequate for our current needs and that suitable additional or substitute space would be available if needed.

Item 3. Legal Proceedings.

For a discussion of material pending legal proceedings, please read Note 15, Commitments and Contingencies – Bardoxolone Securities Litigation, of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K, which is incorporated into this item by reference.

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our Class A common stock has been traded on The Nasdaq Global Market under the symbol “RETA”.  

Our Class B common stock is not publicly traded.  Our Class B common stock is convertible into Class A common stock on a one-for-one basis at the holder’s election at any time.  The conversion right of the Class B common stock has no expiration date.

Stockholders

As of February 23, 2022, there were 380 and 85 stockholders of record of our Class A and Class B common stock, respectively.  In the case of our Class A common stock, the actual number of holders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees.  The number of holders of record of Class A common stock also does not include stockholders whose shares may be held in trust by other entities.

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Performance Graph

The following graph illustrates a comparison of the total cumulative stockholder return for our Class A common stock since December 31, 2016, through December 31, 2021, to two indices: the Nasdaq Composite Index and the Nasdaq Biotechnology Index.  The graph assumes an initial investment of $100 on December 31, 2016, in our Class A common stock, the stocks comprising the Nasdaq Composite Index, and the stocks comprising the Nasdaq Biotechnology Index.  The comparisons in the table are required by the SEC and are not intended to forecast or be indicative of possible future performance of our Class A common stock.  This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended (Securities Act), or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

		December 31
$100 investment in stock or index	Ticker	2016		2017		2018		2019		2020		2021
Reata Pharmaceuticals, Inc.	RETA	$	100.00	$	256.06	$	507.23	$	1,848.37	$	1,117.72	$	238.43
Nasdaq Composite Index	^IXIC	$	100.00	$	141.03	$	135.56	$	183.31	$	263.30	$	319.62
Nasdaq Biotechnology Index	^NBI	$	100.00	$	116.67	$	105.79	$	131.61	$	165.41	$	164.36

Dividend Policy

We have not paid any dividends on our capital stock within the past two fiscal years.  We do not anticipate declaring or paying in the foreseeable future any dividends on our capital stock.  We intend to retain all available funds and any future earnings to support operations and to finance the growth and development of our business.  Any future determination to pay dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend upon our results of operations, financial condition, contractual restrictions, capital requirements, and other factors.  Our future ability to pay dividends on our capital stock may be limited by the terms of any future debt that we may incur or any preferred securities that we may issue in the future.

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Issuer’s Purchases of Equity Securities

None.

Item 6. [Reserved.]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes and other financial information appearing in this Annual Report on Form 10-K.  Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, operations, and product candidates, includes forward-looking statements that involve risks and uncertainties.  You should review the sections of this Annual Report on Form 10-K captioned “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.  Our discussion and analyses below are focused on our 2021, 2020, and 2019 financial results, including comparisons of our year-over-year performance between these years.

Overview

We are a clinical-stage biopharmaceutical company focused on identifying, developing, and commercializing innovative therapies that change patients’ lives for the better.  We concentrate on small-molecule therapeutics with novel mechanisms of action for the treatment of severe, life-threatening diseases with few or no approved therapies.  Our lead programs are omaveloxolone in FA and bardoxolone in rare forms of CKD.  Both of our lead product candidates activate the transcription factor Nrf2 to normalize mitochondrial function, restore redox balance, and resolve inflammation.  Because mitochondrial dysfunction, oxidative stress, and inflammation are features of many diseases, we believe omaveloxolone, bardoxolone, and our next-generation Nrf2 activators have many potential clinical applications. We possess exclusive, worldwide rights to develop, manufacture, and commercialize omaveloxolone, bardoxolone, and our next-generation Nrf2 activators, excluding certain Asian markets for bardoxolone in certain indications, which are licensed to Kyowa Kirin.  In addition, we are developing RTA 901, the lead product candidate from our Hsp90 modulator program, in neurological indications.  We are the exclusive licensee of RTA 901 and have worldwide commercial rights.

Collaborations Update

In October 2019, we and AbbVie entered into the Reacquisition Agreement, under which we reacquired the development, manufacturing, and commercialization rights provided in the AbbVie License Agreement and the Collaboration Agreement.  Under the Reacquisition Agreement, the AbbVie License Agreement and the Collaboration Agreement were amended, resulting in AbbVie granting its exclusive sublicenses back to us, such that we reacquired the worldwide rights to bardoxolone, excluding certain Asian countries previously licensed to Kyowa Kirin, and the worldwide rights to omaveloxolone and certain next-generation Nrf2 activators.  By reacquiring our rights, we were relieved from our obligations under the AbbVie License Agreement and the Collaboration Agreement.

In exchange for such rights, we agreed to pay AbbVie $330.0 million, all of which has subsequently been paid.  Additionally, we will pay AbbVie an escalating, low single-digit royalty on worldwide net sales, on a product-by-product basis, of omaveloxolone and certain next-generation Nrf2 activators.

As a result of the $330.0 million having been paid to AbbVie, the licenses granted to AbbVie and the sublicenses granted to us with respect to omaveloxolone and bardoxolone and certain next-generation Nrf2 activators have terminated, with all rights reverting to us.

Liability Related to Sale of Future Royalties

On June 24, 2020, we closed on the Development Agreement with an affiliate of BXLS, which provided funding for the development and commercialization of bardoxolone for the treatment of CKD caused by Alport syndrome, ADPKD, and certain other rare CKD indications in return for future royalties.  The Development Agreement included a $300.0 million payment by an affiliate of BXLS in return for various percentage royalty payments on worldwide net sales of bardoxolone, if and when approved in the United States or certain specified European countries, by Reata and its licensees, other than Kyowa Kirin.  Pursuant to the Development Agreement, we have granted BXLS a security interest in substantially all of our assets.  

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In addition, concurrent with the Development Agreement, the Company entered into the Purchase Agreement with affiliates of BXLS to sell an aggregate of 340,793 shares of the Company’s Class A common stock at $146.72 per share for a total of $50.0 million.

Corporate Overview

To date, we have focused most of our efforts and resources on developing our product candidates and conducting preclinical studies and clinical trials.  We have historically financed our operations primarily through revenue generated from our collaborations with AbbVie and Kyowa Kirin, from sales of our securities, with secured loans, and from a strategic financing from BXLS.  We have not received any payments or revenue from collaborations other than nonrefundable upfront, milestone, and cost sharing payments from our collaborations with AbbVie and Kyowa Kirin and reimbursements of expenses under the terms of our agreement with Kyowa Kirin.  We have incurred losses in each year since our inception, other than in 2014.  As of December 31, 2021, we had $590.3 million of cash and cash equivalents and an accumulated deficit of $1,255.6 million.  We continue to incur significant research and development and other expenses related to our ongoing operations.  Despite the potential to receive future payments from Kyowa Kirin, we anticipate that we will continue to incur losses for the foreseeable future, and we anticipate that our losses will increase as we continue our development of, seek regulatory approval for, and potential commercialization of our product candidates.  If we do not successfully develop and obtain regulatory approval of our existing product candidates or any future product candidates and effectively manufacture, market, and sell any products that are approved, we may never generate revenue from product sales.  Furthermore, even if we do generate revenue from product sales, we may never again achieve or sustain profitability on a quarterly or annual basis.  Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital.  Our failure to become and remain profitable could depress the market price of our Class A common stock and could impair our ability to raise capital, expand our business, diversify our product offerings, or continue our operations.

The probability of success for each of our product candidates and clinical programs and our ability to generate product revenue and become profitable depend upon a variety of factors, including the quality of the product candidate, clinical results, investment in the program, competition, manufacturing capability, commercial viability, and our collaborators’ ability to successfully execute our development and commercialization plans.  We will also require additional capital through equity, debt, or royalty financings or collaboration arrangements in order to fund our operations and execute on our business plans, and there is no assurance that such financing or arrangements will be available to us on commercially reasonable terms or at all.  For a description of the numerous risks and uncertainties associated with product development and raising additional capital, see “Risk Factors” included in this Annual Report on Form 10-K.

Financial Operations Overview

Revenue

Our revenue to date has been generated primarily from licensing fees received under our collaborative license agreements and reimbursements for expenses.  We currently have no approved products and have not generated any revenue from the sale of products to date.  In the future, we may generate revenue from product sales, royalties on product sales, reimbursements for collaboration services under our current collaboration agreements, or license fees, milestones, or upfront payments if we enter into any new collaborations or license agreements.  We expect that our future revenue will fluctuate from quarter to quarter for many reasons, including the uncertain timing and amount of any such payments and sales.

Our license and milestone revenue has been generated primarily from the Kyowa Kirin Agreement, the AbbVie License Agreement, and the Collaboration Agreement and consists of upfront payments and milestone payments.  License revenue recorded with respect to the Kyowa Kirin Agreement, the AbbVie License Agreement, and the Collaboration Agreement consists solely of the recognition of deferred revenue.  Under our revenue recognition policy, collaboration revenue associated with upfront, non-refundable license payments received under our license and collaboration agreements are deferred and recognized ratably over the expected term of the performance obligations under each agreement.  Under the Reacquisition Agreement, we no longer have performance obligations under the

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AbbVie License Agreement and the Collaboration Agreement.  Under the Kyowa Kirin Agreement, we only expect to recognize the deferred revenue through mid-2022.

Research and Development Expenses

The largest component of our total operating expenses has historically been our investment in research and development activities, including the clinical development of our product candidates.  From our inception through December 31, 2021, we have incurred a total of $1,089.9 million in research and development expense, a majority of which relates to the development of omaveloxolone and bardoxolone.  We expect our research and development expense to continue to increase in the future as we advance our product candidates through clinical trials and expand our product candidate portfolio.  The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and we consider the active management and development of our clinical pipeline to be crucial to our long-term success.  The actual probability of success for each product candidate and preclinical program may be affected by a variety of factors, including the safety and efficacy data for product candidates, investment in the program, competition, manufacturing capability, and commercial viability.

Research and development expenses include:

• expenses incurred under agreements with clinical trial sites that conduct research and development activities on our behalf;

• expenses incurred under contract research agreements and other agreements with third parties;

• employee and consultant-related expenses, which include salaries, benefits, travel, and stock-based compensation;

• laboratory and vendor expenses related to the execution of preclinical and non-clinical studies and clinical trials;

• the cost of acquiring, developing, manufacturing, and distributing clinical trial materials;

• the cost of development, scale up, and process validation activities to support product registration; and

• facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supply costs.

Research and development costs are expensed as incurred.  Costs for certain development activities such as clinical trials are highly judgmental and are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites.

We base our expense accruals related to clinical trials on our estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical trials on our behalf.  The financial terms of these agreements vary from contract to contract and may result in uneven payment flows.  Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones.  In accruing costs, we estimate the time period over which services will be performed and the level of effort to be expended in each period.

To date, we have not experienced material changes in our estimates of accrued research and development expenses after a reporting period.  However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical trials and other research activities.

Currently, Kyowa Kirin has allowed us to conduct clinical studies of bardoxolone in certain rare forms of kidney diseases in Japan and has reimbursed us the majority of the costs for our CARDINAL study in Japan. Kyowa Kirin is the in-country caretaker in our FALCON study in Japan and we are reimbursing Kyowa Kirin for the costs of a certain number of patients in the study.

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The following table summarizes our research and development expenses incurred during the years ended December 31:

		Years Ended December 31
		2021		2020		2019
	(in thousands)
Bardoxolone		$	50,827	$	50,836	$	47,994
Omaveloxolone			12,935		25,231		23,992
RTA 901			5,642		4,189		1,859
Other research and development expenses(1)			86,589		78,824		54,264
Total research and development expenses		$	155,993	$	159,080	$	128,109

(1) RTA 1701 expenses have been included in other research and development expenses due to development updates in the program. See discussion in Other Clinical Programs section above.

The program-specific expenses summarized in the table above include costs that we directly allocate to our product candidates.  Our other research and development expenses include salaries, benefits, stock-based compensation, and preclinical, research, and discovery costs, which we do not allocate on a program-specific basis.

General and Administrative Expenses

General and administrative expenses consist primarily of employee-related expenses for executive, operational, finance, legal, compliance, and human resource functions.  Other general and administrative expenses include personnel expense, facility-related costs, professional fees, accounting and legal services, depreciation expense, other external services, and expenses associated with obtaining and maintaining our intellectual property rights.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development and potential commercialization of our product candidates.  We have also incurred, and anticipate incurring in the future, increased expenses associated with being a public company, including exchange listing and SEC requirements, director and officer insurance premiums, legal, audit and tax fees, compliance with the Sarbanes-Oxley Act, regulatory compliance programs, and investor relations costs.  Additionally, if and when we believe the first regulatory approval of one of our product candidates appears likely, we anticipate an increase in payroll and related expenses as a result of our preparation for commercial operations, especially for the sales and marketing of our product candidates.

Other Income (Expense), Net

Other income (expense) includes interest and gains earned on our cash and cash equivalents, interest expense on term loans, amortization of debt issuance costs, imputed interest on long term payables, loss on extinguishment of debt, gain on termination of lease, foreign currency exchange gains and losses, gains and losses on sales of assets, and non-cash interest expense on liability related to the sale of future royalties.

Benefit from (Provision for) Taxes on Income

Provision for taxes on income consists of net loss, taxed at federal tax rates and adjusted for certain permanent differences.  During 2020, we recognized a tax benefit and receivable of $22.2 million associated with the ability to carryback an applicable prior year’s net operating losses to a preceding year to generate a refund under the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act).  The Company received the tax refund in 2021.  Realization of deferred tax assets is generally dependent upon future earnings by jurisdiction, of which the timing and amount are uncertain for the majority of our deferred tax assets, and valuation allowances are maintained against them.  Changes in valuation allowances also affect the tax provision.

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Results of Operations

Comparison of the Years Ended December 31, 2021, 2020, and 2019

The following table sets forth our results of operations for the years ended December 31:

	2021			Change %			2020			Change %			2019
	(in thousands, except for percentage data)
Collaboration revenue
License and milestone	$	8,040			71		$	4,701			(81	)		25,276
Other revenue		3,450			(20	)		4,318		**				1,241
Total collaboration revenue		11,490			27			9,019			(66	)		26,517
Expenses
Research and development		155,993			(2	)		159,080			24			128,109
Reacquired license rights		—			—			—			(100	)		124,398
General and administrative		99,002			32			75,128			29			58,298
Depreciation		1,203			6			1,136			22			932
Total expenses		256,198			9			235,344			(25	)		311,737
Other income (expense), net		(53,128	)		21			(43,914	)	**				(4,942	)
Loss before taxes on income		(297,836	)		10			(270,239	)		7			(290,162	)
Benefit from (provision for) taxes on income		450			(98	)		22,487		**				(8	)
Net loss	$	(297,386	)		20		$	(247,752	)		(15	)	$	(290,170	)

** Percentage not meaningful

Revenue

License and milestone revenue represented approximately 70%, 52%, and 95% of total revenue for the years ended December 31, 2021, 2020, and 2019, respectively, and consisted primarily of the recognition of deferred revenue.  License and milestone revenue increased by 71% during 2021 compared to 2020, and consisted of the recognition of Kyowa Kirin revenue.  The increase in license and milestone revenue is primarily due to the achievement of a $5.0 million regulatory milestone in 2021.  Upon achievement of the milestone, we recorded $4.7 million in collaboration revenue, representing a cumulative catch-up for the portion of service period relating to our performance obligation that was satisfied in prior periods.

License and milestone revenue decreased by 81% during 2020 compared to 2019, primarily due to the Reacquisition Agreement in October 2019, which ended our performance obligations under the Collaboration Agreement and resulted in the writing off of the related remaining deferred revenue balance, after which no further revenue was recognized.  Total revenue of $4.7 million was recognized in 2020 from deferred revenue related to the Kyowa Kirin Agreement.

Other revenue decreased by $0.9 million during 2021 compared to 2020, primarily due to a decrease in reimbursements of expenses from Kyowa Kirin for manufacturing expenses incurred.

Other revenue increased by $3.1 million during 2020 compared to 2019, primarily due to an increase in reimbursements of expenses from Kyowa Kirin for manufacturing and non-clinical study expenses incurred.

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The following table summarizes the sources of our revenue for the years ended December 31:

	2021		2020		2019
	(in thousands)
License and milestone
AbbVie collaboration agreement	$	—	$	—	$	20,588
Kyowa Kirin agreement		8,040		4,701		4,688
Total license and milestone	$	8,040	$	4,701	$	25,276
Other revenue		3,450		4,318		1,241
Total collaboration revenue	$	11,490	$	9,019	$	26,517

The following table summarizes our expenses, in thousands and as a percentage of total expenses, for the years ended December 31:

	2021		% of Total Expenses			2020		% of Total Expenses			2019		% of Total Expenses
	(in thousands, except for percentage data)
Research and development	$	155,993		60	%	$	159,080		67	%	$	128,109		40	%
Reacquired license rights	$	—		—		$	—		—		$	124,398		40	%
General and administrative		99,002		39	%		75,128		32	%		58,298		19	%
Depreciation		1,203		1	%		1,136		1	%		932		1	%
Total expenses	$	256,198				$	235,344				$	311,737

Research and Development Expenses

Research and development expenses decreased by 2% during 2021 compared to 2020.  The decrease was primarily due to timing of manufacturing activities related to omaveloxolone.  The remaining changes included decreased stock-based compensation expense due to accelerated expense recognized during 2020, offset by an increase in personnel and personnel-related costs to support our product development activities.

Research and development expenses increased by 24% during 2020 compared to 2019.  The increase is primarily due to $30.2 million in increased personnel and equity compensation expenses to support growth of our development activities, including accelerated recognition of stock-based compensation expense as a result of the death of an executive and employees who entered into consulting agreements at the termination of employment.  The remaining changes included increased manufacturing and regulatory costs to support product registration, increased clinical pharmacology and toxicity study expenses for our RTA 901 program, offset by a decrease in clinical study expenses related to PAH studies terminated in the first quarter 2020, and decreased medical affairs and research expenses.

Research and development expenses, as a percentage of total expenses, was 60%, 67%, and 40% for 2021, 2020, and 2019, respectively.  The decrease in 2019 compared to 2021 and 2020 was primarily due to the reacquired license rights expense of $124.4 million incurred during 2019, resulting in higher total operating expenses.  

Reacquired License Rights

The reacquired license rights expense incurred in 2019 was due to the Reacquisition Agreement we entered into with AbbVie in October 2019 to reacquire the development, manufacturing, and commercialization rights provided in the AbbVie License Agreement and the Collaboration Agreement.  

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General and Administrative Expenses

General and administrative expenses increased by 32% during 2021 compared to 2020.  The increase was primarily due to increased spend related to commercial readiness activities, personnel and personnel-related costs to support growth in our development activities, and insurance premiums.

General and administrative expenses increased by 29% during 2020 compared to 2019.  The increase was primarily due to $17.9 million in increased personnel and stock-based compensation expenses in preparation for commercial launch readiness and to support growth in our development activities and $1.2 million in increased insurance expenses, which were offset by a $1.4 million in decreased marketing and commercialization expenses.

General and administrative expenses, as a percentage of total expenses, were 39%, 32%, and 19% for 2021, 2020, and 2019, respectively.  The decrease in 2019 compared to 2021 and 2020 was primarily due to the reacquired license rights expense of $124.4 million incurred during 2019, resulting in higher total operating expenses.  

Other Income (Expense), Net

Other income (expense), net increased by $9.2 million during 2021 compared to 2020. The increase was primarily due to increased non-cash interest expense on liability related to the sale of future royalties and decreased interest income earned due to lower market rates, offset by decreased interest expense and loss on extinguishment of debt due to the payoff on our Term Loans in 2020.

Other income (expense), net increased by $39.0 million during 2020 compared to 2019.  The increase was primarily due to $21.9 million from non-cash interest expense on liability related to the sale of future royalties, $11.2 million from loss on debt extinguishment, and $3.7 million of additional interest expense attributable to additional borrowings under the Term B Loan drawn in December 2019 and the payable due to collaborator related to the Reacquisition Agreement in October 2019, and offset by a decrease of $1.3 million for a gain on lease termination.

Benefit from (Provision for) Taxes on Income

Benefit from taxes on income decreased by $22.0 million during 2021 compared to 2020 and increased by $22.5 million during 2020 compared to 2019, which was primarily due to a tax benefit recognized in 2020 related to a carryback claim associated with the CARES Act.

Liquidity and Capital Resources

Since our inception, we have funded our operations primarily through collaboration and license agreements, the sale of preferred and common stock, the sale of royalty interests, and secured loans.  To date, we have raised gross cash proceeds of $476.6 million through the sale of convertible preferred stock and $785.0 million from payments under license and collaboration agreements.  We also obtained $1,222.1 million in net proceeds from our IPO, follow-on offerings, and the sale of our Class A common stock under the Purchase Agreement, and $299.0 million in net proceeds from the sale of future royalties under the Development Agreement.  We have not generated any revenue from the sale of any products.  As of December 31, 2021, we had available cash and cash equivalents of approximately $590.3 million.  Our cash and cash equivalents are invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.

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Cash Flows

The following table sets forth the primary sources and uses of cash for the years ended December 31:

	2021			2020			2019
	(in thousands)
Net cash (used in) provided by:
Operating activities	$	(235,701	)	$	(322,340	)	$	(251,151	)
Investing activities		(1,329	)		(927	)		(2,673	)
Financing activities		9,138			477,093			580,358
Net change in cash and cash equivalents	$	(227,892	)	$	153,826		$	326,534

Operating Activities

Net cash used in operating activities was $235.7 million for the year ended December 31, 2021, consisting primarily of net loss of $297.4 million adjusted for non-cash items including stock-based compensation expense of $56.8 million, non-cash interest expense on liability related to sale of future royalty of $46.7 million, depreciation and amortization expense of $7.8 million, and a net decrease in operating assets and liabilities of $49.6 million.  The significant items in the change in operating assets that impacted our use of cash in operations were a decrease in income tax receivable of $22.2 million, an increase in accounts payable $8.7 million due to timing of payments, a decrease in payable to collaborators of $80.0 million for a payment made in December 2021 under the Reacquisition Agreement, and a decrease in deferred revenue of $3.0 million.

Net cash used in operating activities was $322.3 million for the year ended December 31, 2020, consisting primarily of net loss of $247.8 million adjusted for non-cash items including stock-based compensation expense of $57.6 million, non-cash interest expense on liability related to sale of future royalty of $21.9 million, loss on extinguishment of debt of $11.2 million, depreciation and amortization expense of $8.7 million, gain on lease termination of $1.3 million, and a net decrease in operating assets and liabilities of $172.7 million.  The significant items in the change in operating assets that impacted our use of cash in operations were an increase in income tax receivable of $22.2 million, an increase in accounts payable $2.9 million due to timing of payments, a decrease in payable to collaborators of $150.0 million for a payment made on June 30, 2020 under the Reacquisition Agreement, and a decreased in deferred revenue of $4.7 million.

Net cash used in operating activities was $251.2 million for the year ended December 31, 2019, consisting primarily of net loss of $290.2 million adjusted for non-cash items including stock-based compensation expense of $26.4 million, depreciation and amortization expense of $2.3 million, and a net increase in operating assets and liabilities of $10.3 million.  The significant items in the change in operating assets that impacted our use of cash in operations include increases in accrued direct research and other current and long-term liabilities of $8.1 million due to activities directly related to our clinical trials and other activities to support our registrational trials, operating lease liability of $3.8 million, an increase in payables to collaborators of $216.9 million primarily due to the remaining payable due to AbbVie for the reacquisition of development, manufacturing, and commercialization rights, a decrease in accounts payable of $2.1 million due to timing of payments, and a decrease in deferred revenue of $216.3 million.  The decrease in deferred revenue is due to the ratable recognition of approximately $25.2 million in revenue offset by the write off of the $191.1 million deferred revenue balance related to the Collaboration Agreement, after our performance obligations were terminated under the Reacquisition Agreement.

Investing Activities

Net cash used in investing activities was $1.3 million, $0.9 million, and $2.7 million for the years ended December 31, 2021, 2020, and 2019, respectively, primarily due to purchases of property and equipment.  

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Financing Activities

Net cash provided by financing activities for the year ended December 31, 2021 was $9.1 million, primarily consisting of option exercises.

Net cash provided by financing activities for the year ended December 31, 2020 was $477.1 million, primarily due to net proceeds of $277.5 million from our follow-on public offering, $349.0 million in net proceeds received under the Purchase Agreement and Development Agreement with BXLS, and $17.8 million from options exercised, offset by $167.2 million to pay off our Term Loans.

Net cash provided by financing activities for the year ended December 31, 2019 was $580.4 million, primarily due to net proceeds of $492.4 million from our follow-on public offering, $75.0 million from the First Amendment to the Amended and Restated Loan and Security Agreement (the Amended Restated Loan Agreement), and $13.4 million from options exercised.

Operating Capital Requirements

To date, we have not generated any revenue from product sales.  We do not know when or whether we will generate any revenue from product sales.  We do not expect to generate significant revenue from product sales unless and until we obtain regulatory approval of and commercialize one or more of our current or future product candidates.  We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products.  We are subject to all the risks related to the development and commercialization of novel therapeutics, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business.  We continue to incur additional costs associated with operating as a public company.  We anticipate that we will need substantial additional funding in connection with our continuing operations.

In October 2019, we entered into the 2019 Lease Agreement, relating to a new headquarter building lease of approximately 327,400 square feet of office and laboratory space located in Plano, Texas.

• In December 2021, we obtained control of the building, and, accordingly, we recorded related right-of-use assets and the lease liabilities during the fourth quarter of 2021.

• We have paused the tenant improvement activities for the new headquarter building and are attempting to sublease the building. At this point, we will not spend the earlier-planned $50 million in capital expenditures. If at a future date, we determine to move into the building, capital expenditures will need to be incurred based on our occupancy requirements at that time.

• The initial term of the lease is 16 years, with up to ten years of extension at our option.  The annual base rent payment, which will begin in June 2022, will be determined based on the project cost, subject to an initial annual cap of approximately $13.3 million.  Beginning in the third lease year, the base rent will increase 1.95% per annum each year.  In addition to the annual base rent, we will pay for taxes, insurance, utilities, operating expenses, assessments under private covenants, maintenance and repairs, certain capital repairs and replacements, and building management fees.

In July 2021, Kyowa Kirin announced the submission of an NDA in Japan for bardoxolone for improvement of renal function in patients with Alport syndrome.  We earned a $5.0 million milestone related to this event that was received and began to be recognized in the third quarter of 2021.

In December 2020, we closed a follow-on underwritten public offering of 2,000,000 shares of our Class A common stock for gross proceeds of $281.7 million.  Net proceeds to us from the offering were approximately $277.5 million, after deducting underwriting discounts and commissions and offering expenses.

In June 2020, we closed on the Development Agreement and Purchase Agreement, each dated June 10, 2020, under which certain BXLS entities paid us an aggregate of $350.0 million in exchange for future royalties on bardoxolone and an aggregate of 340,793 shares of our Class A common stock at $146.72 per share.

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In June 2020, we paid off our Term Loans with Oxford Finance LLC and Silicon Valley Bank, which included payments for principal of $155.0 million, prepayment fees of $5.4 million, exit fees of $6.7 million, and accrued and unpaid interest of $1.0 million.

In March 2020, the United States enacted the CARES Act.  Under its provisions, we recognized a tax benefit and receivable of $22.2 million associated with the ability to carryback an applicable prior year’s net operating losses to a preceding year to generate a refund.  

Our longer term liquidity requirements will require us to raise additional capital, such as through additional equity, debt, or royalty financings or collaboration arrangements.  Our future capital requirements will depend on many factors, including the receipt of milestones under our Kyowa Kirin Agreement and the timing of our expenditures related to clinical trials.  We believe our existing cash and cash equivalents will be sufficient to enable us to fund our operations through the fourth quarter of 2024.  However, we anticipate opportunistically raising additional capital before that time through equity offerings, collaboration or license agreements, additional debt financings, or royalty financings in order to maintain adequate capital reserves.  In addition, we may choose to raise additional capital at any time for the further development of our existing product candidates and may also need to raise additional funds sooner to pursue other development activities related to additional product candidates.  Decisions about the timing or nature of any financing will be based on, among other things, our perception of our liquidity and of the market opportunity to raise equity, debt, or royalty financing.  Additional securities may include common stock, preferred stock, or debt securities.  We may explore strategic collaborations or license arrangements for any of our product candidates.  If we do explore any arrangements, there can be no assurance that any agreement will be reached, and we may determine to cease exploring a potential transaction for any or all of the assets at any time.  If an agreement is reached, there can be no assurance that any such transaction would provide us with a material amount of additional capital resources.

Until we can generate a sufficient amount of revenue from our product candidates, if ever, we expect to finance future cash needs through public or private equity or debt offerings, loans, royalty financings, and collaboration or license transactions.  The outbreak of COVID-19 has caused significant disruption of global financial markets, which may reduce our ability to access capital, which could negatively affect our liquidity.  Additional capital may not be available on reasonable terms, if at all.  If we are unable to raise additional 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 one or more of our product candidates.  If we raise additional funds through the issuance of additional equity or debt securities, it could result in dilution to our existing stockholders or increased fixed payment obligations, and any such securities may have rights senior to those of our common stock.  If we incur indebtedness or obtain royalty financing, we could become subject to covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell, or license intellectual property rights, and other operating restrictions that could adversely affect our ability to conduct our business, and any such debt or royalty financing could be secured by some or all of our assets.  Any of these events could significantly harm our business, financial condition, and prospects.

Our forecast of the period through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors.  We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.  Our future funding requirements, both near- and long-term, will depend on many factors, including, but not limited to:

• the scope, rate of progress, results, and cost of our clinical trials, preclinical testing, and other activities related to the development of our product candidates;

• the number and characteristics of product candidates that we pursue;

• the costs of development efforts for our product candidates that are not subject to reimbursement from our collaborators;

• the costs necessary to obtain regulatory approvals, if any, for our product candidates in the United States and other jurisdictions, and the costs of post-marketing studies that could be required by regulatory authorities in jurisdictions where approval is obtained;

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• the continuation of our existing collaboration with Kyowa Kirin and entry into new collaborations and the receipt of any collaboration payments;

• the time and unreimbursed costs necessary to commercialize products in territories in which our product candidates are approved for sale;

• the revenue from any future sales of our products or for which we are entitled to a profit share, royalties, and milestones;

• the level of reimbursement or third-party payor pricing available to our products;

• the costs of obtaining third-party commercial supplies of our products, if any, manufactured in accordance with regulatory requirements;

• the costs associated with any potential loss or corruption of our information or data in a cyberattack on our computer systems or those of our suppliers, vendors, or collaborators who store or transmit our data;

• the costs associated with being a public company;

• any additional costs we incur, or delays in clinical trials we experience, associated with the COVID-19 pandemic; and

• the costs we incur in the filing, prosecution, maintenance, and defense of our patent portfolio and other intellectual property rights.

If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and results of operations could be materially adversely affected.

Contractual Obligations and Commitments

Contractual Obligations

We have various contractual obligations and other commitments that require payments at certain specified periods.  The following table summarizes our contractual obligations and commitments as of December 31, 2021:

	Payments due by period
	Less than 1 year		1 to 3 years		4 to 5 years		6 years and beyond		Total
	(unaudited, in thousands)
Operating lease obligations (1)	$	8,686	$	13,452	$	27,697	$	183,223	$	233,058
Total contractual obligations	$	8,686	$	13,452	$	27,697	$	183,223	$	233,058

(1) Above table assumes one year rent abatement is applied beginning in June 2023 following FDA approval of omaveloxolone

Clinical Trials

As of December 31, 2021, we have several on-going clinical trials in various stages.  Under agreements with various CROs and clinical trial sites, we incur expenses related to clinical trials of our product candidates and potential other clinical candidates.  The timing and amounts of these disbursements are contingent upon the achievement of certain milestones, patient enrollment, and services rendered or as expenses are incurred by the CROs or clinical trial sites.  Therefore, we cannot estimate the potential timing and amount of these payments, and they have been excluded from the table above.

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements.  On an ongoing basis, we evaluate our estimates and judgments, including those related to

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revenue recognition, accrued research and development expenses, income taxes, and stock-based compensation.  We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 of Notes to Consolidated Financial Statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies to be most critical to understanding the judgments and estimates used by management in the preparation of our financial statements.

Research and Development Costs

All research and development costs are expensed as incurred, including costs for drug supplies used in research and development or clinical trials, property and equipment acquired specifically for a finite research and development project, and nonrefundable deposits incurred at the initiation of research and development activities.  Research and development costs consist principally of costs related to clinical trials managed directly by us and through CROs, manufacture of clinical drug products for clinical trials, preclinical study costs, discovery research expenses, facilities costs, salaries, and related expenses.

As part of the process of recording research and development costs, we are required to estimate and accrue expenses, the largest of which are research and development expenses.  This process involves the following:

• communicating with appropriate internal personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost;

• estimating and accruing expenses in our consolidated financial statements as of each balance sheet date based on facts and circumstances known to us at the time; and

• periodically confirming the accuracy of our estimates with service providers and making adjustments, if necessary.

Examples of estimated research and development expenses that we accrue include:

• payments to CROs in connection with preclinical and toxicology studies and clinical trials;

• payments to investigative sites in connection with clinical trials;

• payments to CMOs in connection with the production of clinical trial materials; and

• professional service fees for consulting and related services.

We base our expense accruals related to clinical trials on our estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical trials on our behalf.  The financial terms of these agreements vary from contract to contract and may result in uneven payment flows.  Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones.  In accruing costs, we estimate the time period over which services will be performed and the level of effort to be expended in each period.

To date, we have not experienced significant changes in our estimates of accrued research and development expenses after a reporting period.  However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical trials and other research activities.

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Liability Related to Sale of Future Royalties

On June 24, 2020, we closed on the Development Agreement with certain BXLS entities, which provided funding for the development and commercialization of bardoxolone for the treatment of CKD caused by Alport syndrome, ADPKD, and certain other rare CKD indications in return for future royalties.  We accounted for the Development Agreement as a sale of future revenues resulting in a debt classification, primarily because we have significant continuing involvement in generating the future revenue on which the royalties are based.  The debt will be amortized under the effective interest rate method and, accordingly, we are recognizing non-cash interest expense over the estimated term of the Development Agreement.  The liability related to the sale of future royalties, and the debt amortization, are based on our current estimate of future royalties expected to be paid over the estimated term of the Development Agreement.  We will periodically assess the expected royalty payments and, if materially different than our previous estimate, will prospectively adjust and recognize the related non-cash interest expense.  The transaction costs associated with the liability will be amortized to non-cash interest expense over the estimated term of the Development Agreement.

Revenue Recognition

We recognize revenue generated primarily from licensing fees received under our collaborative licensing agreements in prior years with AbbVie and currently with Kyowa Kirin and reimbursements for expenses from Kyowa Kirin.  The terms of the agreements include non-refundable upfront fees, funding of research and development activities, payments based upon achievement of milestones, and royalties on net product sales.

Under Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.  To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the promised goods or services in the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the entity satisfies a performance obligation.

At contract inception, we assess the goods or services promised within each contract, determine those that are performance obligations, and assess whether each promised good or service is distinct.  We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied.

Licenses of intellectual property: If a license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the customer, and the customer can use and benefit from the license.  For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees.  We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

Milestone payments: At the inception of each arrangement that includes milestone payments, we evaluate whether the milestones are considered probable of being achieved and estimate the amount to be included in the transaction price using the most likely amount method.  If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission by us) is included in the transaction price, which is then allocated to each performance obligation.  Milestone payments that are not within our control, such as approvals from regulators, are not considered probable of being achieved until those approvals are received.  At the end of each subsequent reporting period, we re-evaluate the probability of achievement of such development milestones and, if necessary, adjust our estimate of the overall transaction price.  Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration, and other revenues and earnings in the period of adjustment and in future periods through the end of the performance obligation period.

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Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and where the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of (a) when the related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).  To date, we have not recognized any royalty revenue resulting from any of its licensing arrangements.

Manufacturing Supply Services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered options.  We assess if these options provide a material right to the licensee and, if so, they are accounted for as separate performance obligations.  If we are entitled to additional payments when the customer exercises these options, any additional payments are recorded when the customer obtains control of the goods, which is upon delivery.

For a complete discussion of accounting for collaborative licensing agreements, see Note 3, Collaboration Agreements of Notes of Consolidated Financial Statements contained in this Annual Report on Form 10-K.  Our revenue to date has been generated primarily from licensing fees received under our collaborative licensing agreements with AbbVie and Kyowa Kirin and reimbursements for expenses from Kyowa Kirin.  The terms of the agreements include non-refundable upfront fees, funding of research and development activities, payments based upon achievement of milestones, and royalties on net product sales.

Income Taxes

We account for income taxes and the related accounts under the liability method.  Deferred tax assets and liabilities are determined based on differences between the financial statement and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.  The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Realization of deferred tax assets is generally dependent upon future earnings by jurisdiction, if any, the timing and amount of which are uncertain.  As of December 31, 2021, based on known factors, for the majority of our deferred tax assets, we cannot conclude that it is more likely than not that they will be utilized, and we have recorded valuation allowances to offset these deferred tax assets.

We account for uncertain tax positions in accordance with the provisions of Accounting Standards Codification (ASC) 740, Income Taxes.  We recognize tax benefit for uncertain tax positions if we believe it is more likely than not that the position will be upheld on audit based solely on the technical merits of the tax position.  We evaluate uncertain tax positions after consideration of all available information.  As of December 31, 2021, the interest accrued related to provision uncertain tax positions was immaterial.

Stock-Based Compensation

We measure and recognize compensation expense for all stock option and restricted stock awards based on the estimated fair value of the award on the grant date.  We use the Black-Scholes option pricing model to estimate the fair value of stock option awards.  The fair value is recognized as expense, over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis when the only condition to vesting is continued service.  If vesting is subject to a market or performance condition, recognition is based on the derived service period of the award.  Expense for awards with performance conditions is estimated and adjusted on a quarterly basis based upon the assessment of the probability that the performance condition will be met.  Use of the Black-

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Scholes option-pricing model requires management to apply judgment under highly subjective assumptions.  These assumptions include:

• Expected term —The expected term represents the period that the stock-based awards are expected to be outstanding and is based on the average period the stock options are expected to be outstanding and was based on our historical information of the options exercise patterns and post-vesting termination behavior.

• Expected volatility —Since we do not have sufficient trading history to estimate the volatility of our common stock, the expected volatility was estimated based on our own historical volatility since our IPO and the average volatility for comparable publicly traded biopharmaceutical companies.  When selecting comparable publicly traded biopharmaceutical companies on which we based our expected stock price volatility, we selected companies with comparable characteristics to us, including enterprise value, risk profiles, position within the industry, and historical share price information sufficient to meet the expected life of the stock-based awards.

• Risk-free interest rate —The risk-free interest rate is based on the United States Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option.

• Expected dividend —We have no plans to pay dividends on our common stock.  Therefore, we used an expected dividend yield of zero.

We will continue to use judgment in evaluating the expected volatility and expected terms utilized for our stock-based compensation calculations on a prospective basis.  We account for forfeitures of share-based awards when they occur.

Stock option and RSU awards have been granted to nonemployees, in connection with research and consulting services provided to us, and to employees, under our LTIP Plan.  Equity awards generally vest over terms of four or five years.  For employees, stock-based compensation expense is recorded ratably through the vesting period for each stock option or tranche of restricted stock award.  For option and RSU awards with performance conditions, we evaluate the probability of the number of shares that are expected to vest and adjust compensation expense to reflect the number of shares expected to vest and the cumulative vesting period met to date.

The weighted-average assumptions used in the Black-Scholes option pricing model were as follows:

	Years Ended December 31
	2021			2020			2019
Dividend yield		—	%		—	%		—	%
Volatility		69.71	%		73.46	%		73.73	%
Risk-free interest rate		0.69	%		1.44	%		2.18	%
Expected term of options (in years)		5.65			5.86			6.23
Weighted average grant date fair value	$	120.97		$	196.96		$	69.76

Leases

We determine if an arrangement is a lease at inception.  Lease assets represents our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized at the lease commencement date based on the present value of lease payments over the lease term calculated using its incremental borrowing rate based on the information available at commencement unless the implicit rate is readily determinable.  Lease assets also include upfront lease payments, lease incentives paid, and direct costs incurred and exclude lease incentives received.  The lease term used to calculate the lease assets and related lease liabilities includes the options to extend or terminate the lease when it is reasonably certain that we will exercise those options.  Lease expense for operating leases is recognized on a straight-line basis over the expected lease term as an operating expense while the expense for finance leases is recognized as depreciation expense over the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise.

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We will account for each separate lease component separately from the nonlease components.  The depreciable life of lease assets and leasehold improvements is limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of its exercise.

Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases and operating leases is recognized on a straight-line basis over the lease term.

Key assumptions and judgments included in the determination of the lease liability include the discount rate applied to the present value of the future lease payments, and the exercise of renewal options.  Our leases do not provide information about the rate implicit in the lease; therefore, we utilize an incremental borrowing rate to calculate the present value of our future lease obligations.  The incremental borrowing rate represents the rate of interest we would have to pay on a collateralized borrowing, for an amount equal to the lease payments, over a similar term and in a similar economic environment.

Off-Balance Sheet Arrangements

Since our inception, we have not had any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements, and we have not engaged in any other off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, please see Note 2 of Notes to Consolidated Financial Statements contained in this Annual Report on Form 10-K.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks in the ordinary course of our business.  These market risks are principally limited to interest rate fluctuations.  We had cash and cash equivalents of $590.3 million at December 31, 2021, consisting primarily of funds in operating cash accounts.  The primary objective of our investment activities is to preserve principal and liquidity while maximizing income without significantly increasing risk.  We do not enter into investments for trading or speculative purposes.  Due to the short-term nature of our investment portfolio, we do not believe an immediate increase of 100 basis points in interest rates would have a material effect on the fair market value of our portfolio, and accordingly we do not expect a sudden change in market interest rates to affect materially our operating results or cash flows.  There have been no changes since the end of the last fiscal year in our primary market risk exposures or the management of those exposures, and we do not expect future changes in these exposures.

We contract with research, development, and manufacturing organizations and investigational sites globally.  Generally, these contracts are denominated in United States dollars.  However, we may be subject to fluctuations in foreign currency rates in connection with agreements not denominated in United States dollars.  We do not hedge our foreign currency exchange rate risk.

Item 8. Financial Statements and Supplementary Data.

The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K.  An index of those financial statements is found in Item 15.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2021.  The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.  Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  Based on the evaluation of our disclosure controls and procedures as of December 31, 2021, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15(d)-15(f) under the Exchange Act, as amended.  Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO framework) to evaluate the effectiveness of internal control over financial reporting.  Management believes that the COSO framework is a suitable framework for its evaluation of financial reporting because it is free from bias, permits reasonably consistent qualitative and quantitative measurements of our internal control over financial reporting, is sufficiently complete so that those relevant factors that would alter a

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conclusion about the effectiveness of our internal control over financial reporting are not omitted, and is relevant to an evaluation of internal control over financial reporting.

Based on its evaluation under the framework in Internal Control—Integrated Framework, our management concluded that the Company maintained effective internal control over financial reporting at a reasonable assurance level as of December 31, 2021, based on those criteria.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Exchange Act, during the quarter ended December 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Attestation Report of the Registered Public Accounting Firm

The effectiveness of the Company’s internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their attestation report appearing below, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Reata Pharmaceuticals, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Reata Pharmaceuticals, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Reata Pharmaceuticals, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, stockholders‘ equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and our report dated February 28, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Dallas, Texas  

February 28, 2022

121

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

122

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this Item is incorporated herein by reference to the information that is contained in Part I, Item 1 of this Form 10-K and that will be contained in our proxy statement related to the 2022 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) of Form 10-K.

Item 11. Executive Compensation.

The information required by this Item is incorporated herein by reference to the information that will be contained in our proxy statement related to the 2022 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) of Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Information concerning our equity compensation plan at December 31, 2021, was as follows:

Equity Compensation Plans

The table below discloses information as of December 31, 2021, with respect to our equity compensation plans and outstanding stock options granted pursuant to individual compensation arrangements.

Plan Category	Number of shares of Class A common stock and Class B common stock to be Issued on Exercise of Outstanding Options, Warrants and Rights(1)		Weighted Exercise Price of Outstanding Options, Warrants and Rights		Number of securities remaining available for future issuance under Equity Compensation Plans (excluding securities reflected in the first column)(2)
Equity compensation plans approved by    security holders:		5,552,325	$	83.27		2,836,302
Total		5,552,325	$	83.27		2,836,302

(1) Represents 4,743,180 stock options and 809,145 RSUs outstanding under the LTIP Plan.  Of the total 4,743,180 stock options, 1,019,603 stock options are exercisable for shares of our Class A common stock, and 3,723,577 stock options are exercisable for shares of our Class B common stock. Of the total 809,145 RSUs, 742,499 RSUs represent shares of our Class A common stock, and 66,646 RSUs represent shares of our Class B common stock.

(2) Represents the number of securities remaining available under the LTIP Plan as of December 31, 2021.  On January 1 of each calendar year, the total number of shares of stock reserved and available for issuance shall automatically increase by an amount equal to 4% of the number of shares of common stock (of all classes) outstanding on the immediately preceding December 31, including as outstanding all securities convertible into shares of common stock on an as converted basis.  The compensation committee retains the authority to determine that there will be no increase or a lesser increase in reserved shares for any year. 

The remaining information required by Item 12 is incorporated by reference to the relevant information contained under the caption “Security Ownership Of Certain Beneficial Owners And Management” in our proxy statement related to the 2022 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) of Form 10-K.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item is incorporated herein by reference to the information that will be contained in our proxy statement related to the 2022 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) of Form 10-K.

123

Item 14. Principal Accounting Fees and Services.

The information required by this Item is incorporated herein by reference to the information that will be contained in our proxy statement related to the 2022 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) of Form 10-K.

124

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a) The following documents are filed as a part of the report:

(1) Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Stockholders’ Deficit

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

(2) Schedules have been omitted as all required information has been disclosed in the financial statements and related footnotes.

(3) The exhibits filed as part of this Annual Report on Form 10-K are set forth on the Exhibit Index immediately following our consolidated financial statements.  The Exhibit Index is incorporated herein by reference.

Item 16. Form 10-K Summary.

None.

125

Exhibit Index

Exhibit		Incorporated by Reference				Filed
Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Herewith
3.1	Thirteenth Amended and Restated Certificate of Incorporation.	S-1	333-208843	3.7	05/16/2016
3.2	Second Amended and Restated Bylaws.	8-K	001-37785	3.1	12/07/2016
4.1	Form of Class A Common Stock Certificate of the Registrant.	S-1	333-208843	4.1	02/08/2016
4.2	Seventh Amended and Restated Registration Rights Agreement by and among the Registrant and certain of its stockholders, dated as of November 10, 2010.	S-1	333-208843	4.3	01/04/2016
4.3	Description of Registrant’s Securities.	10-K	001-37785	4.3	02/19/2020
Agreements with Executive Officers and Directors
10.1+	Indemnification Agreement by and between the Registrant and J. Warren Huff, together with a schedule identifying other substantially identical agreements between the Registrant and the persons identified on the schedule and identifying the material differences between each of the agreements and the filed Indemnification Agreement.	S-1	333-208843	10.1	05/20/2016
10.2+	Indemnification Agreement by and between the Registrant and Dawn C. Bir dated September 6, 2016.	10-Q	001-37785	10.1	11/14/2016
10.3+	Indemnification Agreement by and between the Registrant and William D. McClellan dated March 1, 2017.	8-K	001-37785	10.1	03/02/2017
10.4+	Amended and Restated Employment Agreement, by and between the Registrant and J. Warren Huff, dated as of June 14, 2017.	S-3	333-218915	10.2	06/23/2017
10.5+	Amended and Restated Employment Agreement, by and between the Registrant and Dawn C. Bir, dated as of June 14, 2017.	S-3	333-218915	10.3	06/23/2017
10.6+	Amended and Restated Employment Agreement, by and between the Registrant and Colin Meyer, dated as of June 14, 2017.	S-3	333-218915	10.4	06/23/2017
10.7+	Amended and Restated Employment Agreement, by and between the Registrant and Michael D. Wortley, dated as of June 14, 2017.	S-3	333-218915	10.7	06/23/2017
10.8+	Indemnification Agreement by and between the Company and Manmeet S. Soni dated August 28, 2019.	10-Q	001-37785	10.1	11/12/2019

126

10.9+	Employment Agreement by and between the Company and Manmeet S. Soni dated August 28, 2019.	10-Q	001-37785	10.2	11/12/2019
10.10+	Indemnification Agreement by and between the Company and Martin W. Edwards, dated as of August 3, 2020.	8-K	001-37785	10.1	7/30/2020
10.11+	Indemnification Agreement by and between the Company and Christy J. Oliger, dated as of April 15, 2021.	10-Q	001-37785	10.1	5/6/2021
10.12+	Indemnification Agreement by and between the Company and Shamim Ruff, dated as of April 15, 2021.	10-Q	001-37785	10.2	5/6/2021
10.13+	Indemnification Agreement by and between the Company and Samina Khan, dated as of February 24, 2020.					X
10.14+	Indemnification Agreement by and between the Company and Andrea Loewen, dated as of February 24, 2020.					X
10.15+	Employment Agreement by and between the Company and Samina Khan, dated as of July 7, 2020.					X
10.16+	Employment Agreement by and between the Company and Andrea Loewen, dated as of February 24, 2020.					X
Patent and License Agreements
10.17	Supplement to Exclusive License and Supply Agreement between the Registrant and Kyowa Hakko Kirin Co., Ltd., dated as of March 4, 2016.	S-1	333-208843	10.14	03/22/2016
10.18	Second Supplement to Exclusive License and Supply Agreement, by and between the Registrant and Kyowa Hakko Kirin Co., Ltd., dated as of March 21, 2017.	S-3	333-218915	10.1	06/23/2017
10.19#	Fifth Supplement to Exclusive License and Supply Agreement, dated as of August 22, 2019, between Reata Pharmaceuticals, Inc. and Kyowa Hakko Kirin Co., Ltd.	8-K	001-37785	10.1	08/22/2019
10.20#	Sixth Supplement to Exclusive License and Supply Agreement, dated as of August 22, 2019, between Reata Pharmaceuticals, Inc. and Kyowa Hakko Kirin Co., Ltd.	8-K	001-37785	10.2	08/22/2019
10.21#	Amended and Restated License Agreement, dated as of October 9, 2019.	8-K	001-37785	10.1	10/10/2019
10.22+#	Amendment No. 2 to the Exclusive Patent License Agreement among the Board of Regents of The University of Texas System, The University of Texas M.D. Anderson Cancer Center, and the Trustees of Dartmouth College and the Registrant, dated as of August 17, 2021, as amended.	10-Q	001-37785	10.1	11/18/2021

127

10.23+#	Amendment No. 2 to the Exclusive License Agreement between the Trustees of Dartmouth College and the Registrant, dated as of August 17, 2021, as amended.	10-Q	001-37785	10.2	11/18/2021
10.24#	Exclusive Patent License Agreement among the Board of Regents of The University of Texas System, The University of Texas M.D. Anderson Cancer Center, and the Trustees of Dartmouth College and the Registrant, dated as of July 15, 2004, as amended.					X
10.25#	Exclusive License Agreement between the Trustees of Dartmouth College and the Registrant, dated as of December 16, 2009, as amended.					X
10.26#	Exclusive License Agreement between the KU Center for Technology Commercialization, Inc. and the Registrant, dated as of September 26, 2014.					X
10.27#	Exclusive License and Supply Agreement between the Registrant and Kyowa Hakko Kirin Co. Ltd., dated as of December 24, 2009.					X
10.28#	License Agreement between the Registrant and Abbott Pharmaceuticals PR Ltd., dated as of September 21, 2010.					X
10.29#	Collaboration Agreement between the Registrant and Abbott Pharmaceuticals PR Ltd., dated as of December 9, 2011.					X
10.30#	Third Supplement to Exclusive License and Supply Agreement, dated as of December 6, 2017, between Reata Pharmaceuticals, Inc. and Kyowa Hakko Kirin Co., Ltd.					X
10.31#	Fourth Supplement to Exclusive License and Supply Agreement, dated as of December 6, 2017, between Reata Pharmaceuticals, Inc. and Kyowa Hakko Kirin Co., Ltd.					X
Lease Agreements
10.32	Lease by and between the Registrant and SDCO Gateway Commerce I & II, Inc., dated as of May 25, 2006, as amended.	S-1	333-208843	10.6	01/04/2016
10.33	Lease Amendment No. 11, effective as of November 9, 2017, between Reata Pharmaceuticals, Inc. and SDCO Gateway Commerce I & II, Inc.	10-Q	001-37785	10.1	11/13/2017
10.34	Lease Agreement, dated as of October 15, 2019.	8-K	001-37785	10.1	10/16/2019
10.35	Expansion Agreement, dated as of October 15, 2019.	8-K	001-37785	10.2	10/16/2019

128

10.36	Gateway Lease Expansion Agreement, dated December 12, 2019.	10-K	001-37785	10.39	2/19/2020
10.37	First Amendment to Lease Agreement, dated as of May 27, 2020.	10-Q	001-37785	10.1	8/10/2020
10.38	Lease Amendment No. 13, effective as of February 4, 2022, between Reata Pharmaceuticals, Inc. and SDCO Commerce I & II, Inc.					X
Equity Compensation Plans and Policies
10.39+	Reata Pharmaceuticals, Inc. Second Amended and Restated Long Term Incentive Plan.	10-Q	001-358762	10.1	05/09/2019
10.40+	Stock Option Agreement.	10-Q	001-358762	10.2	05/09/2019
10.41+	Notice of Stock Option Grant forms for employees and director/consultants.	S-8	333-232009	4.5	06/13/2019
10.42+	Restricted Stock Unit Agreement.	10-Q	001-37785	10.3	11/12/2019
10.43+	Notice of Grant of Restricted Stock Units for employees.	10-K	001-37785	10.38	2/19/2020
10.44+	Fourth Amended and Restated Non-Employee Director Compensation Policy, dated as of June 10, 2020.	10-Q	001-37785	10.4	8/10/2020
10.45+	Fifth Amended and Restated Non-Employee Director Compensation Policy, dated as of December 2, 2020.	10-K	001-37785	10.37	3/01/2021
10.46+	Notice of Grant of Restricted Stock Units for director/consultants, dated as of December 2, 2020.	10-K	001-37785	10.38	3/01/2021
10.47+	Notice of Grant of Restricted Stock Units for employees, dated as of December 2, 2020.	10-Q	001-37785	10.3	05/06//2021
10.48*	Notice of Grant of Restricted Stock Units for employees, dated as of December 3, 2021.					X
10.49*	Notice of Grant of Restricted Stock Units Form for director/consultants, dated as of December 3, 2021.					X
10.50*	Sixth Amended and Restated Non-Employee Director Compensation Policy, dates as of December 17, 2021.					X
Other
10.51†#	Common Stock Purchase Agreement between the Company and BXLS V – River L.P, dated as of June 10, 2020.	10-Q	001-37785	10.2	8/10/2020
10.52†#	Development and Commercialization Funding Agreement between the Company and BXLS V – River L.P, dated as of June 10, 2020.	10-Q	001-37785	10.3	8/10/2020
21.1	List of Subsidiaries.					X

129

23.1	Consent of Ernst & Young LLP, an Independent Registered Public Accounting Firm.	X
31.1	Certification of Principal Executive Officer Pursuant to Rules 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 2002.	X
31.2	Certification of Principal Financial Officer Pursuant to Rules 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 2002.	X
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	*
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	*
101.INS	Inline XBRL Instance Document.	X
101.SCH	Inline XBRL Taxonomy Extension Schema Document.	X
101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document.	X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	X
101.PRE	Inline Taxonomy Extension Presentation Linkbase Document.	X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document.	X

+ Indicates management contract or compensatory plan.

# Information in this exhibit identified by brackets is confidential and has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is not material and is the type of information that the Company customarily treats as private or confidential. An unredacted copy of this exhibit will be furnished to the Securities and Exchange Commission on a supplemental basis upon request.

† Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished to the Securities and Exchange Commission upon request.

* Furnished herewith.

130

SIGNATURES

Pursuant 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 be signed on its behalf by the undersigned, thereunto duly authorized.

	REATA PHARMACEUTICALS, INC.
Date: February 28, 2022	By:	/s/ J. Warren Huff
		J. Warren Huff
		Chief Executive Officer

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 of the Registrant in the capacities and on the dates indicated.

Name	Title	Date
/s/ J. Warren Huff	Chief Executive Officer and Chairman of the Board	February 28, 2022
J. Warren Huff	of Directors (Principal Executive Officer)
/s/ Manmeet S. Soni	Chief Operating Officer, Chief Financial Officer and President (Principal Financial Officer)	February 28, 2022
Manmeet S. Soni
/s/ Bhaskar Anand	Vice President, Chief Accounting Officer (Principal	February 28, 2022
Bhaskar Anand	Accounting Officer)
/s/ Martin W. Edward, M.D.	Member of the Board of Directors	February 28, 2022
Martin W. Edward, M.D.
/s/ William D. McClellan, Jr.	Member of the Board of Directors	February 28, 2022
William D. McClellan, Jr.
/s/ R. Kent McGaughy, Jr.	Member of the Board of Directors	February 28, 2022
R. Kent McGaughy, Jr.
/s/ Jack B. Nielsen	Member of the Board of Directors	February 28, 2022
Jack B. Nielsen
/s/ Christy J. Oliger	Member of the Board of Directors	February 28, 2022
Christy J. Oliger
/s/ William E. Rose	Member of the Board of Directors	February 28, 2022
William E. Rose
/s/ Shamim Ruff	Member of the Board of Directors	February 28, 2022
Shamim Ruff

131

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-4
Consolidated Statements of Operations	F-5
Consolidated Statements of Stockholders’ Equity (Deficit)	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-8

F-1

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Reata Pharmaceuticals, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Reata Pharmaceuticals, Inc. (the Company) as of December 31, 2021 and 2020, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.  

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.  

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Provision for Unbilled Accrued Direct Research Liabilities

Description of the Matter

As described in Note 2 to the consolidated financial statements, the Company bases expense accruals related to clinical trials on estimates of the services performed and expenses incurred, pursuant to contracts with multiple research institutions.  As of December 31, 2021, the Company had $14.2 million of accrued direct research liabilities, of which $11.8 million related to accruals for unbilled research and development expenses. The financial terms of these agreements vary from contract to contract, resulting in uneven billing and payment flows.  At a given financial statement date, the Company accumulates and assesses unbilled research and development costs, inclusive of contract milestones, pass-through costs, and estimates of the total costs of unbilled patient visits for clinical trials. Auditing management’s accounting for and disclosure of unbilled accrued direct research liabilities was highly judgmental due to lag times in receiving research and development invoices, necessitating the Company to estimate unbilled costs.

F-2

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the unbilled accrued direct research liabilities process. For example, we tested controls over management’s review of the data inputs used in the estimation of the unbilled accrued direct research liability.   To test the Company’s assumptions and related calculation of accrued direct research liabilities, our audit procedures included, among others, inquiring of management to corroborate our understanding of the inputs and data used to calculate the accrual, including gaining an understanding of the current status and enrollment timelines for each material clinical trial and the current status of other research and development related purchase orders. For each material clinical study, we confirmed the terms of the agreement in effect as of December 31, 2021 with the related invoice processor and clinical sites, as well as significant inputs contributing to the amount accrued, such as lifetime-to-date patient visit costs and amounts invoiced, and compared them to actual inputs used by the Company to calculate the unbilled liability related to each clinical trial. In addition, we performed procedures to evaluate the completeness and accuracy of material unbilled accrued direct research liability components and tested cash payments subsequent to December 31, 2021 that could potentially impact the year-end balances. We also performed analytical procedures to evaluate whether appropriate relationships existed between the unbilled accrued direct research liabilities and drug development costs compared to historical trends.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2002.

Dallas, Texas

February 28, 2022

F-3

Reata Pharmaceuticals, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

	December 31, 2021			December 31, 2020
Assets
Cash and cash equivalents	$	590,258		$	818,150
Prepaid expenses and other current assets		6,217			6,960
Income tax receivable		—			22,228
Total current assets		596,475			847,338
Property and equipment, net		11,604			4,912
Operating lease right-of-use assets		126,777			5,208
Other assets		160			140
Total assets	$	735,016		$	857,598
Liabilities and stockholders’ equity
Accounts payable		13,505			4,790
Accrued direct research liabilities		14,249			14,023
Other current liabilities		21,450			19,423
Operating lease liabilities, current		3,142			2,841
Payable to collaborators		—			73,437
Deferred revenue		1,648			4,688
Total current liabilities		53,994			119,202
Other long-term liabilities		—			3,029
Operating lease liabilities, noncurrent		132,891			2,482
Liability related to sale of future royalties, net		362,142			315,454
Total noncurrent liabilities		495,033			320,965
Commitments and contingencies
Stockholders’ equity:
Common stock A, $0.001 par value:    500,000,000 shares authorized; issued and outstanding – 31,478,197 and    31,109,154 at December 31, 2021 and December 31, 2020, respectively		31			31
Common stock B, $0.001 par value:    150,000,000 shares authorized; issued and outstanding – 4,919,249 and    5,044,931 at December 31, 2021 and December 31, 2020, respectively		5			5
Additional paid-in capital		1,441,584			1,375,640
Accumulated deficit		(1,255,631	)		(958,245	)
Total stockholders’ equity		185,989			417,431
Total liabilities and stockholders’ equity	$	735,016		$	857,598

See accompanying notes.

F-4

Reata Pharmaceuticals, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share data)

	Years Ended December 31
	2021			2020			2019
Collaboration revenue
License and milestone	$	8,040		$	4,701		$	25,276
Other revenue		3,450			4,318			1,241
Total collaboration revenue		11,490			9,019			26,517
Expenses
Research and development		155,993			159,080			128,109
Reacquired license rights		—			—			124,398
General and administrative		99,002			75,128			58,298
Depreciation		1,203			1,136			932
Total expenses		256,198			235,344			311,737
Other income (expense), net		(53,128	)		(43,914	)		(4,942	)
Loss before taxes on income		(297,836	)		(270,239	)		(290,162	)
Benefit from (provision for) taxes on income		450			22,487			(8	)
Net loss	$	(297,386	)	$	(247,752	)	$	(290,170	)
Net loss per share—basic and diluted	$	(8.19	)	$	(7.35	)	$	(9.54	)
Weighted-average number of common shares used in    net loss per share basic and diluted		36,321,351			33,709,480			30,414,203

See accompanying notes.

F-5

Reata Pharmaceuticals, Inc.

Consolidated Statements of Stockholders’ Equity (Deficit)

(in thousands, except share and per share data)

	Common Stock A				Common Stock B						Additional Paid-In		Total Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount			Capital		Deficit			(Deficit) Equity
Balance at January 1, 2019		24,000,683	$	24		5,728,175		$	6		$	435,452	$	(420,323	)	$	15,159
Compensation expense    related to stock-based    compensation		—		—		—			—			26,381		—			26,381
Exercise of options		—		—		707,849			—			13,445		—			13,445
Public offering of common    stock, net of offering costs		2,760,000		3		—			—			491,932		—			491,935
Conversion of common stock    Class B to Class A		1,117,867		1		(1,117,867	)		(1	)		—		—			—
Other shareholder    transactions		—		—		—			—			107		—			107
Net loss		—		—		—			—			—		(290,170	)		(290,170	)
Balance at December 31, 2019		27,878,550	$	28		5,318,157		$	5		$	967,317	$	(710,493	)	$	256,857
Compensation expense    related to stock-based    compensation		—		—		—			—			57,633		—			57,633
Exercise of options		—		—		616,585			1			17,819		—			17,820
Public offering of common    stock, net of offering costs		2,000,000		2		—			—			277,473		—			277,475
Issuance of Common Stock		340,793		—		—			—			55,398		—			55,398
Conversion of common stock    Class B to Class A		889,811		1		(889,811	)		(1	)		—		—			—
Net loss		—		—		—			—			—		(247,752	)		(247,752	)
Balance at December 31, 2020		31,109,154	$	31		5,044,931		$	5		$	1,375,640	$	(958,245	)	$	417,431
Compensation expense    related to stock-based    compensation		—		—					—			56,806		—			56,806
Exercise of options		—		—		234,216			—			9,138		—			9,138
Issuance of common stock upon    vesting of restricted stock units		—		—		9,145			—			—		—			—
Conversion of common stock    Class B to Class A		369,043		—		(369,043	)		—			—		—			—
Net loss		—		—					—			—		(297,386	)		(297,386	)
Balance at December 31, 2021		31,478,197		31		4,919,249			5			1,441,584		(1,255,631	)		185,989

See accompanying notes.

F-6

Reata Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

(in thousands)

	Years Ended December 31
	2021			2020			2019
Operating activities
Net loss	$	(297,386	)	$	(247,752	)	$	(290,170	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,203			1,136			932
Amortization of debt issuance costs and imputed interest		6,563			7,545			1,374
Non-cash interest expense on liability related to sale of future royalty		46,688			21,884			—
Stock-based compensation expense		56,806			57,633			26,381
Loss on extinguishment of debt		—			11,183			—
Gain on lease termination		—			(1,286	)		—
Changes in operating assets and liabilities:
Income tax receivable and payable		22,217			(22,217	)		—
Prepaid expenses, other current assets and other assets		750			222			(59	)
Accounts payable		8,713			2,879			(2,114	)
Accrued direct research, other current and long-term liabilities		1,346			2,090			8,140
Operating lease obligations		439			(956	)		3,835
Payable to collaborators		(80,000	)		(150,000	)		216,862
Deferred revenue		(3,040	)		(4,701	)		(216,332	)
Net cash used in operating activities		(235,701	)		(322,340	)		(251,151	)
Investing activities
Purchases of property and equipment		(1,329	)		(927	)		(2,673	)
Net cash used in investing activities		(1,329	)		(927	)		(2,673	)
Financing activities
Proceeds from issuance of common stock, net		—			333,278			492,453
Payments on deferred offering costs		—			(405	)		(71	)
Payments on long-term debt		—			(167,170	)		75,000
Payments on deferred issuance costs		—			—			(576	)
Exercise of options		9,138			17,820			13,445
Proceeds from sale of future royalties, net		—			293,570			107
Net cash provided by financing activities		9,138			477,093			580,358
Net decrease in cash and cash equivalents		(227,892	)		153,826			326,534
Cash and cash equivalents at beginning of year		818,150			664,324			337,790
Cash and cash equivalents at end of period	$	590,258		$	818,150		$	664,324
Supplemental disclosures
Cash paid for interest	$	—		$	8,021		$	8,207
Non-cash activity:
Accrued deferred offering cost	$	—		$	102		$	447
Right-of-use assets obtained in exchange for lease obligations	$	124,479		$	4,756		$	9,068
Purchases of equipment in accounts payable, accrued direct research, other    current, and long-term liabilities	$	295		$	29		$	302
Acquisition of property and equipment through tenant improvement allowance	$	8,702		$	2,402		$	—

See accompanying notes.

F-7

Reata Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements

December 31, 2021

1. Description of Business

Reata Pharmaceuticals, Inc.’s (Reata, the Company, we, us, or our) mission is to identify, develop, and commercialize innovative therapies that change patients’ lives for the better.  The Company focuses on small-molecule therapeutics with novel mechanisms of action for the treatment of severe, life-threatening diseases with few or no approved therapies.  The Company’s lead programs are omaveloxolone in a rare neurological disease called Friedreich’s ataxia (FA) and bardoxolone methyl (bardoxolone) in rare forms of chronic kidney disease (CKD).  Both of the Company’s lead product candidates activate the transcription factor Nrf2 to normalize mitochondrial function, restore redox balance, and resolve inflammation.  Because mitochondrial dysfunction, oxidative stress, and inflammation are features of many diseases, the Company believes omaveloxolone, bardoxolone, and our next-generation Nrf2 activators have many potential clinical applications.  Reata possesses exclusive, worldwide rights to develop, manufacture, and commercialize omaveloxolone, bardoxolone, and our next-generation Nrf2 activators, excluding certain Asian markets for bardoxolone in certain indications, which are licensed to Kyowa Kirin Co., Ltd. (Kyowa Kirin).  In addition, we are developing RTA 901, the lead product candidate from our Hsp90 modulator program, in neurological indications.  We are the exclusive licensee of RTA 901 and have worldwide commercial rights.

The Company’s consolidated financial statements include the accounts of all majority-owned subsidiaries.  Accordingly, the Company’s share of net earnings and losses from these subsidiaries is included in the consolidated statements of operations.  Intercompany profits, transactions, and balances have been eliminated in consolidation.

Prior period reclassifications

Certain prior period amounts in the consolidated financial statements have been reclassified to conform to the current period presentation. Specifically, Operating lease right-of-use assets, Operating lease liabilities, current and Operating lease liabilities, noncurrent have been reclassed out of Other assets, Other current liabilities and Other long-term liabilities in prior periods to conform with current period presentation on the consolidated balance sheets.

2. Summary of Significant Accounting Policies

Risks and Uncertainties

The Company has experienced losses and negative operating cash flows for many years since inception and has no marketed drug or other products.  The Company’s ability to generate future revenue depends upon the results of its development programs, whose success cannot be guaranteed.  The Company may need to raise additional equity capital in the future in order to fund its operations.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all investments in highly liquid financial instruments with a maturity of three months or less when purchased to be cash equivalents.  Investments qualifying as cash equivalents primarily consist of money market funds.  The carrying amount of cash equivalents approximates fair value.  Investment income consists primarily of interest income on our cash and cash equivalents, which include money market funds.

F-8

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation.  Depreciation is computed using the straight-line method over the following estimated useful lives:

Computer equipment	2-5 years
Software	3 years
Laboratory equipment	5-7 years
Office furniture	5 years
Office equipment	5 years
Manufacturing equipment	10 years

Leasehold improvements are amortized on the straight-line method over the shorter of the lease term or the estimated useful life of the equipment or improvement.  Such amortization is recorded as depreciation expenses in the consolidated statements of operations.

Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment.  Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered.  Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends, and product development cycles.  If impairments are identified, assets are written down to their estimated fair value.  The Company has not recognized any impairment charges in 2021, 2020, or 2019.

Liability Related to Sale of Future Royalties

On June 24, 2020, the Company closed on the Development and Commercialization Funding Agreement with an affiliate of Blackstone Life Sciences, LLC (BXLS), which provided funding for the development and commercialization of bardoxolone for the treatment of CKD caused by Alport syndrome, autosomal dominant polycystic kidney disease (ADPKD), and certain other rare CKD indications in return for future royalties (the Development Agreement).  The Company accounted for the Development Agreement as a sale of future revenues resulting in a debt classification, primarily because the Company has significant continuing involvement in generating the future revenue on which the royalties are based.  The debt will be amortized under the effective interest rate method and, accordingly, the Company is recognizing non-cash interest expense over the estimated term of the Development Agreement.  The liability related to sale of future royalties, and the debt amortization, are based on the Company’s current estimate of future royalties expected to be paid over the estimated term of the Development Agreement.  The Company will periodically assess the expected royalty payments and, if materially different than its previous estimate, will prospectively adjust and recognize the related non-cash interest expense.  The transaction costs associated with the liability will be amortized to non-cash interest expense over the estimated term of the Development Agreement.  For a complete discussion of accounting for Development Agreement see, Note 6, Liability Related to Sale of Future Royalties of Notes to Consolidated Financial Statements contained in this Annual Report on Form 10-K.

Fair Value Measurements

The Company categorizes its financial instruments measured at fair value into a three-level fair value hierarchy that prioritizes the inputs used in determining the fair value of the asset or liability.  The three levels of the fair value hierarchy are as follows:

• Level 1 - Financial instruments that have values based on unadjusted quoted prices for identical assets or liabilities in an active market which the Company has the ability to access at the measurement date.

• Level 2 - Financial instruments that have values based on quoted market prices in markets where trading occurs infrequently or that have values based on quoted prices of instruments with similar attributes in active markets.

F-9

• Level 3 - Financial instruments that have values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.  These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset.

Revenue Recognition

The Company’s revenue to date has been generated primarily from licensing fees received under its collaborative licensing agreements with AbbVie Inc. (AbbVie) and Kyowa Kirin and reimbursements for expenses from Kyowa Kirin.  The terms of the agreements include non-refundable upfront fees, funding of research and development activities, payments based upon achievement of milestones, and royalties on net product sales.

Under Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.  To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the promised goods or services in the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the entity satisfies a performance obligation.

At contract inception, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct.  The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied.

Licenses of intellectual property: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer, and the customer can use and benefit from the license.  For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees.  The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone payments: At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method.  If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission by the Company) is included in the transaction price, which is then allocated to each performance obligation.  Milestone payments that are not within the control of the Company, such as approvals from regulators, are not considered probable of being achieved until those approvals are received.  At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and, if necessary, adjusts its estimate of the overall transaction price.  Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration, and other revenues and earnings in the period of adjustment and in future periods through the end of the performance obligation period.

Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).  To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements.

Manufacturing Supply Services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered options.  The Company assesses if these options provide a material right to the licensee and, if so, they are accounted for as separate performance obligations.  If the Company is entitled to additional payments when the

F-10

customer exercises these options, any additional payments are recorded when the customer obtains control of the goods, which is upon delivery.

For a complete discussion of accounting for collaborative licensing agreements, see Note 3, Collaboration Agreements of Notes of Consolidated Financial Statements contained in this Annual Report on Form 10-K.

Acquired License Rights

All acquired license and sublicense costs that are in-process research and development, which were acquired directly in a transaction other than a business combination that does not have an alternative future use, are expensed as incurred.  For a complete discussion of accounting for reacquisition of license rights in 2019, see Note 3, Collaboration Agreements.

Research and Development Costs

All research and development costs are expensed as incurred, including costs for drug supplies used in research and development or clinical studies, property and equipment acquired specifically for a finite research and development project, and nonrefundable deposits incurred at the initiation of research and development activities.  Research and development costs consist principally of costs related to clinical studies managed directly by the Company and through contract research organizations (CROs), manufacture of clinical drug products for clinical studies, preclinical study costs, discovery research expenses, facilities costs, salaries, and related expenses.

In December 2017, the Company and Kyowa Kirin entered into the Third Supplement to the Kyowa Kirin Agreement, which allows the Company to begin a portion of the registrational CARDINAL trial in Japan, for which Kyowa Kirin has reimbursed costs incurred of $3.0 million as of the end of December 31, 2021.  The Company deemed that this was not a material modification to the Kyowa Kirin Agreement because no payment terms or deliverables were changed.  The Company’s expenses were reduced by $0.5 million for Kyowa Kirin’s share of the study costs for twelve months ended December 31, 2019. No such credits were recorded in the twelve months ended December 31, 2020, or 2021, respectively.

In addition, we have also entered into cost sharing agreement for the FALCON trial and have recorded $1.4 million in expenses during the year ended December 31, 2021.  No such costs were incurred in the twelve months ended December 31, 2019, or 2020, respectively.

The Company bases its expense accruals related to clinical trials on its estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical trials on its behalf.  The financial terms of these agreements vary from contract to contract and may result in uneven payment flows.  Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones.  In accruing costs, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period.  Included within total accrued direct research liabilities is $11.8 million, which was accrued but unbilled, as of December 31, 2021.

To date, the Company has not experienced significant changes in its estimates of accrued research and development expenses after a reporting period.  However, due to the nature of estimates, the Company cannot assure that it will not make changes to its estimates in the future as the Company becomes aware of additional information about the status or conduct of its clinical trials and other research activities.

Patents

Costs associated with filing, prosecuting, enforcing, and maintaining patent rights are expensed as incurred and are classified as general and administrative expenses.

F-11

Stock-Based Compensation

The Company accounts for its stock-based compensation in accordance with ASC 718 Compensation—Stock Compensation (ASC 718).  ASC 718 requires companies to measure and recognize compensation expense for all stock option and RSU awards based on the estimated fair value of the award on the grant date.  The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards.  The fair value is recognized as expense, over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis when the only condition to vesting is continued service.  If vesting is subject to a market or performance condition, recognition is based on the derived service period of the award.  Expense for awards with performance conditions is estimated and adjusted on a quarterly basis based upon the assessment of the probability that the performance condition will be met.  Use of the Black-Scholes option-pricing model requires management to apply judgment under highly subjective assumptions.  These assumptions include:

• Expected term—The expected term represents the period that the stock-based awards are expected to be outstanding and is based on the average period the stock options are expected to be outstanding and was based on our historical information of the options exercise patterns and post-vesting termination behavior.

• Expected volatility—Since the Company does not have sufficient trading history to estimate the volatility of its common stock, the expected volatility was estimated based on its own historical volatility since its initial public offering (IPO) and the average volatility for comparable publicly traded biopharmaceutical companies.  When selecting comparable publicly traded biopharmaceutical companies on which the Company based its expected stock price volatility, the Company selected companies with comparable characteristics to the Company, including enterprise value, risk profiles, position within the industry, and historical share price information sufficient to meet the expected life of the stock-based awards.

• Risk-free interest rate—The risk-free interest rate is based on the United States Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option.

• Expected dividend—The Company has no plans to pay dividends on its common stock.  Therefore, the company used an expected dividend yield of zero.

In addition to the assumptions used in the Black-Scholes option-pricing model, the Company will continue to use judgment in evaluating the expected volatility and expected terms utilized for its stock-based compensation calculations on a prospective basis.  The Company accounts for forfeitures of share-based awards when they occur.

Stock option and RSU unit awards have been granted to nonemployees, in connection with research and consulting services provided to the Company, and to employees, under its Second Amended and Restated Long Term Incentive Plan (the LTIP Plan).  Equity awards generally vest over terms of four or five years.  For employees and non-employees, stock-based compensation expense is recorded ratably through the vesting period for each stock option or tranche of RSU award.  For performance-based awards, the Company evaluates the probability of the number of shares that are expected to vest and adjusts compensation expense to reflect the number of shares expected to vest and the cumulative vesting period met to date.

Income Taxes

The Company accounts for income taxes and the related accounts under the liability method.  Deferred tax assets and liabilities are determined based on differences between the financial statement and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.  The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, Income Taxes.  The Company recognizes a tax benefit for uncertain tax positions if the Company believes it is more likely than not that the position will be upheld on audit based solely on the technical merits of the tax position.  The Company evaluates uncertain tax positions after consideration of all available information.  As of December 31, 2021, the interest accrued related to provision uncertain tax positions was immaterial.  

F-12

Debt Issuance Costs

The Company defers costs related to debt issuance and amortizes these costs to interest expense over the term of the debt, using the effective interest method.  Debt issuance costs are presented in the balance sheet as a deduction from the carrying amount of the debt liability.

Leases

At the inception of an arrangement, the Company determines if an arrangement is, or contains, a lease based on the unique facts and circumstances present in that arrangement.  Lease assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized at the lease commencement date based on the present value of lease payments over the lease term calculated using its incremental borrowing rate based on the information available at commencement unless the implicit rate is readily determinable.  Lease assets also include upfront lease payments, lease incentives paid, and direct costs incurred and exclude lease incentives received.  The lease term used to calculate the lease assets and related lease liabilities includes the options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options.  Lease expense for operating leases is recognized on a straight-line basis over the expected lease term as an operating expense while the expense for finance leases is recognized as depreciation expense over the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise.

The Company accounts for each lease component separately from the nonlease components.  The depreciable life of lease assets and leasehold improvements is limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of its exercise.

Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expenses for these short-term leases and operating leases are recognized on a straight-line basis over the lease term.

Key assumptions and judgments included in the determination of the lease liability include the discount rate applied to the present value of the future lease payments, and the exercise of renewal options. Our leases do not provide information about the rate implicit in the lease; therefore, we utilize an incremental borrowing rate to calculate the present value of our future lease obligations. The incremental borrowing rate represents the rate of interest we would have to pay on a collateralized borrowing, for an amount equal to the lease payments, over a similar term and in a similar economic environment.

Net Income (Loss) per Share

Basic and diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents.  The Company’s potentially dilutive shares, which include unvested RSUs and options to purchase common stock, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.  For periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances from non-owner sources and includes all components of net income (loss) and other comprehensive income (loss).  The other comprehensive income (loss) for the years ended December 31, 2021, 2020, and 2019 was immaterial.

F-13

Recent Accounting Pronouncements Adopted

In December 2019, the Financial Accounting Standards Board (FASB) issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes.  The FASB issued this update as part of its Simplification Initiative to improve areas of U.S. GAAP and reduce cost and complexity while maintaining usefulness.  The main provision that impacts the Company is the removal of the exception to the incremental approach of intra-period tax allocation when there is a loss from continuing operations and income or gain from other items.  ASU 2019-12 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2020.  The Company adopted this standard on January 1, 2021, and its adoption did not have material impact to the Company’s consolidated financial statements and related disclosure.

3. Collaboration Agreements

Subsequent to the 2019 reacquisition of certain rights originally licensed to AbbVie (see “AbbVie” below), the Company’s collaboration revenue and deferred revenue have been generated primarily from licensing fees and reimbursements for expenses received under our exclusive license with Kyowa Kirin Agreement (as defined below).

Kyowa Kirin

In December 2009, the Company entered into an exclusive license with Kyowa Kirin to develop and commercialize bardoxolone in the licensed territory (the Kyowa Kirin Agreement).  The terms of the agreement include payment to the Company of a nonrefundable, up-front license fee of $35.0 million and additional development and commercial milestone payments.  As of December 31, 2021, the Company has received $50.0 million related to regulatory development milestone payments from Kyowa Kirin and has the potential in the future to achieve another $47.0 million from regulatory milestones and $140.0 million from commercial milestones.  The Company also has the potential to achieve tiered royalties ranging from the low teens to the low 20 percent range, depending on the country of sale and the amount of annual net sales, on net sales by Kyowa Kirin in the licensed territory.  The Company is participating on a joint steering committee with Kyowa Kirin to oversee the development and commercialization activities related to bardoxolone.  Any future milestones and royalties received are subject to mid to lower single digit percent declining tiered commissions to certain consultants as compensation for negotiations of the Kyowa Kirin Agreement.  

The up-front payment and regulatory milestones are accounted for as a single unit of accounting.  The Company regularly evaluates its remaining performance obligation under the Kyowa Kirin Agreement.  Accordingly, revenue may fluctuate from period to period due to changes to its estimated performance obligation period and variable considerations.  The Company began recognizing revenue related to the up-front payment upon execution of the Kyowa Kirin Agreement.  

In March 2021, the Company’s performance obligation period under the Kyowa Kirin Agreement was extended to June 2022, which decreased quarterly revenue recognition by approximately $0.4 million prospectively.

On July 27, 2021, Kyowa Kirin, submitted an New Drug Application (NDA) in Japan to the Ministry of Health, Labour and Welfare (MHLW) for bardoxolone for improvement of renal function in patients with Alport syndrome.  Based on this submission, the Company earned a $5.0 million milestone payment, variable consideration previously considered constrained, under the Kyowa Kirin Agreement.  As a result, the Company recorded $4.7 million in collaboration revenue, a cumulative catch-up for the portion of this milestone that was satisfied in prior periods, and $0.3 million in deferred revenue that will be recognized over the remaining performance obligation period, ending in June 2022.

AbbVie

In September 2010, the Company entered into a license agreement with AbbVie (the AbbVie License Agreement) for an exclusive license to develop and commercialize bardoxolone in the Licensee Territory (as defined in the AbbVie License Agreement).

F-14

In December 2011, the Company entered into a collaboration agreement with AbbVie (the Collaboration Agreement) to jointly research, develop, and commercialize the Company’s portfolio of second and later generation oral Nrf2 activators.

In October 2019, the Company and AbbVie entered into an Amended and Restated License Agreement (the Reacquisition Agreement) pursuant to which the Company reacquired the development, manufacturing, and commercialization rights concerning its proprietary Nrf2 activator product platform originally licensed to AbbVie in the AbbVie License Agreement and the Collaboration Agreement.  In exchange for such rights, the Company agreed to pay AbbVie $330.0 million, all of which has subsequently been paid.  Additionally, the Company will pay AbbVie an escalating, low single-digit royalty on worldwide net sales, on a product-by-product basis, of omaveloxolone and certain next-generation Nrf2 activators.  The execution of the Reacquisition Agreement ended our performance obligations under the Collaboration Agreement.

The Company recognized interest expense related to the Reacquisition Agreement of approximately $6.6 million, $6.5 million and $1.4 million during twelve months ended December 31, 2021, 2020 and 2019, respectively.  As of December 31, 2021, the Company has fully satisfied its payable to AbbVie.

4. Other Income (Expense), Net

		Years Ended December 31
		2021			2020			2019
	(in thousands)
Other income (expense), net
Investment income		$	177		$	2,769		$	6,248
Interest expense			(6,563	)		(14,895	)		(11,197	)
Non-cash interest expense on liability    related to sale of future royalty			(46,688	)		(21,884	)		—
Other income (expense)			(54	)		1,279			7
Loss on extinguishment of debt			—			(11,183	)		—
Total other income (expense), net		$	(53,128	)	$	(43,914	)	$	(4,942	)

Investment Income

Interest income consists primarily of interest generated from our cash and cash equivalents.

Interest Expense

Interest expense consists primarily of the imputed interest from amounts due to AbbVie under the Reacquisition Agreement and interest on its Amended Restated Loan Agreement (Term Loans) which were paid in full in 2020.

Non-Cash Interest Expense on Liability Related to Sale of Future Royalties

Non-cash interest expense consists of recognition of interest expense based on the Company’s current estimate of future royalties expected to be paid over the estimated term of the Development Agreement.

Other income (expense)

Other income (expense) consists primarily of gains and losses on foreign currency exchange, sales of assets, extinguishment of debt, and lease termination.

Other income of $1.3 million recorded in the twelve months ended December 31, 2020, related to a gain on the Company’s lease termination due to the bankruptcy filing of its lessor.

F-15

Loss on Extinguishment of Debt

In June 2020, the Company paid off the Term Loans and recorded a loss on the extinguishment of debt of $11.2 million, which consisted primarily of prepayment fees, exit fees and unamortized debt issuance costs.

5. Term Loan

On October 9, 2019, the Company entered into the First Amendment to the Amended and Restated Loan and Security Agreement (the Amended Restated Loan Agreement), under which it borrowed $155.0 million as of December 20, 2019.  On June 24, 2020, the Company paid off the total outstanding balance of the term loans under the Term Loans prior to the maturity date.  The payoff consisted of (i) the outstanding principal balance of $155.0 million, (ii) exit fees of $6.7 million, which were partially accrued up to the date of repayment, (iii) prepayment fees of $5.4 million, and (iv) accrued and unpaid interest of $1.0 million.  At the time of payoff, all liabilities and obligations under the Amended Restated Loan Agreement were terminated.  The Company recognized approximately $8.4 million and $8.3 million in interest expense for the twelve months ended December 31, 2019, and 2020, respectively.  No interest expense was recognized in 2021 as the term loan was paid off in June 2020.

6. Liability Related to Sale of Future Royalties

On June 24, 2020, the Company closed on the Development Agreement.  The Development Agreement included a $300.0 million payment by an affiliate of BXLS in return for various percentage royalty payments on worldwide net sales of bardoxolone, once approved in the United States or certain specified European countries, by Reata and its licensees, other than Kyowa Kirin.  The royalty percentage will initially be in the mid-single digits and, in future years, can vary between higher-mid single digit percentages to low-single digit percentages depending on various milestones, including indication approval dates, cumulative royalty payments, and cumulative net sales.  Pursuant to the Development Agreement, we have granted BXLS a security interest in substantially all of our assets. After a bardoxolone product approval has been obtained by the Company, the Company is obligated to make certain minimum cumulative payment amounts in 2025 through 2033, but only until BXLS has achieved certain internal rate of return target.

In addition, concurrent with the Development Agreement, the Company entered into a common stock purchase agreement (the Purchase Agreement) with affiliates of BXLS to sell an aggregate of 340,793 shares of the Company’s Class A common stock at $146.72 per share for a total of $50.0 million.

The Company concluded that there were two units of accounting for the consideration received, comprised of the liability related to the sale of future royalties and the common shares.  The Company allocated the $300.0 million from the Development Agreement and $50.0 million from the Purchase Agreement between the two units of accounting on a relative fair value basis at the time of the transaction.  The Company allocated $294.5 million, which includes $0.8 million in transaction costs incurred, in transaction consideration to the liability, and $55.5 million to the common shares.  The Company determined the fair value of the common shares based on the closing stock price on the June 24, 2020, the closing date of the Development Agreement.  The effective interest rate under the Development Agreement, including transaction costs, is 13.8%.

The following table shows the activity within the liability related to sale of future royalties for the twelve months ended December 31, 2021:

	Liability Related to Sale of Future Royalties
	(in thousands)
Balance at December 31, 2020	$	316,305
Non-cash interest expense recognized		46,623
Balance at December 31, 2021		362,928
Less: Unamortized transaction cost		(786	)
Carrying value at December 31, 2021	$	362,142

F-16

7. Property and Equipment

Property and equipment consisted of the following as of December 31:

	2021			2020
	(in thousands)
Computer equipment and software	$	3,748		$	3,306
Laboratory equipment		6,389			5,404
Office furniture		1,990			1,990
Office and other equipment		399			412
Leasehold improvements		14,127			7,829
Manufacturing equipment		213			163
		26,866			19,104
Less: accumulated depreciation		(15,262	)		(14,192	)
Property and equipment, net	$	11,604		$	4,912

8. Leases

The Company’s headquarters are located in Plano, Texas, where it leases approximately 122,000 square feet of office space, with lease terms extending through August 31, 2022.  The Company leases additional office and laboratory space of approximately 34,890 square feet located in Irving, Texas, with lease terms extending through October 31, 2022 with an option to renew up to six months. On February 4, 2022, the Company extended this lease agreement. See Note 17, Subsequent Events.

The Company has an additional lease of a single-tenant, build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas with an initial lease term of 16 years.  The Company entered into the lease agreement on October 15, 2019 (the 2019 Lease Agreement), and at the Company’s option, it may renew the lease for two consecutive five-year renewal periods or one ten-year renewal period.  The initial annual base rent will be determined based on the project cost, subject to an initial annual cap of approximately $13.3 million.  Beginning in the third lease year, the base rent will increase 1.95% per annum each year.  In addition to the annual base rent, the Company will pay for taxes, insurance, utilities, maintenance and repairs, and building management fees, all of which are variable in nature and were not included in the measurement of the lease liability.  Under the First Amendment to the Lease Agreement executed in May 2020, the landlord will fund the Company’s leasehold improvements up to $31.3 million, of which the Company has recorded approximately $8.7 million, as of December 15, 2021.

On December 15, 2021, the Company obtained control of the space, and, accordingly, we recorded related right-of-use assets and the lease liabilities during the fourth quarter of 2021.  The Company recorded the liability associated with the 2019 Lease Agreement at the present value of the lease payments not yet paid, using the discount rate as of the commencement date. As the discount rate implicit in the 2019 Lease Agreement was not readily determinable, the Company utilized its incremental borrowing rate.  The renewals are not assumed in the determination of the lease term, since they are not deemed to be reasonably assured at the inception of the lease.  We recorded $124.5 million as a right-of-use asset, which represented a lease liability of $133.2 million, net of $8.7 million of lease incentives recognized as of December 31, 2021.

For the year ended December 31, 2021, the Company paid $3.2 million for amounts included in the measurement of lease liabilities.  For the years ended December 31, 2021, 2020, and 2019, the Company recorded total rent expense of $3.6 million, $3.4 million, and $3.4 million, respectively.  

Supplemental balance sheet and other information related to the Company’s operating leases is as follows:

	As of December 31
	2021			2020
Weighted-average remaining lease term (in years)		15.7			1.8
Weighted-average discount rate		6.6	%		8.2	%

F-17

Maturities of lease liabilities by fiscal year for the Company’s operating leases:

	As of December 31, 2021
	(in thousands)
2022	$	9,798
2023 (1)		6,672
2024 (1)		6,802
2025		13,737
Thereafter		196,049
Total lease payments (1)		233,058
Less: Imputed interest		(97,025	)
Present value of lease liabilities	$	136,033

(1) Above table assumes one year rent abatement is applied beginning in June 2023 following United States Food and Drug Administration (FDA) approval of omaveloxolone.

9. Income Taxes

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act).  The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the U.S. economy and to provide assistance to individuals, families, and businesses affected by the coronavirus disease (COVID-19).  Accordingly, under the provisions of the CARES Act, in March 2020, the Company recognized tax benefits and receivables totaling $22.2 million associated with the ability to carryback an applicable prior year’s net operating losses to a preceding year, which had previously been fully reserved by its valuation allowance.  During the second quarter of 2021, the Company received a total of $22.9 million from the IRS, comprising $22.2 million of the income tax receivable plus $0.7 million in interest.

The following table reconciles the Company’s effective income tax rate from continuing operations to the federal statutory tax rate of 21%:   

	2021			2020			2019
U.S. federal income taxes		21	%		21	%		21	%
Federal and state tax credits		5	%		12			8
Stock-based compensation		(0	)%		4			5
NOL carryback rate differential		—	%		1			—
Foreign rate differential		(3	)%		(2	)		—
Change in valuation allowance		(23	)%		(28	)		(34	)
Recorded federal income tax benefit		—	%		8	%		—	%

F-18

Deferred tax assets and liabilities reflect the net effects of net operating loss and tax credit carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  Significant components of the Company’s net deferred tax assets as of December 31 are as follows (in thousands):  

	2021			2020
Deferred tax assets:
Federal and state tax credits	$	102,590		$	87,056
Net operating loss		101,463			68,936
Accrued royalties		79,458			66,389
Intellectual property		60,753			62,838
Lease Liability		29,847			1,626
Stock-based compensation		23,677			15,158
Deferred revenue		362			987
Other		1,422			903
Deferred tax assets before valuation allowance		399,572			303,893
Less: Valuation allowance		(369,215	)		(300,888	)
Net deferred income tax assets		30,357			3,005
Deferred tax liabilities:
Deferred purchase price		—			(1,127	)
Right-of-use assets		(27,817	)		(1,096	)
Other		(2,424	)		(659	)
Net deferred tax assets	$	116		$	123

Deferred tax assets are regularly reviewed for recoverability by jurisdiction and valuation allowances are established based on historical and projected future taxable losses and the expected timing of the reversals of existing temporary differences.  For the majority of its deferred tax assets, the Company cannot currently conclude that it is more likely than not that they will be utilized.  Therefore, the Company has recorded valuation allowances against these deferred tax assets for 2021.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income (including reversals of deferred tax liabilities) during the periods in which those temporary differences will become deductible.  The valuation allowance increased by $68.3 million and $74.6 million in 2021 and 2020, respectively.  

As of December 31, 2021, the Company had United States federal accumulated net operating losses of $350.6 million of which $0.4 million are subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986, as amended (Section 382).  The Company has United States federal accumulated net operating losses of $59.6 million expiring between fiscal years 2023 and 2037, of which $59.2 million begin expiring in 2037.  Under the Tax Cuts and Jobs Act of 2017 (the 2017 Tax Act), the remaining $291.0 million will be carried forward indefinitely but is limited to 80% of our taxable income.  As of December 31, 2021, the Company had net operating losses in Switzerland of $227.6 million expiring in 2028.  

As of December 31, 2021, the Company has federal orphan drug tax credit, federal research and development tax credit, and state research and development tax credit carryforwards of $76.9 million, $19.3 million, and $6.3 million, respectively, with federal orphan drug and federal research and development tax credits expiring between years 2024 and 2041, of which $0.1 million expires in 2024 and the remainder begins expiring in 2030.

The Company's federal income tax returns for 2013, and 2018 through 2020 remain open to examination by the IRS.  

F-19

10. Patents

Business intellectual property protection is critical to the Company’s ability to successfully commercialize its product innovations.  The potential for litigation regarding the Company’s intellectual property rights always exists and may be initiated by third parties attempting to abridge the Company’s rights, as well as by the Company in protecting its rights.  There were no patent matters outstanding at December 31, 2021, 2020, or 2019.  

11. Licenses

The proprietary rights and technical information covered by various patent and patent applications, which are discussed in more detail below, have been licensed by the Company from third parties, including stockholders.  These licenses will continue for the life of the respective patent or until terminated by either party.  Certain agreements call for the payment of royalties on product sales over the life of the patents.  The term of all agreements is through the useful lives of the licensed patents or for a period of 15 to 20 years for technology rights, for which there are no applicable patent rights.

Bardoxolone and Nrf2 Activators

In July 2004, the Company entered into an exclusive technology and patent license agreement (the 2004 CDDO License Agreement) with two academic institutions for certain patents and patent applications, known as the CDDO Patents.  The Company has the right to sublicense these patents.  In the event of a sublicense, the terms of the contract require the Company to pay the licensors sublicense fees based on a percentage of total compensation received that varies depending on the phase of development of a drug candidate as of the time of the sublicense.  The Company agreed to pay a royalty on net sales of any products developed as a result of the license, an annual license fee, and various milestone fees, and issued shares of its common stock as consideration for the license.

In July 2012, the Company amended the 2004 CDDO License Agreement, which provides, among other terms, that the Company will pay to the licensors a low single-digit royalty on net sales of certain Nrf2 activator compounds, including omaveloxolone, that are claimed in certain patents and patent applications that are wholly owned by or licensed to the Company.  In 2021, the Company paid a development milestone and sublicense payments of $0.6 million under the agreement.

In August 2021, the Company amended the 2004 CDDO License Agreement. This amendment, among other terms, provides consent to an internal restructuring by the Company of certain of its intellectual property rights, facilitates the potential monetization by the Trustees of Dartmouth College (Dartmouth) of their rights to royalties under the license, clarifies the applicability of certain running royalty payment obligations with respect to certain compounds, and specifies the dispute resolution procedure regarding a dispute between the Company and Licensors as to whether the Company is obligated under the 2012 amendment to the 2004 CDDO License Agreement to pay the licensors a low single-digit royalty on sales of products containing bardoxolone.

In January 2009, the Company filed a patent application claiming the use of bardoxolone and related compounds in treating CKD, endothelial dysfunction, cardiovascular disease (CVD), and related disorders.  Several of the original inventors of these compounds at an academic institution were named as co-inventors on this application, along with several company employees.  Consequently, the Company and Dartmouth are co-owners of this patent application.  In December 2009, the Company entered into an agreement with Dartmouth that provides the Company with an exclusive worldwide license to the academic institution’s rights in these applications and any resulting patents (the 2009 License Agreement).  The Company agreed to pay a limited super-royalty on product sales that occur during the effective term of the original patents, a royalty on product sales that occur after the effective term of the original patents, a sublicense fee, an annual license fee, and various milestone fees.  In 2021, the Company paid a development milestone and sublicense payments of $0.4 million under the agreement.

In August 2021, the Company amended the 2009 License Agreement.  These amendments, among other terms, provides consent to an internal restructuring by the Company of certain of its intellectual property rights, facilitates

F-20

the potential monetization by Dartmouth of its rights to royalties under the 2009 License Agreement, clarifies that there is no minimum royalty provision, and adds provisions regarding the defense of certain patent rights.

Other Technologies

The Company has an exclusive technology and patent license agreement with the University of Kansas and the University of Kansas Medical Center (the University of Kansas) for certain patents and patent applications related to small molecule modulators of heat shock proteins, including RTA 901.  The Company has the right to sublicense this patent.  In the event of a sublicense, the terms of the contract require the Company to pay the licensors sublicense fees based on a percentage of total compensation received that varies depending on the phase of development of a drug candidate as of the time of the sublicense.  The Company paid non-refundable license issue fees and agreed to pay royalties on net sales of any products developed as a result of the license, annual license fees, various milestone fees, including reimbursement of sunk-in patent expenses, and fees for sponsored research performed by the University of Kansas as consideration for the license.

12. Convertible Preferred Stock

Under our Thirteenth Amended and Restated Certificate of Incorporation, the Company has 100,000,000 undesignated shares of convertible preferred stock.  As of December 31, 2021 and 2020, there were no shares of convertible preferred stock issued and outstanding.

13. Stock-Based Compensation

The LTIP Plan provides for awards of RSUs, nonstatutory stock options, incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the Code), and other incentive awards and rights to purchase shares of the Company’s common stock.  As of December 31, 2021, a total of 2,836,302 shares of common stock are reserved for future grant under the LTIP Plan.  As of December 31, 2021, 809,145 RSUs and stock options to purchase 4,743,180 shares have been granted and are outstanding under the LTIP Plan.

The Company recognizes stock-based compensation expense for awards with service-based vesting conditions as an expense using the straight-line method. In the case of performance-based awards, compensation expense is recognized for awards when achievement of the underlying performance-based targets become probable, which have typically been in the same period as when the targets are achieved.

The following table summarizes time-based and performance-based stock compensation expense reflected in the consolidated statements of operations:

	Years Ended December 31
	2021		2020		2019
	(in thousands)
Research and development	$	23,566	$	28,114	$	8,692
General and administrative		33,240		29,519		17,689
Total stock compensation expense	$	56,806	$	57,633	$	26,381

Restricted Stock Units

RSUs, including service-based and performance-based awards, were granted under the LTIP Plan. The fair value of these RSUs is equal to the closing price of the Company’s common stock at the date of grant multiplied by the number of shares subject to the RSU awards with forfeitures accounted for as they occur.  The vesting is subject to the satisfaction of service requirements or the satisfaction of achieving certain performance targets.

F-21

The following table summarizes RSUs as of December 31, 2021, and changes during the year ended December 31, 2021 under the LTIP Plan:

	Number of RSUs			Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2021		108,551		$	115.54
Granted		758,246			64.65
Vested		(9,145	)		164.39
Forfeited		(48,507	)		122.40
Outstanding at December 31, 2021		809,145		$	66.91

As of December 31, 2021, total unrecognized compensation expense related to service-based RSU and performance-based RSU awards that were deemed probable of vesting was approximately $36.6 million which is expected to be recognized over a weighted average of 3.1 years, which excludes 134,000 shares of unvested performance-based RSUs that were deemed not probable of vesting totaling unrecognized stock-based compensation expense of $13.9 million.

Stock Options

Stock options, including service-based and performance-based awards, were granted under the LTIP Plan.  The Company estimates stock awards fair value on the date of grant using the Black-Scholes valuation, with the vesting being subject to service requirements' satisfaction or achieving certain performance targets.  The Company accounts for forfeitures when they occur.

The following table summarizes stock option activity as of December 31, 2021, and changes during the year ended December 31, 2021, under the LTIP Plan and standalone option agreements:

	Number of Options			Weighted- Average Price
Outstanding at January 1, 2021		4,306,269		$	79.47
Granted		1,008,879			120.97
Exercised		(234,216	)		39.05
Forfeited		(284,626	)		127.43
Expired		(53,126	)		199.82
Outstanding at December 31, 2021		4,743,180		$	86.06
Exercisable at December 31, 2021		2,874,424		$	56.21

As of December 31, 2021, total unrecognized compensation expense of $95.1 million related to stock options is expected to be recognized over a weighted average of 2.79 years, which excludes the unvested performance-based stock options that were deemed not probable of vesting as of December 31, 2021, constituting 467,850 shares with unrecognized stock-based compensation expense of $47.6 million.

At December 31, 2021, 4,743,180 stock options are fully vested or are expected to vest and have a weighted-average outstanding term of 7.0 years and a weighted-average exercise price of $86.06. Exercisable stock options have a weighted-average outstanding term of 6.1 years.

The total intrinsic value (the difference between market value and exercise prices of in-the-money options) of all outstanding options at December 31, 2021, 2020, and 2019, was $8.6 million, $269.4 million, and $659.3 million, respectively.  The total intrinsic value of exercisable options at December 31, 2021, 2020, and 2019, was $8.6 million, $185.7 million, and $305.0 million, respectively.  In 2021, 2020, and 2019, 234,216, 616,585, and 707,849 options were exercised, respectively.  The total intrinsic value of options exercised was $21.2 million, $68.6 million and $79.4 million for the years ended December 31, 2021, 2020 and 2019, respectively.  For the year ended December 31, 2021 we received $9.1 million in cash from stock option exercises.

F-22

Fair Value Estimates

The Company’s determination of the fair value of stock-based payment awards on the date of grant using the Black-Scholes option pricing model is affected by many factors, including the stock price and a number of highly complex and subjective variables.  These variables include, but are not limited to, the Company’s stock price volatility over the expected term of the awards and estimates of the expected option term.

The weighted-average assumptions used in the Black-Scholes option pricing model were as follows:

	Years Ended December 31
	2021			2020			2019
Dividend yield		—	%		—	%		—	%
Volatility		69.71	%		73.46	%		73.73	%
Risk-free interest rate		0.69	%		1.44	%		2.18	%
Expected term of options (in years)		5.65			5.86			6.23
Weighted average grant date fair value	$	120.97		$	196.96		$	69.76

Expected volatility is based on the Company’s own historical volatility since its IPO and benchmarked public companies during fiscal years 2021, 2020 and 2019.  The risk-free interest rate, ranging from 0.09% to 1.31% during the year ended December 31, 2021, is based on the United States Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the options.  The expected term of options represents the weighted-average period of time that options granted are expected to be outstanding based on historical data.

14. Employee Benefit Plans

In 2010, we adopted an Employee Investment Plan, qualified under Section 401(k) of the Code, which is a retirement savings plan covering substantially all of our U.S. employees (the Plan).  The Plan is administered under the “safe harbor” provision of ERISA.  Under the Plan, an eligible employee may elect to contribute a percentage of their salary on a pre-tax basis, subject to federal statutory limitations.  Beginning in January 2019, the Company implemented a discretionary employer matching contribution of $1.00 for every $1.00 contributed by a participating employee up to $6,000 and $5,000 annually in 2021 and 2020, respectively, which such matching contributions become fully vested after four years of service.  The Company recorded expense of $1.7 million, $1.1 million and $0.4 million for the twelve months ended December 31, 2021, 2020, and 2019 respectively, which includes the Company’s contributions and administrative costs.

15. Commitments and Contingencies

Litigation

From time to time, the Company is a party to legal proceedings in the course of its business, including the matters described below.  The outcome of any such legal proceedings, regardless of the merits, is inherently uncertain.  In addition, litigation and related matters are costly and may divert the attention of our management and other resources that would otherwise be engaged in other activities.  If the Company were unable to prevail in any such legal proceedings, its business, results of operations, liquidity and financial condition could be adversely affected.  The Company recognizes accruals for litigations to the extent that it can conclude that a loss is both probable and reasonably estimable and recognizes legal expenses as incurred.

Patel Litigation

On October 15, 2020, Toshif Patel filed a complaint for alleged violation of federal securities laws against the Company, its Chief Executive Officer and its Chief Financial Officer in the United States District Court for the Eastern District of Texas.  The complaint purported to bring a federal securities class action on behalf of a class of persons who acquired the Company’s common stock between October 15, 2019 and August 7, 2020.  The complaint alleged, among other things, that the defendants made false and misleading statements regarding the sufficiency of its MOXIe Part 2 study results to support a single study marketing approval of omaveloxolone for the treatment of FA in the United States.  On September 27, 2021, the plaintiff voluntarily dismissed the case.

F-23

Bardoxolone Securities Litigation

Four putative stockholders of the Company have filed complaints for alleged violations of the federal securities laws against the Company and certain of its executives, including its Chief Executive Officer, its Chief Operating Officer and Chief Financial Officer, and its Chief Innovation Officer (in one of the suits).  The complaints, three of which were filed in the United States District Court for the Eastern District of Texas, and one of which was filed the District of New Jersey, allege, among other things, that the defendants made false and misleading statements regarding the sufficiency of the Phase 3 CARDINAL study to support an NDA for bardoxolone as treatment for chronic kidney disease caused by Alport syndrome, and the Company’s interactions with the FDA concerning the study.  The complaints filed in the United States District Court for the Eastern District of Texas, were filed on December 20, 2021, January 7, 2022, and January 20, 2022, and the complaint filed in the District of New Jersey was filed on February 18, 2022.  The plaintiffs seek, among other things, a class action designation, an award of damages, and costs and expenses, including counsel fees and expert fees.  The Company currently expects all of the cases to be consolidated and for a single, consolidated, amended complaint to be filed in the future.

The Company believes that the allegations contained in the complaints are without merit and intends to defend the cases.  The Company cannot predict at this point the length of time that these actions will be ongoing or the liability, if any, which may arise therefrom.

Indemnifications

ASC 460, Guarantees, requires that, upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligations it assumes under that guarantee.

As permitted under Delaware law and in accordance with the Company’s bylaws, officers and directors are indemnified for certain events or occurrences, subject to certain limits, while the officer or director is or was serving in such capacity.  The maximum amount of potential future indemnification is unlimited; however, the Company has obtained director and officer insurance that limits its exposure and may enable recoverability of a portion of any future amounts paid.  The Company believes the fair value for these indemnification obligations is minimal.  Accordingly, the Company has not recognized any liabilities relating to these obligations as of December 31, 2021.  

The Company has certain agreements with licensors, licensees, collaborators, and vendors that contain indemnification provisions.  In such provisions, the Company typically agrees to indemnify the licensor, licensee, collaborator, or vendor against certain types of third-party claims.  The Company accrues for known indemnification issues when a loss is probable and can be reasonably estimated.  There were no accruals for expenses related to indemnification issues for any period presented.

16. Net Loss per Share

The computation of basic and diluted net loss income per share attributable to common stockholders of the Company for the years ended December 31 is summarized in the following table:

	Years Ended December 31
	2021			2020			2019
Numerator
Net loss (in thousands)	$	(297,386	)	$	(247,752	)	$	(290,170	)
Denominator
Weighted-average number of common shares    used in net loss per share — basic		36,321,351			33,709,480			30,414,203
Dilutive potential common shares		—			—			—
Weighted-average number of common shares    used in net loss per share — diluted		36,321,351			33,709,480			30,414,203
Net loss per share — basic	$	(8.19	)	$	(7.35	)	$	(9.54	)
Net loss per share — diluted	$	(8.19	)	$	(7.35	)	$	(9.54	)

F-24

The number of weighted average options and RSUs that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive represented 5,552,325, 4,414,820, and 4,088,949 shares for the years ended 2021, 2020, and 2019, respectively.

17. Subsequent Events

On January 3, 2022, the Company awarded 985,531 options to purchase shares of common stock which are time-based awards, vesting over four years. In addition, the Company awarded 493,003 RSUs, vesting over four years and 30,000 performance-based stock options and 15,000 performance-based RSU awards, vesting over approximately four years, upon meeting performance conditions.

On January 7, 2022, January 20, 2022 and February 18, 2022, three putative stockholders of the Company filed complaints for alleged violation of the federal securities laws against the Company. See Note 15, Commitments and Contingencies of Notes to Consolidated Financial Statements for a description of these litigations.

On February 4, 2022, the Company extended the lease for the office and laboratory space in Irving, Texas, to extend until October 31, 2024, with an option to extend for a fixed twelve-month period.

We received a complete response letter (CRL) from the FDA in February 2022 with respect to its review of our NDA for bardoxolone in the treatment of patients with CKD caused by Alport syndrome.  We will continue to work with the FDA to confirm our next steps on our Alport syndrome program.

F-25

EX-10.13

Exhibit 10.13

REATA PHARMACEUTICALS, INC.

INDEMNIFICATION AGREEMENT

This Agreement (“Agreement”) is made and entered into as of the 7th day of July, 2020, by and between Reata Pharmaceuticals, a Delaware corporation (the “Company”), and Samina Khan (“Indemnitee”).

RECITALS

A.    Highly competent and experienced persons are reluctant to serve corporations as directors, executive officers or in other capacities unless they are provided with adequate protection through insurance and indemnification against claims and actions against them arising out of their service to and activities on behalf of the Company.

B.    The Board of Directors of the Company (the “Board”) has determined that the inability to attract and retain such persons would be detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future.

C.    The Board has also determined that it is reasonable, prudent and necessary for the Company, in addition to purchasing and maintaining directors’ and officers’ liability insurance (or otherwise providing for adequate arrangements of self-insurance), contractually to obligate itself to indemnify such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be adequately protected.

D.    Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company, but only on the condition that Indemnitee be so indemnified to the fullest extent permitted by law, as permitted herein.

E.    Article Thirteen of the Amended and Restated Certificate of Incorporation of the Company provides for indemnification of directors and officers to the fullest extent permitted by law.

In consideration of the foregoing and the mutual covenants herein contained, and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I 
Certain Definitions

As used herein, the following words and terms shall have the following respective meanings (whether singular or plural):

“Acquiring Person” means any Person other than (i) the Company, (ii) any of the Company’s Subsidiaries, (iii) any employee benefit plan of the Company or of a Subsidiary of the Company or of a Company owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, or (iv) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Subsidiary of the Company or of a Company owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

“Change in Control” means the occurrence of any of the following events:

(i)    The acquisition, after the date of this Agreement, by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (x) the then outstanding shares of Common Stock of the Company (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Subparagraph (i), the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of paragraph (iii) below; or

(ii)    Members of the Incumbent Board cease for any reason to constitute at least a majority of the Board; or

(iii)    Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or an acquisition of assets of another entity (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common equity and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors or other similar governing body, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or the entity resulting from such Business Combination) beneficially owns, directly or indirectly, 40% or more of, respectively, the then outstanding shares of common equity of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the

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extent that such ownership results solely from ownership of the Company that existed prior to the Business Combination and (C) at least a majority of the members of the board of directors or other similar governing body of the entity resulting from such Business Combination were members ofthe Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv)    Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

“Claim” means an actual or threatened claim or request for relief which was, is or may be made by reason of anything done or not done by Indemnitee in, or by reason of any event or occurrence related to, Indemnitee’s Corporate Status, including any threatened, pending or completed action, suit, arbitration, investigation, inquiry, alternate dispute resolution mechanism, administrative or legislative hearing, or any other proceeding (including, without limitation, any securities laws action, suit, arbitration, alternative dispute resolution mechanism, hearing, or procedure) whether civil, criminal, administrative, arbitrative or investigative and whether or not based upon events occurring, or actions taken, before the date hereof, and any appeal in or related to any such action, suit, arbitration, investigation, hearing or procedure and any inquiry or investigation (including discovery), whether conducted by or in the right of the Company or any other Person, that Indemnitee in good faith believes could lead to any such action, suit, arbitration, alternative dispute resolution mechanism, hearing or other proceeding or appeal thereof.

“Corporate Status” means the status of a person who is, becomes or was a director, officer, employee, agent or fiduciary of the Company or is, becomes or was serving at the request of the Company as a director, officer, partner, member, venturer, proprietor, trustee, employee, agent, fiduciary or similar functionary of another foreign or domestic corporation, partnership, limited liability company, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise. For purposes of this Agreement, the Company agrees that Indemnitee’s service on behalf of or with respect to any Subsidiary of the Company shall be deemed to be at the request of the Company.

“DGCL” means the Delaware General Corporation Law and any successor statute thereto, as either of them may from time to time be amended.

“Disinterested Director” with respect to any request by Indemnitee for indemnification hereunder, means a director of the Company who at the time of the vote is not a named defendant or respondent in the Claim in respect of which indemnification is sought by Indemnitee.

“Exchange Act” means the Securities Exchange Act of 1934.

“Expenses” means all attorneys’ fees and disbursements, retainers, accountant’s fees and disbursements, private investigator fees and disbursements, court costs, transcript costs, fees and expenses of experts, witness fees and expenses, costs and obligations under any bond posted in connection with any Claim, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements, costs or expenses of

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the types customarily incurred in connection with prosecuting, defending (including affirmative defenses and counterclaims), preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in or preparing to participate in (including on appeal) a Claim and all interest or finance charges attributable to any thereof. Should any payments by the Company under this Agreement be determined to be subject to any federal, state or local income or excise tax, “Expenses” shall also include such amounts as are necessary to place Indemnitee in the same after-tax position (after giving effect to all applicable taxes) as Indemnitee would have been in had no such tax been determined to apply to such payments. Also, in this Agreement “witness” includes responding (or objecting) to a discovery request, whether in writing or in an oral deposition, in any Claim.

“Final Adjudication” means a final adjudication by a court from which there is no further right of appeal or a final adjudication of an arbitration pursuant to Section 5.1 if Indemnitee elects to seek such arbitration.

“Incumbent Board” means the individuals who, as of the date of this Agreement, constitute the Board and any other individual who becomes a director of the Company after that date and whose election or appointment by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption ofoffice occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board.

“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither contemporaneously is, nor in the five years theretofore has been, retained to represent: (a) the Company, any subsidiary of the Company, or Indemnitee in any matter material to either such Person (other than as Independent Counsel under this Agreement or similar agreements), (b) any other party to the Claim giving rise to a claim for indemnification hereunder or (c) the beneficial owner, directly or indirectly, of securities of the Company representing 5% or more of the combined voting power of the Company’s then outstanding voting securities, or Person controlled by such beneficial owner (other than, in each such case under clauses (a) through (c)), with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements). Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

“Independent Directors” means the directors on the Board that are independent directors as defined in NASDAQ Marketplace Rule 4200(a)(15) or successor provision, or, if the Company’s Common Stock is not then quoted on the NASDAQ Global Select Market, that qualify as independent, disinterested, or a similar term as defined in the rules of the principal securities exchange or inter-dealer quotation system on which the Company’s Common Stock is then listed or quoted.

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“Person” means any individual, entity or group (within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act).

“Potential Change in Control” shall be deemed to have occurred if (i) any Person shall have announced publicly an intention to effect a Change in Control, or commenced any action (such as the commencement of a tender offer for the Company’s Outstanding Company Common Stock or Outstanding Company Voting Securities or the solicitation of proxies for the election of any of the Company’s directors) that, if successful, could reasonably be expected to result in the occurrence of a Change in Control; (ii) the Company enters into an agreement, the consummation of which would constitute a Change in Control; or (iii) any other event occurs which the Board declares to be a Potential Change of Control.

“Subsidiary” means, with respect to any Person, any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by that Person.

“Voting Securities” means any securities that vote generally in the election of directors, in the admission of general partners, or in the selection of any other similar governing body.

ARTICLE II 
Services by Indemnitee

Indemnitee is serving as an officer of the Company. Indemnitee may from time to time also agree to serve, as the Company may request from time to time, in another capacity for the Company (including another officer or director position) or as a director, officer, partner, member, venturer, proprietor, trustee, employee, agent, fiduciary or similar functionary of another foreign or domestic corporation, partnership, joint venture, limited liability company, sole proprietorship, trust, employee benefit plan or other enterprise. Indemnitee and the Company each acknowledge that they have entered into this Agreement as a means of inducing Indemnitee to serve, or continue to serve, the Company in such capacities. Indemnitee may at any time and for any reason resign from such position or positions (subject to any other contractual obligation or any obligation imposed by operation of law). The Company shall have no obligation under this Agreement to continue Indemnitee in any such position or positions.

ARTICLE III 
Indemnification

Section 3.1General. Subject to the provisions set forth in Article IV, the Company shall indemnify, and advance Expenses to, Indemnitee to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may hereafter from time to time permit. The other provisions set forth in this Agreement are provided in addition to and as a means of furtherance and implementation of, and not in limitation of, the obligations expressed in this Article III. No requirement, condition to or limitation of any right to indemnification or to

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advancement of Expenses under this Article III shall in any way limit the rights of Indemnitee under Article VII.

Section 3.2Additional Indemnity of the Company. Indemnitee shall be entitled to indemnification pursuant to this Section 3.2 if, by reason of anything done or not done by Indemnitee in, or by reason of any event or occurrence related to, Indemnitee’s Corporate Status, Indemnitee is, was or becomes, or is threatened to be made, a party to, or witness or other participant in any Claim. Pursuant to this Section 3.2, Indemnitee shall be indemnified against any and all Expenses, judgments, penalties (including excise or similar taxes), fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any such Expenses, judgments, penalties, fines and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Claim, issue or matter therein. Notwithstanding the foregoing, the obligations of the Company under this Section 3.2 shall be subject to the condition that no determination (which,in any case in which Independent Counsel is involved, shall be in a form of a written opinion) shall have been made pursuant to Article IV that Indemnitee would not be permitted to be indemnified under applicable law. Nothing in this Section 3.2 shall limit the benefits of Section 3.1, Section 3.3 or any other Section hereunder.

Section 3.3Advancement of Expenses. The Company shall pay, on a current and as-incurred basis, all Expenses reasonably incurred by, or in the case of retainers to be incurred by, or on behalf of Indemnitee (or, if applicable, reimburse Indemnitee for any and all Expenses reasonably incurred by Indemnitee and previously paid by Indemnitee) in connection with any Claim, whether brought by the Company or otherwise, in advance of the later of (a) the final, non-appealable determination or resolution of all such Claims and (b) any determination respecting entitlement to indemnification pursuant to Article IV hereof (and shall continue to pay such Expenses after such determination and until it shall ultimately be determined (in a Final Adjudication) that Indemnitee is not entitled to be indemnified by the Company against such Expenses). Such payments and advances shall be made within 10 days after the receipt by the Company of a written request from Indemnitee requesting such payment or payments from time to time, whether prior to or after the final, non-appealable determination or resolution of such Claim. Any such payment by the Company is referred to in this Agreement as an “Expense Advance.” Any dispute as to the reasonableness of the incurrence of any Expense shall not delay an Expense Advance by the Company, and the Company agrees that any such dispute shall be resolved only upon the final, non-appealable determination or resolution of the respective underlying Claim involving Indemnitee. Indemnitee hereby undertakes and agrees that Indemnitee will reimburse and repay the Company without interest for any Expense Advances to the extent that it shall ultimately be determined (in a Final Adjudication) that Indemnitee is not entitled under the law to be indemnified by the Company against such Expenses. Indemnitee shall not be required to provide collateral or otherwise secure the undertaking and agreement described in the prior sentence. The Company shall make all Expense Advances pursuant to this Section 3.3 without regard to the financial ability of the Indemnitee to make repayment and without regard to whether or not the Indemnitee may ultimately be found to be entitled to indemnification under the provisions of this Agreement.

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Section 3.4Indemnification for Additional Expenses. The Company shall indemnify Indemnitee against any and all costs and expenses (of the types described in the definition of Expenses in Article I) and, if requested by Indemnitee, shall (within two business days of that request) advance those costs and expenses to Indemnitee, that are incurred by Indemnitee in connection with any claim asserted against, or action brought by, Indemnitee for (i) indemnification or an Expense Advance by the Company under this Agreement or any other agreement or provision of the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to any Claim, (ii) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, or (iii) enforcement of, or claims for breaches of, any provision of this Agreement, in each of the foregoing situations regardless of whether Indemnitee ultimately isdetermined to be entitled to that indemnification, Expense Advance payment, insurance recovery, enforcement, or damage claim, as the case may be, and regardless of whether the nature of the proceeding with respect to such matters is judicial, by arbitration, or otherwise.

Section 3.5Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses, judgments, fines, penalties, and amounts paid in settlement of a Claim but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims, or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.

ARTICLE IV 
Procedure for Determination of Entitlement to Indemnification

Section 4.1Request by Indemnitee. To obtain indemnification under this Agreement, Indemnitee shall, at such time as determined by Indemnitee in Indemnitee’s sole discretion, submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary or an Assistant Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Nevertheless, any failure of Indemnitee to provide a request to the Company, or to provide such a requestwithin any time frame, shall not relieve the Company of any liability that it may have to Indemnitee hereunder.

Section 4.2Determination of Request. Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 4.1 hereof, a determination, if required by applicable law, with respect to whether Indemnitee is permitted under applicable law to be indemnified shall be made in accordance with the terms of Section 4.5, in the specific case as set forth in this Section 4.2:

(a)If a Potential Change in Control or a Change in Control shall have occurred, by Independent Counsel (selected in accordance with Section 4.3) in a written opinion to the Board and Indemnitee, unless Indemnitee shall request that such determination be made

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by the Board, or a committee of the Board, in which case by the person or persons or in the manner provided for in clause (i) or (ii) of paragraph (b) below; or

(b)If a Potential Change in Control or a Change in Control shall not have occurred, then the determination shall be made by one of the following, in Indemnitee’s sole discretion, as the Indemnitee requests in writing: (i) by the Board by a majority vote of the Disinterested Directors even though less than a quorum of the Board, or (ii) by a majority vote of a committee solely of two or more Disinterested Directors designated to act in the matter by a majority vote of all Disinterested Directors even though less than a quorum of the Board, or (iii) by Independent Counsel selected by the Board or a committee of the Board by a vote as set forth in clauses (i) or (ii)of this paragraph (b), or if such vote is not obtainable or such a committee cannot be established, by a majority vote of all directors, or (iv) by the stockholders of the Company in a vote that excludes the shares held by directors who are not Disinterested Directors.

If it is so determined that Indemnitee is permitted to be indemnified under applicable law, payment to Indemnitee shall be made within 10 days after such determination. Nothing contained in this Agreement shall require that any determination be made under this Section 4.2 prior to the final, non-appealable determination or resolution of a Claim involving Indemnitee for which indemnification is sought hereunder; provided, that Expense Advances shall continue to be made by the Company pursuant to, and to the extent required by, the provisions of Article III. Indemnitee shall cooperate with the person or persons making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person upon reasonable advance request any documentation or information that is not privileged or otherwise protected from disclosure and that is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person or persons making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification), and the Company shall indemnify and hold harmless Indemnitee therefrom.

Section 4.3Independent Counsel. If the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice to the Company, within 10 days after submission of Indemnitee’s request for indemnification, specifying the identity and address of the Independent Counsel so selected unless Indemnitee shall request that such selection be made by the Disinterested Directors or a committee of the Board, in which event the Company shall give written notice to Indemnitee within 10 days after receipt of Indemnitee’s request for the Board or a committee of the Disinterested Directors to make such selection, specifying the identity and address of the Independent Counsel so selected. In either event, (i) such notice to Indemnitee or the Company, as the case may be, shall be accompanied by a written confirmation by the Independent Counsel so selected that it satisfies the requirements of the definition of “Independent Counsel” in Article I and that it agrees to serve in such capacity and (ii) Indemnitee or the Company, as the case may be, may, within seven days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection. Any objection to the selection of Independent Counsel pursuant to this Section

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4.3 may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of the definition of “Independent Counsel” in Article I, and the objection shall set forth with particularity the factual basis of such assertion. If such written objection is timely made, the Independent Counsel so selected may not serve as Independent Counsel unless and until a court of competent jurisdiction(the “Court”) has determined that such objection is without merit or such objection is withdrawn. In the event of a timely written objection to a choice of Independent Counsel, the party originally selecting the Independent Counsel shall have seven days to make an alternate selection of Independent Counsel and to give written notice of such selection to the other party, after which time such other party shall have five days to make a written objection to such alternate selection. If, within 30 days after submission of Indemnitee’s request for indemnification pursuant to Section 4.1, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court for resolution of any objection that shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom an objection is so resolved or the person so appointed shall act as Independent Counsel under Section 4.2. The Company shall pay any and all fees and expenses reasonably incurred by, such Independent Counsel in connection with acting pursuant to Section 4.2, and the Company shall pay all fees and expenses reasonably incurred incident to the procedures of this Section 4.3, regardless of the manner in which such Independent Counsel was selected or appointed. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 5.1, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

Section 4.4Establishment of a Trust. In the event of a Potential Change in Control or a Change in Control, the Company shall, upon written request by Indemnitee, create a trust for the benefit of Indemnitee (the “Trust”) and from time to time upon written request of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for, and defending any Claim, and any and all judgments, fines, penalties, and settlement amounts of any and all Claims from time to time actually paid or claimed, reasonably anticipated, or proposed to be paid. The amount to be deposited in the Trust pursuant to the foregoing funding obligation shall be determined by the Independent Counsel (or other person(s) making the determination of whether Indemnitee is permitted to be indemnified by applicable law). The terms of the Trust shall provide that, upon a Change in Control, (i) the Trust shall not be revoked or the principal thereof invaded, without the written consent of Indemnitee; (ii) the trustee of the Trust shall advance to Indemnitee, within ten days of a request by Indemnitee, any and all Expenses reasonably incurred by, or in case of retainer to be incurred by, or on behalf of Indemnitee (or, if applicable, reimburse Indemnitee for any Expense reasonably incurred by Indemnitee and previously paid by Indemnitee), with any required determination concerning the reasonableness of the Expenses to be made by the Independent Counsel (and Indemnitee hereby agrees to reimburse the Trust under the circumstances in which Indemnitee would be required to reimburse the Company for Expense Advances under Section 3.3 of this Agreement); (iii) the Trust shall continue to be funded by the Company in accordance with the funding obligation set forth above; (iv) the trustee of the Trust shall promptly pay to Indemnitee all amounts for which Indemnitee shall be entitled to

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indemnification pursuant to this Agreement; and (v) all unexpended funds in the Trust shall revert to the Company upon a final determination by the Independent Counsel or a Final Adjudication, as the case may be, that Indemnitee has been fully indemnified under the terms of this Agreement. The trustee of the Trust shall be chosen by Indemnitee and shall be an institution that is not affiliated withIndemnitee. Nothing in this Section 4.4 shall relieve the Company of any of its obligations under this Agreement.

Section 4.5Presumptions and Effect of Certain Proceedings.

(a)Indemnitee shall be presumed to be entitled to indemnification under this Agreement upon submission of a request for indemnification under Section 4.1, and the Company shall have the burden of proof in overcoming that presumption in reaching a determination contrary to that presumption. Such presumption shall be used by Independent Counsel (or other person or persons determining entitlement to indemnification) as a basis for a determination of entitlement to indemnification unless the Company provides information sufficient to overcome such presumption by clear and convincing evidence or unless the investigation, review and analysis of Independent Counsel (or such other person or persons) convinces Independent Counsel by clear and convincing evidence that the presumption should not apply.

(b)If the person or persons empowered or selected under Article IV of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within 60 days after receipt by the Company of the request by Indemnitee therefor, the determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the person making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating to such determination; and provided, further, that the 60-day limitation set forth in this Section 4.5(b) shall not apply and such period shall be extended as necessary (i) if within 30 days after receipt by the Company of the request for indemnification under Section 4.1 Indemnitee and the Company have agreed, and the Board has resolved, to submit such determination to the stockholders of the Company pursuant to Section 4.2(b) for their consideration at an annual meeting of stockholders to be held within 90 days after such agreement and such determination is made thereat, or a special meeting of stockholders is called within 30 days after such receipt for the purpose of making such determination, such meeting is held for such purpose within 60 days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 4.2(a) of this Agreement, in which case the applicable period shall be as set forth in Section 5.1(c).

(c)The termination of any Claim, issue or matter by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) by

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itself adversely affect the rights of Indemnitee to indemnification or create a presumption that Indemnitee failed to meet any particular standard of conduct, that Indemnitee had any particular belief, or that a court has determined that indemnification is not permitted by applicable law. Indemnitee may be found to have failed to meet any particular standard of conduct inrespect of any Claim, issue or matter only after Indemnitee shall have been so adjudged by the Court or arbitrator, as applicable, after exhaustion of all appeals therefrom.

(d)For purposes of the second sentence of Section 3.5, a settlement or other resolution of a Claim short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. For purposes of the second sentence of Section 3.5, in the event that any Claim to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including settlement of such Claim with or without payment of money or other consideration), it shall be presumed that Indemnitee has been successful on the merits or otherwise in suchClaim. Anyone seeking to overcome this presumption shall have the burden of proof by clear and convincing evidence.

(e)The failure of the Company (including by its directors or Independent Counsel) to have made a determination before the commencement of any action pursuant to this Agreement that indemnification is proper because Indemnitee has met the applicable standard of conduct shall not be a defense to the action or create a presumption that Indemnitee has not met the standard of conduct.

ARTICLE V 
Certain Remedies of Indemnitee

Section 5.1Indemnitee Entitled to Adjudication in an Appropriate Court. If (a) a determination is made pursuant to Article IV that Indemnitee is not entitled to indemnification under this Agreement; (b) there has been any failure by the Company to make timely payment or advancement of any amounts due hereunder (including, without limitation, any Expense Advances); or (c) the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 4.2 and such determination shall not have been made and delivered in a written opinion within 60 days after the latest of (i) such Independent Counsel’s being appointed, (ii) the overruling by the Court of objections to such counsel’s selection, or (iii) expiration of all periods for the Company or Indemnitee to object to such counsel’s selection, Indemnitee shall be entitled to commence an action seeking an adjudication in the Court of Indemnitee’s entitlement to such indemnification or advancements due hereunder, including, without limitation, Expense Advances. Alternatively, Indemnitee, in Indemnitee’s sole discretion, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial arbitration rules of the American Arbitration Association. Indemnitee shall commence such action seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such action pursuant to this Section 5.1, or such right shall expire. The Company agrees not to oppose Indemnitee’s right to seek any such adjudication or award in arbitration and it shall continue to pay Expense Advances pursuant to Section 3.3 until

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it shall ultimately be determined (in a Final Adjudication) that Indemnitee is not entitled to be indemnified by the Company against such Expenses.

Section 5.2Adverse Determination Not to Affect any Judicial Proceeding. If a determination shall have been made pursuant to Article IV that Indemnitee is not entitled toindemnification under this Agreement, any judicial proceeding or arbitration commenced pursuant to this Article V shall be conducted in all respects as a de novo trial or arbitration on the merits, and Indemnitee shall not be prejudiced by reason of such initial adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Article V, Indemnitee shall be presumed to be entitled to indemnification or advancement of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proof in overcoming such presumption and to show by clear and convincing evidence that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

Section 5.3Company Bound by Determination Favorable to Indemnitee in any Judicial Proceeding or Arbitration. If a determination shall have been made or deemed to have been made pursuant to Article IV that Indemnitee is entitled to indemnification, the Company shall be irrevocably bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Article V, and shall be precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding and enforceable.

Section 5.4Company Bound by the Agreement. The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Article V that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. Without limiting the generality of the preceding sentence, the Company shall not seek from a court, or agree to, a “bar order” that would have the effect of prohibiting or limiting Indemnitee’s rights to advancement of any Expenses under this Agreement.

ARTICLE VI 
Contribution

Section 6.1Contribution Payment.

(a)Whether or not the indemnification provided in Article III hereof is available, in respect of any threatened, pending or completed action, suit or Claim in which the Company is jointly liable with Indemnitee (or would be if joined in such action, or Claim), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or Claim without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any action, suit or Claim in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit orClaim) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

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(b)Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or Claim in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit orClaim), the Company shall contribute to the amountof Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit orClaim), on the one hand, and Indemnitee, on the other hand, from the transaction or events from which such action, suit or Claim arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit orClaim), on the one hand, and Indemnitee, on the other hand, in connection with the transaction or events that resulted in such Expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered.

(c)The Company hereby agrees, to the fullest extent permitted by applicable law, to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

(d)To the fullest extent permissible under applicable law and without diminishing or impairing the obligations of the Company set forth in the preceding subparagraphs of this Section 6.1, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Claim in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to suchClaim; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Section 6.2Relative Fault. The relative fault of the Indemnitee, on the one hand, and of the Company and any and all other parties (including officers and directors of the Company other than Indemnitee) who may be at fault with respect to such matter shall be determined (i) by reference to the relative fault of Indemnitee as determined by the court or other governmental agency assessing the contribution amounts or (ii) to the extent such court or other governmental agency does not apportion relative fault, by the Independent Counsel (or such other party which makes a determination under Article IV) after giving effect to, among other things, the degree of

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which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary, the degree to which their conduct is active or passive, the degree of the knowledge, access to information, and opportunity to prevent or correct the subject matter of the Claims and other relevant equitable considerations of each party. The Company and Indemnitee agree that it would not be just and equitable if contribution pursuant to this Section 6.2 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 6.2.

ARTICLE VII 
Miscellaneous

Section 7.1Non-Exclusivity. The rights of Indemnitee to receive indemnification and advancement of Expenses under this Agreement shall be in addition to, and shall not be deemed exclusive of, any other rights Indemnitee shall under the DGCL or other applicable law, the charter or bylaws of the Company, any other agreement, vote of stockholders or a resolution of directors, or otherwise. Every other right or remedy of Indemnitee shall be cumulative of the rights and remedies granted Indemnitee hereunder. No amendment or alteration of the charter or bylaws of the Company or any provision thereof shall adversely affect Indemnitee’s rights hereunder, and such rights shall be in addition to any rights Indemnitee may have under the charter, bylaws and the DGCL or other applicable law. To the extent that there is a change in the DGCL or other applicable law (whether by statute or judicial decision) that allows greater indemnification by agreement than would be afforded currently under the Company’s charter or bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by virtue of this Agreement the greater benefit so afforded by such change. Any amendment, alteration or repeal of the DGCL that adversely affects any right of Indemnitee shall be prospective only and shall not limit or eliminate any such right with respect to any Claim involving any occurrence or alleged occurrence of any action or omission to act that took place before the effective date of such amendment or repeal.

Section 7.2Insurance and Subrogation.

(a)To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, agents or fiduciaries of the Company or for individuals serving at the request of the Company as directors, officers, partners, members, venturers, proprietors, trustees, employees, agents, fiduciaries or similar functionaries of another foreign or domestic corporation, partnership, limited liability company, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee, agent or fiduciary under such policy or policies.

(b)In the event of any payment by the Company under this Agreement for which reimbursement is available under any insurance policy or policies obtained by the Company, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee under such insurance policy or policies, who shall execute

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all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights, provided that all Expenses relating to such action shall be borne by the Company.

(c)The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under the Company’s charter or bylaws or any insurance policy, contract, agreement or otherwise.

(d)If Indemnitee is a director of the Company, the Company will advise the Board of any proposed material reduction in the coverage for Indemnitee to be provided by the Company’s directors’ and officers’ liability insurance policy and will not effect such a reduction with respect to Indemnitee without the prior approval of at least 80% of the Independent Directors of the Company.

(e)If Indemnitee is a director of the Company during the term of this Agreement and if Indemnitee ceases to be a director of the Company for any reason, the Company shall procure a run-off directors’ and officers’ liability insurance policy with respect to claims arising from facts or events that occurred before the time Indemnitee ceased to be a director of the Company and covering Indemnitee, which policy, without any lapse in coverage, will provide coverage for a period of six years after the time Indemnitee ceased to be a director of the Company and will provide coverage (including amount and type of coverage and size of deductibles) that are substantially comparable to the Company’s directors’ and officers’ liability insurance policy that was most protective of Indemnitee in the 12 months preceding the time Indemnitee ceased to be a director of the Company and that is reasonably satisfactory to Indemnitee; provided, however, that:

(i)this obligation shall be suspended during the period immediately following the time Indemnitee ceases to be a director of the Company if and only so long as the Company has a directors’ and officers’ liability insurance policy in effect covering Indemnitee for such claims that, if it were a run-off policy, would meet or exceed the foregoing standards, but in any event this suspension period shall end when a Change in Control occurs; and

(ii)no later than the end of the suspension period provided in the preceding clause (i) (whether because of failure to have a policy meeting the foregoing standards or because a Change in Control occurs), the Company shall procure a run-off directors’ and officers’ liability insurance policy meeting the foregoing standards and lasting for the remainder of the six-year period.

(f)Notwithstanding the preceding clause (e) including the suspension provisions therein, if Indemnitee ceases to be an officer or a director of the Company in connection with a Change in Control or at or during the one-year period following the occurrence of a Change in Control, the Company shall procure a run-off directors’ and officers’ liability insurance policy covering Indemnitee that is reasonably satisfactory to Indemnity, meets

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the foregoing standards in clause (e), and lasts for a six-year period upon the Indemnitee’s ceasing to be an officer or a director of the Company in such circumstances.

(g)If at the time of the receipt of a notice of a Claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such Claim to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Claim in accordance with the terms of such policies.

Section 7.3Self Insurance of the Company; Other Arrangements. The parties hereto recognize that the Company may, but except as provided in Section 7.2(d), Section 7.2(e), and Section 7.2(f) is not required to, procure or maintain insurance or other similar arrangements, at its expense, to protect itself and any person, including Indemnitee, who is or was a director, officer, employee, agent or fiduciary of the Company or who is or was serving at the request of the Company as a director, officer, partner, member, venturer, proprietor, trustee, employee, agent, fiduciary or similar functionary of another foreign or domestic corporation, partnership, limited liability company, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise against any expense, liability or loss asserted against or incurred by such person, in such a capacity or arising out of the person’s status as such a person, whether or not the Company would have the power to indemnify such person against such expense or liability or loss.

Except as provided in Section 7.2(d), Section 7.2(e) and Section 7.2(f), in considering the cost and availability of such insurance, the Company (through the exercise of the business judgment of its directors and officers) may, from time to time, purchase insurance which provides for certain (i) deductibles, (ii) limits on payments required to be made by the insurer, or (iii) coverage which may not be as comprehensive as that previously included in insurance purchased by the Company or its predecessors. The purchase of insurance with deductibles, limits on payments and coverage exclusions, even if in the best interest of the Company, may not be in the best interest of Indemnitee. As to the Company, purchasing insurance with deductibles, limits on payments and coverage exclusions is similar to the Company’s practice of self-insurance in other areas. In order to protect Indemnitee who would otherwise be more fully or entirely covered under such policies, the Company shall, to the maximum extent permitted by applicable law, indemnify and hold Indemnitee harmless to the extent (i) of such deductibles, (ii) of amounts exceeding payments required to be made by an insurer, or (iii) of amounts that prior policies of directors’ and officers’ liability insurance held by the Company or its predecessors have provided for payment to Indemnitee, if by reason of Indemnitee’s Corporate Status Indemnitee is or is threatened to be made a party to anyClaim. The obligation of the Company in the preceding sentence shall be without regard to whether the Company would otherwise be required to indemnify such officer or director under the other provisions of this Agreement, or under any law, agreement, vote of stockholders or directors or other arrangement. Without limiting the generality of any provision of this Agreement, the procedures in Article IV hereof shall, to the extent applicable, be used for determining entitlement to indemnification under this Section 7.3.

Section 7.4Certain Settlement Provisions. The Company shall have no obligation to indemnify Indemnitee under this Agreement for amounts paid in settlement of a Claim without the

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Company’s prior written consent. The Company shall not settle any Claim in any manner that would impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent. Neither the Company nor Indemnitee shall unreasonably withhold their consent to any proposed settlement.

Section 7.5Duration of Agreement. This Agreement shall continue for so long as Indemnitee serves as a director, officer, employee, agent or fiduciary of the Company or, at the request of the Company, as a director, officer, partner, member, venturer, proprietor, trustee,employee, agent, fiduciary or similar functionary of another foreign or domestic corporation, partnership, limited liability company, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise, and thereafter shall survive until and terminate upon the later to occur of: (a) the expiration of 20 years after the latest date that Indemnitee shall have ceased to serve in any such capacity; (b) the final non-appealable determination or resolution of all pending Claims in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Article IV relating thereto; or (c) the expiration of all statutes of limitation applicable to possible Claims arising out of Indemnitee’s Corporate Status.

Section 7.6Notice by Each Party. Indemnitee shall promptly notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document or communication relating to any Claim for which Indemnitee may be entitled to indemnification or advancement of Expenses hereunder; provided, however, that any failure of Indemnitee to so notify the Company shall not adversely affect Indemnitee’s rights under this Agreement except to the extent the Company shall have been materially prejudiced as a direct result of such failure. The Company shall promptly notify Indemnitee in writing as to the pendency of any Claim that may involve a claim against Indemnitee for which Indemnitee may be entitled to indemnification or advancement of Expenses hereunder.

Section 7.7Amendment. This Agreement may not be modified or amended except by a written instrument executed by or on behalf of each of the parties hereto.

Section 7.8Waivers. The observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) by the party entitled to enforce such term only by a writing signed by the party against which such waiver is to be asserted. Unless otherwise expressly provided herein, no delay on the part of any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party hereto of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

Section 7.9Entire Agreement. This Agreement and the documents expressly referred to herein constitute the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or

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agreements with respect to the matters covered hereby, including without limitation any prior indemnification agreements, are expressly superseded by this Agreement.

Section 7.10Severability. If any provision of this Agreement (including any provision within a single section, paragraph or sentence), or the application of such provision to any Person or circumstance, shall be judicially declared to be invalid, unenforceable or void, such decision will not have the effect of invalidating or voiding the remainder of this Agreement or affect the application of such provision to other Persons or circumstances, it being the intent and agreement of the parties that this Agreement shall be deemed amended by modifying such provision to the extent necessary to render it valid, legal and enforceable while preserving its intent, or if such modification is not possible, by substituting therefor another provision that is valid, legal and enforceable and thatachieves the same objective. Any such finding of invalidity or unenforceability shall not prevent the enforcement of such provision in any other jurisdiction to the maximum extent permitted by applicable law.

Section 7.11Notices. All notices and other communications hereunder shall be in writing and shall be deemed given upon (a) transmitter’s confirmation of a receipt of a facsimile transmission if during normal business hours of the recipient, otherwise on the next business day, (b) confirmed delivery of a standard overnight courier or when delivered by hand or (c) the expiration of five business days after the date mailed by certified or registered mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice):

If to the Company, to it at:

Reata Pharmaceuticals, Inc.

5320 Legacy Drive

Building 2

Plano, Texas 75024

Attn: Corporate Secretary

Facsimile: 469-442-4740

If to Indemnitee, to Indemnitee at:

or to such other address or to such other individuals as any party shall have last designated by notice to the other parties. All notices and other communications given to any party in accordance with the provisions of this Agreement shall be deemed to have been given when delivered or sent to the intended recipient thereof in accordance with and as provided in the provisions of this Section 7.11.

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Section 7.12Governing Law. This Agreement and the legal relations among the parties shall, to the fullest extent permitted by law, be governed by, and construed and enforced in accordance with , the laws of the State of Delaware without regard to its conflict of laws rule.

Section 7.13 Submission to Jurisdiction. The Company and Indemnitee hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in connection with this Agreement (other than an arbitration provided for in Section 5.1) shall be brought only in the Court of Chancery of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (b) consent to submit to the exclusive jurisdiction of the Delaware Court for the purposes of any action or proceeding arising out of or in connection with this Agreement, (c) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (d) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or otherwise inconvenient forum.

Section 7.14Certain Construction Rules.

(a)The article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. As used in this Agreement, unless otherwise provided to the contrary, (1) all references to days shall be deemed references to calendar days and (2) any reference to a “Section” or “Article” shall be deemed to refer to a section or article of this Agreement. The words “hereof,” “herein” and “hereunder” and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” Unless otherwise specifically provided for herein, the term “or” shall not be deemed to be exclusive. Whenever the context may require, any pronoun used in this Agreement shall include the correspondingmasculine, feminine or neuter forms and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

(b)For purposes of this Agreement, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, nominee, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner the person reasonably believed to be in the interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Company” for purposes of this Agreement and the DGCL.

(c)In the event of a merger, consolidation or amalgamation of the Company with or into any other entity, references to the “Company” shall include the entity surviving or resulting from the merger, consolidation or amalgamation as well as the Company, and

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Indemnitee shall stand in the same position under this Agreement with respect to the surviving or resulting entity as Indemnitee would stand with respect to the Company if its existence had continued upon and after the merger, consolidation or amalgamation.

Section 7.15Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, notwithstanding that both parties are not signatories to the original or same counterpart.

Section 7.16Certain Persons Not Entitled to Indemnification. Notwithstanding any other provision of this Agreement (but subject to Section 7.1), Indemnitee shall not be entitled to indemnification or advancement of Expenses pursuant to the terms of this Agreement with respect to any Claim, issue or matter therein, brought or made by Indemnitee against the Company, except as specifically provided in Article III, Article IV or Section 7.3. In addition, the Company shall not be obligated pursuant to the terms of this Agreement:

(a)To indemnify Indemnitee if (and to the extent that) a final, non-appealable decision by a court or arbitration body having jurisdiction in the matter shall determine that such indemnification is not lawful; or

(b)To indemnify Indemnitee for the payment to the Company of profits pursuant to Section 16(b) of the Exchange Act, or Expenses incurred by Indemnitee for Claims in connection with such payment under Section 16(b) of the Exchange Act.

Section 7.17Indemnification for Negligence, Gross Negligence, etc. Without limiting the generality of any other provision hereunder, it is the express intent of this Agreement that Indemnitee be indemnified and Expenses be advanced regardless of Indemnitee’s acts of negligence, gross negligence, intentional or willful misconduct to the extent that indemnification and advancement of Expenses is allowed pursuant to the terms of this Agreement and under applicable law.

Section 7.18Mutual Acknowledgments. Both the Company and Indemnitee acknowledge that, in certain instances, applicable law (including applicable federal law that may preempt or override applicable state law) or public policy may prohibit the Company from indemnifying the directors, officers, employees, agents or fiduciaries of the Company under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the U.S. Securities and Exchange Commission has taken the position that indemnification of directors, officers and controlling Persons of the Company for liabilities arising under federal securities laws is against public policy and, therefore, unenforceable. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee. In addition, the Company and Indemnitee acknowledge that federal law prohibits indemnifications for certain violations of the Employee Retirement Income Security Act of 1974, as amended.

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Section 7.19Enforcement. The Company agrees that its execution of this Agreement shall constitute a stipulation by which it shall be irrevocably bound in any court or arbitration in which a proceeding by Indemnitee for enforcement of Indemnitee’s rights hereunder shall have been commenced, continued or appealed, that its obligations set forth in this Agreement are unique and special, and that failure of the Company to comply with the provisions of this Agreement will cause irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate. As a result, in addition to any other right or remedy Indemnitee may have at law or in equity with respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief directing specific performance by the Company of its obligations under this Agreement. The Company agrees not to seek, and agrees to waive any requirement for the securing or posting of, a bond in connection with Indemnitee’s seeking or obtaining such relief.

Section 7.20Successors and Assigns. All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators, legal representatives.

Section 7.21Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company or any affiliate of the Company against Indemnitee or Indemnitee’s spouse, heirs, executors, or personal or legal representatives after the expiration of one year from the date of accrual of that cause of action, and any claim or cause of action of the Company or its affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within that one-year period; provided, however, that for any claim based on Indemnitee’s breach of fiduciary duties to the Company or its stockholders, the period set forth in the preceding sentence shall be three years instead of one year; and provided, further, that, if any shorter period of limitations is otherwise applicable to any such cause of action, the shorter period shall govern.

[signatures on following page]

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of the date first above written.

REATA PHARMACEUTICALS, INC.
By:	/s/ Stephen Harman
	Stephen Harman Chief Human Resources Officer
INDEMNITEE:
By:	/s/ Samina Khan
	Samina Khan

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EX-10.14

Exhibit 10.14

REATA PHARMACEUTICALS, INC.

INDEMNIFICATION AGREEMENT

This Agreement (“Agreement”) is made and entered into as of the 24th day of February, 2020, by and between Reata Pharmaceuticals, a Delaware corporation (the “Company”), and Andrea Loewen-Rodriguez (“Indemnitee”).

RECITALS

A.    Highly competent and experienced persons are reluctant to serve corporations as directors, executive officers or in other capacities unless they are provided with adequate protection through insurance and indemnification against claims and actions against them arising out of their service to and activities on behalf of the Company.

B.    The Board of Directors of the Company (the “Board”) has determined that the inability to attract and retain such persons would be detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future.

C.    The Board has also determined that it is reasonable, prudent and necessary for the Company, in addition to purchasing and maintaining directors’ and officers’ liability insurance (or otherwise providing for adequate arrangements of self-insurance), contractually to obligate itself to indemnify such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be adequately protected.

D.    Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company, but only on the condition that Indemnitee be so indemnified to the fullest extent permitted by law, as permitted herein.

E.    Article Thirteen of the Amended and Restated Certificate of Incorporation of the Company provides for indemnification of directors and officers to the fullest extent permitted by law.

In consideration of the foregoing and the mutual covenants herein contained, and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I 
Certain Definitions

As used herein, the following words and terms shall have the following respective meanings (whether singular or plural):

“Acquiring Person” means any Person other than (i) the Company, (ii) any of the Company’s Subsidiaries, (iii) any employee benefit plan of the Company or of a Subsidiary of the Company or of a Company owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, or (iv) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Subsidiary of the Company or of a Company owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

“Change in Control” means the occurrence of any of the following events:

(i)    The acquisition, after the date of this Agreement, by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (x) the then outstanding shares of Common Stock of the Company (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Subparagraph (i), the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of paragraph (iii) below; or

(ii)    Members of the Incumbent Board cease for any reason to constitute at least a majority of the Board; or

(iii)    Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or an acquisition of assets of another entity (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common equity and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors or other similar governing body, as the case may be, of the entity resulting

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from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or the entity resulting from such Business Combination) beneficially owns, directly or indirectly, 40% or more of, respectively, the then outstanding shares of common equity of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership results solely from ownership of the Company that existed prior to the Business Combination and (C) at least a majority of the members of the board of directors or other similar governing body of the entity resulting from such Business Combination were members ofthe Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv)    Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

“Claim” means an actual or threatened claim or request for relief which was, is or may be made by reason of anything done or not done by Indemnitee in, or by reason of any event or occurrence related to, Indemnitee’s Corporate Status, including any threatened, pending or completed action, suit, arbitration, investigation, inquiry, alternate dispute resolution mechanism, administrative or legislative hearing, or any other proceeding (including, without limitation, any securities laws action, suit, arbitration, alternative dispute resolution mechanism, hearing, or procedure) whether civil, criminal, administrative, arbitrative or investigative and whether or not based upon events occurring, or actions taken, before the date hereof, and any appeal in or related to any such action, suit, arbitration, investigation, hearing or procedure and any inquiry or investigation (including discovery), whether conducted by or in the right of the Company or any other Person, that Indemnitee in good faith believes could lead to any such action, suit, arbitration, alternative dispute resolution mechanism, hearing or other proceeding or appeal thereof.

“Corporate Status” means the status of a person who is, becomes or was a director, officer, employee, agent or fiduciary of the Company or is, becomes or was serving at the request of the Company as a director, officer, partner, member, venturer, proprietor, trustee, employee, agent, fiduciary or similar functionary of another foreign or domestic corporation, partnership, limited liability company, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise. For purposes of this Agreement, the Company agrees that Indemnitee’s service on behalf of or with respect to any Subsidiary of the Company shall be deemed to be at the request of the Company.

“DGCL” means the Delaware General Corporation Law and any successor statute thereto, as either of them may from time to time be amended.

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“Disinterested Director” with respect to any request by Indemnitee for indemnification hereunder, means a director of the Company who at the time of the vote is not a named defendant or respondent in the Claim in respect of which indemnification is sought by Indemnitee.

“Exchange Act” means the Securities Exchange Act of 1934.

“Expenses” means all attorneys’ fees and disbursements, retainers, accountant’s fees and disbursements, private investigator fees and disbursements, court costs, transcript costs, fees and expenses of experts, witness fees and expenses, costs and obligations under any bond posted in connection with any Claim, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements, costs or expenses of the types customarily incurred in connection with prosecuting, defending (including affirmative defenses and counterclaims), preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in or preparing to participate in (including on appeal) a Claim and all interest or finance charges attributable to any thereof. Should any payments by the Company under this Agreement be determined to be subject to any federal, state or local income or excise tax, “Expenses” shall also include such amounts as are necessary to place Indemnitee in the same after-tax position (after giving effect to all applicable taxes) as Indemnitee would have been in had no such tax been determined to apply to such payments. Also, in this Agreement “witness” includes responding (or objecting) to a discovery request, whether in writing or in an oral deposition, in any Claim.

“Final Adjudication” means a final adjudication by a court from which there is no further right of appeal or a final adjudication of an arbitration pursuant to Section 5.1 if Indemnitee elects to seek such arbitration.

“Incumbent Board” means the individuals who, as of the date of this Agreement, constitute the Board and any other individual who becomes a director of the Company after that date and whose election or appointment by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption ofoffice occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board.

“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither contemporaneously is, nor in the five years theretofore has been, retained to represent: (a) the Company, any subsidiary of the Company, or Indemnitee in any matter material to either such Person (other than as Independent Counsel under this Agreement or similar agreements), (b) any other party to the Claim giving rise to a claim for indemnification hereunder or (c) the beneficial owner, directly or indirectly, of securities of the Company representing 5% or more of the combined voting power of the Company’s then outstanding voting securities, or Person controlled by such beneficial owner (other than, in each such case under clauses (a) through (c)), with respect to matters concerning the rights of

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Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements). Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

“Independent Directors” means the directors on the Board that are independent directors as defined in NASDAQ Marketplace Rule 4200(a)(15) or successor provision, or, if the Company’s Common Stock is not then quoted on the NASDAQ Global Select Market, that qualify as independent, disinterested, or a similar term as defined in the rules of the principal securities exchange or inter-dealer quotation system on which the Company’s Common Stock is then listed or quoted.

“Person” means any individual, entity or group (within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act).

“Potential Change in Control” shall be deemed to have occurred if (i) any Person shall have announced publicly an intention to effect a Change in Control, or commenced any action (such as the commencement of a tender offer for the Company’s Outstanding Company Common Stock or Outstanding Company Voting Securities or the solicitation of proxies for the election of any of the Company’s directors) that, if successful, could reasonably be expected to result in the occurrence of a Change in Control; (ii) the Company enters into an agreement, the consummation of which would constitute a Change in Control; or (iii) any other event occurs which the Board declares to be a Potential Change of Control.

“Subsidiary” means, with respect to any Person, any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by that Person.

“Voting Securities” means any securities that vote generally in the election of directors, in the admission of general partners, or in the selection of any other similar governing body.

ARTICLE II 
Services by Indemnitee

Indemnitee is serving as an officer of the Company. Indemnitee may from time to time also agree to serve, as the Company may request from time to time, in another capacity for the Company (including another officer or director position) or as a director, officer, partner, member, venturer, proprietor, trustee, employee, agent, fiduciary or similar functionary of another foreign or domestic corporation, partnership, joint venture, limited liability company, sole proprietorship, trust, employee benefit plan or other enterprise. Indemnitee and the Company each acknowledge that they have entered into this Agreement as a means of inducing Indemnitee to serve, or continue to serve, the Company in such capacities. Indemnitee may at any time and for any reason resign from such position or positions (subject to any other contractual obligation or any obligation imposed

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by operation of law). The Company shall have no obligation under this Agreement to continue Indemnitee in any such position or positions.

ARTICLE III 
Indemnification

Section 3.1General. Subject to the provisions set forth in Article IV, the Company shall indemnify, and advance Expenses to, Indemnitee to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may hereafter from time to time permit. The other provisions set forth in this Agreement are provided in addition to and as a means of furtherance and implementation of, and not in limitation of, the obligations expressed in this Article III. No requirement, condition to or limitation of any right to indemnification or to advancement of Expenses under this Article III shall in any way limit the rights of Indemnitee under Article VII.

Section 3.2Additional Indemnity of the Company. Indemnitee shall be entitled to indemnification pursuant to this Section 3.2 if, by reason of anything done or not done by Indemnitee in, or by reason of any event or occurrence related to, Indemnitee’s Corporate Status, Indemnitee is, was or becomes, or is threatened to be made, a party to, or witness or other participant in any Claim. Pursuant to this Section 3.2, Indemnitee shall be indemnified against any and all Expenses, judgments, penalties (including excise or similar taxes), fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any such Expenses, judgments, penalties, fines and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Claim, issue or matter therein. Notwithstanding the foregoing, the obligations of the Company under this Section 3.2 shall be subject to the condition that no determination (which,in any case in which Independent Counsel is involved, shall be in a form of a written opinion) shall have been made pursuant to Article IV that Indemnitee would not be permitted to be indemnified under applicable law. Nothing in this Section 3.2 shall limit the benefits of Section 3.1, Section 3.3 or any other Section hereunder.

Section 3.3Advancement of Expenses. The Company shall pay, on a current and as-incurred basis, all Expenses reasonably incurred by, or in the case of retainers to be incurred by, or on behalf of Indemnitee (or, if applicable, reimburse Indemnitee for any and all Expenses reasonably incurred by Indemnitee and previously paid by Indemnitee) in connection with any Claim, whether brought by the Company or otherwise, in advance of the later of (a) the final, non-appealable determination or resolution of all such Claims and (b) any determination respecting entitlement to indemnification pursuant to Article IV hereof (and shall continue to pay such Expenses after such determination and until it shall ultimately be determined (in a Final Adjudication) that Indemnitee is not entitled to be indemnified by the Company against such Expenses). Such payments and advances shall be made within 10 days after the receipt by the Company of a written request from Indemnitee requesting such payment or payments from time to time, whether prior to or after the final, non-appealable determination or resolution of such Claim. Any such payment by the Company is referred to in this Agreement as an “Expense

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Advance.” Any dispute as to the reasonableness of the incurrence of any Expense shall not delay an Expense Advance by the Company, and the Company agrees that any such dispute shall be resolved only upon the final, non-appealable determination or resolution of the respective underlying Claim involving Indemnitee. Indemnitee hereby undertakes and agrees that Indemnitee will reimburse and repay the Company without interest for any Expense Advances to the extent that it shall ultimately be determined (in a Final Adjudication) that Indemnitee is not entitled under the law to be indemnified by the Company against such Expenses. Indemnitee shall not be required to provide collateral or otherwise secure the undertaking and agreement described in the prior sentence. The Company shall make all Expense Advances pursuant to this Section 3.3 without regard to the financial ability of the Indemnitee to make repayment and without regard to whether or not the Indemnitee may ultimately be found to be entitled to indemnification under the provisions of this Agreement.

Section 3.4Indemnification for Additional Expenses. The Company shall indemnify Indemnitee against any and all costs and expenses (of the types described in the definition of Expenses in Article I) and, if requested by Indemnitee, shall (within two business days of that request) advance those costs and expenses to Indemnitee, that are incurred by Indemnitee in connection with any claim asserted against, or action brought by, Indemnitee for (i) indemnification or an Expense Advance by the Company under this Agreement or any other agreement or provision of the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to any Claim, (ii) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, or (iii) enforcement of, or claims for breaches of, any provision of this Agreement, in each of the foregoing situations regardless of whether Indemnitee ultimately isdetermined to be entitled to that indemnification, Expense Advance payment, insurance recovery, enforcement, or damage claim, as the case may be, and regardless of whether the nature of the proceeding with respect to such matters is judicial, by arbitration, or otherwise.

Section 3.5Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses, judgments, fines, penalties, and amounts paid in settlement of a Claim but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims, or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.

ARTICLE IV 
Procedure for Determination of Entitlement to Indemnification

Section 4.1Request by Indemnitee. To obtain indemnification under this Agreement, Indemnitee shall, at such time as determined by Indemnitee in Indemnitee’s sole discretion, submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary or an Assistant

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Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Nevertheless, any failure of Indemnitee to provide a request to the Company, or to provide such a requestwithin any time frame, shall not relieve the Company of any liability that it may have to Indemnitee hereunder.

Section 4.2Determination of Request. Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 4.1 hereof, a determination, if required by applicable law, with respect to whether Indemnitee is permitted under applicable law to be indemnified shall be made in accordance with the terms of Section 4.5, in the specific case as set forth in this Section 4.2:

(a)If a Potential Change in Control or a Change in Control shall have occurred, by Independent Counsel (selected in accordance with Section 4.3) in a written opinion to the Board and Indemnitee, unless Indemnitee shall request that such determination be made by the Board, or a committee of the Board, in which case by the person or persons or in the manner provided for in clause (i) or (ii) of paragraph (b) below; or

(b)If a Potential Change in Control or a Change in Control shall not have occurred, then the determination shall be made by one of the following, in Indemnitee’s sole discretion, as the Indemnitee requests in writing: (i) by the Board by a majority vote of the Disinterested Directors even though less than a quorum of the Board, or (ii) by a majority vote of a committee solely of two or more Disinterested Directors designated to act in the matter by a majority vote of all Disinterested Directors even though less than a quorum of the Board, or (iii) by Independent Counsel selected by the Board or a committee of the Board by a vote as set forth in clauses (i) or (ii)of this paragraph (b), or if such vote is not obtainable or such a committee cannot be established, by a majority vote of all directors, or (iv) by the stockholders of the Company in a vote that excludes the shares held by directors who are not Disinterested Directors.

If it is so determined that Indemnitee is permitted to be indemnified under applicable law, payment to Indemnitee shall be made within 10 days after such determination. Nothing contained in this Agreement shall require that any determination be made under this Section 4.2 prior to the final, non-appealable determination or resolution of a Claim involving Indemnitee for which indemnification is sought hereunder; provided, that Expense Advances shall continue to be made by the Company pursuant to, and to the extent required by, the provisions of Article III. Indemnitee shall cooperate with the person or persons making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person upon reasonable advance request any documentation or information that is not privileged or otherwise protected from disclosure and that is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person or persons making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification), and the Company shall indemnify and hold harmless Indemnitee therefrom.

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Section 4.3Independent Counsel. If the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice to the Company, within 10 days after submission of Indemnitee’s request for indemnification, specifying the identity and address of the Independent Counsel so selected unless Indemnitee shall request that such selection be made by the Disinterested Directors or a committee of the Board, in which event the Company shall give written notice to Indemnitee within 10 days after receipt of Indemnitee’s request for the Board or a committee of the Disinterested Directors to make such selection, specifying the identity and address of the Independent Counsel so selected. In either event, (i) such notice to Indemnitee or the Company, as the case may be, shall be accompanied by a written confirmation by the Independent Counsel so selected that it satisfies the requirements of the definition of “Independent Counsel” in Article I and that it agrees to serve in such capacity and (ii) Indemnitee or the Company, as the case may be, may, within seven days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection. Any objection to the selection of Independent Counsel pursuant to this Section 4.3 may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of the definition of “Independent Counsel” in Article I, and the objection shall set forth with particularity the factual basis of such assertion. If such written objection is timely made, the Independent Counsel so selected may not serve as Independent Counsel unless and until a court of competent jurisdiction(the “Court”) has determined that such objection is without merit or such objection is withdrawn. In the event of a timely written objection to a choice of Independent Counsel, the party originally selecting the Independent Counsel shall have seven days to make an alternate selection of Independent Counsel and to give written notice of such selection to the other party, after which time such other party shall have five days to make a written objection to such alternate selection. If, within 30 days after submission of Indemnitee’s request for indemnification pursuant to Section 4.1, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court for resolution of any objection that shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom an objection is so resolved or the person so appointed shall act as Independent Counsel under Section 4.2. The Company shall pay any and all fees and expenses reasonably incurred by, such Independent Counsel in connection with acting pursuant to Section 4.2, and the Company shall pay all fees and expenses reasonably incurred incident to the procedures of this Section 4.3, regardless of the manner in which such Independent Counsel was selected or appointed. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 5.1, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

Section 4.4Establishment of a Trust. In the event of a Potential Change in Control or a Change in Control, the Company shall, upon written request by Indemnitee, create a trust for the benefit of Indemnitee (the “Trust”) and from time to time upon written request of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for, and

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defending any Claim, and any and all judgments, fines, penalties, and settlement amounts of any and all Claims from time to time actually paid or claimed, reasonably anticipated, or proposed to be paid. The amount to be deposited in the Trust pursuant to the foregoing funding obligation shall be determined by the Independent Counsel (or other person(s) making the determination of whether Indemnitee is permitted to be indemnified by applicable law). The terms of the Trust shall provide that, upon a Change in Control, (i) the Trust shall not be revoked or the principal thereof invaded, without the written consent of Indemnitee; (ii) the trustee of the Trust shall advance to Indemnitee, within ten days of a request by Indemnitee, any and all Expenses reasonably incurred by, or in case of retainer to be incurred by, or on behalf of Indemnitee (or, if applicable, reimburse Indemnitee for any Expense reasonably incurred by Indemnitee and previously paid by Indemnitee), with any required determination concerning the reasonableness of the Expenses to be made by the Independent Counsel (and Indemnitee hereby agrees to reimburse the Trust under the circumstances in which Indemnitee would be required to reimburse the Company for Expense Advances under Section 3.3 of this Agreement); (iii) the Trust shall continue to be funded by the Company in accordance with the funding obligation set forth above; (iv) the trustee of the Trust shall promptly pay to Indemnitee all amounts for which Indemnitee shall be entitled to indemnification pursuant to this Agreement; and (v) all unexpended funds in the Trust shall revert to the Company upon a final determination by the Independent Counsel or a Final Adjudication, as the case may be, that Indemnitee has been fully indemnified under the terms of this Agreement. The trustee of the Trust shall be chosen by Indemnitee and shall be an institution that is not affiliated withIndemnitee. Nothing in this Section 4.4 shall relieve the Company of any of its obligations under this Agreement.

Section 4.5Presumptions and Effect of Certain Proceedings.

(a)Indemnitee shall be presumed to be entitled to indemnification under this Agreement upon submission of a request for indemnification under Section 4.1, and the Company shall have the burden of proof in overcoming that presumption in reaching a determination contrary to that presumption. Such presumption shall be used by Independent Counsel (or other person or persons determining entitlement to indemnification) as a basis for a determination of entitlement to indemnification unless the Company provides information sufficient to overcome such presumption by clear and convincing evidence or unless the investigation, review and analysis of Independent Counsel (or such other person or persons) convinces Independent Counsel by clear and convincing evidence that the presumption should not apply.

(b)If the person or persons empowered or selected under Article IV of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within 60 days after receipt by the Company of the request by Indemnitee therefor, the determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the person making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating

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of documentation and/or information relating to such determination; and provided, further, that the 60-day limitation set forth in this Section 4.5(b) shall not apply and such period shall be extended as necessary (i) if within 30 days after receipt by the Company of the request for indemnification under Section 4.1 Indemnitee and the Company have agreed, and the Board has resolved, to submit such determination to the stockholders of the Company pursuant to Section 4.2(b) for their consideration at an annual meeting of stockholders to be held within 90 days after such agreement and such determination is made thereat, or a special meeting of stockholders is called within 30 days after such receipt for the purpose of making such determination, such meeting is held for such purpose within 60 days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 4.2(a) of this Agreement, in which case the applicable period shall be as set forth in Section 5.1(c).

(c)The termination of any Claim, issue or matter by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) by itself adversely affect the rights of Indemnitee to indemnification or create a presumption that Indemnitee failed to meet any particular standard of conduct, that Indemnitee had any particular belief, or that a court has determined that indemnification is not permitted by applicable law. Indemnitee may be found to have failed to meet any particular standard of conduct inrespect of any Claim, issue or matter only after Indemnitee shall have been so adjudged by the Court or arbitrator, as applicable, after exhaustion of all appeals therefrom.

(d)For purposes of the second sentence of Section 3.5, a settlement or other resolution of a Claim short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. For purposes of the second sentence of Section 3.5, in the event that any Claim to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including settlement of such Claim with or without payment of money or other consideration), it shall be presumed that Indemnitee has been successful on the merits or otherwise in suchClaim. Anyone seeking to overcome this presumption shall have the burden of proof by clear and convincing evidence.

(e)The failure of the Company (including by its directors or Independent Counsel) to have made a determination before the commencement of any action pursuant to this Agreement that indemnification is proper because Indemnitee has met the applicable standard of conduct shall not be a defense to the action or create a presumption that Indemnitee has not met the standard of conduct.

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ARTICLE V 
Certain Remedies of Indemnitee

Section 5.1Indemnitee Entitled to Adjudication in an Appropriate Court. If (a) a determination is made pursuant to Article IV that Indemnitee is not entitled to indemnification under this Agreement; (b) there has been any failure by the Company to make timely payment or advancement of any amounts due hereunder (including, without limitation, any Expense Advances); or (c) the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 4.2 and such determination shall not have been made and delivered in a written opinion within 60 days after the latest of (i) such Independent Counsel’s being appointed, (ii) the overruling by the Court of objections to such counsel’s selection, or (iii) expiration of all periods for the Company or Indemnitee to object to such counsel’s selection, Indemnitee shall be entitled to commence an action seeking an adjudication in the Court of Indemnitee’s entitlement to such indemnification or advancements due hereunder, including, without limitation, Expense Advances. Alternatively, Indemnitee, in Indemnitee’s sole discretion, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial arbitration rules of the American Arbitration Association. Indemnitee shall commence such action seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such action pursuant to this Section 5.1, or such right shall expire. The Company agrees not to oppose Indemnitee’s right to seek any such adjudication or award in arbitration and it shall continue to pay Expense Advances pursuant to Section 3.3 until it shall ultimately be determined (in a Final Adjudication) that Indemnitee is not entitled to be indemnified by the Company against such Expenses.

Section 5.2Adverse Determination Not to Affect any Judicial Proceeding. If a determination shall have been made pursuant to Article IV that Indemnitee is not entitled toindemnification under this Agreement, any judicial proceeding or arbitration commenced pursuant to this Article V shall be conducted in all respects as a de novo trial or arbitration on the merits, and Indemnitee shall not be prejudiced by reason of such initial adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Article V, Indemnitee shall be presumed to be entitled to indemnification or advancement of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proof in overcoming such presumption and to show by clear and convincing evidence that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

Section 5.3Company Bound by Determination Favorable to Indemnitee in any Judicial Proceeding or Arbitration. If a determination shall have been made or deemed to have been made pursuant to Article IV that Indemnitee is entitled to indemnification, the Company shall be irrevocably bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Article V, and shall be precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding and enforceable.

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Section 5.4Company Bound by the Agreement. The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Article V that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. Without limiting the generality of the preceding sentence, the Company shall not seek from a court, or agree to, a “bar order” that would have the effect of prohibiting or limiting Indemnitee’s rights to advancement of any Expenses under this Agreement.

ARTICLE VI 
Contribution

Section 6.1Contribution Payment.

(a)Whether or not the indemnification provided in Article III hereof is available, in respect of any threatened, pending or completed action, suit or Claim in which the Company is jointly liable with Indemnitee (or would be if joined in such action, or Claim), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or Claim without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any action, suit or Claim in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit orClaim) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

(b)Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or Claim in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit orClaim), the Company shall contribute to the amountof Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit orClaim), on the one hand, and Indemnitee, on the other hand, from the transaction or events from which such action, suit or Claim arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit orClaim), on the one hand, and Indemnitee, on the other hand, in connection with the transaction or events that resulted in such Expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered.

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(c)The Company hereby agrees, to the fullest extent permitted by applicable law, to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

(d)To the fullest extent permissible under applicable law and without diminishing or impairing the obligations of the Company set forth in the preceding subparagraphs of this Section 6.1, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Claim in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to suchClaim; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Section 6.2Relative Fault. The relative fault of the Indemnitee, on the one hand, and of the Company and any and all other parties (including officers and directors of the Company other than Indemnitee) who may be at fault with respect to such matter shall be determined (i) by reference to the relative fault of Indemnitee as determined by the court or other governmental agency assessing the contribution amounts or (ii) to the extent such court or other governmental agency does not apportion relative fault, by the Independent Counsel (or such other party which makes a determination under Article IV) after giving effect to, among other things, the degree of which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary, the degree to which their conduct is active or passive, the degree of the knowledge, access to information, and opportunity to prevent or correct the subject matter of the Claims and other relevant equitable considerations of each party. The Company and Indemnitee agree that it would not be just and equitable if contribution pursuant to this Section 6.2 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 6.2.

ARTICLE VII 
Miscellaneous

Section 7.1Non-Exclusivity. The rights of Indemnitee to receive indemnification and advancement of Expenses under this Agreement shall be in addition to, and shall not be deemed exclusive of, any other rights Indemnitee shall under the DGCL or other applicable law, the charter or bylaws of the Company, any other agreement, vote of stockholders or a resolution of directors, or otherwise. Every other right or remedy of Indemnitee shall be cumulative of the rights and remedies granted Indemnitee hereunder. No amendment or alteration of the charter or bylaws of the Company or any provision thereof shall adversely affect Indemnitee’s rights hereunder, and such rights shall be in addition to any rights Indemnitee may have under the charter, bylaws and

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the DGCL or other applicable law. To the extent that there is a change in the DGCL or other applicable law (whether by statute or judicial decision) that allows greater indemnification by agreement than would be afforded currently under the Company’s charter or bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by virtue of this Agreement the greater benefit so afforded by such change. Any amendment, alteration or repeal of the DGCL that adversely affects any right of Indemnitee shall be prospective only and shall not limit or eliminate any such right with respect to any Claim involving any occurrence or alleged occurrence of any action or omission to act that took place before the effective date of such amendment or repeal.

Section 7.2Insurance and Subrogation.

(a)To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, agents or fiduciaries of the Company or for individuals serving at the request of the Company as directors, officers, partners, members, venturers, proprietors, trustees, employees, agents, fiduciaries or similar functionaries of another foreign or domestic corporation, partnership, limited liability company, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee, agent or fiduciary under such policy or policies.

(b)In the event of any payment by the Company under this Agreement for which reimbursement is available under any insurance policy or policies obtained by the Company, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee under such insurance policy or policies, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights, provided that all Expenses relating to such action shall be borne by the Company.

(c)The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under the Company’s charter or bylaws or any insurance policy, contract, agreement or otherwise.

(d)If Indemnitee is a director of the Company, the Company will advise the Board of any proposed material reduction in the coverage for Indemnitee to be provided by the Company’s directors’ and officers’ liability insurance policy and will not effect such a reduction with respect to Indemnitee without the prior approval of at least 80% of the Independent Directors of the Company.

(e)If Indemnitee is a director of the Company during the term of this Agreement and if Indemnitee ceases to be a director of the Company for any reason, the Company shall procure a run-off directors’ and officers’ liability insurance policy with respect to

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claims arising from facts or events that occurred before the time Indemnitee ceased to be a director of the Company and covering Indemnitee, which policy, without any lapse in coverage, will provide coverage for a period of six years after the time Indemnitee ceased to be a director of the Company and will provide coverage (including amount and type of coverage and size of deductibles) that are substantially comparable to the Company’s directors’ and officers’ liability insurance policy that was most protective of Indemnitee in the 12 months preceding the time Indemnitee ceased to be a director of the Company and that is reasonably satisfactory to Indemnitee; provided, however, that:

(i)this obligation shall be suspended during the period immediately following the time Indemnitee ceases to be a director of the Company if and only so long as the Company has a directors’ and officers’ liability insurance policy in effect covering Indemnitee for such claims that, if it were a run-off policy, would meet or exceed the foregoing standards, but in any event this suspension period shall end when a Change in Control occurs; and

(ii)no later than the end of the suspension period provided in the preceding clause (i) (whether because of failure to have a policy meeting the foregoing standards or because a Change in Control occurs), the Company shall procure a run-off directors’ and officers’ liability insurance policy meeting the foregoing standards and lasting for the remainder of the six-year period.

(f)Notwithstanding the preceding clause (e) including the suspension provisions therein, if Indemnitee ceases to be an officer or a director of the Company in connection with a Change in Control or at or during the one-year period following the occurrence of a Change in Control, the Company shall procure a run-off directors’ and officers’ liability insurance policy covering Indemnitee that is reasonably satisfactory to Indemnity, meets the foregoing standards in clause (e), and lasts for a six-year period upon the Indemnitee’s ceasing to be an officer or a director of the Company in such circumstances.

(g)If at the time of the receipt of a notice of a Claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such Claim to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Claim in accordance with the terms of such policies.

Section 7.3Self Insurance of the Company; Other Arrangements. The parties hereto recognize that the Company may, but except as provided in Section 7.2(d), Section 7.2(e), and Section 7.2(f) is not required to, procure or maintain insurance or other similar arrangements, at its expense, to protect itself and any person, including Indemnitee, who is or was a director, officer, employee, agent or fiduciary of the Company or who is or was serving at the request of the Company as a director, officer, partner, member, venturer, proprietor, trustee, employee, agent, fiduciary or similar functionary of another foreign or domestic corporation, partnership, limited

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liability company, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise against any expense, liability or loss asserted against or incurred by such person, in such a capacity or arising out of the person’s status as such a person, whether or not the Company would have the power to indemnify such person against such expense or liability or loss.

Except as provided in Section 7.2(d), Section 7.2(e) and Section 7.2(f), in considering the cost and availability of such insurance, the Company (through the exercise of the business judgment of its directors and officers) may, from time to time, purchase insurance which provides for certain (i) deductibles, (ii) limits on payments required to be made by the insurer, or (iii) coverage which may not be as comprehensive as that previously included in insurance purchased by the Company or its predecessors. The purchase of insurance with deductibles, limits on payments and coverage exclusions, even if in the best interest of the Company, may not be in the best interest of Indemnitee. As to the Company, purchasing insurance with deductibles, limits on payments and coverage exclusions is similar to the Company’s practice of self-insurance in other areas. In order to protect Indemnitee who would otherwise be more fully or entirely covered under such policies, the Company shall, to the maximum extent permitted by applicable law, indemnify and hold Indemnitee harmless to the extent (i) of such deductibles, (ii) of amounts exceeding payments required to be made by an insurer, or (iii) of amounts that prior policies of directors’ and officers’ liability insurance held by the Company or its predecessors have provided for payment to Indemnitee, if by reason of Indemnitee’s Corporate Status Indemnitee is or is threatened to be made a party to anyClaim. The obligation of the Company in the preceding sentence shall be without regard to whether the Company would otherwise be required to indemnify such officer or director under the other provisions of this Agreement, or under any law, agreement, vote of stockholders or directors or other arrangement. Without limiting the generality of any provision of this Agreement, the procedures in Article IV hereof shall, to the extent applicable, be used for determining entitlement to indemnification under this Section 7.3.

Section 7.4Certain Settlement Provisions. The Company shall have no obligation to indemnify Indemnitee under this Agreement for amounts paid in settlement of a Claim without the Company’s prior written consent. The Company shall not settle any Claim in any manner that would impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent. Neither the Company nor Indemnitee shall unreasonably withhold their consent to any proposed settlement.

Section 7.5Duration of Agreement. This Agreement shall continue for so long as Indemnitee serves as a director, officer, employee, agent or fiduciary of the Company or, at the request of the Company, as a director, officer, partner, member, venturer, proprietor, trustee,employee, agent, fiduciary or similar functionary of another foreign or domestic corporation, partnership, limited liability company, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise, and thereafter shall survive until and terminate upon the later to occur of: (a) the expiration of 20 years after the latest date that Indemnitee shall have ceased to serve in any such capacity; (b) the final non-appealable determination or resolution of all pending Claims in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Article IV relating

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thereto; or (c) the expiration of all statutes of limitation applicable to possible Claims arising out of Indemnitee’s Corporate Status.

Section 7.6Notice by Each Party. Indemnitee shall promptly notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document or communication relating to any Claim for which Indemnitee may be entitled to indemnification or advancement of Expenses hereunder; provided, however, that any failure of Indemnitee to so notify the Company shall not adversely affect Indemnitee’s rights under this Agreement except to the extent the Company shall have been materially prejudiced as a direct result of such failure. The Company shall promptly notify Indemnitee in writing as to the pendency of any Claim that may involve a claim against Indemnitee for which Indemnitee may be entitled to indemnification or advancement of Expenses hereunder.

Section 7.7Amendment. This Agreement may not be modified or amended except by a written instrument executed by or on behalf of each of the parties hereto.

Section 7.8Waivers. The observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) by the party entitled to enforce such term only by a writing signed by the party against which such waiver is to be asserted. Unless otherwise expressly provided herein, no delay on the part of any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party hereto of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

Section 7.9Entire Agreement. This Agreement and the documents expressly referred to herein constitute the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby, including without limitation any prior indemnification agreements, are expressly superseded by this Agreement.

Section 7.10Severability. If any provision of this Agreement (including any provision within a single section, paragraph or sentence), or the application of such provision to any Person or circumstance, shall be judicially declared to be invalid, unenforceable or void, such decision will not have the effect of invalidating or voiding the remainder of this Agreement or affect the application of such provision to other Persons or circumstances, it being the intent and agreement of the parties that this Agreement shall be deemed amended by modifying such provision to the extent necessary to render it valid, legal and enforceable while preserving its intent, or if such modification is not possible, by substituting therefor another provision that is valid, legal and enforceable and thatachieves the same objective. Any such finding of invalidity or unenforceability shall not prevent the enforcement of such provision in any other jurisdiction to the maximum extent permitted by applicable law.

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Section 7.11Notices. All notices and other communications hereunder shall be in writing and shall be deemed given upon (a) transmitter’s confirmation of a receipt of a facsimile transmission if during normal business hours of the recipient, otherwise on the next business day, (b) confirmed delivery of a standard overnight courier or when delivered by hand or (c) the expiration of five business days after the date mailed by certified or registered mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice):

If to the Company, to it at:

Reata Pharmaceuticals, Inc.

5320 Legacy Drive

Building 2

Plano, Texas 75024

Attn: Corporate Secretary

Facsimile: 469-442-4740

If to Indemnitee, to Indemnitee at:

or to such other address or to such other individuals as any party shall have last designated by notice to the other parties. All notices and other communications given to any party in accordance with the provisions of this Agreement shall be deemed to have been given when delivered or sent to the intended recipient thereof in accordance with and as provided in the provisions of this Section 7.11.

Section 7.12Governing Law. This Agreement and the legal relations among the parties shall, to the fullest extent permitted by law, be governed by, and construed and enforced in accordance with , the laws of the State of Delaware without regard to its conflict of laws rule.

Section 7.13 Submission to Jurisdiction. The Company and Indemnitee hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in connection with this Agreement (other than an arbitration provided for in Section 5.1) shall be brought only in the Court of Chancery of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (b) consent to submit to the exclusive jurisdiction of the Delaware Court for the purposes of any action or proceeding arising out of or in connection with this Agreement, (c) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (d) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or otherwise inconvenient forum.

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Section 7.14Certain Construction Rules.

(a)The article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. As used in this Agreement, unless otherwise provided to the contrary, (1) all references to days shall be deemed references to calendar days and (2) any reference to a “Section” or “Article” shall be deemed to refer to a section or article of this Agreement. The words “hereof,” “herein” and “hereunder” and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” Unless otherwise specifically provided for herein, the term “or” shall not be deemed to be exclusive. Whenever the context may require, any pronoun used in this Agreement shall include the correspondingmasculine, feminine or neuter forms and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

(b)For purposes of this Agreement, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, nominee, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner the person reasonably believed to be in the interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Company” for purposes of this Agreement and the DGCL.

(c)In the event of a merger, consolidation or amalgamation of the Company with or into any other entity, references to the “Company” shall include the entity surviving or resulting from the merger, consolidation or amalgamation as well as the Company, and Indemnitee shall stand in the same position under this Agreement with respect to the surviving or resulting entity as Indemnitee would stand with respect to the Company if its existence had continued upon and after the merger, consolidation or amalgamation.

Section 7.15Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, notwithstanding that both parties are not signatories to the original or same counterpart.

Section 7.16Certain Persons Not Entitled to Indemnification. Notwithstanding any other provision of this Agreement (but subject to Section 7.1), Indemnitee shall not be entitled to indemnification or advancement of Expenses pursuant to the terms of this Agreement with respect to any Claim, issue or matter therein, brought or made by Indemnitee against the Company, except

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as specifically provided in Article III, Article IV or Section 7.3. In addition, the Company shall not be obligated pursuant to the terms of this Agreement:

(a)To indemnify Indemnitee if (and to the extent that) a final, non-appealable decision by a court or arbitration body having jurisdiction in the matter shall determine that such indemnification is not lawful; or

(b)To indemnify Indemnitee for the payment to the Company of profits pursuant to Section 16(b) of the Exchange Act, or Expenses incurred by Indemnitee for Claims in connection with such payment under Section 16(b) of the Exchange Act.

Section 7.17Indemnification for Negligence, Gross Negligence, etc. Without limiting the generality of any other provision hereunder, it is the express intent of this Agreement that Indemnitee be indemnified and Expenses be advanced regardless of Indemnitee’s acts of negligence, gross negligence, intentional or willful misconduct to the extent that indemnification and advancement of Expenses is allowed pursuant to the terms of this Agreement and under applicable law.

Section 7.18Mutual Acknowledgments. Both the Company and Indemnitee acknowledge that, in certain instances, applicable law (including applicable federal law that may preempt or override applicable state law) or public policy may prohibit the Company from indemnifying the directors, officers, employees, agents or fiduciaries of the Company under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the U.S. Securities and Exchange Commission has taken the position that indemnification of directors, officers and controlling Persons of the Company for liabilities arising under federal securities laws is against public policy and, therefore, unenforceable. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee. In addition, the Company and Indemnitee acknowledge that federal law prohibits indemnifications for certain violations of the Employee Retirement Income Security Act of 1974, as amended.

Section 7.19Enforcement. The Company agrees that its execution of this Agreement shall constitute a stipulation by which it shall be irrevocably bound in any court or arbitration in which a proceeding by Indemnitee for enforcement of Indemnitee’s rights hereunder shall have been commenced, continued or appealed, that its obligations set forth in this Agreement are unique and special, and that failure of the Company to comply with the provisions of this Agreement will cause irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate. As a result, in addition to any other right or remedy Indemnitee may have at law or in equity with respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief directing specific performance by the Company of its obligations under this Agreement. The Company agrees not to seek, and agrees to waive any requirement for the securing or posting of, a bond in connection with Indemnitee’s seeking or obtaining such relief.

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Section 7.20Successors and Assigns. All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators, legal representatives.

Section 7.21Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company or any affiliate of the Company against Indemnitee or Indemnitee’s spouse, heirs, executors, or personal or legal representatives after the expiration of one year from the date of accrual of that cause of action, and any claim or cause of action of the Company or its affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within that one-year period; provided, however, that for any claim based on Indemnitee’s breach of fiduciary duties to the Company or its stockholders, the period set forth in the preceding sentence shall be three years instead of one year; and provided, further, that, if any shorter period of limitations is otherwise applicable to any such cause of action, the shorter period shall govern.

[signatures on following page]

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of the date first above written.

REATA PHARMACEUTICALS, INC.
	By:	/s/ Stephen Harman
		Stephen Harman
		Chief Human Resources Officer
INDEMNITEE:
	By:	/s/ Andrea Loewen- Rodriguez
		Andrea Loewen-Rodriquez

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EX-10.15

Exhibit 10.15

EMPLOYMENT AGREEMENT

by and between

Reata Pharmaceuticals, Inc.

and

Samina Khan

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of the 7th day July of 2020, by and between Reata Pharmaceuticals, Inc., a Delaware corporation (together with its successors and assigns permitted hereunder, the “Company”), and Samina Khan (the “Executive”).

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.Employment Period.  Subject to earlier termination pursuant to Section 3, the Company hereby agrees to employ the Executive, and the Executive hereby agrees to be employed by the Company, in accordance with the terms and provisions of this Agreement, for the period commencing on the date of this Agreement (the “Effective Date”) and ending at the close of business on July 6, 2024 (the “Employment Period”).  Thereafter, such term of employment shall be extended automatically for successive one-year periods (such extended term, the “Additional Employment Period”) unless the Company or Executive provides the other with written notice no less than 30 days prior to the date the Employment Period or the Additional Employment Period, as applicable, would otherwise end either (i) declining to extend such term of employment, or (ii) requesting that the terms of this Agreement are renegotiated prior to the Agreement’s renewal.  If the parties fail to enter into the renegotiation process within 30 days of receipt of such notice, this Agreement will be extended automatically as if such notice was not given.  

2.Terms of Employment.

(a)Position and Duties.

(i)During the Employment Period, or any Additional Employment Period, the Executive shall serve as the Senior Vice President, Chief Medical Officer of the Company and, in so doing, shall report tothe Chief Research and Development Officer of the Company or such other person as shall be designated by the Chief Research and Development Officer.  The Executive shall have supervision and control over, and responsibility for, such management and operational functions of the Company currently assigned to such positions, and shall have such other powers and duties (including holding officer positions with one or more subsidiaries of the Company) as may from time to time be prescribed by the Board of Directors of the Company (the “Board”), so long as such powers and duties are reasonable and customary for the Senior Vice President, Chief Medical Officer of an enterprise comparable to the Company.

(ii)During the Employment Period, or any Additional Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote full business time to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best efforts to perform faithfully

and efficiently such responsibilities. During the Employment Period, or any Additional Employment Period, it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, or (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement.

(b)Compensation.

(i)Base Salary.  During the Employment Period, or any Additional Employment Period, the Executive shall receive an annual base salary of$425,000 (the “Annual Base Salary”), which shall be paid on a semi-monthly basis in accordance with the customary payroll terms, conditions and practices of the Company. During the Employment Period, or any Additional Employment Period, the Annual Base Salary may be reviewed and may be increased from time to time in accordance with the compensation practices and guidelines of the Company for its executives.  Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement.  The term Annual Base Salary as utilized in this Agreement shall refer to the Executive’s Annual Base Salary as so increased.

(ii)Bonus.  In addition to Annual Base Salary, the Executive shall be eligible to receive during the Employment Period, or any Additional Employment Period, an annual bonus (the “Bonus”), such Bonus to be awarded only upon the Company’s attainment of certain milestones to be determined by the Board (or a committee of the Board).  The Bonus, if any, shall be payable annually to the Executive consistent with the practices for executives of the Company.  The Executive’s target bonus (“Target Bonus”) will be 35% of the Executive’s Annual Base Salary.

(iii)Incentive, Savings and Retirement Plans.  During the Employment Period, or any Additional Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other executives of the Company (the “Investment Plans”).

(iv)Welfare Benefit Plans.  During the Employment Period, or any Additional Employment Period, the Executive and/or the Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs (the “Welfare Plans”) provided generally to other executives of the Company.  In the event of a Change in Control, for a period of two years following the occurrence of the Change in Control, the Company, or its successor, will continue to provide the Executive and/or the Executive’s family, as the case may be, benefits that are not materially diminished, taken as a whole, from the benefits provided to the Executive and/or the Executive’s family, as the case may be, under the Welfare Plans in effect immediately prior to the Change in Control.  

(v)Expenses.  During the Employment Period, or any Additional Employment Period, the Executive shall be entitled to receive prompt reimbursement for

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all reasonable expenses incurred by the Executive on behalf of the Company in accordance with the policies, practices and procedures of the Company, which provide an objectively determinable nondiscretionary definition of the expenses eligible for reimbursement.  Notwithstanding any provision of this Agreement to the contrary, (A) the amount of expenses eligible to receive reimbursement during any calendar year shall not affect the amount of expenses for which the Executive is eligible to receive reimbursement during any other calendar year within the Employment Period, or any Additional Employment Period, (B) the reimbursement of expenses under this Section 2(b)(v) shall be made on or before the last day of the calendar year following the calendar year in which the expense was incurred and (C) the Executive will not receive a payment or other benefit in lieu of reimbursement under this Section 2(b)(v).  

(vi)Vacation and Holidays.  During the Employment Period, or any Additional Employment Period, the Executive shall be entitled to paid vacation and paid holidays in accordance with the plans, policies, programs and practices of the Company for its executives.

3.Termination of Employment.

(a)Death or Disability.  The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period, or any Additional Employment Period.  If a Disability (as defined below) of the Executive has occurred during the Employment Period, or any Additional Employment Period, and subject to Executive’s rights, if any, under the Family Medical Leave Act, Americans with Disabilities Act or similar local, state or federal law, the Company may give to the Executive written notice of its intention to terminate the Executive’s employment.  In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”), provided, that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive’s duties.  For purposes of this Agreement, “Disability” shall mean that the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.  

(b)Cause.  The Company may terminate the Executive’s employment during the Employment Period, or any Additional Employment Period, for Cause or without Cause.  For purposes of this Agreement, “Cause” shall mean:

(i)commission by the Executive of an act of fraud upon, or willful misconduct toward, the Company;  

(ii)a material breach by the Executive of the noncompetition provisions of Section 5 or of the Employee Confidentiality, Nondisclosure, Intellectual Property and Nonsolicitation Agreement described in Section 6;

(iii)the conviction of the Executive of any felony (or a plea of nolocontendere thereto); or

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(iv)the Executive’s addiction to alcohol, drugs or any other controlled substance.

Upon the occurrence of any event described in Section 3(b), the Company may terminate Executive’s employment hereunder for Cause by giving Executive a Notice of Termination to that effect as provided in Section 3(d) within 30 days after the occurrence of the event giving rise to Cause that specifies the date of Executive’s termination (which may be the date the Notice of Termination is delivered) and describes in reasonable detail the facts or circumstances giving rise to the Company’s right to terminate Executive’s employment for Cause (and, if applicable, the action required to cure same).  If the effect of the occurrence of the event described in Section 3(b) may be cured, Executive shall have the opportunity to cure any such effect for a period of 30 days following receipt of the Company’s Notice of Termination.  If, within 30 days following Executive’s receipt of a Notice of Termination for Cause, (A) Executive delivers written notice to the Company denying that Cause exists, the question of the existence or nonexistence of Cause will be subject to the dispute resolution procedure set forth in Section 9(f); or (B) Executive has not cured the facts or circumstances giving rise to the Company’s right to terminate Executive’s employment for Cause and shall not have delivered a notice pursuant to clause (A) herein, then Executive’s termination for Cause shall be effective as of the date specified in the Company’s Notice of Termination (which date may not be earlier than the date the Notice of Termination is delivered to Executive).  If the Company does not give a Notice of Termination to Executive within 30 days after learning of the occurrence of an event giving rise to Cause, then this Agreement will remain in effect, and Executive may not be terminated for Cause based on the occurrence of the event that gave rise to Cause; provided, however, that the failure of the Company to terminate the Executive’s employment for Cause shall not be deemed a waiver of the Company’s right to terminate Executive’s employment for Cause upon the occurrence of a subsequent event described in Section 3(b) in accordance with the terms of this Agreement.  Notwithstanding the foregoing, the right of the Company to terminate Executive’s employment for Cause under this Section 3(b) shall not limit Executive’s right to terminate his employment for Good Reason under Section 3(c) if Good Reason is determined to exist prior to the time Cause is determined to exist.

(c)Good Reason.  The Executive’s employment may be terminated during the Employment Period, or any Additional Employment Period, by the Executive for Good Reason or without Good Reason.  For purposes of this Agreement, “Good Reason” shall mean, without the express written consent of the Executive, the occurrence of any of the following:

(i)a material diminution in the Executive’s base compensation;

(ii)a material diminution in the Executive’s authority, duties or responsibilities; provided, however, following a Change in Control, the Executive’s authority, duties and responsibilities shall be deemed to have been materially diminished (even though his authority, duties and responsibilities have not actually been materially diminished) if, within two years after the Change in Control, the Executive is required to report to an executive of the parent company of the Company, or its successor, who is not serving as a senior vice president (or in a similar or higher position) of such parent company;

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(iii)a material diminution in the authority, duties or responsibilities of the supervisor to whom the Executive is required to report;  provided, however, that, except as provided in Section 3(c)(ii), a change in the person to whom the Executive shall report pursuant to Section 2(a)(i) shall not be or constitute Good Reason;

(iv)a material diminution in the budget over which the Executive retains authority;

(v)a  change in the geographic location at which the Executive must perform services of more than 50  miles in radius from such location as of the date of this Agreement; or

(vi)any other action or inaction that constitutes a material breach by the Company of this Agreement.    

In the case of the Executive’s allegation of Good Reason, (A) the Executive shall provide notice to the Company of the event alleged to constitute Good Reason within 90 days after the occurrence of such event (such notice the “Notice of Good Reason,”) and (B) the Company shall have the opportunity to remedy the alleged Good Reason event within 30 days after receipt of notice of such allegation (the “Cure Period”).  If, within the Cure Period, the Company delivers written notice to the Executive denying that Good Reason exists, the question of the existence or nonexistence of Good Reason will be subject to the dispute resolution procedure set forth in Section 9(f).  In the event the Company has not cured the facts or circumstances giving rise to the Executive’s right to terminate the Executive’s employment for Good Reason during the Cure Period and shall not have delivered a notice pursuant to the preceding sentence, then the Executive’s employment hereunder will be terminated for Good Reason on the 31^st day following the Cure Period.  If the Executive does not give a Notice of Good Reason to the Company within 90 days after learning of the occurrence of an event giving rise to Good Reason, then this Agreement will remain in effect, and Executive may not terminate his employment for Good Reason based on the occurrence of the event that gave rise to Good Reason; provided, however, that the failure of the Executive to provide a Notice of Good Reason or terminate the Executive’s employment for Good Reason shall not be deemed a waiver of the Executive’s right to terminate the Executive’s employment for Good Reason upon the occurrence of a subsequent event described in Section 3(c) in accordance with the terms of this Agreement.  Notwithstanding anything to the contrary contained herein, any isolated, insubstantial and inadvertent action not taken in bad faith and that is remedied by the Company promptly after receipt of notice thereof given by the Executive shall not be or constitute Good Reason.

(d)Notice of Termination.  Any termination by the Company for Cause or without Cause, or by the Executive for Good Reason or without Good Reason, shall be communicated by a Notice of Termination to the other party hereto.  For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) other than with respect to a termination by the Executive for Good Reason, if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date, except for

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a termination of Executive’s employment due to a Disability, shall not be more than 15 days after the giving of such notice or the date the applicable cure period expires, whichever is later).  The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

(e)Date of Termination.  “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, or by the Executive without Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, (ii) if the Executive’s employment is terminated by the Executive for Good Reason, the 31^st day following receipt by the Company of the Notice of Good Reason (provided the Company does not otherwise remedy the alleged Good Reason event within the Cure Period), (iii) if the Executive’s employment is terminated by the Company without Cause, the date on which the Company notifies the Executive of such termination (unless a later date is specified in the Notice of Termination, in which case the Executive’s employment will be terminated on such later date), and (iv) if the Executive dies or incurs a Disability, the date of death of the Executive or the Disability Effective Date, as the case may be.  If the Executive is a member of the Board, any continuation of the Executive’s service to the Company as a member of the Board on or after the Executive’s termination of employment shall not result in any deferral of the Date of Termination.  

4.Obligations of the Company upon Termination.

(a)Termination by the Company for Cause or by the Executive other than for Good Reason.  If, during the Employment Period, or any Additional Employment Period,  the Executive’s employment with the Company is terminated by the Company for Cause or by the Executive other than for Good Reason (and not due to death or Disability), the Company shall have no further payment obligations to the Executive or his legal representatives under this Agreement, other than for:

(i)to the extent not theretofore paid, the sum of (w) the Executive’s Annual Base Salary earned through the Date of Termination, (x) the Bonus for the fiscal year ending immediately prior to the Date of Termination, (y)  compensation previously deferred by the Executive (together with any accrued interest or earnings thereon), and (z) any accrued and unused vacation pay through the Date of Termination (the “Accrued Obligations”), which sum shall be paid within 15 days following the Date of Termination; and

(ii)to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive and/or the Executive’s family any other amounts or benefits required to be paid or provided or which the Executive and/or the Executive’s family is eligible to receive pursuant to this Agreement and under any plan, program, policy or practice or contract or agreement of the Company (“Other Benefits”).

(b)Death or Disability prior to, or more than two years after, a Change in Control.  Upon the Executive’s death or Disability during the Employment Period, or any

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Additional Employment Period, but prior to the occurrence of a Change in Control or more than two years after the occurrence of a Change in Control, the Company shall have no further payment obligations to the Executive or his legal representatives under this Agreement, other than for (i) payment of the Accrued Obligations (within 15 days following the Date of Termination) and Other Benefits; (ii) payment of a lump sum cash amount equal to 9 months of the Executive’s current Annual Base Salary, payable on the next payroll date immediately following the eighth day following the delivery to the Company of a properly executed Release in accordance with Section 4(f) of this Agreement;  (iii) Welfare Benefit Continuation as defined, and pursuant to the terms and in the manner described, in Section 4(d)(ii) up to the 9 month, rather than the 24 month, anniversary of the Date of Termination; and (iv) subject to Section 4(f), all equity awards granted by the Company to, or otherwise held by, the Executive shall immediately vest in full and any repurchase provisions (other than fair market value repurchase provisions) shall lapse and may be exercised and/or settled in accordance with the terms of the applicable plan or award agreement; provided, however, the Executive may elect, and the Company will allow, the payment of the exercise price of any outstanding stock options, and the satisfaction of any required tax withholding with respect to any outstanding stock option or other equity award, through the withholding of shares otherwise issuable to the Executive pursuant to the stock option or other equity award.

(c)Certain Terminations more than six months prior to, or more than two years after, a Change in Control by the Company other than for Cause or by Executive for Good Reason.  If, during the Employment Period, or any Additional Employment Period, but more than six months  prior to, or more than two years after, the occurrence of a Change in Control, the Executive’s employment with the Company is terminated by the Company for any reason other than for Cause (and not due to death or Disability) or by the Executive for Good Reason, the Executive will be entitled to (i) the Accrued Obligations and Other Benefits, payable in accordance with Section 4(a)(i) and (ii), (ii) subject to Sections 4(f) and (h), a lump sum cash amount equal to 9 months of the Executive’s current Annual Base Salary, payable on the next payroll date immediately following the eighth day following the Executive’s delivery to the Company of a properly executed Release in accordance with Section 4(f) of this Agreement, and (iii) Welfare Benefit Continuation as defined, and pursuant to the terms and in the manner described, in Section 4(d)(ii) up to the 9 month, rather than the 24 month, anniversary of the Date of Termination.   In addition, notwithstanding the provisions of any applicable plan or agreement and subject to Section 4(f), equity awards held by the Executive that otherwise would have been forfeited will continue to remain outstanding, unvested (and will not continue vesting) and subject to forfeiture for a period of six months following the Date of Termination (such equity awards, the “Unvested Equity Awards”).  If a Change in Control occurs during such six month period the Unvested Equity Awards will vest in accordance with Section 4(d)(v).  If a Change in Control does not occur during such six month period, the Unvested Equity Awards will be forfeited immediately following such six month period. The Executive may elect, and the Company will allow, the payment of the exercise price of any outstanding vested stock options, and the satisfaction of any required tax withholding with respect to any vested outstanding stock option or other equity award, through the withholding of shares otherwise issuable to the Executive pursuant to the stock option or other equity award.    

(d)Certain Terminations within six months prior to, or within two years following, a Change in Control.  In the event that the Executive’s employment is terminated  by

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the Company for any reason other than Cause or by the Executive for Good Reason or the Executive dies or incurs a Disability, in each case, during the Employment Period, or any Additional Employment Period, and such termination occurs within six months prior to (excluding death or Disability), or within two years after, a Change in Control, the following provisions shall apply and Sections 4(b) and (c) shall not be applicable until Section 4(d) is no longer applicable:  

(i)The Company shall pay to the Executive (A) the Accrued Obligations within 15 days following the Date of Termination, and (B) subject to Sections 4(f) and 4(g), a lump sum cash amount equal to two times the Executive’s then current Annual Base Salary, such sum to be paid on the next payroll date immediately following the eighth day following the Executive’s delivery to the Company of a properly executed Release in accordance with Section 4(f) of this Agreement.

(ii)Until the earlier to occur of (A) the 24 month anniversary of the Date of Termination or (B) the Executive’s acceptance of full-time employment with another entity, the Company shall continue benefits provided under Welfare Plans to the Executive and/or the Executive’s family at least equal to those that would have been provided to them if the Executive’s employment had not been terminated (“Welfare Benefit Continuation”) pursuant to an in-kind benefit arrangement that satisfies the requirements of Treasury Regulation § 1.409A-3(i)(1)(iv)(A), and the Company-provided costs of such Welfare Benefit Continuation will be imputed as income to the Executive and reported on Form W-2; provided, that in the event the Company is unable to provide the Welfare Benefit Continuation under its Welfare Plans or to the extent such Welfare Benefit Continuation would subject the Company to negative tax consequences, the Company will reimburse the Executive for amounts necessary to enable the Executive to obtain similar benefits, and any such reimbursement will be made in accordance with the provisions of Treasury Regulation § 1.409A-3(i)(1)(iv).  Such Welfare Benefit Continuation provided in this Section 4(d)(ii) is in addition to any rights Executive may have to continue such coverages under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).  The COBRA continuation period shall begin on the day following the end of the Welfare Benefit Continuation period provided in this Section 4(d)(ii).

(iii)Subject to Section 4(f), notwithstanding the provisions of any applicable plan or agreement, all equity awards granted by the Company to, or otherwise held by, the Executive shall immediately vest in full and any repurchase provisions (other than fair market value repurchase provisions) will lapse and such awards may be exercised and/or settled in accordance with the terms of the applicable plan or award agreement; provided, however, the Executive may elect, and the Company will allow, the exercise of any outstanding stock options, and the satisfaction of any required tax withholding with respect to any outstanding stock option or other equity award, through the withholding of shares otherwise issuable to the Executive pursuant to the stock option or other equity award.  

(iv)To the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive and/or the Executive’s family the Other Benefits.

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(v)If the Executive’s employment is terminated within six months prior to a Change in Control and the provisions of Section 4(d) apply, but the provisions of Section 4(b) or 4(c) were initially applied, then, subject to Section 4(f), upon the Change in Control, the Company shall pay, no later than the first payroll date following such Change in Control, additional payments and provide additional benefits and vesting in order to provide the Executive the payments, benefits and vesting as set forth in Section 4(d). The post employment exercise period for stock options under the Equity Documents shall be measured from the date of the Change in Control.

(e)In addition, upon a Change in Control, if the Executive’s employment with the Company (or its successor) continues following the Change in Control, any outstanding equity awards that are not vested on the date of the Change in Control shall become vested and, as applicable, exercisable with respect to one-eighteenth of all such unvested equity awards on the one month anniversary of the Change in Control and thereafter with respect to an additional one-eighteenth of all unvested equity awards at the time of the Change in Control on each  subsequent month anniversary of the Change in Control such that the equity awards will be 100% vested and, as applicable, exercisable on the eighteen month anniversary of the Change in Control; provided, however, that if 100% of the equity awards would otherwise become vested pursuant to the vesting rules stated above or in the Equity Documents prior to the eighteen month anniversary of the date of the Change in Control, then the equity awards will become vested and, as applicable, exercisable in accordance with such vesting rules or Equity Documents.  For purposes of this Agreement, “Change in Control” means the occurrence of any of the following events:

(i)The Company is not the surviving entity in any merger or consolidation (or survives only as a subsidiary of an entity other than a previously wholly owned subsidiary of the Company) and as a result of such merger or consolidation, stockholders of the Company immediately prior to such merger cease to own more than 50% of the outstanding capital stock of the surviving corporation determined on a fully diluted basis;  

(ii)The Company sells, leases, or exchanges or agrees to sell, lease, or exchange more than 50% of its assets to any other person or entity (other than a wholly owned subsidiary of the Company);

(iii)The Company is to be dissolved and liquidated (in a dissolution taxed under Section 331 of the Internal Revenue Code of 1986, as amended (the “Code”));

(iv)Any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote), directly, by merger or otherwise,  of more than 50% of the outstanding shares of the Company’s voting stock (based upon voting power) and as a result of such acquisition, the stockholders holding a majority of the capital stock of the Company receive cash or marketable securities for their shares of capital stock; or

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(v)As a result of or in connection with a contested election of directors, the persons who were directors before such election will cease to constitute a majority of the Board.

Notwithstanding the foregoing definition of Change in Control (other than clause (iii) of such definition), a Change in Control shall only be deemed to occur upon a “change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company” under Section 409A of the Code.

(f)Release.  Notwithstanding any other provision in this Agreement to the contrary, in consideration for receiving the accelerated vesting described in Sections 4(b) or 4(d) and the payments described in Section 4(b)(ii), Section 4(c)(ii) or Section 4(d)(i)(B), the Executive hereby agrees to execute (and not revoke) a release agreement in the form attached hereto as Exhibit A (the “Release”) within 60 days of the Date of Termination.  If the Executive fails to properly execute and timely deliver the Release (or revokes the Release), the Executive agrees that the Executive shall not be entitled to receive the accelerated vesting described in Sections 4(b) or 4(d) and the payments described in Section 4(b)(ii), Section 4(c)(ii) or Section 4(d)(i)(B).  For purposes of this Agreement, the Release shall be considered to have been executed by the Executive if it is signed by the Executive’s legal representative (in the case of the Executive’s incapacity due to physical or mental illness) or on behalf of the Executive’s estate (in the case of the Executive’s death).  

(g)Specified Employee Provisions.  For purposes of determining the time of payment of any severance payable pursuant to Section 4(b)(ii), Section 4(c)(ii) and Section 4(d)(i)(B), and the timely return of the Release in accordance with Section 4(f), the Date of Termination shall be the date that the Executive incurs a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h).  To the extent the Executive’s “separation from service” is within the 60 day period ending on December 31 of any calendar year, the severance payable pursuant to Section 4(b)(ii), Section 4(c)(ii) and Section 4(d)(i)(B) will be paid no earlier than the first business day of the following calendar year.  In the event the Executive is determined, in accordance with the methods specified in the regulations issued under Section 409A of the Code, to be a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code) of the Company at the time of the Executive’s “separation from service” (within the meaning of Section 409A(a)(2)(A)(i) of the Code and the applicable regulations and administrative guidance issued thereunder) then, in-lieu of providing Welfare Benefit Continuation pursuant to this Section 4 with respect to benefits that would not constitute medical expenses deductible under section 213 of the Code (disregarding the requirement of section 213(a) of the Code that the deduction is available only to the extent that such expenses exceed 7.5 percent of adjusted gross income) (“Non-Medical Continuation Benefits”), during the six month period following Executive’s “separation from service,” the Company shall pay to the Executive an amount equal to the Company-provided costs of such Non-Medical Continuation Benefits in a single lump sum payment on the first day of the seventh month following the Executive’s “separation from service.”  Nothing in this Section 4(g) will impact the obligation of the Company to provide Welfare Benefit Continuation as provided in this Section 4 with respect to Welfare Benefits other than Non-Medical Continuation Benefits or to provide Non-Medical Continuation Benefits following the six month period following Executive’s “separation from service.”  This Section 4(g) will have no effect with respect to benefits payable pursuant to this Agreement due to the Executive’s Disability.  

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5.Restrictive Covenants.

(a)Confidential Information; Assignment of Rights to Intellectual Property.  

(i)The Executive hereby recognizes and acknowledges that the business of the Company and its Affiliates is highly competitive and that certain information related to their business, including, without limitation, their plans, strategies, research and development, testing methods, clinical trial results, costs, prices, business methods, customer names and needs, prospect names and needs, names of referral sources, identity of contact persons, marketing plans, reports, manuals, methods, costing procedures, information relating to the services provided, developed, used or in the process of development, their services, customer-related lists and other customer information, formatting and programming concepts and plans, computer programs, simulations, data bases, pricing policies, financial information, methods of doing business, policy and/or procedure manuals, training and recruiting procedures, accounting procedures, the status and content of their contracts with their customers, the identity and performance of their employees, their business philosophy, and servicing methods and techniques at any time used, developed, or investigated by them, which are not generally known by or available to the public or which are maintained as confidential by them, comprises confidential or proprietary business information that is a valuable, special, and unique asset of the Company and its Affiliates, that such confidential or proprietary information has been developed through their expenditure of substantial time and money, and that all such confidential or proprietary information could be used by the Executive and others to compete unfairly with them (all such information is jointly referred to herein as “Confidential Information and Trade Secrets”).  The Executive hereby agrees that the Confidential Information and Trade Secrets shall constitute trade secrets, and further agrees not to use or disclose such information except as required to do so by subpoena or other legal process (after the Company has been given reasonable notice and opportunity to seek relief from such subpoena or other legal process). The Executive also agrees to maintain in confidence any confidential or proprietary information of third parties that the Executive received during the course of and as a result of the Executive’s employment with the Company and its Affiliates.  No information otherwise in the public domain (other than by an act of the Executive in violation hereof) shall be considered Confidential Information and Trade Secrets.  The Executive understands that the restrictions set forth in this Section 5(a)(i) shall continue to apply following the Executive’s termination of employment with the Company, regardless of the reason for such termination.

(ii)All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company and any copies, in whole or in part, thereof (“Documents”), whether or not prepared by the Executive, shall be the sole and exclusive property of the Company.  The Executive shall safeguard all Documents and shall surrender to the Company all Documents in Executive’s possession or control at the time Executive’s employment terminates, or at such earlier time or times as the Company may specify.  

(iii)The Executive shall promptly and fully disclose all Intellectual Property to the Company.  “Intellectual Property” means all information, ideas, concepts,

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improvements, discoveries and inventions, whether patentable or not, and whether or not reduced to practice, that are conceived, developed, made or acquired by the Company, either individually or jointly with others, and that relate to the past, present or anticipated business of the Company, irrespective of whether the Executive utilized the Company’s time or facilities and irrespective of whether such information, ideas, concepts, improvements, discoveries and inventions were conceived, developed, discovered or acquired by the Executive on the job, at home or elsewhere.  The Executive hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Executive’s full right, title and interest in and to all Intellectual Property.  The Executive agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights (including, without limitation, the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property.  The Executive will not charge the Company for time spent in complying with any such obligation to execute.  The Executive will, at the Company’s expense, take such other actions as the Company may reasonably request to so assign or enforce such Intellectual Property.  All copyrightable Intellectual Property that Executive created during Executive’s employment is considered “work made for hire.”

(b)Non-Competition; Non-Solicitation.

(i)The Company hereby makes a binding promise not conditioned upon continued employment to provide the Executive with Confidential Information and Trade Secrets above and beyond any Confidential Information and Trade Secrets the Executive may have previously received.  In order in part to protect the Confidential Information and Trade Secrets, and as part of the consideration for the payments described in Section 4 of this Agreement, the Company and the Executive agree to the provisions of this Section 5(b).  As a part of the employment relationship, the Executive learned of and the Company disclosed to the Executive Confidential Information and Trade Secrets.  Accordingly, the Executive hereby agrees that, for one year after the Executive ceases to provide services to the Company, the Executive will not:

A.directly or indirectly, individually or as an officer, director, employee, stockholder, consultant, contractor, partner, joint venturer, agent, equity owner or in any capacity whatsoever, (1) engage in any Competing Business (as hereinafter defined) or (2) divert or take away any customers of the Company or its Affiliates.  Notwithstanding the foregoing, the Company agrees that the Executive may own less than five percent of the outstanding voting securities of any publicly traded company that is a Competing Business so long as the Executive does not otherwise participate in such Competing Business in any way prohibited by the preceding clause;

B.use Executive’s access to, knowledge of, or application of Confidential Information and Trade Secrets to perform any duty for any Competing Business; it being understood and agreed to that this Section 5(b)(i)(B) shall be in addition to and not be construed as a limitation upon the covenants in Section 5(a);

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C.directly or indirectly, for Executive or for others, recruit, solicit or induce any employee of the Company or its Affiliates to terminate his or her employment with the Company or its Affiliates, or hire or assist in the hiring of any such employee by a Person not affiliated with the Company or its Affiliates; or

D.induce or attempt to induce any customer, client, supplier, service provider, researcher, scientist or other business relation of the Company or its Affiliates to cease doing business with the Company or its Affiliates, or in any way interfere with the relationship between the Company and any such Person.

(ii)The restrictions in this Section 5(b) shall be in addition to any restrictions imposed upon the Executive by statute or at common law.

(iii)“Competing Business” means any business that researches, develops, manufactures, markets, licenses or sells (A) antioxidant inflammation modulators that target Keap 1 and activate Nrf2 or have similar mechanisms of action or (B) any other product, compound, or agent having the same or similar mechanisms of action as any product, compound or agent that is being actively developed, manufactured, marketed, licensed or sold by the Company at the Date of Termination.

(iv)“Affiliate” means, with respect to the Company or any other specified Person, any other Person directly or indirectly controlling, controlled by or under common control with the Company or such other specified Person, where control may be by management authority, equity interest or other means.

(v)“Person” means any person or entity of any nature whatsoever, specifically including an individual, a firm, a company, a corporation, a partnership, a limited liability company, a trust or other entity.

(c)Scope of Prohibited Activities.  The parties hereby acknowledge that the restrictions in this Section 5 have been specifically negotiated and agreed to by the parties hereto and are limited only to those restrictions necessary to protect the Company from unfair competition and to protect the Confidential Information and Trade Secrets and the business and goodwill of the Company and its Affiliates.  The parties hereby agree that if the scope or enforceability of any provision, paragraph or subparagraph of this Section 5 is in any way disputed at any time, and should a court find that such restrictions are overly broad, the court may modify and enforce the covenant to the extent that it believes to be reasonable under the circumstances.  Each provision, paragraph and subparagraph of the Section 5 is separable from every other provision, paragraph, and subparagraph and constitutes a separate and distinct covenant.  Nevertheless, the Executive agrees that the enforcement of the restrictions in this Section 5 would not cause the Executive any undue hardship or unreasonably interfere with Executive’s ability to earn a livelihood.  

(d)Non-Disparagement.  The Executive and the Company each agree to refrain from engaging in any conduct, or from making any comments or statements, which have the purpose or effect of harming the Executive’s reputation or goodwill, on the one hand, or the reputation or goodwill of the Company or any of its Affiliates, employees, directors or stockholders, on the other hand.

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6.Full Settlement.  The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others.  In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. Neither the Executive nor the Company shall be liable to the other party for any damages in addition to the amounts payable under Section 4 hereof arising out of the termination of the Executive’s employment prior to the end of the Employment Period, or any Additional Employment Period; provided, however, that the Company shall be entitled to seek damages for any breach of the noncompetition provisions of Section 5 hereof or of the Employee Confidentiality, Nondisclosure, Intellectual Property and Nonsolicitation Agreement, dated July 7, 2020 by and between the Executive and the Company.

7.Successors.

(a)This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

(b)This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, pursuant to a Change in Control or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

8.Effect of Agreement on Other Benefits.  The existence of this Agreement shall not prohibit or restrict the Executive’s entitlement to full participation in the executive compensation, executive benefit and other plans or programs in which executives of the Company are eligible to participate.

9.Miscellaneous.

(a)This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without reference to principles of conflict of laws.  The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.  This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b)All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

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If to the Executive:	Samina Khan
If to the Company:	Reata Pharmaceuticals, Inc.
	5320 Legacy Drive, Building 2
	Plano, Texas 75024
	Attention:  Chief Human Resources Officer

or to such other address as either party shall have furnished to the other in writing in accordance herewith.  Notice and communications shall be effective when actually received by the addressee.

(c)If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement.  Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

(d)The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e)The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or of any other provision or right of this Agreement.

(f)If any dispute arises out of this Agreement, the “complaining party” shall give the “other party” written notice of such dispute.  The other party shall have 10 business days to resolve the dispute to the complaining party’s satisfaction.  If the dispute is not resolved by the end of such period, either disputing party may require the other to submit to non-binding mediation with the assistance of a neutral, unaffiliated mediator.  If the parties encounter difficulty in agreeing upon a neutral unaffiliated mediator, they shall seek the assistance of the American Arbitration Association in the selection process.  If mediation is unsuccessful or if mediation has not commenced, in either case within 30 days after the other party received the notice of dispute, the complaining party may by written notice (the “Notice”) demand arbitration of the dispute as set out below, and each party hereto expressly agrees to submit to, and be bound by, such arbitration.

(i)Each party will, within 10 business days of the Notice, nominate an arbitrator, who shall be a non-neutral arbitrator.  Each nominated arbitrator must be someone experienced in dispute resolution and of good character without moral turpitude and not within the employ or direct or indirect influence of the nominating party.  The two

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nominated arbitrators will, within 10 business days of nomination, agree upon a third arbitrator, who shall be neutral.  If the two appointed arbitrators cannot agree on a third arbitrator within such period, the parties may seek such an appointment through any permitted court proceeding or by the American Arbitration Association (“AAA”).  The three arbitrators will set the rules and timing of the arbitration, but will generally follow the rules of the AAA and this Agreement where same are applicable and shall provide for a reasoned opinion.

(ii)The arbitration hearing will in no event take place more than 180 days after the appointment of the third arbitrator.

(iii)The mediation and the arbitration will take place in Irving, Texas unless otherwise unanimously agreed to by the parties.

(iv)The results of the arbitration and the decision of the arbitrators will be final and binding on the parties and each party agrees and acknowledges that these results shall be enforceable in a court of law.

(v)All costs and expenses of the mediation and arbitration shall be born equally by the Company and the Executive.  The Arbitrator shall award the prevailing party its reasonable attorneys fees incurred in connection with the dispute.

(g)The Company and the Executive hereby agree that Sections 4, 5, 6, 7, 8 and 9, shall survive the expiration of the Employment Period, and any Additional Employment Period, in accordance with their terms.

(h)The parties hereto intend that any amounts payable hereunder comply with or are exempt from Section 409A of the Code (“Section 409A”) (including under Treasury Regulation §§ 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exceptions under subparagraph (iii) and subparagraph (v)(D)) and other applicable provisions of Treasury Regulation §§ 1.409A-1 through A-6).  For purposes of Section 409A, each of the payments that may be made under this Agreement shall be deemed to be a separate payment for purposes of Section 409A.  This Agreement shall be administered, interpreted and construed in a manner that does not result in the imposition of additional taxes, penalties or interest under Section 409A.  The Company and the Executive agree to negotiate in good faith to make amendments to the Agreement, as the parties mutually agree are necessary or desirable to avoid the imposition of taxes, penalties or interest under Section 409A.  Neither the Company nor the Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.

(i)The parties hereto agree that, in the event of any conflict or inconsistency between this Agreement and the terms of any equity award agreement, this Agreement shall govern and shall supersede the terms of the equity award agreement. The parties hereto agree that, in the event of any conflict or inconsistency between this Agreement and the plan document governing any equity award, the terms of the plan document shall control and, if necessary, this Agreement shall be deemed amended so as to carry out the purpose and intent of the plan document.  In the event of any inconsistency between any provision of this Agreement and any provision of any

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employee handbook, personnel manual, program, policy, or arrangement of the Company or any of its Affiliates, or any provision of any agreement, plan, or corporate governance document of any of them (other than the terms of the plan document governing any equity award), the provisions of this Agreement shall control unless the Executive otherwise agrees in a signed writing that expressly refers to the provision whose control the Executive is waiving.  The Company agrees not to impose any restrictions, enforceable by injunction, on Executive’s post-employment activities, other than those expressly set forth in this Agreement.

(j)Each party hereto agrees with the other party hereto that it will cooperate with such other party and will execute and deliver, or cause to be executed and delivered, all such other instruments and documents, and will take such other actions, as such other party may reasonably request from time to time to effectuate the provisions and purpose of this Agreement.

(k)The provisions of this Agreement constitute the complete understanding and agreement among the parties with respect to the subject matter hereof.

(l)This Agreement may be executed in two or more counterparts.

(m)    Protected Rights. The Executive understands, and the Company agrees, that nothing contained in this Agreement, or any other agreement between the Executive and the Company, limits the Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). The Executive further understands, and the Company agrees, that this Agreement, and any other agreement between the Executive and the Company, does not limit the Executive’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information to the Government Agency, without notice to the Company. The Executive further understands, and the Company agrees, that this Agreement, and any other agreement between the Executive and the Company, does not limit the Executive’s right to receive an award for information provided to any Government Agency.

The Executive may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. Further, if the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose the Company’s trade secrets to the attorney and use the trade secret information in the court proceeding if the Executive: (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from its Board, the Company has caused this Agreement to be executed in its name on its behalf, as of the date first written above.

EXECUTIVE
By:	/s/ Samina Khan
	Samina Khan

REATA PHARMACEUTICALS, INC.
By:	/s/ Stephen Harman
	Stephen Harman Chief Human Resources Officer

S-1

EXHIBIT A

RELEASE

This Release (“Release”) is entered into between you, the undersigned employee, and Reata Pharmaceuticals, Inc., a Delaware corporation (the “Company”), in connection with the Employment Agreement between you and the Company dated as of _________, ____ (the “Employment Agreement”).  You have __days to consider this Release, which you agree is a reasonable amount of time.  In order to receive the consideration set forth in Section 2 below, you must return this Release to the Company on or before ____________, ____.

1.Definitions.

(a)“Released Parties” means the Company and its past, present and future parents, subsidiaries, divisions, successors, predecessors, employee benefit plans and affiliated or related companies, and also each of the foregoing entities’ past, present and future owners, officers, directors, stockholders, investors, partners, managers, principals, members, committees, administrators, sponsors, executors, trustees, fiduciaries, employees, agents, assigns, representatives and attorneys, in their personal and representative capacities.  Each of the Released Parties is an intended beneficiary of this Release.

(b)“Claims” means all theories of recovery of whatever nature, whether known or unknown, recognized by the law or equity of any jurisdiction.  It includes but is not limited to any and all actions, causes of action, lawsuits, claims, complaints, petitions, charges, demands, liabilities, indebtedness, losses, damages, rights and judgments in which you have had or may have an interest.  It also includes but is not limited to any claim for wages, benefits or other compensation; provided, however that nothing in this Release will affect your entitlement to any of the following, none of which shall be deemed to be a Claim: (i) benefits pursuant to the terms of any employee benefit plan (as defined in the Employee Retirement Income Security Act of 1974, as amended) sponsored by the Company in which you are a participant; (ii) outstanding equity compensation awards previously granted to you pursuant to any equity compensation plan sponsored by the Company (the “Equity Plan and Equity Awards”); (iii)to enforce your rights to receive the consideration set forth in Section 2 below and any other rights under the Employment Agreement; or (iv) indemnification and D&O insurance (as set forth in the Employment Agreement, any other agreement to which you and the Company are a party, or the charter or bylaws of the Company) (the “Indemnification Rights”).  The term Claims also includes but is not limited to claims asserted by you or on your behalf by some other person, entity or government agency.

2.Consideration.  The Company agrees to provide the accelerated vesting described in [Section 4(b)] [Section 4(d)] and to pay you the consideration set forth in [Section 4(b)(ii)] [Section 4(c)(ii)] [Section 4(d)(i)(B)] of the Employment Agreement.  The Company will make the payment(s) to you on the first pay date of the Company occurring at least eight (8) days following the date you sign this Release (and return it to the Company).  You acknowledge that any payment that the Company makes to you under this Release is in addition to anything else of value to which you are entitled and that the Company is not otherwise obligated to make such payment to you.

3.Release of Claims.

(a)You — on behalf of yourself and your heirs, executors, administrators, legal representatives, successors, beneficiaries, and assigns — unconditionally release and forever discharge the Released Parties from, and waive, any and all Claims that you have or may have against any of the Released Parties arising from your employment with the Company, the termination thereof, and any other acts or omissions occurring on or before the date you sign this Release.

(b)The release set forth in Paragraph 3(a) includes, but is not limited to, any and all Claims under (i) the common law (tort, contract or other) of any jurisdiction; (ii) the Rehabilitation Act of 1973, the Age Discrimination in Employment Act of 1967 and the Older Worker’s Benefit Protection Act of 1990, as amended, the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, and any other federal, state and local statutes, ordinances, employee orders and regulations prohibiting discrimination or retaliation upon the basis of age, race, sex, national original, religion, disability, or other unlawful factor; (iii) the National Labor Relations Act; (iv) the Employee Retirement Income Security Act; (v) the Family and Medical Leave Act; (vi) the Fair Labor Standards Act; (vii) the Equal Pay Act; (viii) the Worker Adjustment and Retraining Notification Act; and (ix) any other federal, state or local law.

(c)In furtherance of this Release, you promise not to bring any Claims against any of the Released Parties in or before any court or arbitral authority.

(d.)Nothing in this Release prevents you from filing any non-legally waivable claim with the Equal Employment Opportunity Commission (“EEOC”) or other federal, state or local agency or participating in (or cooperating with) any investigation or proceeding conducted by the EEOC or other federal, state or local agency; however, you understand and agree that you are waiving any and all rights to recover any monetary or personal relief or to obtain any other recovery as a result of such proceeding or subsequent legal action or any action pursued by any person or entity on your behalf.

4.Acknowledgment.  You acknowledge that, by entering into this Release, the Company does not admit to any wrongdoing in connection with your employment or termination, and that this Release is intended as a compromise of any Claims you have or may have against the Released Parties.  You acknowledge that you continue to be subject to the Employee Confidentiality, Nondisclosure, Intellectual Property and Nonsolicitation Agreement by and between you and the Company.

5.ADEA Rights.  You further acknowledge that:

(a)You have been advised that you have the right to seek legal counsel before signing this Release and you have had adequate opportunity to do so.  You warrant that you are executing this Release voluntarily and of your own free will, after having a reasonable period of time to review and deliberate regarding its meaning and effect.

(b)[You have been provided with, and attached to this Release as Annex A is, a listing of: (i) the job titles and ages of all employees selected for termination and offered a payment in exchange for entering into an agreement and release; (ii) the ages of all employees in

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the same job classification or organizational unit who were not selected for termination and not eligible to receive a payment in exchange for entering into an agreement and release; and (iii) information about coverage, eligibility factors and time limits associated with such terminations and related agreements and releases.]  [To be included as applicable.]

(c)You have been given at least [___________] days to review this Release and you understand that if you do not accept this Release by returning an executed copy to the Company on or before ___________, ___, this offer will expire.

(d)You have seven (7) days after signing this Release to revoke it.  This Release will not become effective or enforceable until the revocation period has expired.  Any notice of revocation of the Release is effective only if received by the Chief Financial Officer, in care of the Company at 5320 Legacy Drive, Building 2, Plano, Texas 75024, in writing by the close of business at 5:00 p.m. Central Time on the seventh day after your signing of this Release.  If you revoke your acceptance of this Release pursuant to this Section 5(d), the Company will not provide you with any of the consideration described in Section 2 above and all other terms of this Release will become null and void.

6.Applicable Law.  This Release shall be construed and interpreted pursuant to the laws of the State of Texas without regard to its choice of law rules.

7.Severability.  Each part, term, or provision of this Release is severable from the others.  Notwithstanding any possible future finding by a duly constituted authority that a particular part, term, or provision is invalid, void, or unenforceable, this Release has been made with the clear intention that the validity and enforceability of the remaining parts, terms and provisions shall not be affected thereby.  If any part, term, or provision is so found invalid, void or unenforceable, the applicability of any such part, term or provision shall be modified to the minimum extent necessary to make it or its application valid and enforceable.

8.Litigation Assistance and Cooperation.  You acknowledge and affirm that you may be a witness in litigation, arbitrations, government or other administrative proceedings involving the Company of which you have specific knowledge.  In connection therewith, you covenant and agree, upon reasonable prior notice and during normal business hours, to make yourself reasonably available to and otherwise reasonably assist and cooperate with the Company, and with its respective attorneys and advisors in connection with any such litigation, arbitrations, government or other administrative proceeding; provided, that, in connection with so making yourself available to, assisting or cooperating with such parties (i) the Company shall pay you a mutually agreeable per diem rate, bi-weekly in arrears, (ii) the Company shall bear, and reimburse you for, all out-of-pocket expenses reasonably incurred by you in connection with such services, and (iii) you shall not be required to devote an amount of time that would materially interfere with your other professional responsibilities or services provided to any other person or entity.

9.Other Agreements.  The Company and you acknowledge and agree that each party has continuing obligations to the other party under the Employment Agreement, the Indemnification Rights, and Equity Plan and Equity Agreements.  Accordingly, the Company and you acknowledge and agree that, to the extent expressly provided in each agreement, the Employment Agreement, Indemnification Rights and Equity Plan and Equity Agreements shall remain in full force and effect in accordance with their respective terms.

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I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THE FOREGOING AGREEMENT, UNDERSTAND ALL OF ITS TERMS, UNDERSTAND THAT IT CONTAINS A COMPLETE RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, AND AM ENTERING INTO IT VOLUNTARILY.

Accepted and Agreed:

EXECUTIVE
By:	/s/ Samina Khan
	Samina Khan

REATA PHARMACEUTICALS, INC.
By:	/s/ Stephen Harman
	Stephen Harman Chief Human Resources Officer

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ANNEX A

ATTACHMENT TO SEVERANCE AGREEMENT AND GENERAL RELEASE OF CLAIMS

The decisional unit was all employees of Reata Pharmaceuticals, Inc. (the “Company”).  Employees were selected for termination on the basis of business necessity. All persons whose employment was selected for termination in conjunction with the current layoffs are eligible to receive a payment in exchange for entering into an agreement and release.

The following is a listing of employees (by job title and age) in the above-referenced decisional unit who have been selected for termination and offered a payment in exchange for entering into an agreement and release:

[INSERT LIST OF EMPLOYEES]

The above-selected employees must sign the agreement and release and return it to the Company within the 45-day period prescribed in the agreement and release if they wish to receive the payment set forth in the agreement and release.  For employees receiving this Exhibit, once the agreement is signed, the employee has 7 days to revoke the agreement.

The following is a listing of employees (by age) in the above-referenced decisional unit who have not been selected for termination and are not eligible for a payment in exchange for entering into an agreement and release:

[INSERT LIST OF EMPLOYEES]

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EX-10.16

Exhibit 10.16

EMPLOYMENT AGREEMENT
by and between
Reata Pharmaceuticals, Inc.
and

Andrea Loewen-Rodriguez

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of the 24th day February of 2020, by and between Reata Pharmaceuticals, Inc., a Delaware corporation (together with its successors and assigns permitted hereunder, the “Company”), and Andrea Loewen-Rodriguez (the “Executive”).

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.Employment Period.  Subject to earlier termination pursuant to Section 3, the Company hereby agrees to employ the Executive, and the Executive hereby agrees to be employed by the Company, in accordance with the terms and provisions of this Agreement, for the period commencing on the date of this Agreement (the “Effective Date”) and ending at the close of business on February 23, 2024 (the “Employment Period”).  Thereafter, such term of employment shall be extended automatically for successive one-year periods (such extended term, the “Additional Employment Period”) unless the Company or Executive provides the other with written notice no less than 30 days prior to the date the Employment Period or the Additional Employment Period, as applicable, would otherwise end either (i) declining to extend such term of employment, or (ii) requesting that the terms of this Agreement are renegotiated prior to the Agreement’s renewal.  If the parties fail to enter into the renegotiation process within 30 days of receipt of such notice, this Agreement will be extended automatically as if such notice was not given.  

2.Terms of Employment.

(a)Position and Duties.

(i)During the Employment Period, or any Additional Employment Period, the Executive shall serve as the Vice President, Global Regulatory Affairs of the Company and, in so doing, shall report tothe Chief Development Officer of the Company or such other person as shall be designated by the Chief Development Officer.  The Executive shall have supervision and control over, and responsibility for, such management and operational functions of the Company currently assigned to such positions, and shall have such other powers and duties (including holding officer positions with one or more subsidiaries of the Company) as may from time to time be prescribed by the Board of Directors of the Company (the “Board”), so long as such powers and duties are reasonable and customary for the Vice President, Regulatory Affairs of an enterprise comparable to the Company.

(ii)During the Employment Period, or any Additional Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote full business time to the business and affairs of the

Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period, or any Additional Employment Period, it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, or (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement.

(b)Compensation.

(i)Base Salary.  During the Employment Period, or any Additional Employment Period, the Executive shall receive an annual base salary of$385,000 (the “Annual Base Salary”), which shall be paid on a semi-monthly basis in accordance with the customary payroll terms, conditions and practices of the Company. During the Employment Period, or any Additional Employment Period, the Annual Base Salary may be reviewed and may be increased from time to time in accordance with the compensation practices and guidelines of the Company for its executives.  Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement.  The term Annual Base Salary as utilized in this Agreement shall refer to the Executive’s Annual Base Salary as so increased.

(ii)Bonus.  In addition to Annual Base Salary, the Executive shall be eligible to receive during the Employment Period, or any Additional Employment Period, an annual bonus (the “Bonus”), such Bonus to be awarded only upon the Company’s attainment of certain milestones to be determined by the Board (or a committee of the Board).  The Bonus, if any, shall be payable annually to the Executive consistent with the practices for executives of the Company.  The Executive’s target bonus (“Target Bonus”) will be 30% of the Executive’s Annual Base Salary.

(iii)Incentive, Savings and Retirement Plans.  During the Employment Period, or any Additional Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other executives of the Company (the “Investment Plans”).

(iv)Welfare Benefit Plans.  During the Employment Period, or any Additional Employment Period, the Executive and/or the Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs (the “Welfare Plans”) provided generally to other executives of the Company.  In the event of a Change in Control, for a period of two years following the occurrence of the Change in Control, the Company, or its successor, will continue to provide the Executive and/or the Executive’s family, as the case may be, benefits that are not materially diminished, taken as a whole, from the benefits provided to the Executive and/or the Executive’s family, as the case may be, under the Welfare Plans in effect immediately prior to the Change in Control.  

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(v)Expenses.  During the Employment Period, or any Additional Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive on behalf of the Company in accordance with the policies, practices and procedures of the Company, which provide an objectively determinable nondiscretionary definition of the expenses eligible for reimbursement.  Notwithstanding any provision of this Agreement to the contrary, (A) the amount of expenses eligible to receive reimbursement during any calendar year shall not affect the amount of expenses for which the Executive is eligible to receive reimbursement during any other calendar year within the Employment Period, or any Additional Employment Period, (B) the reimbursement of expenses under this Section 2(b)(v) shall be made on or before the last day of the calendar year following the calendar year in which the expense was incurred and (C) the Executive will not receive a payment or other benefit in lieu of reimbursement under this Section 2(b)(v).  

(vi)Vacation and Holidays.  During the Employment Period, or any Additional Employment Period, the Executive shall be entitled to paid vacation and paid holidays in accordance with the plans, policies, programs and practices of the Company for its executives.

3.Termination of Employment.

(a)Death or Disability.  The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period, or any Additional Employment Period.  If a Disability (as defined below) of the Executive has occurred during the Employment Period, or any Additional Employment Period, and subject to Executive’s rights, if any, under the Family Medical Leave Act, Americans with Disabilities Act or similar local, state or federal law, the Company may give to the Executive written notice of its intention to terminate the Executive’s employment.  In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”), provided, that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive’s duties.  For purposes of this Agreement, “Disability” shall mean that the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.  

(b)Cause.  The Company may terminate the Executive’s employment during the Employment Period, or any Additional Employment Period, for Cause or without Cause.  For purposes of this Agreement, “Cause” shall mean:

(i)commission by the Executive of an act of fraud upon, or willful misconduct toward, the Company;  

(ii)a material breach by the Executive of the noncompetition provisions of Section 5 or of the Employee Confidentiality, Nondisclosure, Intellectual Property and Nonsolicitation Agreement described in Section 6;

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(iii)the conviction of the Executive of any felony (or a plea of nolocontendere thereto); or

(iv)the Executive’s addiction to alcohol, drugs or any other controlled substance.

Upon the occurrence of any event described in Section 3(b), the Company may terminate Executive’s employment hereunder for Cause by giving Executive a Notice of Termination to that effect as provided in Section 3(d) within 30 days after the occurrence of the event giving rise to Cause that specifies the date of Executive’s termination (which may be the date the Notice of Termination is delivered) and describes in reasonable detail the facts or circumstances giving rise to the Company’s right to terminate Executive’s employment for Cause (and, if applicable, the action required to cure same).  If the effect of the occurrence of the event described in Section 3(b) may be cured, Executive shall have the opportunity to cure any such effect for a period of 30 days following receipt of the Company’s Notice of Termination.  If, within 30 days following Executive’s receipt of a Notice of Termination for Cause, (A) Executive delivers written notice to the Company denying that Cause exists, the question of the existence or nonexistence of Cause will be subject to the dispute resolution procedure set forth in Section 9(f); or (B) Executive has not cured the facts or circumstances giving rise to the Company’s right to terminate Executive’s employment for Cause and shall not have delivered a notice pursuant to clause (A) herein, then Executive’s termination for Cause shall be effective as of the date specified in the Company’s Notice of Termination (which date may not be earlier than the date the Notice of Termination is delivered to Executive).  If the Company does not give a Notice of Termination to Executive within 30 days after learning of the occurrence of an event giving rise to Cause, then this Agreement will remain in effect, and Executive may not be terminated for Cause based on the occurrence of the event that gave rise to Cause; provided, however, that the failure of the Company to terminate the Executive’s employment for Cause shall not be deemed a waiver of the Company’s right to terminate Executive’s employment for Cause upon the occurrence of a subsequent event described in Section 3(b) in accordance with the terms of this Agreement.  Notwithstanding the foregoing, the right of the Company to terminate Executive’s employment for Cause under this Section 3(b) shall not limit Executive’s right to terminate his employment for Good Reason under Section 3(c) if Good Reason is determined to exist prior to the time Cause is determined to exist.

(c)Good Reason.  The Executive’s employment may be terminated during the Employment Period, or any Additional Employment Period, by the Executive for Good Reason or without Good Reason.  For purposes of this Agreement, “Good Reason” shall mean, without the express written consent of the Executive, the occurrence of any of the following:

(i)a material diminution in the Executive’s base compensation;

(ii)a material diminution in the Executive’s authority, duties or responsibilities; provided, however, following a Change in Control, the Executive’s authority, duties and responsibilities shall be deemed to have been materially diminished (even though his authority, duties and responsibilities have not actually been materially diminished) if, within two years after the Change in Control, the Executive is required to report to an executive of the parent company of the Company, or its successor, who is not

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serving as a senior vice president (or in a similar or higher position) of such parent company;

(iii)a material diminution in the authority, duties or responsibilities of the supervisor to whom the Executive is required to report;  provided, however, that, except as provided in Section 3(c)(ii), a change in the person to whom the Executive shall report pursuant to Section 2(a)(i) shall not be or constitute Good Reason;

(iv)a material diminution in the budget over which the Executive retains authority;

(v)a  change in the geographic location at which the Executive must perform services of more than 50  miles in radius from such location as of the date of this Agreement; or

(vi)any other action or inaction that constitutes a material breach by the Company of this Agreement.    

In the case of the Executive’s allegation of Good Reason, (A) the Executive shall provide notice to the Company of the event alleged to constitute Good Reason within 90 days after the occurrence of such event (such notice the “Notice of Good Reason,”) and (B) the Company shall have the opportunity to remedy the alleged Good Reason event within 30 days after receipt of notice of such allegation (the “Cure Period”).  If, within the Cure Period, the Company delivers written notice to the Executive denying that Good Reason exists, the question of the existence or nonexistence of Good Reason will be subject to the dispute resolution procedure set forth in Section 9(f).  In the event the Company has not cured the facts or circumstances giving rise to the Executive’s right to terminate the Executive’s employment for Good Reason during the Cure Period and shall not have delivered a notice pursuant to the preceding sentence, then the Executive’s employment hereunder will be terminated for Good Reason on the 31^st day following the Cure Period.  If the Executive does not give a Notice of Good Reason to the Company within 90 days after learning of the occurrence of an event giving rise to Good Reason, then this Agreement will remain in effect, and Executive may not terminate his employment for Good Reason based on the occurrence of the event that gave rise to Good Reason; provided, however, that the failure of the Executive to provide a Notice of Good Reason or terminate the Executive’s employment for Good Reason shall not be deemed a waiver of the Executive’s right to terminate the Executive’s employment for Good Reason upon the occurrence of a subsequent event described in Section 3(c) in accordance with the terms of this Agreement.  Notwithstanding anything to the contrary contained herein, any isolated, insubstantial and inadvertent action not taken in bad faith and that is remedied by the Company promptly after receipt of notice thereof given by the Executive shall not be or constitute Good Reason.

(d)Notice of Termination.  Any termination by the Company for Cause or without Cause, or by the Executive for Good Reason or without Good Reason, shall be communicated by a Notice of Termination to the other party hereto.  For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the

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Executive’s employment under the provision so indicated, and (iii) other than with respect to a termination by the Executive for Good Reason, if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date, except for a termination of Executive’s employment due to a Disability, shall not be more than 15 days after the giving of such notice or the date the applicable cure period expires, whichever is later).  The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

(e)Date of Termination.  “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, or by the Executive without Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, (ii) if the Executive’s employment is terminated by the Executive for Good Reason, the 31^st day following receipt by the Company of the Notice of Good Reason (provided the Company does not otherwise remedy the alleged Good Reason event within the Cure Period), (iii) if the Executive’s employment is terminated by the Company without Cause, the date on which the Company notifies the Executive of such termination (unless a later date is specified in the Notice of Termination, in which case the Executive’s employment will be terminated on such later date), and (iv) if the Executive dies or incurs a Disability, the date of death of the Executive or the Disability Effective Date, as the case may be.  If the Executive is a member of the Board, any continuation of the Executive’s service to the Company as a member of the Board on or after the Executive’s termination of employment shall not result in any deferral of the Date of Termination.  

4.Obligations of the Company upon Termination.

(a)Termination by the Company for Cause or by the Executive other than for Good Reason.  If, during the Employment Period, or any Additional Employment Period,  the Executive’s employment with the Company is terminated by the Company for Cause or by the Executive other than for Good Reason (and not due to death or Disability), the Company shall have no further payment obligations to the Executive or his legal representatives under this Agreement, other than for:

(i)to the extent not theretofore paid, the sum of (w) the Executive’s Annual Base Salary earned through the Date of Termination, (x) the Bonus for the fiscal year ending immediately prior to the Date of Termination, (y)  compensation previously deferred by the Executive (together with any accrued interest or earnings thereon), and (z) any accrued and unused vacation pay through the Date of Termination (the “Accrued Obligations”), which sum shall be paid within 15 days following the Date of Termination; and

(ii)to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive and/or the Executive’s family any other amounts or benefits required to be paid or provided or which the Executive and/or the Executive’s family is eligible to receive pursuant to this Agreement and under any plan, program, policy or practice or contract or agreement of the Company (“Other Benefits”).

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(b)Death or Disability prior to, or more than two years after, a Change in Control.  Upon the Executive’s death or Disability during the Employment Period, or any Additional Employment Period, but prior to the occurrence of a Change in Control or more than two years after the occurrence of a Change in Control, the Company shall have no further payment obligations to the Executive or his legal representatives under this Agreement, other than for (i) payment of the Accrued Obligations (within 15 days following the Date of Termination) and Other Benefits; (ii) payment of a lump sum cash amount equal to 9 months of the Executive’s current Annual Base Salary, payable on the next payroll date immediately following the eighth day following the delivery to the Company of a properly executed Release in accordance with Section 4(f) of this Agreement;  (iii) Welfare Benefit Continuation as defined, and pursuant to the terms and in the manner described, in Section 4(d)(ii) up to the 9 month, rather than the 24 month, anniversary of the Date of Termination; and (iv) subject to Section 4(f), all equity awards granted by the Company to, or otherwise held by, the Executive shall immediately vest in full and any repurchase provisions (other than fair market value repurchase provisions) shall lapse and may be exercised and/or settled in accordance with the terms of the applicable plan or award agreement; provided, however, the Executive may elect, and the Company will allow, the payment of the exercise price of any outstanding stock options, and the satisfaction of any required tax withholding with respect to any outstanding stock option or other equity award, through the withholding of shares otherwise issuable to the Executive pursuant to the stock option or other equity award.

(c)Certain Terminations more than six months prior to, or more than two years after, a Change in Control by the Company other than for Cause or by Executive for Good Reason.  If, during the Employment Period, or any Additional Employment Period, but more than six months  prior to, or more than two years after, the occurrence of a Change in Control, the Executive’s employment with the Company is terminated by the Company for any reason other than for Cause (and not due to death or Disability) or by the Executive for Good Reason, the Executive will be entitled to (i) the Accrued Obligations and Other Benefits, payable in accordance with Section 4(a)(i) and (ii), (ii) subject to Sections 4(f) and (h), a lump sum cash amount equal to 9 months of the Executive’s current Annual Base Salary, payable on the next payroll date immediately following the eighth day following the Executive’s delivery to the Company of a properly executed Release in accordance with Section 4(f) of this Agreement, and (iii) Welfare Benefit Continuation as defined, and pursuant to the terms and in the manner described, in Section 4(d)(ii) up to the 9 month, rather than the 24 month, anniversary of the Date of Termination.   In addition, notwithstanding the provisions of any applicable plan or agreement and subject to Section 4(f), equity awards held by the Executive that otherwise would have been forfeited will continue to remain outstanding, unvested (and will not continue vesting) and subject to forfeiture for a period of six months following the Date of Termination (such equity awards, the “Unvested Equity Awards”).  If a Change in Control occurs during such six month period the Unvested Equity Awards will vest in accordance with Section 4(d)(v).  If a Change in Control does not occur during such six month period, the Unvested Equity Awards will be forfeited immediately following such six month period. The Executive may elect, and the Company will allow, the payment of the exercise price of any outstanding vested stock options, and the satisfaction of any required tax withholding with respect to any vested outstanding stock option or other equity award, through the withholding of shares otherwise issuable to the Executive pursuant to the stock option or other equity award.    

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(d)Certain Terminations within six months prior to, or within two years following, a Change in Control.  In the event that the Executive’s employment is terminated  by the Company for any reason other than Cause or by the Executive for Good Reason or the Executive dies or incurs a Disability, in each case, during the Employment Period, or any Additional Employment Period, and such termination occurs within six months prior to (excluding death or Disability), or within two years after, a Change in Control, the following provisions shall apply and Sections 4(b) and (c) shall not be applicable until Section 4(d) is no longer applicable:  

(i)The Company shall pay to the Executive (A) the Accrued Obligations within 15 days following the Date of Termination, and (B) subject to Sections 4(f) and 4(h), a lump sum cash amount equal to two times the Executive’s then current Annual Base Salary, such sum to be paid on the next payroll date immediately following the eighth day following the Executive’s delivery to the Company of a properly executed Release in accordance with Section 4(f) of this Agreement.

(ii)Until the earlier to occur of (A) the 24 month anniversary of the Date of Termination or (B) the Executive’s acceptance of full-time employment with another entity, the Company shall continue benefits provided under Welfare Plans to the Executive and/or the Executive’s family at least equal to those that would have been provided to them if the Executive’s employment had not been terminated (“Welfare Benefit Continuation”) pursuant to an in-kind benefit arrangement that satisfies the requirements of Treasury Regulation § 1.409A-3(i)(1)(iv)(A), and the Company-provided costs of such Welfare Benefit Continuation will be imputed as income to the Executive and reported on Form W-2; provided, that in the event the Company is unable to provide the Welfare Benefit Continuation under its Welfare Plans or to the extent such Welfare Benefit Continuation would subject the Company to negative tax consequences, the Company will reimburse the Executive for amounts necessary to enable the Executive to obtain similar benefits, and any such reimbursement will be made in accordance with the provisions of Treasury Regulation § 1.409A-3(i)(1)(iv).  Such Welfare Benefit Continuation provided in this Section 4(d)(ii) is in addition to any rights Executive may have to continue such coverages under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).  The COBRA continuation period shall begin on the day following the end of the Welfare Benefit Continuation period provided in this Section 4(d)(ii).

(iii)Subject to Section 4(f), notwithstanding the provisions of any applicable plan or agreement, all equity awards granted by the Company to, or otherwise held by, the Executive shall immediately vest in full and any repurchase provisions (other than fair market value repurchase provisions) will lapse and such awards may be exercised and/or settled in accordance with the terms of the applicable plan or award agreement; provided, however, the Executive may elect, and the Company will allow, the exercise of any outstanding stock options, and the satisfaction of any required tax withholding with respect to any outstanding stock option or other equity award, through he withholding of shares otherwise issuable to the Executive pursuant to the stock option or other equity award.  

(iv)To the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive and/or the Executive’s family the Other Benefits.

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(v)If the Executive’s employment is terminated within six months prior to a Change in Control and the provisions of Section 4(d) apply, but the provisions of Section 4(b) or 4(c) were initially applied, then, subject to Section 4(f), upon the Change in Control, the Company shall pay, no later than the first payroll date following such Change in Control, additional payments and provide additional benefits and vesting in order to provide the Executive the payments, benefits and vesting as set forth in Section 4(d). The post employment exercise period for stock options under the Equity Documents shall be measured from the date of the Change in Control.

(e)In addition, upon a Change in Control, if the Executive’s employment with the Company (or its successor) continues following the Change in Control, any outstanding equity awards that are not vested on the date of the Change in Control shall become vested and, as applicable, exercisable with respect to one-eighteenth of all such unvested equity awards on the one month anniversary of the Change in Control and thereafter with respect to an additional one-eighteenth of all unvested equity awards at the time of the Change in Control on each  subsequent month anniversary of the Change in Control such that the equity awards will be 100% vested and, as applicable, exercisable on the eighteen month anniversary of the Change in Control; provided, however, that if 100% of the equity awards would otherwise become vested pursuant to the vesting rules stated above or in the Equity Documents prior to the eighteen month anniversary of the date of the Change in Control, then the equity awards will become vested and, as applicable, exercisable in accordance with such vesting rules or Equity Documents.  For purposes of this Agreement, “Change in Control” means the occurrence of any of the following events:

(i)The Company is not the surviving entity in any merger or consolidation (or survives only as a subsidiary of an entity other than a previously wholly owned subsidiary of the Company) and as a result of such merger or consolidation, stockholders of the Company immediately prior to such merger cease to own more than 50% of the outstanding capital stock of the surviving corporation determined on a fully diluted basis;  

(ii)The Company sells, leases, or exchanges or agrees to sell, lease, or exchange more than 50% of its assets to any other person or entity (other than a wholly owned subsidiary of the Company);

(iii)The Company is to be dissolved and liquidated (in a dissolution taxed under Section 331 of the Internal Revenue Code of 1986, as amended (the “Code”));

(iv)Any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote), directly, by merger or otherwise,  of more than 50% of the outstanding shares of the Company’s voting stock (based upon voting power) and as a result of such acquisition, the stockholders holding a majority of the capital stock of the Company receive cash or marketable securities for their shares of capital stock; or

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(v)As a result of or in connection with a contested election of directors, the persons who were directors before such election will cease to constitute a majority of the Board.

Notwithstanding the foregoing definition of Change in Control (other than clause (iii) of such definition), a Change in Control shall only be deemed to occur upon a “change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company” under Section 409A of the Code.

(f)Release.  Notwithstanding any other provision in this Agreement to the contrary, in consideration for receiving the accelerated vesting described in Sections 4(b) or 4(d) and the payments described in Section 4(b)(ii), Section 4(c)(ii) or Section 4(d)(i)(B), the Executive hereby agrees to execute (and not revoke) a release agreement in the form attached hereto as Exhibit A (the “Release”) within 60 days of the Date of Termination.  If the Executive fails to properly execute and timely deliver the Release (or revokes the Release), the Executive agrees that the Executive shall not be entitled to receive the accelerated vesting described in Sections 4(b) or 4(d) and the payments described in Section 4(b)(ii), Section 4(c)(ii) or Section 4(d)(i)(B).  For purposes of this Agreement, the Release shall be considered to have been executed by the Executive if it is signed by the Executive’s legal representative (in the case of the Executive’s incapacity due to physical or mental illness) or on behalf of the Executive’s estate (in the case of the Executive’s death).  

(g)Gross-Up for Certain Taxes.  In the event that it is determined that any payment (other than the Gross-Up payment provided for in this Section 4(g)) or distribution by the Company (or any of its Affiliates) to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) by reason of being considered “contingent on a change in ownership or control” of the Company, within the meaning of Section 280G of the Code or any successor provision thereto (such tax being hereafter referred to as the “Excise Tax”), then the Executive will be entitled to receive an additional payment or payments (a “Gross-Up Payment”).  The Gross-Up Payment will be in an amount such that, after payment by the Executive of all taxes, penalties and interest, including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.  For purposes of determining the amount of the Gross-Up Payment, the Executive will be considered to pay (A) federal income taxes at the highest rate in effect in the year in which the Gross-Up Payment will be made and (B) state and local income taxes at the highest rate in effect in the state or locality in which the Gross-Up Payment would be subject to state or local tax, net of the maximum reduction in federal income tax that could be obtained from deduction of such state and local taxes.  The determination of whether an Excise Tax would be imposed, the amount of such Excise Tax, and the calculation of the amounts referred to in this Section 4(g) will be made at the expense of the Company by the Company’s regular independent accounting firm (the “Accounting Firm”), which shall provide detailed supporting calculations.  Any determination by the Accounting Firm will be binding upon the Company and the Executive.  The Gross-Up Payment will be paid to the Executive as soon as administratively

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practicable following the later of (i) the date Executive is required to pay the excise tax imposed by Section 4999 of the Code, or (ii) in the event the Executive is determined, in accordance with the methods specified in the regulations issued under Section 409A of the Code, to be a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code) of the Company at the time of the Executive’s “separation from service” (within the meaning of Section 409A(a)(2)(A)(i) of the Code and the applicable regulations and administrative guidance issued thereunder), the first day of the seventh month after the date of the Executive’s “separation from service” or, if earlier, the date of death of Executive.  In the event that the Excise Tax is later determined by the Accounting Firm or pursuant to any proceeding or negotiations with the Internal Revenue Service to exceed the Gross-Up Payment at the time the payment is made under this Section 4(g) (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of such payment), the Company shall make an additional payment in respect of such excess (plus any interest or penalty payable with respect to such excess) at the time that the amount of such excess is finally determined.  In the event that the Excise Tax is subsequently determined by the Accounting Firm or pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the Gross-Up Payment at the time payment is made under this Section 4(g), the Executive shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior payment that would not have been paid if such Excise Tax had been applied in initially calculating such payment, plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code.  Notwithstanding the foregoing, in the event that any portion of the payment made hereunder that is to be refunded to the Company has been paid to any Federal, state or local tax authority, repayment thereof shall not be required until actual refund or credit of such portion has been made to the Executive, and interest payable to the Company shall not exceed interest received or credited to the Executive by such tax authority for the period it held such portion.  The Gross-Up Payment will be made in a manner that complies with Treasury Regulation § 1.409A-3(i)(1)(v).  

(h)Specified Employee Provisions.  For purposes of determining the time of payment of any severance payable pursuant to Section 4(b)(ii), Section 4(c)(ii) and Section 4(d)(i)(B), and the timely return of the Release in accordance with Section 4(f), the Date of Termination shall be the date that the Executive incurs a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h).  To the extent the Executive’s “separation from service” is within the 60 day period ending on December 31 of any calendar year, the severance payable pursuant to Section 4(b)(ii), Section 4(c)(ii) and Section 4(d)(i)(B) will be paid no earlier than the first business day of the following calendar year.  In the event the Executive is determined, in accordance with the methods specified in the regulations issued under Section 409A of the Code, to be a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code) of the Company at the time of the Executive’s “separation from service” (within the meaning of Section 409A(a)(2)(A)(i) of the Code and the applicable regulations and administrative guidance issued thereunder) then, in-lieu of providing Welfare Benefit Continuation pursuant to this Section 4 with respect to benefits that would not constitute medical expenses deductible under section 213 of the Code (disregarding the requirement of section 213(a) of the Code that the deduction is available only to the extent that such expenses exceed 7.5 percent of adjusted gross income) (“Non-Medical Continuation Benefits”), during the six month period following Executive’s “separation from service,” the Company shall pay to the Executive an amount equal to the Company-provided costs of such Non-Medical Continuation Benefits in a single lump sum payment on the first day of the

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seventh month following the Executive’s “separation from service.”  Nothing in this Section 4(h) will impact the obligation of the Company to provide Welfare Benefit Continuation as provided in this Section 4 with respect to Welfare Benefits other than Non-Medical Continuation Benefits or to provide Non-Medical Continuation Benefits following the six month period following Executive’s “separation from service.”  This Section 4(h) will have no effect with respect to benefits payable pursuant to this Agreement due to the Executive’s Disability.  

5.Restrictive Covenants.

(a)Confidential Information; Assignment of Rights to Intellectual Property.  

(i)The Executive hereby recognizes and acknowledges that the business of the Company and its Affiliates is highly competitive and that certain information related to their business, including, without limitation, their plans, strategies, research and development, testing methods, clinical trial results, costs, prices, business methods, customer names and needs, prospect names and needs, names of referral sources, identity of contact persons, marketing plans, reports, manuals, methods, costing procedures, information relating to the services provided, developed, used or in the process of development, their services, customer-related lists and other customer information, formatting and programming concepts and plans, computer programs, simulations, data bases, pricing policies, financial information, methods of doing business, policy and/or procedure manuals, training and recruiting procedures, accounting procedures, the status and content of their contracts with their customers, the identity and performance of their employees, their business philosophy, and servicing methods and techniques at any time used, developed, or investigated by them, which are not generally known by or available to the public or which are maintained as confidential by them, comprises confidential or proprietary business information that is a valuable, special, and unique asset of the Company and its Affiliates, that such confidential or proprietary information has been developed through their expenditure of substantial time and money, and that all such confidential or proprietary information could be used by the Executive and others to compete unfairly with them (all such information is jointly referred to herein as “Confidential Information and Trade Secrets”).  The Executive hereby agrees that the Confidential Information and Trade Secrets shall constitute trade secrets, and further agrees not to use or disclose such information except as required to do so by subpoena or other legal process (after the Company has been given reasonable notice and opportunity to seek relief from such subpoena or other legal process). The Executive also agrees to maintain in confidence any confidential or proprietary information of third parties that the Executive received during the course of and as a result of the Executive’s employment with the Company and its Affiliates.  No information otherwise in the public domain (other than by an act of the Executive in violation hereof) shall be considered Confidential Information and Trade Secrets.  The Executive understands that the restrictions set forth in this Section 5(a)(i) shall continue to apply following the Executive’s termination of employment with the Company, regardless of the reason for such termination.

(ii)All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company and any copies, in whole or in part, thereof (“Documents”), whether or not prepared by the Executive, shall

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be the sole and exclusive property of the Company.  The Executive shall safeguard all Documents and shall surrender to the Company all Documents in Executive’s possession or control at the time Executive’s employment terminates, or at such earlier time or times as the Company may specify.  

(iii)The Executive shall promptly and fully disclose all Intellectual Property to the Company.  “Intellectual Property” means all information, ideas, concepts, improvements, discoveries and inventions, whether patentable or not, and whether or not reduced to practice, that are conceived, developed, made or acquired by the Company, either individually or jointly with others, and that relate to the past, present or anticipated business of the Company, irrespective of whether the Executive utilized the Company’s time or facilities and irrespective of whether such information, ideas, concepts, improvements, discoveries and inventions were conceived, developed, discovered or acquired by the Executive on the job, at home or elsewhere.  The Executive hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Executive’s full right, title and interest in and to all Intellectual Property.  The Executive agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights (including, without limitation, the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property.  The Executive will not charge the Company for time spent in complying with any such obligation to execute.  The Executive will, at the Company’s expense, take such other actions as the Company may reasonably request to so assign or enforce such Intellectual Property.  All copyrightable Intellectual Property that Executive created during Executive’s employment is considered “work made for hire.”

(b)Non-Competition; Non-Solicitation.

(i)The Company hereby makes a binding promise not conditioned upon continued employment to provide the Executive with Confidential Information and Trade Secrets above and beyond any Confidential Information and Trade Secrets the Executive may have previously received.  In order in part to protect the Confidential Information and Trade Secrets, and as part of the consideration for the payments described in Section 4 of this Agreement, the Company and the Executive agree to the provisions of this Section 5(b).  As a part of the employment relationship, the Executive learned of and the Company disclosed to the Executive Confidential Information and Trade Secrets.  Accordingly, the Executive hereby agrees that, for one year after the Executive ceases to provide services to the Company, the Executive will not:

A.directly or indirectly, individually or as an officer, director, employee, stockholder, consultant, contractor, partner, joint venturer, agent, equity owner or in any capacity whatsoever, (1) engage in any Competing Business (as hereinafter defined) or (2) divert or take away any customers of the Company or its Affiliates.  Notwithstanding the foregoing, the Company agrees that the Executive may own less than five percent of the outstanding voting securities of any publicly traded company that is a Competing Business so long as the Executive does not

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otherwise participate in such Competing Business in any way prohibited by the preceding clause;

B.use Executive’s access to, knowledge of, or application of Confidential Information and Trade Secrets to perform any duty for any Competing Business; it being understood and agreed to that this Section 5(b)(i)(B) shall be in addition to and not be construed as a limitation upon the covenants in Section 5(a);

C.directly or indirectly, for Executive or for others, recruit, solicit or induce any employee of the Company or its Affiliates to terminate his or her employment with the Company or its Affiliates, or hire or assist in the hiring of any such employee by a Person not affiliated with the Company or its Affiliates; or

D.induce or attempt to induce any customer, client, supplier, service provider, researcher, scientist or other business relation of the Company or its Affiliates to cease doing business with the Company or its Affiliates, or in any way interfere with the relationship between the Company and any such Person.

(ii)The restrictions in this Section 5(b) shall be in addition to any restrictions imposed upon the Executive by statute or at common law.

(iii)“Competing Business” means any business that researches, develops, manufactures, markets, licenses or sells (A) antioxidant inflammation modulators that target Keap 1 and activate Nrf2 or have similar mechanisms of action or (B) any other product, compound, or agent having the same or similar mechanisms of action as any product, compound or agent that is being actively developed, manufactured, marketed, licensed or sold by the Company at the Date of Termination.

(iv)“Affiliate” means, with respect to the Company or any other specified Person, any other Person directly or indirectly controlling, controlled by or under common control with the Company or such other specified Person, where control may be by management authority, equity interest or other means.

(v)“Person” means any person or entity of any nature whatsoever, specifically including an individual, a firm, a company, a corporation, a partnership, a limited liability company, a trust or other entity.

(c)Scope of Prohibited Activities.  The parties hereby acknowledge that the restrictions in this Section 5 have been specifically negotiated and agreed to by the parties hereto and are limited only to those restrictions necessary to protect the Company from unfair competition and to protect the Confidential Information and Trade Secrets and the business and goodwill of the Company and its Affiliates.  The parties hereby agree that if the scope or enforceability of any provision, paragraph or subparagraph of this Section 5 is in any way disputed at any time, and should a court find that such restrictions are overly broad, the court may modify and enforce the covenant to the extent that it believes to be reasonable under the circumstances.  Each provision, paragraph and subparagraph of the Section 5 is separable from every other provision, paragraph, and subparagraph and constitutes a separate and distinct covenant.  Nevertheless, the Executive

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agrees that the enforcement of the restrictions in this Section 5 would not cause the Executive any undue hardship or unreasonably interfere with Executive’s ability to earn a livelihood.  

(d)Non-Disparagement.  The Executive and the Company each agree to refrain from engaging in any conduct, or from making any comments or statements, which have the purpose or effect of harming the Executive’s reputation or goodwill, on the one hand, or the reputation or goodwill of the Company or any of its Affiliates, employees, directors or stockholders, on the other hand.

6.Full Settlement.  The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others.  In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. Neither the Executive nor the Company shall be liable to the other party for any damages in addition to the amounts payable under Section 4 hereof arising out of the termination of the Executive’s employment prior to the end of the Employment Period, or any Additional Employment Period; provided, however, that the Company shall be entitled to seek damages for any breach of the noncompetition provisions of Section 5 hereof or of the Employee Confidentiality, Nondisclosure, Intellectual Property and Nonsolicitation Agreement, dated February 24, 2020 by and between the Executive and the Company.

7.Successors.

(a)This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

(b)This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, pursuant to a Change in Control or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

8.Effect of Agreement on Other Benefits.  The existence of this Agreement shall not prohibit or restrict the Executive’s entitlement to full participation in the executive compensation, executive benefit and other plans or programs in which executives of the Company are eligible to participate.

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9.Miscellaneous.

(a)This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without reference to principles of conflict of laws.  The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.  This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b)All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:	Andrea Loewen-Rodriguez
If to the Company:	Reata Pharmaceuticals, Inc.
	5320 Legacy Drive, Building 2
	Plano, Texas 75024
	Attention:  Chief Financial Officer

or to such other address as either party shall have furnished to the other in writing in accordance herewith.  Notice and communications shall be effective when actually received by the addressee.

(c)If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement.  Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

(d)The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e)The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or of any other provision or right of this Agreement.

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(f)If any dispute arises out of this Agreement, the “complaining party” shall give the “other party” written notice of such dispute.  The other party shall have 10 business days to resolve the dispute to the complaining party’s satisfaction.  If the dispute is not resolved by the end of such period, either disputing party may require the other to submit to non-binding mediation with the assistance of a neutral, unaffiliated mediator.  If the parties encounter difficulty in agreeing upon a neutral unaffiliated mediator, they shall seek the assistance of the American Arbitration Association in the selection process.  If mediation is unsuccessful or if mediation has not commenced, in either case within 30 days after the other party received the notice of dispute, the complaining party may by written notice (the “Notice”) demand arbitration of the dispute as set out below, and each party hereto expressly agrees to submit to, and be bound by, such arbitration.

(i)Each party will, within 10 business days of the Notice, nominate an arbitrator, who shall be a non-neutral arbitrator.  Each nominated arbitrator must be someone experienced in dispute resolution and of good character without moral turpitude and not within the employ or direct or indirect influence of the nominating party.  The two nominated arbitrators will, within 10 business days of nomination, agree upon a third arbitrator, who shall be neutral.  If the two appointed arbitrators cannot agree on a third arbitrator within such period, the parties may seek such an appointment through any permitted court proceeding or by the American Arbitration Association (“AAA”).  The three arbitrators will set the rules and timing of the arbitration, but will generally follow the rules of the AAA and this Agreement where same are applicable and shall provide for a reasoned opinion.

(ii)The arbitration hearing will in no event take place more than 180 days after the appointment of the third arbitrator.

(iii)The mediation and the arbitration will take place in Irving, Texas unless otherwise unanimously agreed to by the parties.

(iv)The results of the arbitration and the decision of the arbitrators will be final and binding on the parties and each party agrees and acknowledges that these results shall be enforceable in a court of law.

(v)All costs and expenses of the mediation and arbitration shall be born equally by the Company and the Executive.  The Arbitrator shall award the prevailing party its reasonable attorneys fees incurred in connection with the dispute.

(g)The Company and the Executive hereby agree that Sections 4, 5, 6, 7, 8 and 9, shall survive the expiration of the Employment Period, and any Additional Employment Period, in accordance with their terms.

(h)The parties hereto intend that any amounts payable hereunder comply with or are exempt from Section 409A of the Code (“Section 409A”) (including under Treasury Regulation §§ 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exceptions under subparagraph (iii) and subparagraph (v)(D)) and other applicable provisions of Treasury Regulation §§ 1.409A-1 through A-6).  For purposes of Section 409A, each of the payments that may be made under this Agreement shall be deemed to be a separate payment

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for purposes of Section 409A.  This Agreement shall be administered, interpreted and construed in a manner that does not result in the imposition of additional taxes, penalties or interest under Section 409A.  The Company and the Executive agree to negotiate in good faith to make amendments to the Agreement, as the parties mutually agree are necessary or desirable to avoid the imposition of taxes, penalties or interest under Section 409A.  Neither the Company nor the Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.

(i)The parties hereto agree that, in the event of any conflict or inconsistency between this Agreement and the terms of any equity award agreement, this Agreement shall govern and shall supersede the terms of the equity award agreement. The parties hereto agree that, in the event of any conflict or inconsistency between this Agreement and the plan document governing any equity award, the terms of the plan document shall control and, if necessary, this Agreement shall be deemed amended so as to carry out the purpose and intent of the plan document.  In the event of any inconsistency between any provision of this Agreement and any provision of any employee handbook, personnel manual, program, policy, or arrangement of the Company or any of its Affiliates, or any provision of any agreement, plan, or corporate governance document of any of them (other than the terms of the plan document governing any equity award), the provisions of this Agreement shall control unless the Executive otherwise agrees in a signed writing that expressly refers to the provision whose control the Executive is waiving.  The Company agrees not to impose any restrictions, enforceable by injunction, on Executive’s post-employment activities, other than those expressly set forth in this Agreement.

(j)Each party hereto agrees with the other party hereto that it will cooperate with such other party and will execute and deliver, or cause to be executed and delivered, all such other instruments and documents, and will take such other actions, as such other party may reasonably request from time to time to effectuate the provisions and purpose of this Agreement.

(k)The provisions of this Agreement constitute the complete understanding and agreement among the parties with respect to the subject matter hereof.

(l)This Agreement may be executed in two or more counterparts.

(m)    Protected Rights. The Executive understands, and the Company agrees, that nothing contained in this Agreement, or any other agreement between the Executive and the Company, limits the Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). The Executive further understands, and the Company agrees, that this Agreement, and any other agreement between the Executive and the Company, does not limit the Executive’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information to the Government Agency, without notice to the Company. The Executive further understands, and the Company agrees, that this Agreement, and any other agreement between the Executive and the Company, does not limit the Executive’s right to receive an award for information provided to any Government Agency.

18

The Executive may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. Further, if the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose the Company’s trade secrets to the attorney and use the trade secret information in the court proceeding if the Executive: (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.

[SIGNATURE PAGE FOLLOWS]

19

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from its Board, the Company has caused this Agreement to be executed in its name on its behalf, as of the date first written above.

	EXECUTIVE
By:		/s/ Andrea Loewen- Rodriguez
		Andrea Loewen-Rodriquez
		REATA PHARMACEUTICALS, INC.
By:		/s/ Stephen Harman
		Chief Human Resources Officer

S-1

EXHIBIT A

RELEASE

This Release (“Release”) is entered into between you, the undersigned employee, and Reata Pharmaceuticals, Inc., a Delaware corporation (the “Company”), in connection with the Employment Agreement between you and the Company dated as of _________, ____ (the “Employment Agreement”).  You have __days to consider this Release, which you agree is a reasonable amount of time.  In order to receive the consideration set forth in Section 2 below, you must return this Release to the Company on or before ____________, ____.

1.Definitions.

(a)“Released Parties” means the Company and its past, present and future parents, subsidiaries, divisions, successors, predecessors, employee benefit plans and affiliated or related companies, and also each of the foregoing entities’ past, present and future owners, officers, directors, stockholders, investors, partners, managers, principals, members, committees, administrators, sponsors, executors, trustees, fiduciaries, employees, agents, assigns, representatives and attorneys, in their personal and representative capacities.  Each of the Released Parties is an intended beneficiary of this Release.

(b)“Claims” means all theories of recovery of whatever nature, whether known or unknown, recognized by the law or equity of any jurisdiction.  It includes but is not limited to any and all actions, causes of action, lawsuits, claims, complaints, petitions, charges, demands, liabilities, indebtedness, losses, damages, rights and judgments in which you have had or may have an interest.  It also includes but is not limited to any claim for wages, benefits or other compensation; provided, however that nothing in this Release will affect your entitlement to any of the following, none of which shall be deemed to be a Claim: (i) benefits pursuant to the terms of any employee benefit plan (as defined in the Employee Retirement Income Security Act of 1974, as amended) sponsored by the Company in which you are a participant; (ii) outstanding equity compensation awards previously granted to you pursuant to any equity compensation plan sponsored by the Company (the “Equity Plan and Equity Awards”); (iii)to enforce your rights to receive the consideration set forth in Section 2 below and any other rights under the Employment Agreement; or (iv) indemnification and D&O insurance (as set forth in the Employment Agreement, any other agreement to which you and the Company are a party, or the charter or bylaws of the Company) (the “Indemnification Rights”).  The term Claims also includes but is not limited to claims asserted by you or on your behalf by some other person, entity or government agency.

2.Consideration.  The Company agrees to provide the accelerated vesting described in [Section 4(b)] [Section 4(d)] and to pay you the consideration set forth in [Section 4(b)(ii)] [Section 4(c)(ii)] [Section 4(d)(i)(B)] of the Employment Agreement.  The Company will make the payment(s) to you on the first pay date of the Company occurring at least eight (8) days following the date you sign this Release (and return it to the Company).  You acknowledge that any payment that the Company makes to you under this Release is in addition to anything else of value to which you are entitled and that the Company is not otherwise obligated to make such payment to you.

2

3.Release of Claims.

(a)You — on behalf of yourself and your heirs, executors, administrators, legal representatives, successors, beneficiaries, and assigns — unconditionally release and forever discharge the Released Parties from, and waive, any and all Claims that you have or may have against any of the Released Parties arising from your employment with the Company, the termination thereof, and any other acts or omissions occurring on or before the date you sign this Release.

(b)The release set forth in Paragraph 3(a) includes, but is not limited to, any and all Claims under (i) the common law (tort, contract or other) of any jurisdiction; (ii) the Rehabilitation Act of 1973, the Age Discrimination in Employment Act of 1967 and the Older Worker’s Benefit Protection Act of 1990, as amended, the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, and any other federal, state and local statutes, ordinances, employee orders and regulations prohibiting discrimination or retaliation upon the basis of age, race, sex, national original, religion, disability, or other unlawful factor; (iii) the National Labor Relations Act; (iv) the Employee Retirement Income Security Act; (v) the Family and Medical Leave Act; (vi) the Fair Labor Standards Act; (vii) the Equal Pay Act; (viii) the Worker Adjustment and Retraining Notification Act; and (ix) any other federal, state or local law.

(c)In furtherance of this Release, you promise not to bring any Claims against any of the Released Parties in or before any court or arbitral authority.

(d.)Nothing in this Release prevents you from filing any non-legally waivable claim with the Equal Employment Opportunity Commission (“EEOC”) or other federal, state or local agency or participating in (or cooperating with) any investigation or proceeding conducted by the EEOC or other federal, state or local agency; however, you understand and agree that you are waiving any and all rights to recover any monetary or personal relief or to obtain any other recovery as a result of such proceeding or subsequent legal action or any action pursued by any person or entity on your behalf.

4.Acknowledgment.  You acknowledge that, by entering into this Release, the Company does not admit to any wrongdoing in connection with your employment or termination, and that this Release is intended as a compromise of any Claims you have or may have against the Released Parties.  You acknowledge that you continue to be subject to the Employee Confidentiality, Nondisclosure, Intellectual Property and Nonsolicitation Agreement by and between you and the Company.

5.ADEA Rights.  You further acknowledge that:

(a)You have been advised that you have the right to seek legal counsel before signing this Release and you have had adequate opportunity to do so.  You warrant that you are executing this Release voluntarily and of your own free will, after having a reasonable period of time to review and deliberate regarding its meaning and effect.

(b)[You have been provided with, and attached to this Release as Annex A is, a listing of: (i) the job titles and ages of all employees selected for termination and offered a payment in exchange for entering into an agreement and release; (ii) the ages of all employees in

3

the same job classification or organizational unit who were not selected for termination and not eligible to receive a payment in exchange for entering into an agreement and release; and (iii) information about coverage, eligibility factors and time limits associated with such terminations and related agreements and releases.]  [To be included as applicable.]

(c)You have been given at least [___________] days to review this Release and you understand that if you do not accept this Release by returning an executed copy to the Company on or before ___________, ___, this offer will expire.

(d)You have seven (7) days after signing this Release to revoke it.  This Release will not become effective or enforceable until the revocation period has expired.  Any notice of revocation of the Release is effective only if received by the Chief Financial Officer, in care of the Company at 2801 Gateway Drive, Suite 150, Irving, Texas, 75063, in writing by the close of business at 5:00 p.m. Central Time on the seventh day after your signing of this Release.  If you revoke your acceptance of this Release pursuant to this Section 5(d), the Company will not provide you with any of the consideration described in Section 2 above and all other terms of this Release will become null and void.

6.Applicable Law.  This Release shall be construed and interpreted pursuant to the laws of the State of Texas without regard to its choice of law rules.

7.Severability.  Each part, term, or provision of this Release is severable from the others.  Notwithstanding any possible future finding by a duly constituted authority that a particular part, term, or provision is invalid, void, or unenforceable, this Release has been made with the clear intention that the validity and enforceability of the remaining parts, terms and provisions shall not be affected thereby.  If any part, term, or provision is so found invalid, void or unenforceable, the applicability of any such part, term or provision shall be modified to the minimum extent necessary to make it or its application valid and enforceable.

8.Litigation Assistance and Cooperation.  You acknowledge and affirm that you may be a witness in litigation, arbitrations, government or other administrative proceedings involving the Company of which you have specific knowledge.  In connection therewith, you covenant and agree, upon reasonable prior notice and during normal business hours, to make yourself reasonably available to and otherwise reasonably assist and cooperate with the Company, and with its respective attorneys and advisors in connection with any such litigation, arbitrations, government or other administrative proceeding; provided, that, in connection with so making yourself available to, assisting or cooperating with such parties (i) the Company shall pay you a mutually agreeable per diem rate, bi-weekly in arrears, (ii) the Company shall bear, and reimburse you for, all out-of-pocket expenses reasonably incurred by you in connection with such services, and (iii) you shall not be required to devote an amount of time that would materially interfere with your other professional responsibilities or services provided to any other person or entity.

9.Other Agreements.  The Company and you acknowledge and agree that each party has continuing obligations to the other party under the Employment Agreement, the Indemnification Rights, and Equity Plan and Equity Agreements.  Accordingly, the Company and you acknowledge and agree that, to the extent expressly provided in each agreement, the Employment Agreement, Indemnification Rights and Equity Plan and Equity Agreements shall remain in full force and effect in accordance with their respective terms.

4

I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THE FOREGOING AGREEMENT, UNDERSTAND ALL OF ITS TERMS, UNDERSTAND THAT IT CONTAINS A COMPLETE RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, AND AM ENTERING INTO IT VOLUNTARILY.

Accepted and Agreed:
	By:	/s/ Stephen Harman
		Stephen Harman
		Chief Human Resources Officer
	By:	/s/ Andrea Loewen- Rodriguez
		Andrea Loewen-Rodriquez

5

ANNEX A

ATTACHMENT TO SEVERANCE AGREEMENT AND GENERAL RELEASE OF CLAIMS

The decisional unit was all employees of Reata Pharmaceuticals, Inc. (the “Company”).  Employees were selected for termination on the basis of business necessity. All persons whose employment was selected for termination in conjunction with the current layoffs are eligible to receive a payment in exchange for entering into an agreement and release.

The following is a listing of employees (by job title and age) in the above-referenced decisional unit who have been selected for termination and offered a payment in exchange for entering into an agreement and release:

[INSERT LIST OF EMPLOYEES]

The above-selected employees must sign the agreement and release and return it to the Company within the 45-day period prescribed in the agreement and release if they wish to receive the payment set forth in the agreement and release.  For employees receiving this Exhibit, once the agreement is signed, the employee has 7 days to revoke the agreement.

The following is a listing of employees (by age) in the above-referenced decisional unit who have not been selected for termination and are not eligible for a payment in exchange for entering into an agreement and release:

[INSERT LIST OF EMPLOYEES]

6

EX-10.24

Exhibit 10.24

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXCLUSIVE PATENT LICENSE AGREEMENT

AMONG

THE UNIVERSITY OF TEXAS

M. D. ANDERSON CANCER CENTER

DARTMOUTH COLLEGE

AND

REATA DISCOVERY, INC.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

TABLE OF CONTENTS

	RECITALS	PAGE 1
l.	EFFECTIVE DATE	PAGE 1
2.	DEFINITIONS	PAGE 1
3.	WARRANTY: SUPERIOR-RIGHTS	PAGE 3
4.	LICENSE	PAGE 4
5.	PAYMENTS AND REPORTS	PAGE 5
6.	EQUITY OWNERSHIP	PAGE 8
7.	SPONSORED RESEARCH	PAGE 9
8.	TERM AND TERMINATION	PAGE 10
9.	INFRINGEMENT BY THIRD PARTIES	PAGE 11
10.	ASSIGNMENT	PAGE 12
11.	PATENT MARKING	PAGE 12
12.	INDEMNIFICATION	PAGE 12
13.	USE OF NAME	PAGE 13
14.	CONFIDENTIAL INFORMATION	PAGE 14
15.	PATENTS AND INVENTIONS	PAGE 15
16.	GENERAL	PAGE 16
	SIGNATURES	PAGE 19
	EXHIBIT I-PATENT RIGHTS	PAGE 20
	EXHIBIT 2-ROYALTY REPORT	PAGE 21
	EXHIBIT 3-Materials Transfer Agreement	PAGE 23
	EXHIBIT 4-Agreement Between Dr. Andreeff and LICENSEE	PAGE 26
	EXHIBIT 5-Agreement Between Dr. Konopleva and LICENSEE	PAGE 27

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

AGREEMENT BETWEEN THE

UNIVERSITY OF TEXAS

M. D. ANDERSON CANCER

CENTER, DARTMOUTH

COLLEGE

AND

REATA DISCOVERY, INC.

THIS Agreement (“AGREEMENT”) is made on this 15th day of July, 2004, by and among the Board of Regents (the “BOARD”) of The University of Texas System (the “SYSTEM”), an agency of the State of Texas, whose address is 201West 7th Street, Austin, Texas 78701, on behalf of the University of Texas M. D. Anderson Cancer Center (‘‘UTMDACC”), a component institution of the SYSTEM, Trustees of Dartmouth College (“DARTMOUTH”), a non-profit educational and research institution existing under the laws of the State of New Hampshire, and being located at Hanover, New Hampshire (BOARD, UTMDACC and DARTMOUTH collectively “LICENSORS”), and Reata Discovery, Inc. (“LICENSEE”), a Delaware corporation having a principal place of business located at 1950 N. Stemmons Freeway, Suite 5001, Dallas, Texas 75207.

RECITALS

A. BOARD and DARTMOUTH own certain PATENT RIGHTS (as defined below) and TECHNOLOGY RIGHTS (as defined below) related to LICENSED SUBJECT MATTER (as defined below), which were developed at DARTMOUTH and/or UTMDACC.

B. LICENSORS entered into the Commercialization Agreement on October 6, 2000, as amended (the “Commercialization Agreement”), whereby they agreed to jointly license LlCENSED SUBJECT MATTER and that any resulting license agreements would be administered and monitored by UTMDACC, and any license revenue would be received and distributed by UTMDACC.

C. LICENSORS desire to have the LICENSED SUBJECT MATTER developed and used for the benefit of LICENSEE, INVENTORS (as defined below), LICENSORS, and the public as outlined in BOARD’S and DARTMOUTH’S Intellectual Property Policies.

D. LICENSEE wishes to obtain a license from LICENSORS to practice LICENSED SUBJECT MATTER.

NOW, THEREFORE, in consideration of the mutual covenants and premises herein contained, the PARTIES (as defined below) agree as follows:

1. EFFECTIVE DATE

This AGREEMENT is effective as of the date written above (the “EFFECTIVE DATE”).

2. DEFINITIONS

As used in this AGREEMENT, the following terms have the meanings indicated:

2.1 AFFILIATE means any business entity more than 50% owned by LICENSEE, any business entity that owns more than 50% of LICENSEE, or any business entity that is more than 50% owned by a business entity that owns more than 50% of LICENSEE.

1

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

2.2 FDA means United States Food and Drug Administration.

2.3 INVENTOR(S) means the individuals listed as inventors on the patents and patent applications listed in attached Exhibit I.

2.4 LEAD COMPOUND means a compound that: (a) is identified by LICENSEE or its AFFILIATES; (b) is covered by or produced using LICENSED SUBJECT MATTER; and (c) has clear potential to be converted to a new drug by LEAD OPTIMIZATION (as defined below).

2.5 LEAD OPTIMIZATION means: (a) the application of medicinal chemistry to improve specificity; (b) optimization of pharmacokinetics and bioavailability; and (c) testing in preclinical studies in animals.

2.6 LICENSED FIELD means all human therapeutic and diagnostic uses, research reagent uses, and veterinary uses of LICENSED SUBJECT MATTER.

2.7 LICENSED PRODUCT means any product, process or service which is covered by or is produced using LICENSED SUBJECT MATTER.

2.8 LICENSED SUBJECT MATTER means inventions, discoveries and processes covered by PATENT RIGHTS and/or TECHNOLOGY RIGHTS within LICENSED FIELD. LICENSED SUBJECT MATTER shall not include any information or rights held by LICENSORS on tricyclic-bis-enone compounds or their derivatives.

2.9 NDA means New Drug Application as defined by the rules and regulations of the FDA or a similar regulatory requirement in any national jurisdiction.

2.10 NET SALES means the gross amount invoiced by LICENSEE, AFFILIATE and/or any sublicensee for the SALE of LICENSED PRODUCTS to a third party less: (i) normal and customary trade, cash and other discounts actually granted; (ii) charge back payments and rebates granted to managed health care organizations or to federal, state and local governments, their agencies and purchasers; (iii) commercially reasonable and customary fees paid to distributors (other than AFFILIATES) that are included in the gross invoiced amount; (iv) credits or allowances actually granted for rejections or returns of LICENSED PRODUCTS, including recalls (not to exceed the original invoiced amount); (v) sales or similar taxes, including without limitation, value added taxes or other governmental charges which are included in the invoiced amount; and (vi) freight, postage, shipping, customs duties and insurance charges for packaging which are included in the invoiced amount, all as recorded by LICENSEE in LICENSEE’s official books and records in accordance with generally accepted accounting practices and consistent with LICENSEE’s published financial statements and/or regulatory filings with the United States Securities and Exchange Commission.

2.11 PARTIES (or singly PARTY) means LICENSEE, UTMDACC, DARTMOUTH, and BOARD.

2

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

2.12 PATENT RIGHTS means LICENSORS’ rights in information or discoveries covered in the patents and patent applications listed in attached Exhibit I, and all divisionals, continuations, and letters patent that issue thereon and reissues, reexaminations or extensions thereof, and any corresponding foreign patents and patent applications.

2.13 PHASE 1 means that portion of the drug development and review process which provides for the initial introduction of an investigational new drug into humans, as more specifically defined by the rules and regulations of the FDA or a similar regulatory requirement in any national jurisdiction.

2.14 PHASE 2 means that portion of the drug development and review process which provides for early controlled clinical studies conducted to obtain preliminary data on effectiveness of an investigational new drug for a particular indication, as more specifically defined by the rules and regulations of the FDA or a similar regulatory requirement in any national jurisdiction.

2.15 PHASE 3 means that portion of the drug development and review process in which expanded clinical studies are conducted to gather the additional information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of an investigational new drug, as more specifically defined by the rules and regulations of the FDA or a similar regulatory requirement in any national jurisdiction.

2.16 SALE, SELL or SOLD means the transfer or disposition of a LICENSED PRODUCT for value to a party other than LICENSEE.

2.17 TECHNOLOGY RIGHTS means LICENSORS’ rights in technical information, know-how, processes, procedures, compositions, devices, methods, formulas, protocols, techniques, software, designs, drawings or data created by INVENTORS at DARTMOUTH or UTMDACC before the EFFECTIVE DATE and owned by either DARTMOUTH and UTMDACC, which are not covered by PATENT RIGHTS but which are necessary for practicing the PATENT RIGHTS.

3. WARRANTY: SUPERIOR-RIGHTS

3.1 Except for the rights, if any, of the government of the United States of America (the “GOVERNMENT”), as set forth below, LICENSORS represent and warrant (a) that they have legal authority to enter into this AGREEMENT, (b) that they are the owners of the entire right, title, and interest in and to LICENSED SUBJECT MATTER, (c) that they have the sole right to grant licenses thereunder, and (d) that they have not knowingly granted agreements thereunder to any other entity that would restrict rights granted to LICENSEE except as stated herein.

3.2 LICENSEE understands that the LICENSED SUBJECT MATTER may have been developed under a funding agreement with the GOVERNMENT and, if so, that the GOVERNMENT may have certain rights relative thereto. This AGREEMENT is explicitly made subject to the GOVERNMENT’S rights under any agreement and any applicable law or regulation. If there is a conflict between any agreement, applicable law or regulation and this AGREEMENT, the terms of such GOVERNMENT agreement, applicable law or regulation shall prevail. LICENSEE agrees to take all reasonable action necessary to enable LICENSORS to satisfy their obligations, if any, under 35 U.S.C. 200, et seq.

3

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

3.3 LICENSEE understands and acknowledges that LICENSORS, by this AGREEMENT, make no representation as to the operability or fitness for any use, safety, efficacy, approvability by regulatory authorities, time and cost of development, patentability, and/or breadth of the LICENSED SUBJECT MATTER. LICENSORS, by this AGREEMENT, also make no representation as to whether any patent covered by PATENT RIGHTS is valid or as to whether there are any patents now held, or which will be held, by others or by LICENSORS in the LICENSED FIELD, nor do LICENSORS make any representation that the inventions contained in PATENT RIGHTS do not infringe any other patents now held or that will be held by others or by LICENSORS. As of the EFFECTIVE DATE, UTMDACC’s Office of Technology Commercialization and DARTMOUTH acknowledge that they have not received any communications from third parties that allege or threaten the validity or enforceability of the PATENT RIGHTS.

3.4 LICENSEE, by execution hereof, acknowledges, covenants and agrees that it has not been induced in any way by LICENSORS or their employees to enter into this AGREEMENT, and further warrants and represents that (a) it has conducted sufficient due diligence with respect to all items and issues pertaining to this AGREEMENT and all other matters pertaining to this AGREEMENT; and (b) LICENSEE has adequate knowledge and expertise, or has utilized knowledgeable and expert consultants, to adequately conduct such due diligence, and agrees to accept all risks inherent herein.

3.5 To UTMDACC’s Office of Technology Commercialization and DARTMOUTH’s knowledge, as of the EFFECTIVE DATE the patents and patent applications listed in attached Exhibit 1 constitute all of the patents and pending patent applications prosecuted by UTMDACC and DARTMOUTH necessary to practice the LICENSED SUBJECT MATTER.

4. LICENSE

4.1 LICENSORS hereby grant to LICENSEE a worldwide, royalty-bearing, exclusive license under LICENSED SUBJECT MATTER to manufacture, have manufactured, use and/or SELL LICENSED PRODUCTS for use within LICENSED FIELD. This grant is subject to Sections 3.2 and 3.3 herein, the payment by LICENSEE to UTMDACC of all consideration as provided herein, the timely payment of all amounts due under any sponsored research agreement between LICENSEE and UTMDACC and/or DARTMOUTH in effect during the term of this AGREEMENT, and is further subject to rights retained by LICENSORS to:

a. publish the general scientific findings from research related to LICENSED SUBJECT MATTER subject to the terms of Article 14, Confidential Information; and

b. use LICENSED SUBJECT MATTER for academic research, teaching, patient care and other educationally-related purposes; and

c. transfer LICENSED SUBJECT MATTER to academic or research institutions for non- commercial research use, provided however, that any transfer of material embodiments of LICENSED SUBJECT MATTER pursuant to this Section 4.l(c) will be governed by a material transfer agreement substantially in the form attached as EXHIBIT 3.

4

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Notwithstanding the rights retained by LICENSORS in Section 4.l(b) to use the LICENSED SUBJECT MATTER for patient care, LICENSORS agree that a LICENSED PRODUCT which is in active commercial development or under consideration for such development by LICENSEE will not be administered by LICENSORS to any human, nor provided to any third party for administration to humans, except as part of a clinical trial sponsored by LICENSEE or a commercial partner of LICENSEE.

4.2 LICENSEE may extend the license granted herein to any AFFILIATE if the AFFILIATE consents in writing to be bound by this AGREEMENT to the same extent as LICENSEE. LICENSEE must deliver to UTMDACC a true and accurate copy of such written agreement, and any modification or termination thereof, within 30 days after execution, modification or termination.

4.3 LICENSEE may grant sublicenses consistent with this AGREEMENT if LICENSEE is responsible for the compliance by its sublicensees with all applicable terms and conditions of this AGREEMENT, and for diligently collecting all amounts due from sublicensees. If a sublicensee pursuant hereto becomes bankrupt, insolvent or placed in the hands of a receiver or trustee, LICENSEE to the extent allowed under the applicable law and in a timely manner agrees to use its best reasonable efforts to collect all consideration owed and to have the sublicense agreement confirmed or rejected by a court of proper jurisdiction. Additionally, LICENSEE must deliver to UTMDACC a true and correct copy of each sublicense granted by LICENSEE, and any modification or termination thereof, within 30 days after execution, modification, or termination. If this AGREEMENT is terminated, LICENSORS agree to accept as successors to LICENSEE existing sublicensees in good standing at the date of termination, provided that the sublicensees consent in writing to be bound by all the terms and conditions of this AGREEMENT.

5. PAYMENTS AND REPORTS

5.1 In consideration of rights granted by LICENSORS to LICENSEE under this AGREEMENT, LICENSEE will pay or issue to UTMDACC the following:

a. equity as described in Article 6;

b. an annual license reissue fee in the amount of $[***], due and payable on each anniversary of the EFFECTIVE DATE beginning on the first anniversary and occurring before FDA pre-marketing approval of any LICENSED PRODUCT;

c. a running royalty of [***]% of NET SALES (including NET SALES of any sublicensees). After FDA pre-marketing approval of any LICENSED PRODUCT, LICENSEE shall pay a minimum royalty of $[***] on each anniversary of the EFFECTIVE DATE if that amount is greater than [***]% of NET SALES;

5

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

d. milestone fees according to the table below, due and payable within 30 days of each milestone event for application of a LICENSED PRODUCT as a cancer therapeutic agent (the “Cancer Applications”):

Milestone Event	Milestone Fee
[***]	$	[***]
[***]	$	[***]
[***]	$	[***]

For the purpose of this Paragraph 5.ld, Paragraph 5.1e, and Paragraph 5.1g below, “Initiation” means the date the first patient is dosed by or on behalf of LICENSEE. All milestone fees for Cancer Applications are payable only once, regardless of the number of times the milestone is achieved and regardless of the number of LICENSED PRODUCTS that achieve a milestone event;

e. milestone fees according to the table below, due and payable within 30 days of each milestone event for application of a LICENSED PRODUCT as a therapeutic agent for any indication other than cancer (the “Non-Cancer Applications”):

Milestone Event	Milestone Fee
[***]	$	[***]
[***]	$	[***]
[***]	$	[***]

All milestone fees for Non-Cancer Applications are payable only once, regardless of the number of times the milestone is achieved and regardless of the number of LICENSED PRODUCTS that achieve a milestone event;

f. $[***] for all out-of-pocket expenses paid by LICENSORS prior to December 31, 2003 in filing, prosecuting, enforcing and maintaining PATENT RIGHTS, and all such expenses paid by LICENSORS thereafter, for so long as, and in such countries as this AGREEMENT remains in effect. UTMDACC will invoice LICENSEE on a quarterly basis for expenses paid by LICENSORS after December 31, 2003. The invoiced amounts will be due and payable by LICENSEE within 60 days. LICENSEE agrees to pay UTMDACC $[***] of such prior expenses in US dollars. Solely at LICENSEE’S discretion on an invoice-by-invoice basis, LICENSEE may pay all other amounts due under this Section 5.1f in U.S. currency or issue to LICENSORS a sufficient number of fully paid shares of its most recently sold series of preferred stock valued at the price it was sold to independent third parties; provided such sale shall have been for an aggregate of at least $[***] and consummated in the previous twelve (12) months; if there has been no such sale within the most recent twelve (12) months, LICENSEE must pay such invoices in cash. In any issuance of stock pursuant to this paragraph, LICENSEE shall make the same representations and warranties to LICENSORS that it makes in Article 6 hereof. If within six months of paying an invoice by issuing shares LICENSEE issues stock at a price per equivalent share less than the calculation used in such invoice, LICENSEE shall issue additional shares to LICENSORS so that LICENSORS will have received sufficient additional shares such that at the lower valuation the aggregate shares issued have a value equal to the invoice amount; and

g. a sublicense fee equal to the applicable percentage listed in the table below of all compensation, regardless of form, other than royalties on NET SALES, and research and development money, received by LICENSEE in consideration of grant of sublicense pursuant to Paragraph 4.3 above, within 30 days of LICENSEE’S receipt of any such

6

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

consideration. In the event a sublicense agreement includes consideration for a combination of LICENSED SUBJECT MATTER and LICENSEE’S other technologies, the amount due will be reasonably determined by LICENSORS and LICENSEE based on the relative value of LICENSED SUBJECT MATTER and LICENSEE’S additional technology, as agreed by LICENSORS and LICENSEE:

Sublicense Date	Fee
[***]		[***]	%
[***]		[***]	%
[***]		[***]	%
[***]		[***]	%
[***]		[***]	%
[***]		[***]	%

5.2

The “value” of any equity securities will be calculated as follows: (1) if traded on a securities exchange or the NASDAQ National Market System, the value shall be deemed for all purposes to be the average of the security’s last sales price (or if there shall have been no sales, the last bid price) for five consecutive trading days preceding the date such securities are received by LICENSEE; (2) if actively traded over the counter (other than the NASDAQ National Market System), the value shall be deemed for all purposes to be the average of the security’s closing bid price for five consecutive trading days preceding the date such securities are received by LICENSEE; or (3) if there is no active public market, the value shall be the estimated fair value thereof, as determined in LICENSEE’S and UTMDACC’s reasonable discretion, taking into consideration the cost of the securities, prices of recent significant placements of securities of the same issuer, any financial data and projections of the company provided to the LICENSEE, and such other factors as LICENSEE and UTMDACC may deem relevant. Notwithstanding the foregoing, the value of any equity securities under (1) or (2) above that are subject to a restriction impairing the free marketability thereof shall be determined by making an appropriate discount, as determined in LICENSEE’S and UTMDACC’s reasonable discretion, to the valuation determined under (1) or (2) to reflect the effect on the value of the restrictions on marketability. If the sublicense or assignment agreement calls for equity payment in excess of fair market value, then the excess payment will be subject to the sublicense fee payment schedule in Section 5.1g above.

5.3 In the event of late payments or issues to UTMDACC due under Article 5 or 6, a late payment charge calculated using simple interest on the overdue amount at [***]% above the prime rate, or successive prime rates, in effect at The JP Morgan Chase Bank during the delinquency will be assessed and due additionally from LICENSEE for each such late payment. If such interest rate is greater than the highest allowable rate by law, then the interest rate will be the highest allowable rate by law.

7

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

5.4 During the term of this AGREEMENT and for one year thereafter, LICENSEE agrees to keep complete and accurate records of its and its sublicensees’ SALES and NET SALES in sufficient detail to enable the royalties and other payments due hereunder to be determined. LICENSEE agrees to permit UTMDACC or its representatives, at UTMDACC’s expense and with fourteen (14) days written notice, to examine its books, ledgers, and records during regular business hours, once per calendar year, for the purpose of and solely to the extent necessary to verify any report required under this AGREEMENT. If the amounts due to LICENSORS are determined to have been underpaid by an amount equal or greater than [***]% of the total amount due during the period examined, LICENSEE will pay the cost of such examination and all overdue amounts with accrued interest at the highest allowable rate.

5.5 Unless otherwise provided, all payments under this Article 5 are due and payable within 30 days after March 31, June 30, September 30, and December 31 of each year during the term of this AGREEMENT. At such times, LICENSEE must also deliver to UTMDACC a true and accurate written report, even if no payments are due LICENSORS, giving the particulars of the business conducted by LICENSEE and its sublicensee(s), if any exist, during the preceding three calendar months under this AGREEMENT as necessary for UTMDACC to account for LICENSEE’s payments hereunder. Such reports will be on a per-country and per-product basis and presented substantially in the form as shown in Exhibit 2. Simultaneously with the delivery of each report, LICENSEE must pay or issue to UTMDACC the amount due, if any, for the period of each report.

On or before January 31 of each year during the term of this AGREEMENT, irrespective of having a first SALE or offer for SALE, LICENSEE must deliver to UTMDACC a written progress report as to LICENSEE’S (and any sublicensee’s) efforts and accomplishments during the preceding year in researching and commercializing LICENSED SUBJECT MATTER and LICENSEE’S (and sublicensee’s) research and commercialization plans for the upcoming year.

5.6 All amounts payable by LICENSEE must be paid in United States dollars without deductions for taxes, assessments, fees, or charges of any kind. Royalties accruing on SALES in countries other than the United States must be paid in United States dollars in amounts based on the rate of exchange as quoted in the Wall Street Journal (WSJ) as of the last business day of the reporting period. If the WSJ does not publish any such rate, a comparable rate publication will be agreed upon from time to time by UTMDACC and LICENSEE, and with respect to each country for which such rate is not published by the WSJ or in a comparable publication UTMDACC and LICENSEE will use the prevailing rate for bank cable transfers for such date, as quoted by leading United States banks in New York City dealing in the foreign exchange market.

5.7 All payments must be payable to UTMDACC and sent to the address listed in Paragraph 16.3.

5.8 No payments due or royalties owed under this AGREEMENT will be reduced as the result of co-ownership of LICENSED SUBJECT MATTER by BOARD, DARTMOUTH or another party, including but not limited to LICENSEE.

6. EQUITY OWNERSHIP

6.1 ln consideration of the rights granted to LICENSEE by LICENSORS in this AGREEMENT, LICENSEE will, upon execution of this AGREEMENT, issue BOARD [***]

8

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

([***]) fully paid, non-assessable shares of its common stock, at $0.001 par value (the “Shares”). LICENSEE shall issue the Shares in the name of the Board of Regents of The University of Texas System and deliver such Shares to: William Doty, Managing Director, Technology Commercialization, M. D. Anderson Cancer Center, 7515 South Main, Suite 490, Houston, Texas 77030. Additionally, LICENSEE will issue each UTMDACC inventor, [***] and [***], fully paid, non-assessable shares of its common stock, at $0.001 par value in separate agreements to be promptly negotiated and executed by LICENSEE and each inventor to which LICENSORS will not be a party. Such agreements will be attached hereto as Exhibits 4 and 5 upon their execution and the Parties agree that this may be done after the execution of this AGREEMENT.

6.2 LICENSEE hereby represents and warrants individually to each of the LICENSORS as follows:

a. LICENSEE is duly incorporated, validly existing and in good standing under the laws of its state of incorporation, and is duly qualified to do business as a foreign corporation in all jurisdictions in which the failure to be so qualified would materially and adversely affect the business or financial condition, properties or operations of LICENSEE.

b. LICENSEE’s authorized stock consists of (i) 15,000,000 shares of Common Stock of which 4,302,292 shares are outstanding; (ii) 1,751,000 shares of Series A Convertible Preferred Stock of which 1,751,000 shares are outstanding; (iii) 4,166,666 shares of Series B Convertible Preferred Stock of which 3,177,587 shares are outstanding; and (iv) 82,334 shares of undesignated preferred stock, none of which is outstanding.

c. The Shares, when issued in accordance with this AGREEMENT, will be validly authorized, duly issued and fully paid and nonassessable shares of Common Stock of LICENSEE, and the issuance thereof will not conflict with the certificate of incorporation or bylaws of LICENSEE or any agreement by which LICENSEE is bound. The issuance of the Shares will be in compliance with all federal and state securities laws applicable to such issuance and sale.

d. LICENSEE sold 3,050,921 shares of its Series B Convertible Preferred Stock for a price of $1.50 per share with a final closing date of November 25, 2003, to unrelated third parties.

7. SPONSORED RESEARCH

LICENSEE agrees to enter into separate sponsored research agreements with UTMDACC and DARTMOUTH within one hundred and eighty (180) days from the EFFECTIVE DATE in which LICENSEE will provide financial payments to LICENSOR(S) to support the development of the LICENSED SUBJECT MATTER or related subject matter. The specific amounts and timing of such payments, and the associated work plans, will be determined under a separate agreement with each of LICENSORS. Additionally, if LICENSEE receives payments for sponsored research pursuant to a sublicense under this AGREEMENT, LICENSEE (a) will notify UTMDACC and/or DARTMOUTH in writing of all opportunities to conduct this sponsored research (including clinical trials, if applicable), (b) solicit research and/or clinical proposals from UTMDACC and/or DARTMOUTH for this purpose, and (c) will give good faith consideration to funding the proposals at UTMDACC and/or DARTMOUTH.

9

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

8. TERM AND TERMINATION

8.1 Subject to Sections 3.2 and 3.3, the term of this AGREEMENT is from the EFFECTIVE DATE to the full end of the term or terms for which PATENT RIGHTS have not expired or, if only TECHNOLOGY RIGHTS are licensed and no PATENT RIGHTS are applicable, then for a period of 20 years.

8.2 Any time after [***] years from the EFFECTIVE DATE, LICENSORS have the right to terminate this license in any national political jurisdiction if LICENSEE, within ninety (90) calendar days after receiving written notice from LICENSORS of the intended termination, fails to provide written evidence satisfactory to LICENSORS that LICENSEE is using its best efforts to commercialize a licensed invention in such jurisdiction(s). As evidence of LICENSEE’s best efforts, LICENSEE will achieve at least the following performance milestones within the designated time period following the EFFECTIVE DATE:

a. [***] within [***] months;

b. [***] within [***] years;

       and

c. [***] within [***] years.

Additionally, LICENSEE will continue to use its best efforts to initiate and complete PHASE 3 and to have commercial sales of LICENSED PRODUCTS. LICENSORS recognize that completion of clinical milestone targets will be contingent on the lead LICENSED PRODUCT’S performance in preclinical and PHASE 1, respectively. If LICENSEE fails to meet any of the above provisions because it is not using its best efforts to develop the LICENSED PRODUCTS, then LICENSORS at their sole discretion have the right and option to either terminate this AGREEMENT or reduce LICENSEE’s exclusive license to a nonexclusive license. Notwithstanding the foregoing, LICENSEE may extend the due date of any given performance milestone for a period of up to [***] years upon payment of $[***]. Such payments must be paid on or before the due date of each performance milestone, and for any subsequent years, on or before each anniversary of such due date.

8.3 This AGREEMENT will terminate earlier than as set forth in Paragraph 8.1:

a. automatically if LICENSEE becomes the subject of insolvency, dissolution or bankruptcy proceedings affecting the operation of its business and/or if the business of LICENSEE is placed in the hands of a receiver, assignee, or trustee, whether by voluntary act of LICENSEE or otherwise; or

b. upon 30 days written notice from UTMDACC (on behalf of LICENSORS) if LICENSEE breaches or defaults on its obligations (i) to make payments (if any are due) or reports, in accordance with the terms of Article 5, (ii) to issue stock under Article 6, or (iii) under Article 13 (Use of Name), unless, before the end of the 30 day period, LICENSEE has cured the breach or default to LICENSORS’ satisfaction and so notifies LICENSORS in writing, stating the manner of the cure; or

10

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

c. upon 90 days written notice from UTMDACC (on behalf of LICENSORS) if LICENSEE breaches or defaults on any other material obligation under this AGREEMENT, unless, before the end of the 90 day period, LICENSEE has cured the breach or default to LICENSORS’ satisfaction and so notifies LICENSORS in writing, stating the manner of the cure; or

d. at any time by mutual written agreement among LICENSEE, UTMDACC, and DARTMOUTH, upon 30 days written notice to all PARTIES and subject to any terms herein which survive termination;

e. at any time by LICENSEE, upon 180 days written notice to all parties and subject to any terms herein which survive termination;

f. under the provisions of Paragraph 8.2 if invoked; or

g. if LICENSEE has defaulted or been late on its payment obligations under this AGREEMENT on any two occasions during a twelve (12) month period.

8.4 Upon termination of this AGREEMENT:

a. nothing herein will be construed to release either PARTY of any obligation matured prior to the effective date of the termination;

b. LICENSEE agrees and covenants to be bound by the provisions of Articles 12 (Indemnification), Article 13 (Use of Name) and Article 14 (Confidential Information) of this AGREEMENT;

c. after the effective date of the termination, LICENSEE will provide BOARD with a written inventory of all LICENSED PRODUCTS in process of manufacture, in use or in stock. LICENSEE may SELL any such LICENSED PRODUCTS within the 90 day period following such termination if it pays earned royalties thereon, and any other amount due pursuant to the terms of Article 5; and

d. LICENSEE grants to UTMDACC and DARTMOUTH a nonexclusive royalty bearing license with the right to sublicense others with respect to improvements made by LICENSEE (including improvements licensed by LICENSEE from third parties) in the LICENSED SUBJECT MATTER. LICENSEE, UTMDACC and DARTMOUTH agree to negotiate in good faith the royalty rate for the nonexclusive license. UTMDACC’s and DARTMOUTH’s right to sublicense others hereunder is solely for the purpose of permitting others to develop and commercialize the entire technology package.

9. INFRINGEMENT BY THIRD PARTIES

9.1 Each PARTY will promptly inform the other of any suspected infringement of any claims in the PATENT RIGHTS or the misuse, misappropriation, theft or breach of confidence of other proprietary rights in the LICENSED SUBJECT MATTER by a third party. LICENSEE has the right, but not the obligation, to institute an action for infringement, misuse, misappropriation, theft

11

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

or breach of confidence of the proprietary rights against such third party and is entitled to retain recovery from such enforcement, provided however, after reimbursement of LICENSEE’s reasonable legal costs and expenses related to such enforcement, any award or damages awarded to LICENSEE that constitute lost profits shall be considered NET SALES for purposes of calculating royalties due LICENSORS. Additionally, if any award or damages awarded to LICENSEE constitute “reasonable royalties” pursuant to 35 USC §284 or punitive damages, LICENSEE agrees to pay LICENSORS [***] percent ([***]%) of any such reasonable royalties or punitive damages. At LICENSEE’S request and expense, and subject to the statutory duties of the Texas Attorney General, LICENSORS agree to join any such action brought by LICENSEE if necessary. If LICENSEE fails to bring such an action or proceeding within 120 days after receiving notice or otherwise having knowledge of such infringement, then LICENSORS may institute an action for infringement, misuse, misappropriation, theft or breach of confidence of the proprietary rights against such third party at its own expense and retain all recoveries from such enforcement, and/or reduce the license granted hereunder to semi-exclusive and grant a license to such third party. LICENSORS will provide LICENSEE with 20 days written notice before they commence any legal action to terminate infringement of PATENT RIGHTS and LICENSEE may commence legal action at any time during the 20 day notice period. LICENSEE must provide LICENSORS with evidence that it has commenced legal action within the 20 day notice period, and all recoveries resulting from such action will be divided equally between LICENSEE and LICENSORS after LICENSEE recovers its costs and expenses directly related to such action.

9.2 In any infringement suit or dispute, the PARTIES agree to cooperate fully with each other. At the request and expense of the PARTY bringing suit, the other PARTY will permit access to all relevant personnel, records, papers, information, samples, specimens, etc., during regular business hours.

10. ASSIGNMENT

Except in connection with the sale of substantially all of LICENSEE’S assets to a third party, or in the case of a merger, consolidation or a similar transaction, with written notice to LICENSORS, LICENSEE may not assign this AGREEMENT without the prior written consent of LICENSORS, which will not be unreasonably withheld. A sale of LICENSEE’s outstanding stock, at any time, by any of its then existing stockholders, in one or a series of transactions, such that after such sale persons who prior to such sale held shares of stock representing the right to appoint a majority of the board of directors no longer hold shares of stock representing the right to appoint a majority of the board of directors, shall be deemed to be an assignment of this AGREEMENT and subject to the terms of this Article 10.

11. PATENT MARKING

LICENSEE must permanently and legibly mark all products, packaging and documentation manufactured or SOLD by it under this AGREEMENT with a patent notice as may be permitted or required under Title 35, United States Code or other applicable national law.

12. INDEMNIFICATION

12.1 LICENSEE agrees to hold harmless and indemnify BOARD, INVENTORS, SYSTEM, DARTMOUTH, UTMDACC, their officers, employees, students and agents from and against any claims, demands, or causes of action whatsoever, costs of suit and reasonable attorneys fees, including without limitation those arising on account of any injury or death of persons or damage to property caused by, or arising out of, or resulting from, the exercise or practice of the rights granted hereunder by LICENSEE, its AFFILIATES or their officers, employees, agents or representatives.

12

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

12.2 In no event shall BOARD, SYSTEM, UTMDACC or DARTMOUTH be liable for any indirect, special, consequential or punitive damages (including, without limitation, damages for loss of profits or expected savings or other economic losses, or for injury to persons or property) arising out of, or in connection with, this AGREEMENT or its subject matter, regardless of whether BOARD, SYSTEM, UTMDACC or DARTMOUTH knows or should know of the possibility of such damages.

12.3 At such time as any product, process, service relating to, or developed pursuant to, this AGREEMENT is being commercially distributed or SOLD (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a sublicensee, LICENSEE shall at its sole cost and expense, procure and maintain comprehensive general liability insurance in amounts not less than $[***] per incident and naming UTMDACC, SYSTEM, BOARD and DARTMOUTH as additional insureds. Such comprehensive general liability insurance shall provide (i) product liability coverage and (ii) broad form contractual liability coverage for LICENSEE’s indemnification under this AGREEMENT. If LICENSEE elects to self-insure all or part of the limits described above (including deductibles or retentions which are in excess of $[***] annual aggregate) such self-insurance program must be acceptable to LICENSORS. Such insurance will be considered primary as to any other valid and collectible insurance, but only as to acts of the named insured. The minimum amounts of insurance coverage required shall not be construed to create a limit of LICENSEE’s liability with respect to its indemnification under this AGREEMENT.

LICENSEE shall provide LICENSORS with written evidence of such insurance upon request of any LICENSOR. LICENSEE shall provide LICENSORS with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance; if LICENSEE does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, LICENSORS shall have the right to terminate this AGREEMENT effective at the end of such fifteen (15) day period without notice or any additional waiting periods.

LICENSEE shall maintain such comprehensive general liability insurance beyond the expiration or termination of this AGREEMENT during (i) the period that any product, process, or service, relating to, or developed pursuant to, this AGREEMENT is being commercially distributed or sold by LICENSEE or by a sublicensee; and (ii) a reasonable period after the period referred to in (i) above which in no event shall be less than fifteen (15) years.

13. USE OF NAME

LICENSEE may not use the name of UTMDACC, SYSTEM, DARTMOUTH, INVENTORS, or BOARD (or their employees) without express written consent from UTMDACC and/or DARTMOUTH except as required by governmental law, rule or regulation. Consent must be requested from, in the case of UTMDACC and SYSTEM:

M.D. Anderson Services Corporation

7505 S. Main Suite 500, Unit

0525 Houston, TX 77030

ATTENTION: Natalie Wright

Email: nwright@mdanderson.org

13

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

and, in the case of DARTMOUTH:

Office of General Counsel

14 South Main Street, Suite 2 - C

Hanover, New Hampshire 03755

14. CONFIDENTIAL INFORMATION

14.1 The PARTIES agree that all information forwarded to one PARTY by the other and clearly designated in writing as “CONFIDENTIAL” at the time of transfer or so designated in writing within thirty (30) days after oral disclosure: (1) are to be received in strict confidence, (2) are to be used only for the purposes of this AGREEMENT, and (3) are not to be disclosed by the recipient PARTY, its agents or employees without the prior written consent of the other PARTY, except to the extent that the recipient PARTY can establish competent written proof that such information:

a. was in the public domain at the time of disclosure;

b. later became part of the public domain through no act or omission of the recipient PARTY, its employees, agents, successors or assigns;

c. was lawfully disclosed to the recipient PARTY by a third party having the right to disclose it;

d. was already known by the recipient PARTY at the time of disclosure;

e. was independently developed by the recipient PARTY without use of the other PARTY’s confidential information; or

f. is required by law or regulation to be disclosed, provided however, that the disclosing PARTY shall first give the other PARTY written notice and adequate opportunity to object to such order for disclosure or to request confidential treatment.

14.2 Information shall not be deemed to be available to the public or to be in the recipient PARTY’s possession merely because it:

a. includes information that falls within an area of general knowledge available to the public or to the recipient (but which does not include the specific information provided by the other PARTY); or

b. can be reconstructed in hindsight from a combination of information from multiple sources that are available to the public or to the recipient, if not one of those sources actually taught or suggested the entire combination, together with its meaning and importance.

14.3 Each PARTY’s obligation of confidence hereunder shall be fulfilled by using at least the same degree of care with the other PARTY’s confidential information as it uses to protect its own confidential information, but always at least a reasonable degree of care. This obligation shall exist while this AGREEMENT is in force and for a period of three years thereafter.

14

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

14.4 LICENSORS reserve the right to publish the general scientific findings from research related to LICENSED SUBJECT MATTER, with due regard to the protection of LICENSEE’s confidential information. UTMDACC and/or DARTMOUTH will submit the manuscript of any proposed publication to LICENSEE at least thirty (30) calendar days before publication, and LICENSEE shall have the right to review and comment upon the publication in order to protect LICENSEE’s confidential information.

Upon LICENSEE’s request, publication may be delayed up to sixty (60) additional calendar days to enable LICENSEE to secure adequate intellectual property protection of LICENSEE’s confidential information that would otherwise be affected by the publication.

15. PATENTS AND INVENTIONS

15.1 If after consultation, the PARTIES agree that a patent application should be filed for LICENSED SUBJECT MATTER, then LICENSORS will prepare and file the appropriate patent application, and LICENSEE will pay the cost of searching, preparing, filing, prosecuting and maintaining same and this application will be considered PATENT RIGHTS. lf LICENSEE notifies LICENSORS that it does not intend to pay such costs, or if LICENSEE does not respond or make an effort to agree with LICENSORS on the disposition of rights in the subject invention, then LICENSORS may file an application at their own expense and LICENSEE will have no rights to such invention. LICENSORS shall retain the sole right to select the attorney responsible for filing, prosecution and maintenance of any patents based on technology invented at UTMDACC and DARTMOUTH and subject to this AGREEMENT. UTMDACC will provide LICENSEE a copy of any patent application for which LICENSEE has paid the cost of filing, as well as copies of any documents received or filed with the respective patent office during the prosecution thereof. The PARTIES each have the right to review and comment upon the wording of specifications, claims and responses to office actions prior to their submission to the appropriate patent office and will promptly and timely submit such comments to UTMDACC. If UTMDACC anticipates any extraordinary expenditures arising from the preparation, filing, prosecution, or defense of any patent application and/or patent included in PATENT RIGHTS, then UTMDACC will consult with LICENSEE to determine a mutually acceptable course of action prior to incurring such expenditures. The PARTIES agree that they share a common legal interest to get valid enforceable patents and that LICENSEE will keep all privileged information received pursuant to this Section confidential.

15.2 Each PARTY will promptly inform the other of any request for, or filing or declaration of, any interference, opposition, or reexamination relating to PATENT RIGHTS. In connection with any interference, opposition, reissue, or reexamination proceeding relating to PATENT RIGHTS filed by a third party, LICENSORS shall retain the sole right to select the attorney responsible for handling such matter and shall direct such attorney. Additionally, the PARTIES will cooperate fully on such action or proceeding and will provide each other with any information or assistance that either may reasonably request. Each PARTY will keep the other informed of developments in any such action or proceeding, including, to the extent permissible, the status of any settlement negotiations and the terms of any offer related thereto. The PARTIES agree that they share a common legal interest to keep valid enforceable patents and that LICENSEE will keep all privileged information received pursuant to this Section confidential.

15

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

15.3 DARTMOUTH and UTMDACC agree that to the extent any of the terms in this Article IS conflict with the terms in the Commercialization Agreement, the terms of the Commercialization Agreement shall control.

16. GENERAL

16.1 This AGREEMENT constitutes the entire and only agreement between the PARTIES for LICENSED SUBJECT MATTER and all other prior negotiations, representations, agreements, and understandings are hereby superseded. No agreements altering or supplementing these terms may be made except by a written document signed by all PARTIES.

16.2 Any payments required by this AGREEMENT must be paid to [***] or by wire transfer to:

[***]

[***]

[***]

[***]

[***]

[***]

REFERENCE: include title and EFFECTIVE DATE of AGREEMENT and type of payment (e.g., license documentation fee, milestone payment, royalty [including applicable patent/application identified by MDA reference number and patent number or application serial number], or maintenance fee, etc.).

16.3 Any notice required by this AGREEMENT must be given by email or facsimile transmission confirmed by personal delivery (including delivery by reputable messenger services such as Federal Express) or by prepaid, first class, certified mail, return receipt requested, addressed in the case of BOARD and UTMDACC to:

The University of Texas M.D. Anderson Cancer Center

Office for Technology Commercialization

7515 S. Main Street, Suite 490, Unit 0510

Houston, Texas 77030

ATTENTION: William J. Doty

Email: wdoty@mdanderson.org

Phone: (713) 745-9600

Fax: (713) 794-1356

or in the case of DARTMOUTH to:

Dartmouth College

Technology Transfer Office

II Rope Feny Road

Hanover, NH 03755

ATTENTION: Alla Kan, Director

Email: alla.kan@dartmouth.edu

Phone: (603) 646-3027

Fax: (606) 646-3670

16

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

or in the case of LICENSEE to:

Reata Discovery, Inc.

1950 N. Stemmons Freeway, Suite 5001

Dallas, Texas 75207

ATTENTION: J. Warren Huff, CEO and President

Email: warren.huff@reatadiscovery.com

Phone: (214) 800-870I

Fax: (214) 722-0867

or other addresses as may be given from time to time under the terms of this notice provision.

16.4 LICENSEE must comply with all applicable national, state and local laws and regulations in connection with its activities pursuant to this AGREEMENT.

16.5 This AGREEMENT will be construed and enforced in accordance with the laws of the United States of America and of the State of Texas, without regard to its conflict of law provisions. The Texas state courts of Harris County, Texas (or, if there is exclusive federal jurisdiction, the United States District Court for the Southern District of Texas) shall have exclusive jurisdiction and venue over any dispute arising out of this AGREEMENT, and LICENSEE hereby consents to the jurisdiction of such courts; however, nothing herein shall be deemed as a waiver by BOARD, SYSTEM or UTMDACC of its sovereign immunity

16.6 Any dispute or controversy arising out of or relating to this AGREEMENT, its construction or its actual or alleged breach will be decided by mediation. If the mediation does not result in a resolution of such dispute or controversy, it will be finally decided by an appropriate method of alternate dispute resolution, including without limitation, arbitration, conducted in the city of Houston, Harris County, Texas, in accordance with the then applicable procedures of the American Arbitration Association. The arbitration panel will include members knowledgeable in the evaluation of the LICENSED SUBJECT MATTER. Judgment upon the award rendered may be entered in the highest court or forum having jurisdiction, state or federal. The provisions of this Section 16.6 will not apply to decisions on the validity of patent claims or to any dispute or controversy as to which any treaty or law prohibits such arbitration. The decision of the arbitration must be sanctioned by a court of law having jurisdiction to be binding upon and enforceable by the PARTIES.

16.7 Failure of LICENSORS to enforce a right under this AGREEMENT will not act as a waiver of that right or the ability to later assert that right relative to the particular situation involved.

16.8 Headings are included herein for convenience only and shall not be used to construe this AGREEMENT.

16.9 lf any part of this AGREEMENT is for any reason found to be unenforceable, all other parts nevertheless remain enforceable.

16.10 Neither PARTY shall be held liable or responsible to the other PARTY nor be deemed to have defaulted under or breached this AGREEMENT for failure or delay in fulfilling or

17

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

performing any term of this AGREEMENT when such failure or delay is caused by or results from causes beyond the control of the affected PARTY, including, without limitation, fire, floods, earthquakes, natural disasters, embargoes, war, acts of war (whether war is declared or not), insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority.

18

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

IN WITNESS WHEREOF, the PARTIES hereto have caused their duly authorized representatives to execute this AGREEMENT.

BOARD OF REGENTS OF THE UNIVERSITY OF TEXAS SYSTEM				REATA DISCOVERY, INC.
	By	/s/ John Mendelsohn			By	/s/ J. Warren Huff
		John Mendelsohn, M.D.				J. Warren Huff
		President				Chief Executive Officer
		The University of Texas
		M.D. Anderson Cancer Center
Date 8/10/04				Date 7/20/2004
THE UNIVERSITY OF TEXAS M. D. ANDERSON CANCER CENTER By
		Leon Leach
		Executive Vice President
		The University of Texas
		M. D. Anderson Cancer Center
Date 7/20/2004
Approved as to Content:
	By	/s/ William J. Doty
		William J. Doty
		Managing Director
		Commercialization
		M. D. Anderson Cancer Center
Date 7/20/2004
THE TRUSTEES OF DARTMOUTH COLLEGE
B		/s/ Alla Kan
		Alla Kan, Director
		Technology Transfer Office
Date 7/20/2004			Approved as to form				/s/ N.W.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXHIBIT I

PATENT

RIGHTS

l. [***]

[***]

2. [***]

[***]

3. [***]

[***]

4. [***]

[***]

5. [***]

[***]

6. [***]

[***]

7. [***]

[***]

20

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXHIBIT 2

ROYALTY REPORT

Period / / through / /

Licensee: Agreement # :

If license covers several product lines, please prepare a separate report for

each product line. Then combine all product lines into a summary report.

Report Type:	¨	Single Product Line Report:
	¨	Multi-Product Summary Report (Page 1 of pages)

Country	Quantity Produced	Gross Sales($)	*Less Allowances	Net Sales ($)	Royalty Rate	Conversion Rate (if applicable)	Royalties Due this period (US$)
USA
Canada
Japan
Other:
Sublicenses:

Subtotal:

Less Advanced Royalty Balance (if any):

TOTAL ROYALTIES DUE THIS PERIOD:

All other amounts due:

TOTAL FOR THIS PERIOD:

*  Please indicate in the following space the specific types of deductions and the corresponding amounts used to calculate Allowances:

Please indicate the accounting methodology used to account for and calculate the items included in the report and any differences in such accounting methodology used in any previous reports:

Prepared by	–	Name:
		Title:
		Date:

21

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXHIBIT 3

MATERIALS TRANSFER AGREEMENT

                     agrees to provide                      with certain materials and know-how for the purposes stated herein under the following conditions:

1. The parties to this Agreement are:                     , hereinafter “RECIPIENT’, and                      hereinafter “INSTITUTION.” The RESEARCH (as hereinafter defined) will be conducted by RECIPIENT under the supervision of                      hereinafter “SCIENTIST”.

2. The material that is covered by this Agreement includes: (a)                     , which was developed by                      of INSTITUTION, and (b) any related chemical or biological material or associated know-how and data that will be provided by INSTITUTION or received by SCIENTIST from INSTITUTION, hereinafter “MATERIAL.” The MATERIAL is considered proprietary to INSTITUTION. INSTITUTION shall be free, in its sole discretion, to distribute the MATERIAL to others and to use it for its own purposes.

3. The MATERIAL shall be used by SCIENTIST in research to study hereinafter “RESEARCH.”

4. Neither SCIENTIST nor RECIPIENT shall distribute, release, or in any way disclose the MATERIAL to any person or entity other than laboratory personnel under SCIENTIST’S direct supervision, and SCIENTIST and RECIPIENT shall ensure that no one will be allowed to take or send MATERIAL to any other location, unless written permission is obtained from INSTITUTION. Neither SCIENTIST nor RECIPIENT shall distribute, release, or in any way disclose the MATERIAL to any commercial or for-profit entity. This MATERIAL is made available for investigational use only in laboratory animals or in vitro experiments. RECIPIENT agrees to use the MATERIAL solely for research, teaching and other educationally-related, non-commercial purposes only. RECIPIENT agrees that the MATERIAL will not be used for any other purpose. Neither the MATERIAL nor any biological materials treated therewith will be used in human beings.

5. RECIPIENT understands that the MATERIAL may be subject to certain licensing arrangements between INSTITUTION and a commercial entity (hereinafter “COMPANY”). RECIPIENT and SCIENTIST shall promptly notify INSTITUTION of any invention(s) resulting from RECIPIENT’S or SCIENTIST’S use of the MATERIAL. If INSTITUTION makes a reasonable determination that such invention(s) are subject to the terms and conditions of a licensing arrangement between INSTITUTION and COMPANY, then RECIPIENT agrees to join INSTITUTION in offering COMPANY a right of first refusal to such invention(s).

6. RECIPIENT agrees that nothing herein shall be deemed to grant to RECIPIENT or SCIENTIST any rights under any INSTITUTION patents or any rights to use the MATERIAL for any products or processes for profit-making or commercial purposes. The MATERIAL will not be used in commercially sponsored research or research that is subject to consulting or licensing obligations of RECIPIENT or SCIENTIST to another individual, institution or business entity unless prior written permission is obtained from INSTITUTION.

23

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

7. RECIPIENT shall have no rights in the MATERIAL other than as provided in this Agreement. At the request of INSTITUTION, RECIPIENT will return all unused MATERIAL.

8. RECIPIENT will inform INSTITUTION, in confidence, of results of RESEARCH related to the MATERIAL by personal written communication or by providing INSTITUTION with a draft manuscript describing such results. If RECIPIENT’S SCIENTIST desires to publish such RESEARCH results in a noncommercial scientific publication, RECIPIENT will provide INSTITUTION with a copy of any manuscript or abstract disclosing such RESEARCH results prior to submission thereof to a publisher or to any third party, and in any case, not less than forty-five (45) days prior to any public disclosure, for the purpose of protecting the MATERIAL and any proprietary and intellectual property of INSTITUTION that might be disclosed by such publication. If the publication comes about, RECIPIENT agrees to acknowledge INSTITUTION scientists, as academically and scientifically appropriate, based on provision of the MATERIAL or other direct contribution to the RESEARCH. INSTITUTION agrees that it will acknowledge SCIENTIST’S publications, as academically and scientifically appropriate, in its publications, which may refer to the results of SCIENTIST’S RESEARCH.

9. The MATERIAL is experimental in nature and it is provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. INSTITUTION MAKES NO REPRESENTATION OR WARRANTY THAT THE USE OF THE MATERIAL WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.

10. In no event shall INSTITUTION be liable for any use by SCIENTIST or RECIPIENT of the MATERIAL or any loss, claim, damage or liability, of whatsoever kind of nature, which may arise from or in connection with this Agreement or the use, handling or storage of the MATERIAL. (Except where limited by Federal law, or by the constitution and laws of the state governing the recipient,) RECIPIENT agrees to hold harmless INSTITUTION, their trustees, regents, officers, agents and employees, from any liability, loss or damage they may suffer as a result of claims, demands, costs or judgments against them arising out of the activities to be carried out pursuant to this Agreement and the use by RECIPIENT of the results obtained from RESEARCH.

11. SCIENTIST and RECIPIENT will use the MATERIAL in compliance with all laws, governmental regulations and guidelines applicable to the MATERIAL, including any specially applicable to research with recombinant DNA, and when the MATERIAL is used in the United States, SCIENTIST will comply with current NIH guidelines.

12. This Agreement is not assignable, whether by operation of law or otherwise, without the prior written consent of INSTITUTION.

24

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

13. This AGREEMENT constitutes the entire and only agreement between the parties for MATERIAL and all other prior representations, agreements, and understandings are superseded hereby.

INSTITUTION	RECIPIENT
	Address
	Name:
	Title:
	Date:
	READ AND UNDERSTOOD

25

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXHIBIT 4

AGREEMENT BETWEEN DR. ANDREEFF AND LICENSEE

(TO BE ATTACHED WHEN COMPLETE - CAN BE AFTER EXECUTION OF LICENSE AGREEMENT)

26

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXHIBIT 5

AGREEMENT BETWEEN DR. KONOPLEVA AND LICENSEE

(TO BE ATTACHED WHEN COMPLETE - CAN BE AFTER EXECUTION OF LICENSE AGREEMENT)

27

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

AMENDMENT NO. 1 TO THE

EXCLUSIVE PATENT LICENSE AGREEMENT

BETWEEN THE UNIVERSITY OF TEXAS

M.D. ANDERSON CANCER CENTER,

DARTMOUTH COLLEGE AND

REATA DISCOVERY, INC.

This is AMENDMENT NO. 1 effective this 11th day of April 2007 (“AMENDMENT NO. 1 EFFECTIVE DATE”) to the Exclusive Patent License Agreement (the “ORIGINAL LICENSE”) dated effective as of July 15, 2004 by and among the Board of Regents (the “BOARD”) of The University of Texas System (the “SYSTEM”), an agency of the State of Texas, whose address is 201 West 11 th street, Austin, Texas 78701, on behalf of The University of Texas M.D. Anderson Cancer Center (“UTMDACC”), a component institution of the SYSTEM; Trustees of Dartmouth College (“DARTMOUTH”), a non-profit educational and research institution existing under the laws of the State of New Hampshire, and being located at Hanover, New Hampshire; and Reata Pharmaceuticals, Inc. (“LICENSEE”), a Delaware corporation having a principal place of business located at 2801 Gateway Drive, Suite 150, Irving, TX 75063.

RECITALS

A. The parties want to simplify the royalty reporting requirements during the period prior to SALE of LICENSED PRODUCTS.

B. The definitions set forth in the ORIGINAL LICENSE shall apply in this AMENDMENT NO. 1, except to the extent that a definition in this AMENDMENT NO. 1 is specific to this AMENDMENT NO. 1.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereby agree to the following:

AMENDED TERMS

1. Section 5.5 of the ORIGINAL LICENSE is hereby amended to include the following language at the end of the first paragraph:

“However, until the first SALE, the quarterly royalty reports described above will not be required. Instead, LICENSEE will provide an annual royalty report on or before January 31 of each year during the term of this AGREEMENT in concert with the annual progress report described below.”

2. The parties acknowledge and agree that, except as set forth in this AMENDMENT NO. 1 the terms and conditions of the ORIGINAL LICENSE shall remain in full force and effect.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives to execute this AMENDMENT NO. 1.

BOARD OF REGENTS OF		REATA DISCOVERY, INC.
THE UNIVERSITY OF TEXAS SYSTEM
By	/s/ John Mendelsohn		By	/s/ J. Warren Huff
	John Mendelsohn, M.D.			J. Warren Huff
	President			Chief Executive Officer
	The University of Texas
	M.D. Anderson Cancer Center
Date 4/11/07		Date 3/5/2007
THE UNIVERSITY OF TEXAS
M.D. ANDERSON CANCER CENTER
By	/s/ Leon Leach
	Leon Leach
	Executive Vice President
	The University of Texas
	M.D. Anderson Cancer Center
Date 4/11/07
Approved as to Content:
By	/s/ Christopher C. Capelli
	Christopher C. Capelli
	Vice President, Technology Transfer
	Office of Technology Commercialization
	M.D. Anderson Cancer Center
Date 3/28/07
THE TRUSTEES OF
DARTMOUTH COLLEGE
By	/s/ Alla Kan
	Alla Kan, Director
	Technology Transfer Office
Date 3/12/07

2

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THESE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT WITH THREE ASTERISKS [***]. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

Execution Copy

AMENDMENT NO.1 TO 2004 LICENSE AGREEMENT

Amendment No. 1, dated as of July 9, 2012 (the “Amendment”), to the Exclusive Patent License Agreement, dated as of July 15, 2004 (the “Agreement”), by and among the Board of Regents (the “BOARD”) of The University of Texas System (the “SYSTEM”), an agency of the State of Texas, whose address is 201 West 7 th Street, Austin, Texas 78701, on behalf of The University of Texas M.D. Anderson Cancer Center (“UTMDACC”), a component institution of the SYSTEM, Trustees of Dartmouth College (“DARTMOUTH”), a non-profit educational and research institution existing under the laws of the State of New Hampshire, and being located at Hanover, New Hampshire (BOARD, UTMDACC and DARTMOUTH collectively “LICENSORS”), and Reata Pharmaceuticals, Inc., a Delaware corporation also formerly known as Reata Discovery, Inc. (“LICENSEE”), having a principal place of business located at 2801 Gateway Drive, Suite 150, Irving, Texas 75063.

WHEREAS, [***]; and

WHEREAS, [***].

NOW, THEREFORE, in consideration of the recitals above and the mutual promises contained herein and for other good and valuable consideration, including the consideration stated in the [***], the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:

1. Paragraph 5.1g of the Agreement is hereby amended to add the following sentence at the end of Paragraph 5.lg:

“As used herein, “LICENSEE’S other technologies” does not include any product, process, or usage that falls within the scope of any claim of any patent that constitutes a part of the PATENT RIGHTS.”

2. Section 5.1 of the Agreement is hereby amended to add the following Paragraph h to Section 5.1:

“h. a sublicense fee of $ [***] within 30 days [***]

3. Section 5.4 of the Agreement is hereby amended to add the following sentence as the last sentence of Section 5.4:

“The second and third sentences of this Section 5.4 shall not apply to amounts payable under Paragraph 5.1c or Article 17 of this AGREEMENT.”

4. Paragraphs 8.3b and 8.3c of the Agreement are each hereby amended to add the following at the beginning of each such Paragraph:

“Subject to the provisions of Article 18,”

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

5. Paragraph 8.4b of the Agreement is hereby amended to read in its entirety as follows:

“b. Each PARTY, as applicable, agrees and covenants to be bound by the provisions of Article 12 (Indemnification), Article 13 (Use of Name), Article 14 (Confidential Information), Article 17 (Collaboration Agreement Fee) and Article 18 (Royalty Dispute Resolution) and all definitions contained, and other Sections and all Exhibits cross-referenced, therein;”

6. Article 10 of the Agreement is hereby amended to read in its entirety as follows: “LICENSEE may not assign this AGREEMENT without the prior written consent of LICENSORS, which consent will not be unreasonably withheld. A sale of substantially all of LICENSEE’S assets to a third party, a merger, consolidation or similar transaction involving LICENSEE or an issuance of its capital stock by, or sale of capital stock of, LICENSEE shall not constitute an assignment of this AGREEMENT. Promptly after the consummation of a sale of substantially all of LICENSEE’S assets to a third party, a merger, consolidation or similar transaction involving LICENSEE or an issuance of its capital stock by, or sale of capital stock of, LICENSEE (if in each case such issuance or sale represents a majority of the outstanding shares of capital stock of LICENSEE), LICENSEE shall give written notice thereof to LICENSORS.”

7. Section 16.2 of the Agreement is hereby amended to read in its entirety as follows:

“All amounts payable hereunder by LICENSEE will be paid in United States funds without deductions for taxes, assessments, fees, or charges of any kind. Checks are to be made payable to [***]:

[***]

[***]

[***]

[***]

[***]

[***]

REFERENCE: include title and EFFECTIVE DATE of AGREEMENT and type of payment (e.g., license documentation fee, milestone payment, royalty [including applicable patent/application identified by MDA reference number and patent number or application serial number], or maintenance fee, etc.).”

8. Section 16.3 of the Agreement is hereby amended to read in its entirety as follows:

Any notices required by this AGREEMENT must be in writing and must be sent by (i) email, (ii) electronic facsimile transmission, as evidenced by a confirmed fax transmission report, (iii) prepaid, first class, registered or certified mail, return receipt requested, or (iv) a nationally recognized overnight deli very service or air courier (e.g., UPS and FED EX). Until a change of address is communicated, as provided below, all notices must be sent to the PARTIES at

2

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

the following:

If to UTMDACC:	The University of Texas M.D. Anderson Cancer Center
	Office for Technology Commercialization
	7515 S. Main Street, Suite 490, Unit 0510
	Houston, Texas 77030
	Attention: Christopher Capelli, MD
	Vice President, Technology Based Ventures
	Email: ccapelli@mdanderson.org
	Phone: (713) 745-9602
	Fax: (713) 563-9568
If to DARTMOUTH:	Dartmouth College
	Office of the General Counsel
	63 South Main Street, Suite 301
	Hanover, New Hampshire 03755
	Attention: Lorraine Sostowski, Associate General Counsel
	E-mail: lorraine.sostowski@dartmouth.edu
	Phone: (603) 646-2444
	Fax: (606) 646-2447
If to LICENSEE:	Reata Pharmaceuticals, Inc.
	2801 Gateway Drive, Suite 150
	Irving, Texas 75063-2648
	Attention: Robin Kral, Vice President, Licensing and
	Intellectual Property
	E-mail: robin.kral@reatapharma.com
	Phone: (972) 865-2203
	Fax: (214) 292-9692

All notices will be effective and will be deemed delivered (i) if delivery service or courier, on the date of delivery; (ii) if by email or electronic facsimile communication, on the date of transmission of the communication; and (iii) if by registered or certified mail, postage paid, three (3) days after deposit in the mail. Any PARTY may from time to time change its address, facsimile number or other information for the purpose of notices to that PARTY by giving notice specifying such change to the other PARTIES hereto.

9. Section 16.5 of the Agreement is hereby amended by adding the following at the beginning of the second sentence of Section 16.5:

“In the event of a conflict between this Section 16.5 and Article 18, Article 18 shall govern.”

10. Section 16.6 is hereby amended by adding the following sentence as the last sentence of Section 16.6:

“The provisions of this Section 16.6 will not apply to any dispute or controversy to which the provisions of Article 18 are applicable.”

3

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

11. The following new Article 17 is hereby added to the Agreement:

“17. COLLABORATION AGREEMENT FEE

LICENSEE agrees to pay UTMDACC, in accordance with the provisions of Section 16.2, [***] percent ([***]%) of Net Sales (as defined in the Collaboration Agreement between LICENSEE and ABBOTT, dated December 9, 2011 (the “ABBOTT COLLABORATION AGREEMENT”)) of products containing or embodying the intellectual property of LICENSEE that is (i) described or claimed in the patents listed in Exhibit 1 to the [***] among LICENSEE, the BOARD and DARTMOUTH, dated as of July 9, 2012, any patent application listed in that Exhibit 1 or any patent that issues on such patent application, any continuation, divisional, continuation-in-part, reexamination, reissue, substitution, or extension of any such patent application or any patent that issues with respect thereto, and any patent or patent application, including any foreign equivalent filed or yet to be filed, that claims priority to any patent or patent application listed in that Exhibit 1, or (ii) claimed in any other patent or patent application that includes a claim that encompasses any of the compounds identified on Schedules [***] or [***] of the ABBOTT COLLABORATION AGREEMENT, which Net Sales occur before the expiration of the last-to-expire patent, as described in clause (i ) or clause (ii) above, that is applicable to such product. Payment under this Article 17 shall be made to UTMDACC (on behalf of UTMDACC and DARTMOUTH) by LICENSEE within sixty (60) days after the end of each calendar quarter in which LICENSEE realizes Net Sales (as defined in the ABBOTT COLLABORATION AGREEMENT) to a third party for such products and/or inwhich LICENSEE receives a report from ABBOTT or from another third party with respect to Net Sales of such products by ABBOTT or any such third party, in each case with such payment being accompanied by a report in the form of Exhibit 2 to this AGREEMENT. The provisions of Sections 5.3, the first sentence of Section 5.4, the second and third sentences of the first paragraph of Section 5.5 (applicable to such times after payments are due under this Article 17), Section 5.6, and Article 18 shall apply to payments required to be made by this Article 17, and the second paragraph of Section 5.5 shall not apply to products with respect to which payments are required to be made by this Article 17; provided, however, that LICENSEE shall provide annual reports to UTMDACC, on or prior to March 1st of each year, in form and substance substantially similar to that attached hereto as Exhibit 6, but such annual reports shall not include any information that would violate any agreement to which LICENSEE is a party and/or violate any law, rule, regulation or order that is applicable to LICENSEE. Notwithstanding the foregoing, if a product under the ABBOTT COLLABORATION AGREEMENT contains or embodies a

4

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

LICENSED PRODUCT, then the provisions of Paragraph 5.lc of this AGREEMENT shall apply (and the provisions of this Article 17 shall not apply to such product) until the expiration of the last-to-expire of the PATENT RIGHTS applicable to such product, whereafter the provisions of this Article 17 shall be applicable pursuant to its terms.”

12. The following new Article 18 is hereby added to the Agreement:

“18. ROYALTY DISPUTE RESOLUTION

Notwithstanding the provisions of Section 16.5 and 16.6 of this Agreement to the contrary, the provisions of this Article 18 shall control the resolution of any dispute arising between or among the PARTIES under Paragraph 5.1 c or Article 17 of this Agreement (individually a “Royalty Provision”). There shall be a mandatory audit of payments due under Paragraph 5.1c or Article 17 to the LICENSORS every two years beginning on the date which is the second anniversary of the first payment due from LICENSEE under Paragraph 5.lc or Article 17, as applicable. The auditor shall be a firm selected by the LICENSORS and shall act solely as the agent of the LICENSORS. The cost of the audit, including the fees and expenses of the auditor, shall be paid by LICENSEE. LICENSEE shall make available to the auditor at the offices of LICENSEE, for inspection and copying, all books and records that are reasonably requested by the auditor and that relate to Net Sales for which a royalty is payable during the applicable audit period; provided, however, that LICENSEE may redact any commercial or proprietary information that does not diminish or limit the auditor’s ability to calculate Net Sales; and provided further that prior to making such books and records available, the auditor and LICENSORS shall first execute a confidentiality agreement that is reasonably acceptable to LICENSEE, and to which LICENSEE is a party, pursuant to which the auditor and LICENSORS (including their attorneys) have agreed to keep confidential and not disclose to third parties or use any non-public information of LICENSEE, other than (i) disclosure to the ACCOUNTING ARBITRATOR (hereafter defined) pursuant to any accounting arbitration proceeding or (ii) use in connection with the inspections and accounting arbitration proceedings provided by this Section 18. The auditor may provide to LICENSORS (including their attorneys) documents and information that the auditor has reviewed or obtained in the course of the auditor’s investigation, and shall not be required to disclose to LICENSEE any advice provided by the auditor to LICENSORS. If either of the LICENSORS (each an “OBJECTING PARTY”) objects to LICENSEE’s calculation of any payment due under a Royalty Provision, then the OBJECTING PARTY shall provide notice in writing to LICENSEE of its objection within thirty (30) days after the completion of the audit, as determined by the auditor, and shall set forth, in writing and in reasonable detail, the basis of such objection. If an OBJECTING PARTY fails to deliver such notice of objection within the foregoing time period, then

5

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

LICENSEE’s calculation of such payment shall be deemed accepted by each of the LICENSORS, and shall become final and binding on the PARTIES to this Agreement. If an OBJECTING PARTY gives a written objection notice complying with the foregoing requirements within the applicable time period, then LICENSEE and the OBJECTING PARTY shall attempt in good faith, for a period of thirty (30) days following receipt by LICENSEE of such notice, to resolve any dispute concerning the item(s) subject to such notice. If LICENSEE and the OBJECTING PARTY are unable to resolve the dispute during such 30 - day period, then, at the request of either such PARTY, LICENSEE and the OBJECTING PARTY shall refer the matter to the ACCOUNTING ARBITRATOR within fourteen (14) days following the expiration of such 30-day period to resolve the matters in dispute, and the determination of the ACCOUNTING ARBITRATOR in respect of each matter remaining in dispute shall be conclusive and binding on LICENSEE and the OBJECTING PARTY. If any disputed matters are submitted to the ACCOUNTING ARBITRATOR, LICENSEE and the OBJECTING PARTY shall each enter into a reasonable customary engagement letter with the ACCOUNTING ARBITRATOR at the time such matters are submitted to the ACCOUNTING ARBITRATOR, in which each of the ACCOUNTING ARBITRATOR and LICENSORS (including their attorneys) agree to keep confidential and not to use or disclose any non-public information of LICENSEE to any third party other than use in connection with such accounting arbitration proceeding. Subject to the execution of such engagement agreement, LICENSEE shall provide to the ACCOUNTING ARBITRATOR copies of any or all of the books and records of LICENSEE that were provided to the auditor by LICENSEE that are requested in writing to be provided by LICENSORS to the ACCOUNTING ARBITRATOR. Each of LICENSEE and the OBJECTING PARTY may present a supporting brief and provide any supplemental materials to the ACCOUNTING ARBITRATOR (and provide a copy thereof to the other PARTY) within thirty (30) days after the appointment of the ACCOUNTING ARBITRATOR. Within fourteen (14) days after receipt of a supporting brief and any supplemental materials, the receiving PARTY may present a responsive brief and supplemental materials to the ACCOUNTING ARBITRATOR (and provide a copy thereof to the other PARTY). If either the OBJECTING PARTY or LICENSEE wishes to make an oral presentation to the ACCOUNTING ARBITRATOR, a hearing shall be held by the ACCOUNTING ARBITRATOR within thirty (30) days after the submission of such responsive brief and materials, which shall be attended by all PARTIES to the dispute. The ACCOUNTING ARBITRATOR shall deliver to LICENSEE and the OBJECTING PARTY as promptly as practicable a written report setting forth the resolution of any such disputed matters.

6

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

The ACCOUNTING ARBITRATOR shall elect the position of either LICENSEE or the OBJECTING PARTY on an item-by-item basis as the resolution for each disputed matter based upon which position is more nearly correct and shall not impose an alternative resolution with respect to any item of disagreement. The ACCOUNTING ARBITRATOR shall make its determination based solely on the briefs, presentations and supporting material provided by the PARTIES and not pursuant to any independent review. The determination of the ACCOUNTING ARBITRATOR shall be final and binding on LICENSEE and the OBJECTING PARTY and shall constitute an arbitral award that is final, binding and unappealable and upon which a judgment may be entered by a court having jurisdiction thereof pursuant to Section 16.5 of this AGREEMENT. Notwithstanding any other provision of this AGREEMENT to the contrary, (i) in the event that the aggregate underpayment by LICENSEE is equal to or less than [***] Dollars ($[***]), then such underpayment amount shall bear interest at the rate of [***] percent ([***]%) above the prime rate, or successive prime rates, in effect at the JP Morgan Chase Bank from the date when such payment was due or if such underpayment is composed of amounts due on more than one date, Interest on each constituent amount shall be calculated from the applicable due date of such constituent amount or (ii) in the event that the aggregate underpayment by LICENSEE is greater than [***] Dollars ($[***]), then all such underpayments shall bear interest at the rate of [***] percent ([***]%) from the date when such payment was due (i.e., if the underpayment is composed of amounts due on more than one date, interest on each constituent amount shall be calculated from the applicable due date of such constituent amount). LICENSEE may reduce, without interest, a future royalty amount owed to LICENSORS in an amount equal to any overpayment of royalty payment made by LICENSEE to LICENSORS. Each party shall bear its own expenses of the accounting arbitration. However, the fees and expenses of the ACCOUNTING ARBITRATOR shall be allocated between LICENSEE and the OBJECTING PARTY so that the OBJ ECTING PARTY’s share of such fees and expenses shall be equal to the product of (i) the aggregate amount of such fees and expenses, multiplied by (ii) a fraction, the numerator of which is the amount in dispute that is ultimately unsuccessfully disputed by the OBJECTING PARTY (as determined by the ACCOUNTING ARBITRATOR), and the denominator of which is the total amount in dispute, and LICENSEE’s share of such fees and expenses shall be equal to the aggregate amount of all fees and expenses of the ACCOUNTING ARBITRATOR minus the OBJECTING PARTY’s share of such fees and expenses. Prior to the determination of the final allocation of the fees and expenses of the ACCOUNTING ARBITRATOR, such fees and expenses (if due) shall be paid 50% by LICENSEE and 50% by the OBJECTING PARTY, with appropriate reimbursement being made

7

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

after the final allocation of such fees and expenses. For purposes of this Article 18, the term “ACCOUNTING ARBTTRATOR” shall mean any of the independent accounting firms of Deloitte, Ernst & Young, PricewaterhouseCoopers, KPMG, McGladrey & Pullen, LLP, Grant Thornton, LLP, BKD-Baird, Kurtz & Dobson, Clifton Gunderson and Mayer Hoffman McCann, so long as the performance by the applicable accounting firm under this Article 18 would not cause such accounting firm to lose its status as an “independent accountant” within the meaning Rule 20l(b) of Regulation S-X of the Securities and Exchange Commission to either LICENSEE or the OBJECTING PARTY. The OBJECTING PARTY shall select the ACCOUNTING ARBITRATOR for the applicable dispute under this Article 18; provided, however, that if a particular accounting firm has served as the ACCOUNTING ARBITRATOR for an immediately preceding dispute under this Article 18, then the OBJECTING PARTY shall select a different accounting firm from the one of the firms named above to serve as the ACCOUNTING ARBITRATOR for the then current dispute under this Article 18. If none of the listed accounting firms is qualified, available or willing to serve as the ACCOUNTING ARBITRATOR, the OBJECTING PARTY will select another firm subject to the reasonable approval of LICENSEE. Notwithstanding any provision of Paragraph 8.3b or Paragraph 8.3c of this AGREEMENT to the contrary, the LICENSORS shall not have the right to declare or give notice of a default or breach of this AGREEMENT by LICENSEE, or terminate this AGREEMENT, as to any dispute or controversy covered by the provisions of this Article 18, and if the auditor determines that LICENSEE underpaid amounts due to LICENSORS more than once in any twelve-month period, then the provisions of Paragraph 8.3g shall not apply; provided, however, that any breach by LICENSEE of its obligations under this Article 18, other than any failure to pay any amount determined by the ACCOUNTING ARBITRATOR to be owed to LICENSORS pursuant to the provisions of this Article 18, that is not cured within thirty (30) days after the receipt of written notice by an OBJECTING PARTY, and any failure to pay any amount determined by the ACCOUNTING ARBITRATOR to be owed to LICENSORS pursuant to the provisions of this Article 18, including any interest payable with respect to any such amount, within ten (10) days after any such determination shall entitle the OBJECTING PARTY, on behalf of LICENSORS, to terminate this AGREEMENT without further notice to LICENSEE and without affording LICENSEE a further opportunity to cure such breach or default.”

13. The following new Article 19 is hereby added to the Agreement:

“19. STATE AGENCY LIMITATIONS

UTMDACC is an agency of the State of Texas and under the Constitution and the laws of the State of Texas possesses certain rights and privileges,

8

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

is subject to certain limitations and restrictions, and only has such authority as is granted to it under the Constitution and laws of the State of Texas. Notwithstanding any provision hereof, nothing in this AGREEMENT is intended to be, nor will it be construed to be, a waiver of the sovereign immunity of the State of Texas or a prospective waiver or restriction of any of the rights, remedies, claims, and privileges of the State of Texas. Moreover, notwithstanding the generality or specificity of any provision hereof, the provisions of this AGREEMENT as they pertain to UTMDACC are enforceable only to the extent authorized by the Constitution and laws of the State of Texas; accordingly, to the extent any provision hereof conflicts with the Constitution or laws of the State of Texas or exceeds the right, power or authority of UTMDACC to agree to such provision, then that provision will not be enforceable against UTMDACC or the State of Texas.”

14. Except as amended by this Amendment, the Agreement shall remain in full force and effect pursuant to its terms.

15. Terms not otherwise defined in this Amendment shall have the meaning set forth in the Agreement.

16. This Amendment may be executed in one or more counterparts all of which together shall constitute one and the same agreement. The delivery by any party of an executed counterpart hereof by facsimile transmission or email of .pdf copies shall be effective as an original executed counterpart of this Amendment by such party and shall constitute an original enforceable document.

[signatures set forth on the following page]

9

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date first written above.

REATA PHARMACEUTICALS, INC.
By:	/s/ Warren Huff
Name:	Warren Huff
Title:	Chief Executive Officer
TRUSTEES OF DARTMOUTH COLLEGE
By:	/s/ Martin N. Wybourne
Name:	Martin N. Wybourne
Title:	Interim Provost and Vice Provost for Research

BOARD OF REGENTS OF THE UNIVERSITY OF TEXAS SYSTEM ON BEHALF OF THE UNIVERSITY OF TEXAS M.D. ANDERSON CANCER CENTER

By:

Name:

Title:

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EX-10.25

Exhibit 10.25

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THESE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT WITH THREE ASTERISKS [***].

REATA PHARMACEUTICALS, INC.

DARTMOUTH EXCLUSIVE LICENSE AGREEMENT

This Agreement, effective this 16th day of December 2009, between TRUSTEES OF DARTMOUTH COLLEGE, a non-profit educational and research institution existing under the laws of the State of New Hampshire, and being located at Hanover, New Hampshire 03755, hereinafter called Dartmouth, and REATA PHARMACEUTICALS. INC., a corporation of the State of Texas, with a principal place of business at 2801 Gateway Drive, Suite 150, Irving, Texas 75063; hereinafter called Company or Reata.

WHEREAS, [***] are named as inventors in certain United States and foreign patent applications concerning the use of CDDO-Me (a.k.a. RTA 402, a.k.a. bardoxolone methyl) and related synthetic triterpenoids in the treatment of renal disease, cardiovascular disease, diabetes, and related disorders; and

WHEREAS, Dartmouth represents that it has the right to grant the licenses granted in this agreement; and

WHEREAS, Company wishes to obtain a license under the terms and conditions hereinafter set forth, and to use its expertise and resources to manufacture and market the technology;

NOW THEREFORE, in consideration of the premises and the faithful performance of the covenants herein contained, IT IS AGREED:

ARTICLE I. Definitions

Section 1.01 Dartmouth Know-How. “Dartmouth Know-How” shall mean any ideas, methods, characterization and techniques developed by Dartmouth Inventors at Dartmouth before the Effective Date, which are necessary for practicing Dartmouth Patent Rights.

Section 1.02 Dartmouth Patent Rights. “Dartmouth Patent Rights” shall mean Dartmouth rights in United States provisional patent applications [***] and [***] and United States Patent Application Serial [***], filed on [***], and any United States or Foreign Patents issuing therefrom, and any continuations, continuations-• in-part, divisions, reissues, reexaminations or extensions thereof. Company and Dartmouth are the joint assignees and owners of all such Patents and Patent Applications.

Section 1.03 Licensed Products. “Licensed Products” shall mean any products or processes covered by or made, in whole or in part, by the use of Dartmouth Patent Rights or by the use of Dartmouth Know-How

Section 1.04 Field. The “Field” of this Agreement shall mean any and all aspects of the inventions set forth for the first time in the Dartmouth Patent Rights, including but not limited to United States Patent Application [***].

Section 1.05 Territory . The “Territory” shall mean the world.

Section 1.06 Affiliate. “Affiliate” means any business entity more than 50% owned by LICENSEE, any business entity that owns more than 50% of LICENSEE, or any business entity that is more than 50% owned by a business entity that owns more than 50% of LICENSEE.

pg. 1

Section 1.07 Agreement. “Agreement” shall mean this License Agreement.

Section 1.08 Net Sales. “Net Sales” shall mean the gross billing price Company, its subsidiaries and sublicensees charge to their customers for Licensed Products, less credits, sales, use, occupation and excise taxes, and transportation, discounts, returns and allowances in lieu of returns.

Section 1.09 Effective Date. “Effective Date” shall mean the date first written above and shall be the Effective Date of this Agreement.

Section 1.10 License Year. The “First License Year” shall mean the period commencing on the Effective Date and ending December 31, 2009. The second and all subsequent “License Years” shall commence on January 1 and end on December 31 of each year.

Section 1.11 Calendar Quarter. “Calendar Quarter” shall mean the periods ending on March 31, June 30, September 30 and December 31 of each year.

Section 1.12 Valid Claim. “Valid Claim” shall mean an issued or pending claim under the Dartmouth Patent Rights in any country, which, but for the licenses granted herein, would be infringed by use of a Licensed Product in an approved or developmental indication.

Section 1.13 Original Dartmouth Patents. “Original Dartmouth Patents” shall mean [***]; [***];[***]; [***]; and all divisionals, continuations, continuations-in-part, and foreign equivalents.

ARTICLE II. Grant

Section 2.01 License Grant . Dartmouth hereby grants to Company and its Subsidiaries an exclusive , royalty-bearing license under Dartmouth Know - How and Dartmouth Patent Rights to make, have made, use, and/or sell Licensed Products in the Field in the Territory. Notwithstanding the foregoing, Dartmouth expressly reserves a non-transferable royalty-free right to use, for educational and non-clinical research purposes only, the Dartmouth Patent Rights and Dartmouth Know-How in the Field itself, including use by its faculty, staff and researchers.

Section 2.02 Sublicenses. Company shall have the right to grant sublicenses to third parties under Dartmouth Know-How and Patent Rights to make, have made, use and sell the Licensed Products. All such sublicenses shall be in writing and expressly subject to the terms of this Agreement. Company agrees to be responsible for the performance hereunder by its sublicensees. Dartmouth shall have the right to review such sublicenses to assure conformity with this Section. Upon termination of this Agreement, any such sublicenses will revert directly to Dartmouth.

Section 2.03 Patents. Company shall be responsible for all expenses in connection with the preparation, filing, prosecution and maintenance of Dartmouth Patent Rights. Company and Dartmouth shall continue using the firm of Fulbright & Jaworski L.L.P., or a successor firm chosen by Company and reasonably acceptable to Dartmouth, for the preparation, filing, prosecution and maintenance of Dartmouth Patent Rights. Dartmouth shall continue to exercise its right to review the documents related thereto with the counsel of its own and provide recommendations. Costs of such consultations shall be reimbursed to Dartmouth by the Company. As of December 9, 2009 such costs amounted to $[***]. If Company chooses

pg. 2

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

to discontinue prosecution or maintenance of any United States Patent or Patent Application, which is a subject of Dartmouth Patent Rights, it will so inform Dartmouth within a reasonable time before implementation of such decision. Dartmouth then shall have the right to prosecute or maintain such Patent or Patent Application on its own and at its own expense, in which case the license to Company under such Patent or Patent Application will terminate. COMPANY shall notify Dartmouth by at least three (3) months before a National Phase deadline whether it will support the filing of patent applications in particular foreign territories. If COMPANY decides not to support the filing or maintaining foreign applications, Dartmouth reserves the right to file or maintain such applications on its own, in which case the license to COMPANY in the particular territory will terminate.

ARTICLE III.

Disclosure of Invention, Confidentiality and Representations

Section 3.01 Disclosure of Invention. Dartmouth agrees promptly after the Effective Date of this Agreement to deliver and to disclose to duly authorized representatives of Company, all proprietary technical data, methods, processes, including the technology, and other information and specifications relating to Dartmouth Know - How.

Section 3.02 Mutual Confidentiality. Company and Dartmouth realize that some information received by one party from the other pursuant to this Agreement shall be confidential. It is therefore agreed that any information received by one party from the other, and clearly designated in writing as “CONFIDENTIAL” at the time of transfer, shall not be disclosed by the receiving party to any third party and shall not be used by the receiving party for purposes other than those contemplated by this Agreement for a period of three (3) years from the termination of the Agreement, unless or until—

(a) said information shall become known to third parties not under any obligation of confidentiality to the disclosing party, or shall become publicly known through no fault of the receiving party, or

(b) said information was already in the receiving party’s possession prior to the disclosure of said information to the receiving party, except in cases when the information has been covered by a preexisting Confidentiality Agreement. or

(c) said information shall be subsequently disclosed to the receiving party by a third party not under any obligation of confidentiality to the disclosing party, or

(d) said information is approved for disclosure by prior written consent of the disclosing party, or

(e) said information is required to be disclosed by court order or govern- mental law or regulation, provided that the receiving party gives the disclosing party prompt notice of any such requirement and cooperates with the disclosing party in attempting to limit such disclosure.

Section 3.03 Corporate Action. Dartmouth and Company each represent and warrant to the other party that they have full power and authority to enter into this Agreement and carry out the transactions contemplated hereby, and that all necessary corporate action had been duly taken in this regard.

pg. 3

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

ARTICLE IV . Due Diligence

Section 4.01 Milestones. Company has represented to Dartmouth, to induce Dartmouth to issue this license, that it will commit itself to a diligent program of exploiting the Licensed Products so that public utilization will result therefrom. Company agrees to use commercially reasonable efforts to develop, commercialize, and market Licensed Products, including by targeting the following developmental milestones:

(a) [***]

(b) [***]

(c) [***];

ARTICLE V. Payments, Records and Reports

Section 5.01 Payments. For the rights and privileges granted under this license, Company shall pay to Dartmouth

(a) a non-refundable, non-creditable, one-time license access fee of $[***] due upon execution of this Agreement; and

(b) annual license maintenance fee of $[***] due upon each anniversary of the Agreement; and

(c) [***] percent ([***] %) of any consideration, received from an infringement settlement, less litigation expenditures and payments of portions due to sublicensees (if any) from the settlement, as described in Section 8.01, and from each sublicense, except running royalty on the sale of Licensed Products (e.g., license issue fees, license maintenance fees, lump sum payments in lieu of royalty payments, stocks, etc.) received from each sublicensee of Company for the grant of a sublicense. It is agreed that R&D payments from sublicensees to Company shall not be the subject to this Subsection 5.01(c); and

(d) for the achievement of the following milestones for each indication in the first territory a non-refundable, non-creditable milestone payment as follows:

[***]	$	[	***]
[***]	$	[	***]
[***]				$	[	***]

Company shall notify Dartmouth within 30 days of the achievement of each milestone event, and payment of the associated fee shall be due within 30 days of milestone achievement.

(e)

[***]:

[***]	$	[	***]
[***]	$	[	***]

pg. 4

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(f) Upon expiration of the Original Dartmouth Patents in any territory or termination of Exclusive Patent License Agreement among The University of Texas; M.D. Anderson Cancer Center Dartmouth College and Reata Discovery, Inc., whichever is sooner, Reata shall pay to Dartmouth a royalty of [***] % of Net Sales of Licensed Products in that territory, so long as the sale of any Reata product in that territory is covered by one or more Valid Claims in any of the Dartmouth Patent Rights; and

(g) In addition to any royalties on sales of Licensed Products payable to Dartmouth under this or any other agreement, Company will pay the following super-royalty based on the achievement of sales milestones of Licensed Products worldwide, as follows:

$[***] for achieving $[***] in aggregate Net Sales

$[***] for achieving $[***] in aggregate Net Sales

$[***] for achieving $[***] in aggregate Net Sales

$[***] for achieving $[***] in aggregate Net Sales

$[***] for achieving $[***] in aggregate Net Sales

Section 5.02 Reports. Company shall render to Dartmouth:

(a) Beginning with the date of first commercial sale of a Licensed Product in any country, within sixty (60) days after the end of each Calendar Quarter a written account of all quantities of Licensed Products subject to royalty hereunder sold by Company, any Affiliate, and any sublicensee during such Calendar Quarter, the calculation of royalty thereon, and sufficient data for Dartmouth to verify the calculation, including gross sales and allowable deductions to derive to Net Sales figures, and shall simultaneously pay in United States dollars to Dartmouth the royalty due with respect to such sales. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States on the date of royalty payments by Company. Such report shall be certified as correct by an officer of Company. If, after the date of first commercial sale, no Licensed Products subject to royalty hereunder have been sold by Company, its Subsidiaries and its sublicensees during any such quarter, Company shall so report in writing to Dartmouth within sixty (60) days after the end of said quarter. Prior to the date of first commercial sale of a Licensed Product, no royalty reports will be required. If royalties for any License Year do not equal or exceed the minimum royalties established in Section 4.03, Company shall include the balance of the minimum royalty with the payment for the Calendar Quarter ending December 31. Late payments shall be subject to an interest charge of [***] (%) per month.

(b) within sixty (60) days after the close of each License Year written annual reports which shall include but not limited to: reports of progress on research and development, regulatory approvals, manufacturing, sublicensing, marketing and sales during preceding twelve (12) months as well as plans for coming year. Company shall also provide any reasonable additional data Dartmouth requires to evaluate Company’s performance.

(c) within sixty (60) days of occurrence, report of the date of first sale of Licensed Products in each country.

Section 5.03 Books of Accounts . Company, its Subsidiaries and sublicensees shall keep full, true and accurate books of accounts and other records containing all particulars which may be necessary for the purpose of ascertaining and verifying the royalties payable to Dartmouth by Company hereunder. Upon Dartmouth’s request, Company, its Subsidiaries and sublicensees shall permit an independent Certified Accountant selected by Dartmouth (except one to whom Company has some reasonable objection), to

pg. 5

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

periodically have access during ordinary business hours to such records of Company, its Subsidiaries and sublicensees as may be necessary to determine, for any quarter ending not more than three (3) years prior to the date of such request, the correctness of any report and/or payment made under this Agreement. In the event that any such inspection shows an underreporting and underpayment in excess of [***] percent ([***]%) for any twelve (12) month period, then Company shall pay the cost of such examination.

ARTICLE VI. Technical Assistance and Commercial Development

Section 6.01 Technical Assistance. Throughout the term of the Agreement, Dartmouth agrees to permit Company and its designees to consult with its employees and agents regarding developments and enhancements made subsequent to the Effective Date relating to the Licensed Products, at such times and places as may be mutually agreed upon; provided that Company agrees to make suitable arrangements with, and to compensate the Dartmouth employees and agents for such consultation.

Section 6.02 Commercial Development. During the term of this Agreement, Company agrees to use commercially reasonable efforts to effectively manufacture and market Licensed Products. Such efforts will include sublicensing, development of promotional literature, mailings, and journal advertisements.

Section 6.03 Name . Company shall not use and shall not permit to be used by any other person or entity the name of Dartmouth nor any adaptation thereof, or the name of Dartmouth’s employees, in any advertising, promotional or sales literature, or for any other purpose without prior written permission of Dartmouth, except that Company may state that it is licensed by Dartmouth under Dartmouth Know-How and Patent Rights.

ARTICLE VII. Indemnity, Insurance, Disclaimers

Section 7.01 Indemnity . Company shall defend and indemnify and hold Dartmouth and its trustees, officers, agents and employees (the “lndemnitees”) harmless from any judgements and other liabilities based upon claims or causes of action against Dartmouth or its employees which arise out of alleged negligence in the development, manufacture or sale of Licensed Products by Company, its Subsidiaries, and sublicensees, or from the use by the end users of Licensed Products, except to the extent that such judgements or liabilities arise in whole or in part from the gross negligence or willful misconduct of Dartmouth or its employees, provided that Dartmouth promptly notifies Company of any such claim coming to its attention and that it cooperates with Company in the defense of such claim. If any such claims or causes of action are made, Dartmouth shall be defended by counsel to Company, subject to Dartmouth’s approval, which shall not be unreasonably withheld. Dartmouth reserves the right to be represented by its own counsel at its own expense.

Section 7.02 Insurance. At such time as any product, process, service relating to, or developed pursuant to, this Agreement is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by Company or by a sublicensee, Affiliate or agent of Company, Company shall at its sole cost and expense, procure and maintain comprehensive general liability insurance in amounts not less than $[***] per incident and naming the indemnitees as additional insureds. Such comprehensive general liability insurance shall provide (i) product liability coverage and (ii) broad form contractual liability coverage for Company’s indemnification under this Agreement. If Company elects to self-insure all or part of the limits described above (including deductibles or retentions which are in excess of $[***] annual aggregate) such self-insurance program must be acceptable to Dartmouth and Dartmouth Risk Manager. Such insurance will be considered primary as to any other valid and collectible insurance, but only as to acts of the named insured. The minimum amounts of insurance coverage required shall not be construed to create a limit of Company’s liability with respect to its indemnification under this Agreement.

pg. 6

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Company shall provide Dartmouth with written evidence of such insurance upon request of Dartmouth. Company shall provide Dartmouth with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance; if Company does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, Dartmouth shall have the right to terminate this Agreement effective at the end of such fifteen (15) day period without notice or any additional waiting periods.

Company shall maintain such comprehensive general liability insurance beyond the expiration or termination of this Agreement during (I) the period that any product, process, or service, relating to, or developed pursuant to, this Agreement is being commercially distributed or sold by Company or by a sublicensee, Affiliate or agent of Company and (ii) a reasonable period after the period referred to in (i) above which in no event shall be less than fifteen (15) years.

Section 7.03 Disclaimer. Nothing contained in this Agreement shall be construed as:

(a) a warranty or representation by Dartmouth as to the validity or scope of any Patent Rights;

(b) a warranty or representation that any Licensed Products manufactured, used or sold will be free from infringement of patents, copyrights, or rights of third parties, except that Dartmouth represents that it has no knowledge of any existing issued patents or copyrights which might be infringed;

(c) except as provided in Section 7.01, an agreement to defend against actions or suits of any nature brought by any third parties.

DARTMOUTH MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF LICENSED PRODUCTS

ARTICLE VIII. Infringement Matters

Section 8.01 Infringement by Third Parties. Company shall give Dartmouth prompt notice of any incident of infringement of Joint Patent Rights coming to its attention. Company agrees to use reasonable efforts to stop any such infringement, but shall not be obliged to commence proceedings against the infringer. If Company decides to commence proceedings however, Company shall be responsible for any legal costs incurred and will be entitled to retain any damages recovered other than payments otherwise due to Dartmouth hereunder. Financial recoveries from any such litigation will first be applied to reimburse Company for its litigation expenditures and to reimburse any litigation fees or pay other recoveries due to sublicensees (if applicable) from the settlement, with additional recoveries being paid to Company, subject to payments due Dartmouth per Section 5.01 (c). Should Company or applicable sublicensee decide not to commence proceedings, Dartmouth shall be entitled to do so in its own name against the infringer, in which event Dartmouth shall be responsible for all legal costs incurred, without recourse to Company. Financial recoveries from any such Dartmouth-initiated litigation (i.e., from Dartmouth acting subsequent to Company declining to act) will be retained fully by Dartmouth, once litigation expenses actually incurred by Reata or any Reata sublicense are paid. In any action to enforce Joint Patent Rights, either party, at the request and expense of the other party shall cooperate to the fullest extent reasonably possible, including by agreeing to participate in such action as a named party, if necessary to maintain the action. Company may not settle any infringement action in any way detrimental to Dartmouth Patent Rights without the expressed written consent of Dartmouth.

pg. 7

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

ARTICLE IX.

Duration and Termination

Section 9.01 Term. This Agreement shall become effective upon the date first written above, and unless sooner terminated in accordance with any of the provisions herein, shall remain in full force during the life of the last to expire patents under Dartmouth Patent Rights contemplated by this agreement in the last to expire territory. If mutually desired, the parties may negotiate for an extension of this License. Upon the termination of the Agreement Company shall have the right to sell the remainder of the Licensed Product on hand, provided the sales will be subject to the royalty payments of this Agreement.

Section 9.02 Termination - Breach. In the event that either party defaults or breaches any of the provisions of this Agreement, the other party shall have the right to terminate this Agreement by giving written notice to the defaulting party, provided, however, that if the said defaulting party cures said default within thirty (30) days after said notice shall have been given, this Agreement shall continue in full force and effect. The failure on the part of either of the parties hereto to exercise or enforce any right conferred upon it hereunder shall not be deemed to be a waiver of any such right nor operate to bar the exercise or enforcement thereof at any time or times thereafter.

Section 9.03 Termination at Will. Company shall have the right to terminate this Agreement by giving three (3) months advance written notice to Dartmouth to that effect and paying a termination fee of $[***]. Upon termination, a final report shall be submitted and royalty and other payments due under Article V, as well as unreimbursed patent expenses due Dartmouth become immediately payable. Upon receipt of the termination notice, Dartmouth should be free to start negotiations with a third party for the rights granted herein.

Section 9.04 Insolvency. In the event that Company shall become insolvent, shall make an assignment for the benefit of creditors, or shall have a petition in bankruptcy filed for or against it, the Agreement shall terminate.

Section 9.05 Prior Obligations and Survivability. Termination of this Agreement for any reason shall not release either party from any obligation theretofore accrued. Sections 3.02, 5.01- 5.03, 7.01- 7.03, 9.03, 10.01 - 10.09 shall survive the termination of this Agreement.

ARTICLE X. Miscellaneous

Section 10.01 Governing Law . This Agreement shall be construed, governed, interpreted and enforced according to the laws of the State of Delaware.

Section 10.02 Notices. Any notice or communication required or permitted to be given by either party hereunder, shall be deemed sufficiently given, if mailed by certified mail, return receipt requested, and addressed to the party to whom notice is given as follows:

If to Company, to:

J. Warren Huff

CEO

Reata Pharmaceuticals, Inc.

2801 Gateway Drive

Irving, TX 75063-2648

pg. 8

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

If to Dartmouth, to:

Alla Kan

Director

Technology Transfer Office

Dartmouth College

11 Rope Ferry Road

Hanover, NH 03755

Section 10.03. Assignment. Except in connection with the sale of substantially all of Company’s assets to a third party, or in the case of a merger, consolidation or a similar transaction, which will require written notice to Dartmouth and not Dartmouth’s consent, neither party shall assign or transfer this Agreement without the express prior written consent of the other, such consent not to be unreasonably withheld,. For purposes of this Agreement, an assignment or transfer of this Agreement by COMPANY shall be deemed to occur in connection with (a) an express assignment or transfer, (b) a general assignment for the benefit of creditors or in connection with any bankruptcy or other debtor relief law, (c) any merger or consolidation to which COMPANY is a party, regardless of whether COMPANY is the surviving corporation, or (d) any other transaction pursuant to which a change would occur in the “ultimate parent entity” of COMPANY, applying the rules in effect from time to time under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Section 10.04 Entire Agreement. This Agreement represents the entire Agreement between the parties as of the effective date hereof, and may only be subsequently altered or modified by an instrument in writing. This agreement cancels and supersedes any and all prior oral or written agreements between the parties which relate to the subject matter of this Agreement.

Section 10.05 Mediation and Arbitration . Both parties agree that they shall attempt to resolve any dispute arising from this Agreement through mediation. Both parties agree that at least one employee, capable of negotiating an agreement on behalf of his employer, shall, within three weeks of receipt of written notification of a dispute, meet with at least one employee of the other party who is also capable of negotiating an agreement on behalf of his employer. If no agreement can be reached, both parties agree to meet again within a four week period after the initial meeting; with a neutral third party acceptable to both Dartmouth and Company present to facilitate such second meeting, to negotiate in good faith to resolve the dispute. If no agreement can be reached after this second meeting, both parties agree to submit the dispute to binding arbitration under the Rules of the American Arbitration Association before a three member arbitration panel comprised of one member chosen by each party, who shall then jointly appoint the third member of the arbitration panel.

Section 10.06 Waiver. A failure by one of the parties to this Agreement to assert its rights for or upon any breach or default of this Agreement shall not be deemed a waiver of such rights nor shall any such waiver be implied from acceptance of any payment. No such failure or waiver in writing by any one of the parties hereto with respect to any rights, shall extend to or affect any subsequent breach or impair any right consequent thereon.

Section 10.07 Severability. The parties agree that it is the intention of neither party to violate any public policy, statutory or common laws, and govern- mental or supranational regulations; that if any

pg. 9

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

sentence, paragraph, clause or combination of the same is in violation of any applicable law or regulation, or is unenforceable or void for any reason whatsoever, such sentence, paragraph, clause or combinations of the same shall be inoperative and the remainder of the Agreement shall remain binding upon the parties.

Section 10.08 Marking. Company agrees to mark the Licensed Products with all applicable trademarks, and patent numbers.

Section 10.09 Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not constitute a part hereof.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in duplicate originals, by their respective officers hereunto duly authorized, the day and year herein written.

THE TRUSTEES OF DARTMOUTH COLLEGE
By	/s/ Alla Kan
Date	December 16, 2009
Name	Alla Kan
Title	Director, Technology Transfer Office
REATA PHARMACEUTICALS, INC.
By	/s/ Warren Huff
Date	12/16/2009
Name	Warren Huff
Title	CEO

pg. 10

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THESE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT WITH THREE ASTERISKS [***].

Execution Copy

AMENDMENT NO. 1 TO 2009 LICENSE AGREEMENT

Amendment No. 1, dated as of July 9, 2012 (the “Amendment”), to the Reata Pharmaceuticals Inc. - Dartmouth Exclusive License Agreement, effective December 16, 2009 (the “Agreement”), by and between TRUSTEES OF DARTMOUTH COLLEGE (collectively “Dartmouth”), said college being a non-profit educational and research institution existing under the laws of the State of New Hampshire, Hanover, New Hampshire 03755, and REATA PHARMACEUTICALS, INC. (“Reata”), a Delaware corporation having a principal place of business located at 2801 Gateway Drive, Suite 150, Irving, Texas 75063.

WHEREAS, [***]

WHEREAS, [***].

NOW, THEREFORE, in consideration of the recitals above and the mutual promises contained herein and for other good and valuable consideration, including the consideration stated in the [***], the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:

1. Section 1.03 of the Agreement is hereby amended to read in its entirety as follows:

“Licensed Products. “Licensed Products” shall mean any product (i) (A) covered by, (B) made, in whole or in part by the use of, or (C) sold for a use claimed in, the Dartmouth Patent Rights or (ii) which utilizes the Dartmouth Know - How.”

2. Section 2.03 (Patents) of the Agreement is hereby amended to read in its entirety as follows:

“Company shall control all aspects of preparation, filing, prosecution, maintenance, and enforcement of Dartmouth Patent Rights, and shall be responsible for all costs thereof except as otherwise provided herein. Dartmouth shall have the right to review and provide comments to Company on amendments, responses to office actions, and other submissions to patent authorities. The costs of such consultations shall be reimbursed to Dartmouth by Company. All such amendments, responses and other submissions shall be submitted to Dartmouth for its consideration at least fourteen days in advance of actual filing and no amendment of any claim of a pending application or issued patent that diminishes the scope of that claim may be made without Dartmouth’s written consent. Company will reasonably consider comments and suggestions provided by Dartmouth regarding amendments that do not diminish the scope of any such claim, responses and other submissions, but shall have no obligation to act upon such comments

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

and suggestions. Company and Dartmouth shall continue using the firm of Fulbright & Jaworski L.L.P., or a successor firm chosen by Company and reasonably acceptable to Dartmouth, for the preparation, filing, prosecution and maintenance of Dartmouth Patent Rights. If Company chooses to discontinue prosecution or maintenance of any United States Patent or Patent Application, which is a subject of Dartmouth Patent Rights, it will so inform Dartmouth at least thirty days before implementation of such decision. Dartmouth then shall have the right to prosecute or maintain such Patent or Patent Application on its own and at its own expense, in which case the license to Company under such Patent or Patent Application will terminate. Company shall notify Dartmouth by at least three (3) months before a National Phase deadline whether it will support the filing, prosecution, or maintenance of patent applications in particular foreign territories. If Company decides not to support the filing, prosecuting, or maintaining of foreign applications, Dartmouth reserves the right to file, prosecute, or maintain such applications on its own, in which case the license to Company in the particular territory will terminate. The decision by Company to abandon any particular Patent, Patent Application and/or foreign application will relieve Company from any further diligence or commercialization obligations of Company in the applicable territory.”

3. Section 5.01 of the Agreement is hereby amended to add the following Section 5.01(h) to Section 5.01:

“(h) a sublicense fee of $[***] within 30 days [***]:

4. Section 5.03 of the Agreement is hereby amended to add the following sentence as the last sentence of Section 5.03:

“The second and third sentences of this Section 5.03 shall not apply to amounts payable under Section 5.01(f) and 5.01(g) of this Agreement.”

5. Section 9.02 of the Agreement is hereby amended to add the following at the beginning of the first sentence of Section 9.02:

“Subject to the provisions of Article Xl,”

6. Section 10.03 of the Agreement is hereby amended to read in its entirety as follows:

“Company may not assign this Agreement without the prior written consent of Dartmouth, which consent will not be unreasonably withheld. A sale of substantially all of Company’s assets to a third party, a merger, consolidation or similar transaction involving Company or an issuance of its capital stock by, or sale of capital stock of, Company shall not constitute an assignment of this Agreement. Promptly after the consummation of a sale of substantially all of

2

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Company’s assets to a third party, a merger, consolidation or similar transaction involving Company or an issuance of its capital stock by, or sale of capital stock of, Company (if in each case such issuance or sale represents a majority of the outstanding shares of capital stock of Company), Company shall give written notice thereof to Dartmouth.”

7. Section 10.05 of the Agreement is hereby amended by adding the following sentence as the last sentence of Section 10.05:

“The provisions of this Section 10.05 will not apply to any dispute or controversy to which the provisions of Article XI are applicable.”

8. The following new Article XI is hereby added to the Agreement:

“ARTICLE XI. ROYALTY DISPUTE RESOLUTION

Notwithstanding the provisions of Section 10.05 of this Agreement to the contrary, the provisions of this Article XI shall control the resolution of any dispute arising between the parties under Sections 5.01(f) or 5.01(g) of this Agreement (individually a “Royalty Provision”). There shall be a mandatory audit of payments due to Dartmouth every two years beginning on the date which is the second anniversary of the first payment due from Company under Section 5.01(f) or Section 5.0l(g), as applicable. The auditor shall be a firm selected by Dartmouth and shall act solely as the agent of Dartmouth. The cost of the audit, including the fees and expenses of the auditor, shall be paid by Company. Company shall make available to the auditor at the offices of Company, for inspection and copying, all books and records that are reasonably requested by the auditor and that relate to Net Sales for which a royalty is payable during the applicable audit period; provided, however, that Company may redact any commercial or proprietary information that does not diminish or limit the auditor’s ability to calculate Net Sales; and provided further that prior to making such books and records available, the auditor and Dartmouth shall first execute a confidentiality agreement that is reasonably acceptable to Company and to which Company is a party pursuant to which the auditor and Dartmouth (including its attorneys) have agreed to keep confidential and not disclose to third parties or use any non-public information of Company, other than (i) disclosure to the Accounting Arbitrator (hereafter defined) pursuant to any accounting arbitration proceeding or (ii) use in connection with the inspections and accounting arbitration proceedings provided by this Article XI. The auditor may provide to Dartmouth (including its attorneys) documents and information that the auditor has reviewed or obtained in the course of the auditor’s investigation, and shall not be required to disclose to Company any advice provided by the auditor to Dartmouth. If Dartmouth (an “Objecting Party””) objects to Company’s calculation of any payment due under a Royalty Provision, then the Objecting Party shall provide notice in writing to Company of its objection within thirty (30) days after the completion of the audit as determined

3

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

by the auditor, and shall set forth, in writing and in reasonable detail, the basis of such objection. If an Objecting Party fails to deliver such notice of objection within the foregoing time period, then Company’s calculation of such payment shall be deemed accepted by Dartmouth, and shall become final and binding on the parties to this Agreement. If an Objecting Party gives a written objection notice complying with the foregoing requirements within the applicable time period, then Company and

the Objecting Party shall attempt in good faith, for a period of thirty (30) days following receipt by Company of such notice, to resolve any dispute concerning the item(s) subject to such notice. If Company and the Objecting Party are unable to resolve the dispute during such 30-day period, then, at the request of either such party, Company and the Objecting Party shall refer the matter to the Accounting Arbitrator within fourteen (14) days following the expiration of such 30-day period to resolve the matters in dispute, and the determination of the Accounting Arbitrator in respect of each matter remaining in dispute shall be conclusive and binding on Company and the Objecting Party. If any disputed matters are submitted to the Accounting Arbitrator, Company and the Objecting Party shall each enter into a reasonable customary engagement letter with the Accounting Arbitrator at the time such matters are submitted to the Accounting Arbitrator, in which each of the Accounting Arbitrator and Dartmouth (including its attorneys) agree to keep confidential and not to use or disclose any non-public information of Company to any third party other than use in connection with such accounting arbitration proceeding. Subject to the execution of such engagement agreement, Company shall provide to the Accounting Arbitrator copies of any or all of the books and records of Company that were provided to the auditor by Company that are requested in writing to be provided by Dartmouth to the Accounting Arbitrator. Each of Company and the Objecting Party may present a supporting brief and provide any supplemental materials to the Accounting Arbitrator (and provide a copy thereof to the other party) within thirty (30) days after the appointment of the Accounting Arbitrator. Within fourteen (14) days after receipt of a supporting brief and any supplemental materials, the receiving party may present a responsive brief and supplemental materials to the Accounting Arbitrator (and provide a copy thereof to the other party). If either the Objecting Party or Company wishes to make an oral presentation to the Accounting Arbitrator, a hearing shall be held by the Accounting Arbitrator within thirty (30) days after the submission of such responsive brief and materials, which shall be attended by all parties to the dispute. The Accounting Arbitrator shall deliver to Company and the Objecting Party as promptly as practicable a written report setting forth the resolution of any such disputed matters. The Accounting Arbitrator shall elect the position of either Company or the Objecting Party on an item-by-item basis as the resolution for each disputed matter based upon which position is more nearly correct and shall not impose an alternative resolution with respect to any item of disagreement. The Accounting Arbitrator shall make its determination based solely on the briefs, presentations and supporting material provided by the parties and not pursuant to any independent review. The determination of the Accounting Arbitrator shall be final and binding on Company and the

4

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Objecting Party and shall constitute an arbitral award that is final, binding and unappealable and upon which a judgment may be entered by a court having jurisdiction thereof. Notwithstanding any other provision of this Agreement to the contrary, (i) in the event the aggregate underpayment by Company is equal to or less than [***] Dollars ($[***]), then such underpayment amount shall bear interest at the rate of [***] percent ([***]%) above the prime rate, or successive prime rates, in effect at The JP Morgan Chase Bank from the date when such payment was due or if such underpayment is composed of amounts due on more than one date, interest on each constituent amount shall be calculated from the applicable due date of such constituent amount or (ii) in the event that the aggregate underpayment by Company is greater than [***] Dollars ($[***]), then all such underpayments shall bear interest at the rate of [***] percent ([***]%) from the date when such payment was due (i.e., if the underpayment is composed of amounts due on more than one date, interest on each constituent amount shall be calculated from the applicable due date of such constituent amount). LICENSEE may reduce, without interest, a future royalty amount owed to LICENSORS in an amount equal to any overpayment of royalty payment made by LICENSEE to LICENSORS. Each party shall bear its own expenses of the accounting arbitration. However, the fees and expenses of the Accounting Arbitrator shall be allocated between Company and the Objecting Party so that the Objecting Party’s share of such fees and expenses shall be equal to the product of (i) the aggregate amount of such fees and expenses, multiplied by (ii) a fraction, the numerator of which is the amount in dispute that is ultimately unsuccessfully disputed by the Objecting Party (as determined by the Accounting Arbitrator), and the denominator of which is the total amount in dispute, and Company’s share of such fees and expenses shall be equal to the aggregate amount of all fees and expenses of the Accounting Arbitrator minus the Objecting Party’s share of such fees and expenses. Prior to the determination of the final allocation of the fees and expenses of the Accounting Arbitrator, such fees and expenses (if due) shall be paid 50% by Company and 50% by the Objecting Party, with appropriate reimbursement being made after the final allocation of such fees and expenses. For purposes of this Article XI, the term “Accounting Arbitrator” shall mean any of the independent accounting firms of Deloitte, Ernst & Young, PricewaterhouseCoopers, KPMG, McGladrey & Pullen, LLP, Grant Thornton, LLP, BKD - Baird, Kurtz & Dobson, Clifton Gunderson and Mayer Hoffman McCann, so long as the performance by the applicable accounting firm under this Article XI would not cause such accounting firm to lose its status as an “independent accountant” within the meaning Rule 20l(b) of Regulation S-X of the Securities and Exchange Commission to either Company or the Objecting Party. The Objecting Party shall select the Accounting Arbitrator for the applicable dispute under this Article XI; provided, however, that if a particular accounting firm has served as the Accounting Arbitrator for an immediately preceding dispute under this Article XI, then the Objecting Party shall select a different accounting firm from

5

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

the one of the firms named above to serve as the Accounting Arbitrator for the then current dispute under this Article XI. If none of the listed accounting firms is qualified, available or willing to serve as the Accounting Arbitrator, the Objecting Party will select another firm subject to the reasonable approval of Company. Notwithstanding any provision of Section 9.02 of this Agreement to the contrary, Dartmouth shall not have the right to declare or give notice of a default or breach of this Agreement or terminate this Agreement as to any dispute or controversy covered by the provisions of this Article XI; provided, however, that any breach by Company of its obligations under this Article XI, other than any failure to pay any amount determined by the Accounting Arbitrator to be owed to Dartmouth pursuant to the provisions of this Article Xl, that is not cured within thirty (30) days after the receipt of written notice by the Objecting Party, and any failure to pay any amount determined by the Accounting Arbitrator to be owed to Dartmouth pursuant to the provisions of this Article XI, including any interest payable with respect to any such amount, within ten (10) days after any such determination shall entitle the Objecting Party to terminate this Agreement without further notice to Company and without affording Company a further opportunity to cure such breach or default

9. Except as amended by this Amendment, the Agreement shall remain in full force and effect pursuant to its terms.

10. Terms not otherwise defined in this Amendment shall have the meaning set forth in the Agreement.

11. This Amendment may be executed in one or more counterparts all of which together shall constitute one and the same agreement. The delivery by any party of an executed counterpart hereof by facsimile transmission or email of .pdf copies shall be effective as an original executed counterpart of this Amendment by such party and shall constitute an original enforceable document.

[signatures set forth on the following page]

6

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date first written above.

REATA PHARMACEUTICALS, INC.
By:	/s/ Warren Huff
Name:	Warren Huff
Title:	Chief Executive Officer
TRUSTEES OF DARTMOUTH COLLEGE
By:	/s/ Martin N. Wybourne
Name:	Martin N. Wybourne
Title:	Interim Provost and Vice Provost for Research

7

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EX-10.26

Exhibit 10.26

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXCLUSIVE LICENSE AGREEMENT

between

Reata Pharmaceuticals, Inc.

and

KU Center for Technology Commercialization, Inc.

Exclusive License Agreement

Page i of 34

TABLE OF CONTENTS

ARTICLE l. DEFINITIONS	3
ARTICLE 2. LICENSE GRANT	6
ARTICLE 3. TERM OF AGREEMENT	7
ARTICLE 4. FEES & ROYALTIES	7
ARTICLE 5. COMMERCIAL DILIGENCE & MILESTONES	10
ARTICLE 6. EQUITY OWNERSHIP	12
ARTICLE 7. CONFIDENTIALITY	12
ARTICLE 8. QUARTERLY & ANNUAL REPORTS	13
ARTICLE 9. PAYMENTS, RECORDS and AUDITS	14
ARTICLE 10. PATENT MARKING	15
ARTICLE 11. PATENT PROSECUTION AND MAINTENANCE	15
ARTICLE 12. TERMINATION BY LICENSOR	16
ARTICLE 13. TERMINATION BY LICENSEE	16
ARTICLE 14. DISPOSITION OF LICENSED PRODUCTS ON HAND	16
ARTICLE 15. WARRANTY BY LICENSOR	17
ARTICLE 16. INFRINGEMENT	17
ARTICLE 17. INSURANCE	18
ARTICLE 18. WAIVER	18
ARTICLE 19. ASSIGNABILITY	18
ARTICLE 20. INDEMNIFICATION BY LICENSEE	19
ARTICLE 21. NOTICES	19
ARTICLE 22. REGULATORY COMPLIANCE	19
ARTICLE 23. GOVERNING LAW	20
ARTICLE 24. RELATIONSHIP OF PARTIES	20
ARTICLE 25. USE OF NAMES	20
ARTICLE 26. DISPUTE RESOLUTION	20
ARTICLE 27. GENERAL PROVISIONS	21
EXHIBIT “A”	23
PATENT RIGHTS	23
EXHIBIT “B”	25
LICENSE TO THE UNITED STATES GOVERNMENT	25
EXHIBIT “C”	26
XXXX ROYALTY REPORT	26
EXHIBIT “D”	28
ANNUAL DEVELOPMENT and COMMERCIALIZATION REPORT	28
EXHIBIT “E”	30
CURRENT DEVELOPMENT PLAN	30
EXHIBIT “F”	31
MATERIAL TRANSFER AGREEMENT TEMPLATE	31

LICENSE AGREEMENT

THIS LICENSE Agreement (“Agreement”) is entered into this 26th day of September, 2014 by and between the KU CENTER FOR TECHNOLOGY COMMERCIALIZATION, INC, a Kansas non-profit § 501(c)(3) corporation, having its principal place of business at 3901 Rainbow Boulevard, Kansas City, Kansas 66160, hereinafter referred to as “KUCTC” or “Licensor,” and “REATA PHARMACEUTICALS, INC.” having its principal place of business at 2801 Gateway Drive, Suite 150, Irving, Texas 75063, hereinafter referred to as “Licensee.”

Page 2 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

WITNESSETH

WHEREAS, certain inventions, generally characterized as small molecule modulators of heat shock proteins and assigned KUCTC Technology ID numbers [***], and [***], hereinafter collectively referred to as “the Invention”, have been made in the course of research at the University of Kansas conducted by Dr. Brian Blagg, et al., and are Covered By Patent Rights (as defined below);

WHEREAS, the University of Kansas and the University of Kansas Medical Center (hereinafter collectively referred to as “KU”) and KUCTC have an agreement wherein KUCTC is the manager of intellectual property owned by KU;

WHEREAS, the Inventions have been and/or will be developed by employees, students, or postdoctoral fellows of KU; and

WHEREAS, KU and KUCTC together own all right, title and interest in the Inventions and the Patent Rights; and

WHEREAS, Licensor desires that the Patent Rights be developed and utilized to the fullest extent so that their benefits can be enjoyed by the general public;

WHEREAS, Licensee wishes to obtain from Licensor a license under certain patent rights for the commercial development, production, manufacture, use and sale of Licensed Products and Licensor is willing to grant such a license upon the terms and conditions hereinafter set forth;

WHEREAS, the Patent Rights were developed in the course of research sponsored in part by the U.S. Government, and as a consequence are subject to overriding obligations of Licensor to the U.S. Government;

NOW THEREFORE, for and in consideration of the covenants, conditions and undertakings hereinafter set forth, the parties hereby agree as follows:

ARTICLE l. DEFINITIONS

1.1 “Affiliate” means any company or other business entity that, directly or indirectly, controls, or is controlled by, or is under common control by Licensee. Solely for purposes of this definition, the term “control” means the possession of the power to direct or cause the direction of the management and policies of the entity, whether through ownership of voting securities or by contract. Control will be presumed if an entity owns, either of record or beneficially, at least fifty percent (50%) of the voting stock of the other entity. An entity will be deemed an Affiliate only while such ownership or control relationship continues.

     1.2 “Clinical Candidate” means a compound which, following Lead Optimization, has been designated by Licensee for entry into GLP Toxicology Studies and other IND-directed research activities.

1.3 “… Covered By …” means a compound, composition, product, process, method or other substance or activity, the use, manufacture, or sale of which would infringe a Valid Claim within any pending or issued patent included in the Patent Rights claiming all, a portion, or a component or step of a Licensed Product.

1.4 “ Commercially Diligent Efforts ” means, with respect to a Licensed Product, the diligent exercise, dedication and expenditure of efforts, money, personnel, and resources as reasonably needed to develop, manufacture, market and sell the Licensed Product. Such efforts shall be documented and must be consistent with those utilized by companies of similar size and type that have successfully developed products and services similar to the Licensed Product. In determining Commercially Diligent Efforts with respect to a particular Licensed Product, Licensee may not reduce such efforts due to the competitive, regulatory or other impact of any other product or method that it owns, licenses or is developing or commercializing.

Page 3 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.5 “Effective Date” means the latest date upon which an authorized representative of Licensee or Licensor signs this Agreement.

1.6 “ Entity ” means a corporation, an association, a joint venture, a partnership, a trust, a business, an institution, an individual, a government or political subdivision thereof, including an agency, or any other organization that can exercise independent legal standing.

1.7 “ Fair Market Value ” means the cash consideration which Licensee or its Sublicensee would realize from an unaffiliated, unrelated buyer in an arm’s length sale of an identical item sold in the same quantity, under the same terms, and at the same time and place.

1.8 “FDA” means the United States Food and Drug Administration.

1.9 “ Field of Use ” means all human and veterinary therapeutic and diagnostic uses.

1.10 “First Dosing” , with respect to human clinical trials, means the first administration of a Licensed Product to a subject in a specified clinical trial.

1.11 “GLP Toxicology Studies” means a non-clinical toxicology study conducted according to Good Laboratory Practices guidelines promulgated by the FDA, and intended to support submission of an IND.

1.12 “IND” means an investigational new drug application filed with the FDA for authorization to commence Clinical Studies in the U.S. or an equivalent application filed with the applicable Regulatory Authority in another country or regulatory jurisdiction.

1.13 “IND Acceptance” means that either by issuing no comment during the 30-day IND review period or by providing some affirmative communication, the FDA has assented to the performance of the clinical trial proposed in the IND application.

1.14 “Initiation” means, with respect to a study in non-human mammals, the first dosing of a live subject in a study.

1.15 “ Insolvent ” means being unable to meet one’s debt obligations to another Entity as such debt obligations become due and not being able to provide reasonable financial assurances of becoming able to meet such obligations.

1.16 “Lead Compound” means an organic compound identified in screening assays and in vivo studies that shows sufficient activity to be a standard of comparison in medicinal chemistry research programs intended to identify additional compounds having superior potency, selectivity, in vivo activity, or other superior drug-like qualities.

1.17 “Lead Optimization” means the program of medicinal chemistry research intended to identify structure-activity relationships and apply the knowledge of those relationships to produce compounds having superior properties relative to a Lead Compound.

1.18 “ Licensed Product ” means any product, process, method of use, apparatus, kit or component part thereof, or any other subject matter, the manufacture, design, creation, use, importation, distribution, or sale of which is Covered By any Valid Claim.

Page 4 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.19 “ NDA ” means New Drug Application according to FDA regulations, or the foreign equivalent.

1.20 “ NDA Acceptance ” means receipt of a communication from the FDA stating that a filed NDA has been accepted for review.

1.21 “ Net Sales ” means the gross amount invoiced by LICENSEE, AFFILIATE and/or any Sublicensee for the SALE of LICENSED PRODUCTS to a third party less: (i) normal and customary trade, cash and other discounts actually granted; (ii) charge back payments and rebates granted to managed health care organizations or to federal, state and local governments, their agencies and purchasers; (iii) commercially reasonable and customary fees paid to distributors (other than AFFILIATES) that are included in the gross invoiced amount;(iv) credits or allowances actually granted for rejections or returns of LICENSED PRODUCTS, including recalls (not to exceed the original invoiced amount); (v) sales or similar taxes, including without limitation, value added taxes or other governmental charges which are included in the invoiced amount; and (vi) freight, postage, shipping, customs duties and insurance charges for packaging which are included in the invoiced amount, all as recorded by LICENSEE in LICENSEE’s official books and records in accordance with generally accepted accounting practices and consistent with LICENSEE’s published financial statements and/or regulatory filings with the United States Securities and Exchange Commission, or as reported by any Sublicensee to Licensee in compliance with the terms of the relevant sublicense, as applicable. For the avoidance of doubt, sales and transfers among Licensee and its Sublicensees (for example, transfer of finished drug product from Licensee to a Sublicensee for commercial distribution) of Licensed Products intended for ultimate sale to third parties shall be disregarded for purposes of computing Net Sales.

1.22 “ Patent Rights ” means and include all of the following Licensor intellectual property: The United States patents and/or patent applications listed in Exhibit “A”; United States patents issued from the applications listed in Exhibit “A” and from divisionals and continuations (other than continuations-in-part) of these applications and any reissues of such United States patents; claims of continuation-in-part applications and patents directed to subject matter specifically described in the patent(s) and/or patent application(s) listed in Exhibit “A”; and claims of all foreign applications and patents which are directed to subject matter specifically described in the United States patents and/or patent applications listed in Exhibit “A”.

1.23 “Phase 1 Clinical Trials” means a human clinical trial of a Licensed Product, the principal purpose of which is a preliminary determination of safety in healthy individuals or patients or similar clinical study prescribed by the FDA or a comparable foreign regulatory authority, including the trials referred to in 21 C.F.R. §312.21(a), as amended.

1.24 “Phase 2 Clinical Trials” means a human clinical trial of a Product or a New Collaboration Compound, the principal purpose of which is a determination of safety and efficacy in the target patient population or a similar clinical study prescribed by the Regulatory Authorities, from time to time, pursuant to Applicable Law or otherwise, including the trials referred to in 21 C.F.R. §312.21(b), as amended.

1.25 “Phase 3 Clinical Trials” means a human clinical trial of a Product or New Collaboration Compound on a sufficient number of subjects that is designed to establish that a pharmaceutical product is safe and efficacious for its intended use and to determine warnings, precautions, and adverse reactions that are associated with such pharmaceutical product in the dosage range to be prescribed, which trial is intended to support marketing approval of such Product or New Collaboration Compound, including all tests and studies that are required by the FDA from time to time, pursuant to Applicable Law or otherwise.

1.26 “ Sublicensee ” means any party other than an Affiliate which enters into an agreement or arrangement with Licensee or receives a license grant from Licensee under the Patent Rights, to manufacture, have manufactured, offer for sale, sell, lease, use, practice, and/or import the Licensed Product, subject to the then-current applicable article, item, service, technology, and technical data-specific requirements of the U.S. export laws and regulations.

Page 5 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.27 “ Territory ” means worldwide.

1.28 “ Valid Claim ” means a claim of any issued and unexpired patent or patent application that is part of Patent Rights, whose validity, enforceability, or patentability has not been affected by any of the following: (i) irretrievable lapse, abandonment, revocation, dedication to the public, or disclaimer, or (ii) a holding, finding, or decision of invalidity, unenforceability, or non-patentability by a court, governmental agency, national or regional patent office, or other appropriate body that has competent jurisdiction, such holding, finding, or decision being final and unappealable or unappealed within the time allowed for appeal.

ARTICLE 2. LICENSE GRANT

2.1 Exclusive Grant

Subject to the terms and conditions set forth herein, Licensor hereby grants to Licensee a royalty-bearing exclusive license to make, have made, use and sell any Licensed Product in the Field of Use under Licensor’s Patent Rights throughout the Territory. This grant is subject to the payment by Licensee to Licensor of all consideration required under this Agreement, and subject to any rights of the Government of the United States as set forth in Section 2.2. This grant is further subject to rights retained by Licensor and KU to:

a. publish the general scientific findings from research conducted in whole or in part at KU related to the Patent Rights;

b. manufacture, have manufactured, use, or practice the Patent Rights for research, teaching and other educationally-related purposes; and

c. to permit other qualified non-profit and/or academic research institutions the limited right to use the Patent Rights, to make, have made, and use any Licensed Product for such organizations’ internal non-commercial research purposes. Any such grant of limited rights to a third party institution, including the transfer of any Licensed Product to any such third party institution or any other third party, shall be contingent upon the execution of a Material Transfer Agreement or equivalent agreement, substantially in the form of Exhibit “F”, limiting such third party’s activities to a specified research program for a specified period of time and providing Licensee with a right of first negotiation for exclusive rights to any resulting inventions. No such grant of limited rights to a third party institution shall include the right to conduct any research whatsoever, without the express written consent of Licensee in each and every instance, with a compound that has been designated by Licensee as a Clinical Candidate or which is under consideration for designation as a Clinical Candidate. As of the Effective Date, such compounds include [***], and the compounds covered by U.S. provisional patent application [***]. Any such grant of limited rights to a third party institution shall explicitly exclude, at all times, the right to conduct any research whatsoever in humans or administer any Licensed Product to humans.

d. Neither KU nor Licensor, nor any Affiliate thereof, shall at any time use any Licensed Product in humans for any purpose whatsoever without the express written consent of Licensee.

2.2 The license granted in Section 2.1 hereof is expressly made subject to a non-exclusive, irrevocable, royalty-free license heretofore granted to the U.S. Government and in the general form as attached hereto as Exhibit “B” and incorporated herein by reference.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

2.3 Affiliates

Licensee may extend the license granted herein to any Affiliate if the Affiliate consents in writing to be bound by this Agreement to the same extent as Licensee; provided, however, that any fee or other consideration paid to Licensee in consideration of such extension will be subject to the provisions of Section 2.4 as if the Affiliate were a Sublicensee. Other agreements or arrangements with Affiliates relating to Patent Rights which result in the sale of Licensed Product(s) will be subject to the royalty payment and other applicable payment provisions of this Agreement

2.4 Sublicensing

Licensor hereby grants to Licensee the right to enter into sublicensing agreements with Sublicensees, provided that Licensee has current exclusive rights thereto in the Territory being sublicensed pursuant to Section 2.1 and subject to the following:

a. Any sublicense granted by Licensee to a Sublicensee shall incorporate all of the terms and conditions of this Agreement, which shall be binding upon each Sublicensee as if such Sublicensee were a party to this Agreement. Licensee shall collect and guarantee all payments due Licensor from Sublicensee(s).

b. If Licensee becomes Insolvent, Licensor’s proportionate share of all payments then or thereafter due and owing to Licensee from its Sublicensees for the sublicense of the Patent Rights will, upon notice from Licensor to any such Sublicensee, become payable directly to Licensor by Sublicensee for the account of Licensee.

c. Licensee shall within thirty (30) days of: (a) execution, provide Licensor with a copy of each sublicense granted by Licensee hereunder, and any amendments thereto or terminations thereof; and (b) receipt, summarize and deliver copies of all reports due to Licensee from Sublicensee(s).

d. If this Agreement is terminated for any reason, any existing Sublicensee(s) will have the right to assume Licensee’s rights and obligations hereunder in the territory covered by the Sublicense. If any of the United States, Mexico, or Canada are not covered by any Sublicense, then the Sublicensee having rights in the countries of the European Union shall have the right to assume Licensee’s rights and obligations in any such non-sublicensed country. Following the termination of this Agreement, the Sublicensee shall execute a license agreement with Licensor.

ARTICLE 3. TERM OF AGREEMENT

Unless otherwise terminated by operation of law or by acts of the parties pursuant to the terms of this Agreement, this Agreement shall be in full force and effect from the Effective Date until the later of (a) the end of the term of the last-to-expire of Licensor’s Patent Rights licensed under this Agreement in each country, (b) ten (10) years from the date of the First Commercial Sale in each country, or (c) the expiration of regulatory exclusivity in each country that effectively bars the commercial sale of a generic version of a Licensed Product by a third party.

ARTICLE 4. FEES & ROYALTIES

4.1 License Issue Fee

Licensee shall pay to Licensor a non-refundable License Issue Fee of [***] US Dollars ($[***]) upon execution of this Agreement. Such License Issue Fee shall be deemed earned and immediately payable upon execution of this Agreement; failure to deliver said fee to Licensor on or before ten (10) business days following execution of this Agreement by both parties shall terminate this Agreement.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

4.2 License Maintenance Fee

Licensee will pay an annual license maintenance fee in the amount of [***] US Dollars ($[***]), due and payable on each anniversary of the Effective Date beginning on September 26, 2015.

4.3 Running Royalty

As consideration for the license under this Agreement, if a Licensed Product contains [***] or another compound that is specifically disclosed in one or more of the patents or patent applications listed in Exhibit A, Licensee shall pay to Licensor an earned royalty of [***] percent ([***]%) of Net Sales, whether Net Sales are achieved by Licensee or by a Sublicensee. For example, if Net Sales by Licensee in a territory are [***] dollars ($[***]), a royalty of [***] dollars ($[***]) will be due to Licensor. If Net Sales by any Sublicensee in a territory are [***] dollars, a royalty of [***] dollars will be due to Licensor, payable by Licensee. If a Licensed Product contains as its active principle a compound that is not specifically disclosed in one or more of the patents or patent applications listed in Exhibit A, Licensee shall pay to Licensor an earned royalty of [***] percent ([***]%) of Net Sales, whether Net Sales are achieved by Licensee or by a Sublicensee. Earned royalties shall accrue in each country, the period of time commencing on the date of the First Commercial Sale in that country and continuing until the later of (a) the expiration of the last to expire Valid Claim in that country covering the manufacture, use or sale of such Licensed Product in such country, (b) ten (10) years from the date of the First Commercial Sale in that country, or (c) the expiration in that country of regulatory exclusivity that effectively bars the commercial sale of a generic version of a Licensed Product by a third party. Upon the occurrence in any given country of the later of events (a) through (c) in the preceding sentence, no further royalty shall accrue to Licensor for Net Sales in that country regardless of the amount of sales achieved in that country by Licensee or any Sublicensee.

4.4 Minimum Royalty

Commencing with the first calendar quarter to occur following the date of first occurrence of Net Sales, Licensee shall pay to Licensor within forty-five (45) days of the end of said quarter a minimum annual royalty as provided below:

YEAR 1         [***] US Dollars ($[***])

YEAR 2         [***] US Dollars ($[***])

YEAR 3         [***] US Dollars ($[***])

YEAR 4         [***] US Dollars ($[***])

YEAR 5         [***] US Dollars ($[***])         (and Beyond)

Licensee shall continue to pay such minimum annual royalty until the end of the term of the last to expire of Licensor’s Patent Rights. Licensor shall fully credit each payment of minimum annual royalties against any earned royalties payable by Licensee with respect to the year in which the minimum annual royalty is made.

4.5 Sublicense Fees and Royalties

Licensee shall pay to Licensor the percentage specified below of any lump sum fee that is not an earned royalty, any fixed fee , license fee, milestone payment, unearned portion of any minimum royalty payment, joint marketing fee, intellectual property cross license , and any other property, consideration or thing of value given or exchanged as compensation for a sublicense (collectively, “Sublicense Income”). All such consideration received by Licensee shall be fully auditable by

Page 8 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Licensor. If a Sublicensee purchases equity in Licensee in connection with the grant of a sublicense, Licensee and Licensor shall discuss in good faith to determine whether such equity investment was or was not purchased as compensation for the sublicense grant. Licensee shall not receive from Sublicensee(s) anything of value in lieu of cash payments in consideration for any sublicense under this Agreement without the express prior written permission of Licensor . Any non-cash consideration, including, without limitation, equity in other companies or equity investments in Licensee, received by the Licensee from any Sublicensee(s) will be valued at its Fair Market Value as of the date of receipt by Licensee.

If additional technologies owned or licensed by Licensee are included in a sublicense agreement that grants rights under this Agreement, the parties hereto will reasonably allocate value among the Patent Rights and the other technologies included in the sublicense and the Sublicense Income percentages set forth below shall be adjusted accordingly, resulting in the Sublicense Income percentages below being applied only to the portion of the total license value that is allocated to the Patent Rights, provided that in no event shall the value allocated to the Patent Rights be less than % of the total value of the Patent Rights and such other technologies. Additional technologies owned or licensed by Licensee are deemed to contribute no value if (1) they are a product, process or usage that falls within the scope of any Valid Claim and (2) the filing date of the Patent Rights predates the filing date of the additional Licensee owned or licensed patent rights included in the sublicense.

Project Status at Time of Sublicense	Sublicense Income Percentage
[***]	[***]% ([***] percent of Sublicense Income received by Licensee)
[***]	[***]% ([***] percent of Sublicense Income received by
[***]	Licensee)
[***]
[***]	[***]% ([***] percent of Sublicense Income received by
[***]	Licensee)
[***]
[***]	[***]% ([***] percent of Sublicense Income received
[***]	by Licensee)
[***]
[***]	[***]% ([***] percent of Sublicense Income received by Licensee)
[***]
[***]
[***]	[***]% ([***] percent of Sublicense Income received [***] by Licensee)

Page 9 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

4.6 Past Patent Expenses

Licensee shall reimburse past patent expenses incurred by Licensor in filing and prosecuting patent applications included in the Patents Rights according to the following payment plan. As of September 15, 2014, these expenses are estimated at [***] US Dollars ($[***]) (“Past Patent Expenses”).

(a) As partial reimbursement of Past Patent Expenses, Licensee shall pay to Licensor [***] US Dollars ($[***]) within Fifteen (15) calendar days following initiation of GLP Toxicology Studies with a Licensed Product by Licensee.

(b) As partial reimbursement of Past Patent Expenses, Licensee shall pay to Licensor [***] US Dollars ($[***]) within Fifteen (15) calendar days following completion of 28-day non-rodent GLP Toxicology Studies with a Licensed Product resulting in an Acceptable Toxicity Profile.

The payments in 4.6 (a) and (b) above shall be payable whether the stipulated event is first achieved with a Licensed Product under this Agreement or a Licensed Product under the terms of the Exclusive License Agreement between KUCTC and Licensee, contract number [***]. Achievement of these events with a Licensed Product under this Agreement shall also satisfy the requirements for reimbursement of Past Patent Expenses under contract number [***].

“Acceptable Toxicity Profile” shall be defined as a body of results that is suitable to support IND filing for the proposed indication, including but not limited to a defined no-adverse-effect-level (NOAEL) that would provide an appropriate safety margin to support clinical development.

Licensee shall pay all future patent expenses as set forth in Article 10 hereof.

ARTICLE 5. COMMERCIAL DILIGENCE & MILESTONES

5.1 Commercial Diligence

Upon execution of this Agreement, Licensee shall diligently proceed with Commercially Diligent Efforts to develop, manufacture, practice, sell and use the Licensed Products in order to make them readily available to the general public as soon as possible on commercially reasonable terms. Licensee shall continue active, diligent Commercially Diligent Efforts for one or more Licensed Product(s) throughout the term of this Agreement (“Actively Commercializing”). In addition, Licensee shall perform at least the following obligations as part of its due diligence activities hereunder:

(a) Licensee shall [***].

(b) Licensee shall [***].

(c) Licensee shall [***].

(d) Licensee [***].

Meeting each milestone one time will satisfy Commercial Diligence requirements in Section 5.1, regardless of the number of compounds that are ultimately developed. Achievement of one or more of the above milestones with [***] or another compound that is a Licensed Product under the terms of the Exclusive License Agreement between KUCTC and Licensee, contract number [***], and payment of the associated fee(s) pursuant to section 5.2 of that Agreement, will satisfy Commercial Diligence requirements hereunder with respect to any such milestone(s) and milestone payment(s).

Page 10 of 34

.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

If, despite using Commercially Diligent Efforts, Licensee is unable to meet any of the foregoing due diligence milestones, Licensor will grant to Licensee, upon Licensee’s request, [***] extension of time to meet any missed milestone, subject to the following: (i) Licensor would have no obligation to grant Licensee more than [***] extensions per milestone; (ii) In consideration of each [***] extension that Licensor grants, Licensee would be obligated to pay Licensor an extension fee of [***] Dollars ($[***] USD) for each of the [***] extensions, and (iii) Each extension granted shall be considered to apply to the specific milestone for which it is granted and to all subsequent milestones, but shall be considered one (1) extension for purposes of clauses (i) and (ii).

5.2 Milestones and Fees for Development of Licensed Products

a. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon [***].

b. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon [***].

c. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon [***].

d. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon [***].

e. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon [***].

f. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon [***].

g. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon [***].

h. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon [***].

Each required payment will be paid to Licensor within thirty (30) days of completion of each milestone listed above.

Beginning with IND acceptance, each milestone may be paid up to [***] times if different compounds are developed in different therapeutic areas, (e.g., [***]). If a back-up or replacement compound is substituted for an initial lead compound in a given indication, milestones achieved with the back-up or replacement compound will not be payment-bearing until a previously unpaid milestone is reached. For example, if the initially developed compound has entered Phase I and is then replaced, no milestone payments will be due for the replacement compound until first dosing in a Phase II trial is achieved. These considerations will apply without regard to whether such back-up or replacement compound, or the initial lead compound, is a Licensed Compound under this Agreement or under the terms of the Exclusive License Agreement between KUCTC and Licensee, contract number [***].

5.3 Sales Milestones

a. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon first achievement of worldwide Net Sales of [***] US Dollars ($[***]) for the first Licensed Product.

b. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon first achievement of worldwide Net Sales of [***] US Dollars ($[***]) for the first Licensed Product.

c. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon first achievement of worldwide Net Sales of [***] US Dollars ($[***]) for the first Licensed Product.

d. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon first achievement of worldwide Net Sales of [***] US Dollars ($[***]) for the first Licensed Product.

Page 11 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

e. Licensee shall pay to Licensor a milestone fee of [***] US Dollars ($[***]) upon first achievement of worldwide Net Sales of [***] US Dollars ($[***]) for the first Licensed Product.

Each required payment will be paid to Licensor within thirty (30) days of completion of each milestone listed above. If a product that is a Licensed Product under the terms of the Exclusive License Agreement between KUCTC and Licensee, contract number [***], achieves Net Sales before any product that is a Licensed Product pursuant to this Agreement has achieved Net Sales, the sales milestones under this section 5.3 shall no longer be applicable to any Licensed Product hereunder.

5.4 Sponsored Research

Licensee shall spend at least [***] US dollars ($[***]) at KU within one (1) year of the Effective Date for the development of Licensed Products (“Sponsored Research”). This sponsored research agreement will be renewable annually upon mutual agreement. The Parties agree to negotiate the terms of such Sponsored Research Agreements in good faith. Support provided pursuant to Licensee’s obligations under Section 5.4 of the Exclusive License Agreement between KUCTC and Licensee, contract number [***], shall be fully applicable to Licensee’s obligations under this Section 5.4, such that the aggregate amount of support required under both Agreements shall not exceed $[***].

ARTICLE 6. EQUITY OWNERSHIP

The parties agree that no equity interest in Licensee will be granted to Licensor or KU in relation to this Agreement.

ARTICLE 7. CONFIDENTIALITY

7.1 Licensee and Licensor acknowledge that either party may provide certain information to the other with regard to the Inventions that is considered to be confidential. It is therefore agreed that any information received by one party from the other, and clearly designated at the time of disclosure or promptly thereafter as “CONFIDENTIAL” (“Confidential Information”), shall not be disclosed by either party to any third party other than its outside legal, accounting, tax and financial advisors, bona fide potential acquirors and potential investors, and potential and existing lenders, financing sources, Sublicensees, consultants, and contractors, provided that they have been informed of the confidential nature of such information and are bound by confidentiality obligations no less stringent than the obligations contained herein. It is acknowledged and agreed that the financial information contained in this Agreement is Confidential Information. Confidential Information shall not be used by either party hereto or the third parties enumerated above for purposes other than those contemplated by this Agreement for a period of five (5) years from the termination of this Agreement, unless or until –

a. said information becomes known to third parties not under any obligation of confidentiality to the disclosing party, or becomes publicly known through no fault of the receiving party;

b. contemporaneously dated written records demonstrate that said information was already in the receiving party’s possession prior to the disclosure of said information to the receiving party, except in cases when the information has been covered by a preexisting confidentiality agreement;

c. said information is subsequently disclosed to the receiving party by a third party not under any obligation of confidentiality to the disclosing party;

d. said information is approved for disclosure by prior written consent of the disclosing party;

Page 12 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

e. said information is required to be disclosed by court order or governmental law or regulation, provided that, except with respect to disclosures required by applicable securities laws or regulations, the receiving party gives the disclosing party prompt notice of any such requirement and cooperates with the disclosing party in attempting to limit such disclosure; or

f. said information is proven by contemporaneously dated written records to have been independently developed by the receiving party without recourse or access to the information.

7.2 Each party hereto acknowledges that the obligations undertaken by it pursuant to this Section are unique and that the other party will have no adequate remedy at law if such party shall fail to perform any of its obligations hereunder, and such party therefor confirms the other party’s right to specific performance of the terms of this Section is essential to protect the rights and interests of the other party. Accordingly, each party agrees that, in addition to any other remedies that the other party may have at law or in equity, the other party shall have the right to sue in equity to have all obligations of such party pursuant to this Section specifically performed by such party, and the other party shall have the right to seek preliminary and permanent injunctive relief to secure specific performance and to prevent a breach or contemplated breach of this Section by such party. Each party hereby expressly waives the defense that a remedy in damages will be adequate for a breach by it under this Section. Each party further agrees that the other party shall not be required to post a bond as a condition to obtaining or exercising such remedies, and such party hereby waives any such requirement or condition.

7.3 Licensee acknowledges that Licensor is subject to the Kansas Open Records Act, K.S.A. 45-215 et seq.. Licensor shall keep confidential any information provided to Licensor by Licensee that Licensee considers confidential, to the extent allowable under the Kansas Open Records Act.

ARTICLE 8. QUARTERLY & ANNUAL REPORTS

8.1 Annual and Quarterly Royalty Report

Within sixty (60) days after the end of the calendar year in which Net Sales first occur, and within sixty (60) days after the end of each calendar quarter thereafter, Licensee shall provide Licensor with a written report detailing all sales and uses, if any, made of Licensed Products during the preceding calendar quarter, and detailing the amount of Net Sales made during such quarter and calculating the royalties due to Licensor pursuant to Article 4 hereof. Each report shall include at least the following:

g. Amount of Net Sales, on a country-by-country basis, of Licensed Products sold by and/or for Licensee, Affiliates and all Sublicensees;

h. accounting for Net Sales, noting the deductions applicable as provided in Section 1.21;

i. total royalties due to Licensor; and

j. names and addresses of all Sublicensees.

Each report shall be in substantially similar form as Exhibit “C” attached hereto. Each such report shall be signed by an officer of Licensee (or the officer’s designee). With each such report submitted, Licensee shall pay to Licensor the royalties and fees due and payable under this Agreement. If no royalties shall be due, Licensee shall so report. Licensee’s failure to submit a royalty report in the required form will constitute a breach of this Agreement. Prior to achievement of Net Sales, no report shall be due to Licensor other than as specified in Section 8.2 or in association with a payment based on one or more developmental milestones as listed in Section 5.2.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

8.2 Progress Report and Commercialization Plan

Commencing thirty days after January 1, 2015, and thirty days after each January 1 thereafter, Licensee shall submit to Licensor a written report covering Licensee’s (and any Sublicensee’s) progress in (a) development and testing of all Licensed Products; (b) achieving the due diligence milestones specified herein; (c) preparing, filing, and obtaining of any approvals necessary for marketing the Licensed Products; and (d) plans for the upcoming year in commercializing the Licensed Product(s). Each report shall be in substantially similar form and contain at least the information required by Exhibit “D” attached hereto and incorporated herein by this reference.

8.3 On or before the ninetieth (90 th ) day following the close of Licensee’s fiscal year, Licensee shall provide Licensor with Licensee’s certified financial statements for the preceding fiscal year including, at a minimum, a balance sheet. Provision of more than a balance sheet will be at Licensee’s sole option.

8.4 In addition to the regular reports required by Section 8.1 and 8.2, hereof, Licensee shall provide a written report to Licensor of the date of first occurrence of Net Sales in each country within sixty (60) days of the occurrence thereof.

ARTICLE 9. PAYMENTS, RECORDS and AUDITS

9.1 Payments

Licensee shall pay all royalties accruing to Licensor in U.S. Dollars, without deduction of exchange, collection, wiring fees, bank fees, or any other charges, within thirty (30) days following the calendar quarter in which Net Sales occur. Each payment will reference KUCTC License ID # [***]. All payments to Licensor will be made in United States Dollars by wire transfer or check payable to the [***], and sent to:

[***]

[***]

[***]

[***]

[***]

Wire Transfer Information:

[***]

[***]

[***]

[***]

[***]

[***]

[***]

For converting any Net Sales made in a currency other than United States Dollars, the parties will use the conversion rate published in the Wall Street Journal /Telegraphic Transfer Selling conversion rate reported by the Sumitomo Bank, Tokyo, or other industry standard conversion rate approved in writing by Licensor for the last day of the calendar quarter for which such royalty payment is due or, if the last day is not a business day, the closest preceding business day.

Page 14 of 34

9.2 Late Payments

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

In the event royalty payments or other fees are not received by Licensor when due hereunder, Licensee shall pay to Licensor interest charges at the rate of twelve percent (12%) per annum on the total royalties or fees due for the reporting period.

9.3 Records

Licensee shall keep, and require its Sublicensees and Affiliates to keep, complete, true and accurate records and books containing all particulars that may be necessary for the purpose of showing the amounts payable to Licensor hereunder. Records and books shall be kept at Licensee’s principal place of business or the principal place of business of the appropriate division of Licensee to which this Agreement relates.

9.4 Audit

The books and the supporting data referred to in Section 9.3 shall be open to inspection by Licensor or its agents, upon reasonable prior notice to Licensee, at all reasonable times for a term of five (5) years following the end of the calendar year to which they pertain, upon reasonable prior notice to Licensee, for the purpose of verifying Licensee’s royalty statement or compliance in other respects with this Agreement. Such access will be available to Licensor upon not less than ten (10) days written notice to Licensee, not more than once each calendar year until termination of this Agreement, during normal business hours, and once a year for three (3) years after the expiration or termination of this Agreement. Should such inspection lead to the discovery of a discrepancy in reporting to Licensor’s detriment exceeding [***] percent ([***]%) of the amount due or [***] dollar ($[***]) US, whichever is greater, Licensee agrees to pay the full cost of such inspection and shall pay such cost within thirty (30) days after receiving written notice that such inspection showed such underpayment. If the audit determines that there has been an overpayment by Licensee, the amount of the overpayment will be deducted from the next payment due to Licensor.

ARTICLE 10. PATENT MARKING

Licensee shall permanently and legibly mark all Licensed Products made, used or sold under the terms of this Agreement, or their containers, in accordance with all applicable patent-marking and notice provisions under Title 35, United States Code.

ARTICLE 11. PATENT PROSECUTION AND MAINTENANCE

11.1 Future Patent Expenses

Licensee will pay, within thirty (30) days of invoice, all future expenses for filing, prosecuting, enforcing, and maintaining the Patent Rights that are licensed to Licensee hereunder, including without limitation, any taxes on such Patent Rights. Licensee will receive such invoices directly from patent counsel; Licensor will receive a copy of such invoice. Licensee shall pay such invoices directly to patent counsel with written confirmation of payment to Licensor.

11.2 Patent Counsel

Licensor will work closely with Licensee to develop a suitable strategy for the prosecution and maintenance of all Patents Rights. Licensee may select patent counsel for the prosecution and maintenance of Patent Rights, provided such counsel is reasonably acceptable to Licensor. The selected patent attorney will agree to keep both Licensee and Licensor, as co-clients, equally informed and involved as to all material information, material communications with governmental patent offices, material issues and decisions, and related matters applicable to prosecuting the patent applications for the

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Patent Rights and for maintaining the Patent Rights in good standing. Decisions for prosecuting the patent applications will be made so as to obtain the broadest patent protection that is reasonable and practical under the circumstances. Licensee will request that copies of all documents prepared by the patent attorney selected by Licensee be provided to Licensor for review and comment prior to filing to the extent practicable under the circumstances. All patent applications and patents will be in the name of Licensor, owned by Licensor and included as part of the Patent Rights licensed pursuant to this Agreement. Licensee will promptly notify Licensor of its plans to file, revise or drop any patent application or claim which may adversely affect the Patent Rights or the rights or royalties of Licensor in the Licensed Product(s) under this Agreement. Licensee and the selected patent attorney shall not change any inventorship designations and shall not drop or reduce any claim in a pending patent application which may adversely affect the Patent Rights or royalties of Licensor without the written consent of Licensor. Licensee shall notify Licensor at least forty five (45) days prior to abandonment of any patent application and/or patents under Patent Rights.

ARTICLE 12. TERMINATION BY LICENSOR

12.1 If Licensee should: (a) fail to deliver to Licensor any statement or report required hereunder when due; (b) fail to make any payment at the time that the same should be due; (c) violate or fail to perform any covenant, condition, or undertaking of this Agreement to be performed by it hereunder; (d) cease active Commercially Reasonable Effort to commercialize a Licensed Product(s); (e) file a bankruptcy action, or have a bankruptcy action against it, or become Insolvent; or (f) enter into a composition with creditors, or have a receiver appointed for it; then Licensor may give written notice of such default to Licensee. If Licensee should fail to cure such default within thirty (30) days of such notice, the rights, privileges, and license granted hereunder shall automatically terminate.

12.2 No termination of this Agreement by Licensor shall relieve Licensee of its obligation to pay any monetary obligation due or owing at the time of such termination and shall not impair any accrued right of Licensor. Licensee shall pay all attorneys’ fees and costs incurred by Licensor in enforcing any obligation of Licensee or accrued right of Licensor. Articles 7, 9, 20, 22, 25, 26, and Section 12.2, 15.2, 15.3, and 27.7 hereof shall survive any termination of this Agreement.

ARTICLE 13. TERMINATION BY LICENSEE

13.1 Licensee may terminate this Agreement, in whole or as to any specified patent, at any time and from time to time without cause, by giving written notice thereof to Licensor. Such termination shall be effective one hundred twenty (90) days after such notice and all Licensee’s rights associated therewith shall cease as of that date.

13.2 Any termination pursuant to Section 13.1 hereof shall not relieve Licensee of any obligation or liability accrued hereunder prior to the effective date of such termination, or rescind or give rise to any right to rescind any payments made or other consideration given to Licensor hereunder prior to the time such termination becomes effective. Such termination shall not affect in any manner any rights of Licensor arising under this Agreement prior to the date of such termination.

ARTICLE 14. DISPOSITION OF LICENSED PRODUCTS ON HAND

Upon termination of this Agreement by either party pursuant to section 13.1 or 12.1, Licensee shall provide Licensor with a written inventory of all Licensed Products in process of manufacture, in use or in stock. Licensee may dispose of any such Licensed Products within the ninety (90) day period following such termination, provided, however, that Licensee shall pay royalties and render reports to Licensor thereon in the manner specified herein.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

ARTICLE 15. WARRANTY BY LICENSOR

15.1 Licensor warrants that it has the lawful right to grant the license set forth in this Agreement.

15.2 EXCEPT AS EXPRESSLY PROVIDED IN SECTION 15.1, THE PARTIES ACKNOWLEDGE AND AGREE THAT KU, LICENSOR, ITS AFFILIATES, AGENTS, EMPLOYEES, AND THE INVENTORS HAVE MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR THE VALIDITY OR ENFORCEABILITY OF PATENT RIGHTS IN NO EVENT SHALL LICENSOR, ITS AFFILIATES, AGENTS, EMPLOYEES, AND THE INVENTORS BE HELD RESPONSIBLE FOR ANY DIRECT, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE EXERCISE OF PATENT RIGHTS, EVEN IF LICENSOR IS ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.

15.3 Nothing in this Agreement shall be construed as:

a. a warranty or representation by Licensor as to the validity, enforceability, or scope of any Patent Rights.

b. a warranty or representation by Licensor that the exercise or practice by the Licensee of the license granted herein (including making, using, selling, offering for sale, or importing the Licensed Product) is or will be free from infringement of intellectual property rights of third parties.

c. an obligation by Licensor or KU to bring or prosecute actions or suits against third parties for patent infringement, except as expressly provided in Article 16 hereof.

d. an obligation to furnish any know-how not provided in the Patent Rights.

e. conferring by implication, estoppel or otherwise any license or rights under any patents of Licensor other than Patent Rights.

15.4 Any breach of the representations or warranties made in this Article 15 shall entitle Licensee to a refund of all payments made to Licensor as consideration for the rights granted under this Agreement, and said refund shall be the sole remedy available to Licensee for breach or violation of any provisions contained in this Article 15.

ARTICLE 16. INFRINGEMENT

16.1 If either party learns of a claim of infringement of any of Licensor’s Patent Rights licensed under this Agreement, that party shall give written notice of such claim to the other party. Licensor, in consultation with Licensee, shall then use reasonable efforts to terminate such infringement if the parties mutually agree that such efforts are appropriate under the circumstances. In the event Licensor fails to abate the infringing activity within ninety (90) days after such written notice or to bring legal action against the third party, Licensee may bring suit for patent infringement. No settlement, consent judgment or other voluntary final disposition of the suit may be entered into without the consent of Licensor, which consent shall not be unreasonably withheld.

16.2 Any such legal action shall be at the expense of the party by whom suit is filed, hereinafter referred to as the “Litigating Party”. Any damages or costs recovered by the Litigating Party in connection with a legal action filed by it hereunder, and provided that the Litigating Party is reimbursed for its costs and expenses reasonably incurred in the lawsuit, and after any royalties or other payments due to Licensor under Article 4 are paid, shall be retained by Licensee under the following conditions: (a) damages for lost sales shall be treated as Net Sales (after reasonable costs and expenses of litigation are subtracted), and the royalty due on the corresponding amount of Net Sales shall be paid to Licensor; (b) [***] percent ([***]%) of punitive damages, if any, in excess of damages for lost sales shall be paid to Licensor and the remainder shall be retained by Licensee.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

16.3 Licensee and Licensor shall cooperate with each other in litigation proceedings instituted hereunder, provided that such cooperation shall be at the expense of the Litigating Party, and such litigation shall be controlled by the Litigating Party.

ARTICLE 17. INSURANCE

17.1 Insurance Requirements

Beginning at the time any Licensed Product is being distributed or sold (including for the purpose of obtaining any required regulatory approvals) by Licensee, Affiliate, or a Sublicensee, Licensee will, at its sole cost and expense, procure and maintain commercial general liability insurance issued by an insurance carrier with an A.M. Best rating of “A” or better in amounts not less than $[***] per incident and $[***] annual aggregate. Licensee will have Licensor, KU, and their respective officers, employees and agents, named as additional insureds. All rights of subrogation will be waived against Licensor and its insurers. Such commercial general liability insurance will provide (i) product liability coverage; (ii) broad form contractual liability coverage for Licensee’s indemnification under this Agreement; and (iii) coverage for litigation costs. The specified minimum insurance amounts will not constitute a limitation on Licensee’s obligation to indemnify Licensor, KU, and their respective officers, employees and agents, under this Agreement.

17.2 Evidence of Insurance and Notice of Changes

Licensee will provide Licensor with written evidence of such insurance upon request by Licensor. Licensee will provide Licensor with written notice of at least thirty (30) days prior to the cancellation, non-renewal, or material change in such insurance.

17.3 Continuing Insurance Obligations

Licensee will maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during (i) the period that any Licensed Product(s) and/or Licensed Service(s) developed pursuant to this Agreement is being commercially distributed or sold by Licensee, any Affiliate, or any Sublicensee or agent of Licensee; and (ii) for five (5) years after such period.

ARTICLE 18. WAIVER

No waiver by either party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.

ARTICLE 19. ASSIGNABILITY

This Agreement is not assignable or otherwise transferable by Licensee without the prior written consent of Licensor, except in conjunction with a merger, acquisition, or similar transaction. The failure of Licensee to comply with the terms of this paragraph shall be grounds for termination of the Agreement by Licensor under Article 12.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

ARTICLE 20. INDEMNIFICATION BY LICENSEE

Licensee shall indemnify, hold harmless and defend Licensor, KU, and their respective officers, employees, inventors, affiliates, and agents, against any and all claims, suits, losses, damages, costs, liabilities, fees and expenses (including reasonable fees of attorneys) resulting from or arising out of or in connection with: (a) the exercise of any license granted under this Agreement; (b) the breach of this Agreement by Licensee; (c) Licensee’s failure to comply with any applicable laws, rules, or regulations, or (d) any act, error, or omission of Licensee, its officers, agents, employees, Affiliates, or Sublicensees, except where such claims, suits, losses, damages, costs, fees, or expenses result solely from the gross negligence, fraud, or intentional misconduct of the Licensor, its affiliates, officers, employees or agents. Licensee shall give Licensor prompt and timely notice of any claim or suit instituted of which Licensee has knowledge that in any way, directly or indirectly, affects or might affect Licensor, and Licensor shall have the right at its own expense to participate in the defense of the same.

ARTICLE 21. NOTICES

Any payment, notice or other communication required or permitted to be given to either party hereto shall be in writing and shall be deemed to have been properly given and effective: (a) on the date of delivery if delivered in person during recipient’s normal business hours; or (b) on the date of attempted delivery if delivered by courier, express mail service or first-class mail, registered or certified. Such notice shall be sent or delivered to the respective addresses given below, or to such other address as either party shall designate by written notice given to the other party as follows:

In the case of Licensee:

Reata Pharmaceuticals, Inc.

Attn: Robin Kral, VP of Licensing & Intellectual Property

2801 Gateway Drive, Suite 150

Irving, Texas 75063

In the case of Licensor:

KU Center for Technology Commercialization, Inc.

Attn: Director, KUCTC

KU Medical Center

Wescoe Pavilion M.S. 1039

3901 Rainbow Boulevard

Kansas City, Kansas 66160

ARTICLE 22. REGULATORY COMPLIANCE

21.1 When required by local/national law, Licensee shall register this Agreement, pay all costs and legal fees connected therewith, and otherwise ensure that the local/national laws affecting this Agreement are fully satisfied.

21.2 Licensee shall comply with all applicable U.S. laws dealing with the export and/or management of technology or information. Licensee understands that the Arms Export Control Act (AECA), including its implementing International Traffic In Arms Regulations (ITAR,) and the Export Administration Act (EAA), including its Export Administration Regulations (EAR), are some (but not all) of the laws and regulations that comprise the U.S. export laws and regulations. Licensee further understands that the U.S. export laws and regulations include (but are not limited to): (1) ITAR and EAR product/service/data-specific requirements; (2) ITAR and EAR ultimate destination-specific requirements; (3) ITAR and EAR end user-specific requirements; (4) ITAR and EAR end use-specific requirements; (5) Foreign Corrupt Practices Act; and (6) anti-boycott laws and regulations. Licensee will comply with all then-current applicable export laws and regulations of the U.S. Government (and other applicable U.S. laws and regulations) pertaining to the Licensed Product(s) (including any associated products, items, articles, computer software, media, services, technical data, and other information). Licensee certifies that it will not, directly or indirectly, export (including any deemed export), nor

Page 19 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

re-export (including any deemed re-export) the Licensed Product(s) (including any associated products, items, articles, computer software, media, services, technical data, and other information) in violation of U.S. export laws and regulations or other applicable U.S. laws and regulations. Licensee will include an appropriate provision in its agreements with its authorized Sublicensees to assure that these parties comply with all then-current applicable U.S. export laws and regulations and other applicable U.S. laws and regulations

21.3 Licensee agrees to use commercially reasonable efforts to ensure that products used or sold in the United States embodying Licensed Products shall be manufactured substantially in the United States, unless a written waiver is obtained in advance from the sponsoring federal agency.

ARTICLE 23. GOVERNING LAW

This Agreement shall be interpreted and construed in accordance with the laws of the State of Kansas, without application of any principles of choice of laws.

ARTICLE 24. RELATIONSHIP OF PARTIES

In assuming and performing the respective obligations under this Agreement, Licensee and Licensor are each acting as independent parties and neither shall be considered or represent itself as a joint venture, partner, agent or employee of the other.

ARTICLE 25. USE OF NAMES

25.1 By Licensee

Licensee shall not, without prior written consent of the Licensor, use the name or any trademark or trade name owned by Licensor, KU, or by an affiliate of KU, in any publication, publicity, advertising, or otherwise, except that Licensee may identify KUCTC as licensor of the Patent Rights and Licensed Products.

25.2 By Licensor

Licensor may use Licensee’s name in connection with Licensor’s publicity related to Licensor’s intellectual property and commercialization achievements.

ARTICLE 26. DISPUTE RESOLUTION

Except for the right of either party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm, any and all claims, disputes or controversies arising under, out of, or in connection with the Agreement, including but not limited to any dispute relating to patent validity or infringement, which the parties shall be unable to resolve within sixty (60) days shall be mediated in good faith. The party raising such dispute shall promptly advise the other party, in writing, of such dispute. By not later than five (5) business days after the recipient has received such notice of dispute, each party shall have selected for itself a representative who shall have the authority to bind such party, and shall additionally have advised the other party in writing of the name and title of such representative. By not later than ten (10) days after the date of such notice of dispute, the party against whom the dispute shall be raised shall select a mediator in the Kansas City area and such representatives shall schedule a date with such mediator for a hearing. The parties shall enter into good faith mediation and shall share the costs equally. If the representatives of the parties have not been able to resolve the dispute within fifteen (15) business days after such mediation hearing, then any and all claims, disputes or controversies arising under, out of, or in connection with this Agreement, including any dispute relating to patent

Page 20 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

validity or infringement, shall be resolved through arbitration if the parties mutually consent, or through any judicial proceeding either in the courts of the State of Kansas or in the United States District Court for the District of Kansas, to whose jurisdiction for such purposes Licensee and Licensor each hereby irrevocably consents and submits. All costs and expenses, including reasonable attorneys’ fees, of the prevailing party in connection with resolution of a dispute by arbitration or litigation of such controversy or claim shall be borne by the other party.

ARTICLE 27. GENERAL PROVISIONS

27.1 The headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

27.2 This Agreement shall not be binding upon the parties until it has been signed below by or on behalf of each party.

27.3 No amendment or modification of this Agreement shall be valid or binding upon the parties unless made in writing and signed by both parties hereto.

27.4 This Agreement embodies the entire understanding of the parties and supersedes all previous communications, representations or understandings, either oral or written, between the parties relating to the subject matter thereof.

27.5 The provisions of this Agreement are severable, and in the event that any provision of this Agreement shall be determined to be invalid or unenforceable under any controlling body of the law, such invalidity or unenforceability shall not in any way affect the validity or enforceability of the remaining provisions hereof.

27.6 This Agreement may be signed in counterparts, each of which when taken together shall constitute one fully executed document. Each individual executing this Agreement on behalf of a legal Entity does hereby represent and warrant to each other person so signing that he or she has been duly authorized to execute this Agreement on behalf of such Entity.

27.7 In the event of any litigation, arbitration, judicial reference or other legal proceeding involving the parties to this Agreement to enforce any provision of this Agreement, to enforce any remedy available upon default under this Agreement, or seeking a declaration of the rights of either party under this Agreement, the prevailing party shall be entitled to recover from the other such attorneys’ fees and costs as may be reasonably incurred, including the costs of reasonable investigation, preparation and professional or expert consultation incurred by reason of such litigation, arbitration, judicial reference, or other legal proceeding.

27.8 Except as required by law, neither party may disclose the financial terms of this Agreement without the prior written consent of the other party.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

IN WITNESS WHEREOF, Licensor and Licensee have executed this Agreement by their respective officers hereunto duly authorized, on the day and year hereinafter written.

“Licensee”		“Licensor”
REATA PHARMACEUTICALS, INC.		KU CENTER FOR TECHNOLOGY COMMERCIALIZATION, INC.
By	/s/ J. Warren Huff	By	/s/ Rajiv Kulkarni, Ph.D, MBA, CLP
	(Signature)		(Signature)
Name	J. Warren Huff	Name:	Rajiv Kulkarni, Ph.D, MBA, CLP
	(Please Print)
Title	Chief Executive Officer	Title:	Director
Date	9/29/2014	Date	9/30/2014

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXHIBIT “A”

PATENT RIGHTS

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

KU Ref No.	Matter	Application No. Date of Filing	Title	Inventor(s)
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXHIBIT “B”

LICENSE TO THE UNITED STATES GOVERNMENT

This instrument confers to the United States Government, as represented by the Department of Health and Human Services, a non-exclusive, non-transferable, irrevocable, paid-up license to practice or have practiced on its behalf throughout the world the following subject inventions. This license will extend to all divisions or continuations of the patent application and all patents or reissues, which may be granted thereon:

Invention Title:

[***]

[***]

[***]

[***]

[***]

[***]

[***].

Inventor(s):

[***]

[***]

[***]

[***]

[***]

[***]

Patent Application Serial No.: All Patent Application Serial numbers in Exhibit A including foreign patent applications.

The subject Inventions were conceived and/or first actually reduced to practice in performance of a government-funded project, Grant Nos.: [***], [***],[***],[***] and [***],[***],[***],[***],[***], and [***].

Principal rights to this subject invention have been left with the University of Kansas, subject to the provisions of 37 CFR 401 and 45 CFR 8.

Signed:		Date:
Name:	Rajiv Kulkarni, Ph.D, MBA, CLP	Title:	Director, KUCTC

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXHIBIT “C”

2015 ROYALTY REPORT

LICENSEE:	KUCTC Technology ID #
Period Covered: From   Through:
Prepared By:	Date:
Approved By:	Date:

If Licensee has several licensed products, please prepare separate reports for each. Then, compile all licensed products into a summary report.

Country and

Product or

Quantity

Unit

Gross

* Less

Net

Royalty

Period Royalty Amount

Patent

Tradename

Sold

Price

Sales

Allowances

Sales

Rate

This Year

Last Year

USA

$

$

$

$

$

#

Canada

#

Europe:

#

#

#

#

#

#

Japan

#

Other:

#

#

Sublicense #1 (name)

#

Sublicense #2 (name)

#

TOTAL:

$

$

$

$

$

Total Royalty Due: $

Sales Milestone Payments: If any of the cumulative sales milestones in Section 5.3 of the Exclusive License Agreement have been achieved, specify the milestone(s) achieved and the associated payment(s) due. If payment has not already been made in accordance with Section 5.3, please include such payment separately along with the total royalty due.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

* On a separate page, please indicate the reasons for adjustments, if significant. Please refer to the following examples as applicable: (1) cash, trade or quantity discounts actually allowed; (2) sales, use, tariff, customs duties or other excise taxes directly imposed upon particular sales; (3) outbound transportation charges—prepaid or allowed, and (4) allowances or credits to third parties for rejections or returns.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXHIBIT “D”

ANNUAL DEVELOPMENT AND COMMERCIALIZATION REPORT

For

Reata Pharmaceuticals, Inc.

[***] (if several, use oldest)

For period beginning and ending (“Period”)

Date:

Contact Person: Phone: Email:

1. Commercialization Efforts

A. List all countries in which marketing approval was first received for a Licensed Product in the preceding calendar year. Provide the corresponding commercial name of any such newly approved Licensed Products.

B. List all countries in which an NDA or equivalent marketing application was filed for a Licensed Product in the preceding calendar year, providing details of the applicable indication(s). If any such application was not accepted, or if the application was not approved, provide details.

C. List all countries in which first commercial sales of a Licensed Product were achieved in the preceding calendar year.

D. List any other material changes in the marketing status of any Licensed Product.

E. If any of A-C above is associated with a milestone payment under Section 5 of the Exclusive License Agreement, please note this and confirm that the payment has been made.

 Yes   No In the designated reporting period, did your company or any Sublicensee of the above-referenced technology have 500 or more employees? (This information is required to determine and report large or small entity status in the United States.)

2. Product Development

A. List all clinical trials of Licensed Products that were initiated in the preceding calendar year, whether by Licensee or a Sublicensee.

B. List all clinical trials of Licensed Products that were completed in the preceding calendar year. If the results are known and have been publicly disclosed, provide a summary of the results (if a press release or other public disclosure concerning such results became available during the preceding calendar year, please provide if not previously communicated to Licensor). If a trial was initiated but not completed, describe the trial and the reasons for non-completion.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

C. If a Licensed Product has not yet entered clinical trials, list all major non-clinical studies completed during the preceding calendar year (i.e., GLP studies designed to support an IND or NDA filing) and provide a summary of the results if known.

D. List any significant manufacturing issues or achievements related to Licensed Products during the preceding calendar year.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXHIBIT “E”

CURRENT DEVELOPMENT PLAN

[***] Program

[***]

Exhibit “E”

CURRENT DEVELOPMENT PLAN

In addition to the activities shown above, manufacturing studies will address the feasibility of large-scale production of both [***] and [***]. Research at KU sponsored by Licensee will support in vivo testing of these compounds, and others, in models of diabetic neuropathy. Studies with anti-cancer compounds will be directed towards further profiling and eventual selection of a lead compound for detailed in vivo profiling.

Page 30 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXHIBIT “F”

MATERIAL TRANSFER AGREEMENT TEMPLATE

THIS AGREEMENT, between                     having an address at                     , hereinafter referred to as “RECIPIENT,” and the University of Kansas, having an address at Youngberg Hall, 2385 Irving Hill Road, Lawrence, KS 66045-7568, hereinafter referred to as “UNIVERSITY,” shall govern the conditions of disclosure by UNIVERSITY to RECIPIENT of certain confidential information (DATA) and/or materials (MATERIALS) listed in Exhibit “A” relating to                     . MATERIALS, as used herein, include all such original materials actually provided to RECIPIENT, plus any materials derived by RECIPIENT directly therefrom.

IN CONSIDERATION of the transfer of MATERIALS and/or disclosure of DATA, and the mutual promises set forth in this Agreement, the parties intending to be legally bound and agree as follows:

1. The Principal Investigator from RECIPIENT,                     , will receive the MATERIALS and/or DATA and is also bound by the conditions of this Agreement.

2. RECIPIENT hereby agrees:

a. Not to use such MATERIALS or DATA for any commercial purpose, and limit use of DATA and MATERIALS only to the non-commercial research purpose described in Exhibit X (the “Research Plan”). Recipient agrees not to analyze, have analyzed or otherwise attempt to ascertain the chemical composition, functional mechanisms, nor physical structure of said proprietary samples or MATERIAL outside the scope of the Purpose without the prior written consent of UNIVERSITY. MATERIAL shall not be used for any purpose other than performance of the Research Plan, and shall not be used in humans under any circumstances.

b. Except as provided in (c) below, not to disclose DATA to others (except to its employees who reasonably require same for the purposes hereof and who are bound to it by like obligation as to confidentiality) without the express written permission of UNIVERSITY.

c. RECIPIENT shall not be prevented from using or disclosing DATA:

i. which RECIPIENT can demonstrate by written records was previously known to it;

ii. which is now, or becomes in the future, public knowledge other than through acts or omissions of RECIPIENT;

iii. which is independently developed by RECIPIENT by those not having access to the DATA and which can be proven through verifiable written records; or

iv. which is lawfully obtained by RECIPIENT from sources independent of UNIVERSITY without any obligation of confidentiality to the UNIVERSITY; or

v. to the extent such use or disclosure is required by law or by court order, providing such use and disclosure is limited to such purpose.

d. To provide UNIVERSITY with a copy of information generated using DATA and/or MATERIALS.

e. Not to transfer MATERIALS to any others (except to its employees who are bound to RECIPIENT by like obligations conditioning and restricting access, use, and continued use of MATERIALS) without the express written consent of UNIVERSITY.

f. To safeguard MATERIALS and/or DATA against disclosure and transmission to others with the same degree of care as it exercises with its own materials of a similar nature, but in no case less than a reasonable degree of care.

g. To return all MATERIALS and DATA within Fifteen (15) days of the expiration date of this Agreement, unless this deadline is extended by UNIVERSITY in writing before said Fifteen (15) days has elapsed.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

h. To the extent permitted by law, to hold harmless UNIVERSITY against any claims, costs, or other liabilities which may arise as a result of: 1) RECIPIENT’S storage, use or disposal of MATERIAL or use of DATA; and 2) RECIPIENT’S breach of this Agreement. RECIPIENT assumes all liability for damages which may arise from its use, storage or disposal of MATERIAL.

i. The RECIPIENT agrees to use the MATERIAL and/or DATA in compliance with all applicable statutes and regulations, including Public Health Service and National Institutes of Health regulations and guidelines such as, for example, those relating to research involving the use of animals or recombinant DNA.

j. Recipient shall observe all applicable laws with respect to the transfer of the MATERIAL and related technical data to foreign countries, including without limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations.

k. With regard to any publications resulting from the use of DATA or MATERIALS, to include appropriate UNIVERSITY authors, where applicable, and submit to the UNIVERSITY any publications for review by UNIVERSITY ninety (90) days prior to submission in order to file a patent application or take such other measures as UNIVERSITY deems necessary to establish and preserve its proprietary rights.

3. UNIVERSITY MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF MATERIALS, DATA OR INFORMATION WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER PROPRIETARY RIGHTS.

4. Title and all rights to DATA and MATERIALS provided under this Agreement shall remain vested in UNIVERSITY. It is further agreed that the furnishing of DATA or MATERIALS to RECIPIENT shall not constitute any express or implied grant or license to RECIPIENT under any patents, patent application, trade secrets or other proprietary or legal rights now or hereinafter held by UNIVERSITY. RECIPIENT acknowledges that MATERIALS are the subject of an Exclusive License Agreement between UNIVERSITY and its Licensee. If any invention arises from RECIPIENT’s use of MATERIALS, or derived from MATERIALS, RECIPIENT is free to file patent application(s) claiming such invention, but agrees to promptly notify UNIVERSITY upon filing a patent application. RECIPIENT shall allow UNIVERSITY’s Licensee to enter into confidential, good faith negotiations for a license to such invention and any related patents that claim priority to such invention. RECIPIENT hereby grants to UNIVERSITY a non-exclusive, royalty-free, transferrable license, to make and use any such invention(s) derived from Recipient’s use of the MATERIAL for non-commercial research purposes.

5. RECIPIENT’s right to use the DATA and/or MATERIALS shall expire one (1) year from the date of RECIPIENT’s signature below. At the end of that period, RECIPIENT will either enter into good faith negotiations with UNIVERSITY for a commercial license should one still be available at that time, or else return MATERIAL within fifteen (15) days.

6. This AGREEMENT may be terminated by either party on thirty (30) days written notice to the other party. RECIPIENT’s obligations under section 1, 2(a), 2(b), and 2(d) through (k), and 4 shall survive termination of the Agreement.

7. The interpretation and validity of this AGREEMENT and the rights of the parties shall be governed by the laws of the State of Kansas. The Federal and State courts located in Kansas shall have sole and exclusive jurisdiction over any disputes arising under the terms of this Agreement.

8. This AGREEMENT may not be modified except by written instrument signed on behalf of each party. This AGREEMENT embodies the entire agreement and understanding of the parties and terminates and supersedes all prior independent agreements and under takings between the parties.

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Recipient	The University of Kansas
By:  (Signature)	By:  (Signature)
Name:	Name: Joseph A. Heppert, Ph.D.
Title:	Title: Associate Vice Chancellor for Research
Date:	Date:
By:  (Signature)	By:  (Signature)
Name:	Name:
Title:	Title:
Date:	Date:
Recipient Scientist

I, have read the provisions of this agreement and agree to abide by and am bound by all conditions of this Agreement.

By: 

(Signature)

Name: 

(Please Print)

Title:

Date:

Page 33 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Research plan of MTA Template in Exhibit F

Page 34 of 34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EX-10.27

Exhibit 10.27

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

EXCLUSIVE LICENSE

and

SUPPLY AGREEMENT

by and between

REATA PHARMACEUTICALS, INC.

and

KYOWA HAKKO KIRIN CO. LTD.

Execution Version

TABLE OF CONTENTS

ARTICLE I DEFINITIONS		1
1.1	Definitions	1
1.2	Additional Definitions	12
1.3	Financial Terms	13
ARTICLE II LICENSES		14
2.1	Licenses Regarding Licensed Compounds and Licensed Products	14
2.2	License Regarding RTA 402 Class	15
2.3	Reata Trademarks	15
2.4	Kyowa Kirin Trademarks	16
2.5	Product Trademarks	16
2.6	Reservation of Rights	17
ARTICLE III JOINT STEERING COMMITTEE		17
3.1	Establishment and Membership	17
3.2	Purpose of JSC	17
3.3	Membership and Procedures	17
3.4	Decision-Making	19
3.5	Expenses	20
3.6	Relationship of Parties	20
ARTICLE IV CLINICAL DEVELOPMENT		20
4.1	Kyowa Kirin Clinical Development Activities	20
4.2	Clinical Development Data	21
4.3	No Debarred Personnel	22
4.4	Use of Animals	22
4.5	Development Outside the Territory	22
4.6	Development of the Licensed Compound	22
ARTICLE V REGULATORY MATTERS		23
5.1	Regulatory Activities	23
5.2	Kyowa Kirin Regulatory Data and Regulatory Approvals	23
5.3	Provision of Regulatory Information to Kyowa Kirin	24
5.4	Safety; Adverse Event Reporting	25
5.5	Recalls and Voluntary Withdrawals	26
5.6	Inspection Rights	26
5.7	Governmental Inspections and Inquiries	26
5.8	Regulatory Matters Outside the Territory	27
5.9	Development in China	27

i

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Execution Version

ARTICLE VI SALES AND MARKETING; DILIGENCE OBLIGATIONS		27
6.1	Sales and Marketing Activities	27
6.2	Marketing Plan	28
6.3	Sales Forecasts	28
6.4	Pricing	28
6.5	Labeling and Patent Rights Marking	28
6.6	Medical Affairs Activities	28
6.7	Medical Affairs Plan	29
6.8	Marketing and Promotional Literature	29
6.9	Marketing and Sales and Medical Affairs Outside the Territory	29
ARTICLE VII FINANCIAL TERMS		30
7.1	Upfront Payment	30
7.2	Milestone Payments	30
7.3	Sales Royalties	32
7.4	Royalty Adjustments	33
7.5	Method of Payment	34
7.6	Interest on Overdue Payments	34
7.7	Foreign Currency Exchange	34
7.8	Taxes	34
7.9	Prohibited Payments	35
ARTICLE VIII REATA SUPPLY OF LICENSED PRODUCT; SPECIFICATIONS		35
8.1	Reata Obligation to Supply Licensed Product	35
8.2	Supply of Licensed Product for Development	36
8.3	Commercial Supply of Licensed Product	39
8.4	General Manufacturing and Supply Provisions	41
8.5	Specifications	43
ARTICLE IX RECORDS AND REPORTING		46
9.1	Reports	46
9.2	Royalty Records	46
9.3	Audits	46
ARTICLE X INTELLECTUAL PROPERTY PROVISIONS		47
10.1	Patent Prosecution and Maintenance	47
10.2	Ownership of Inventions	48
10.3	Disclosure	48

ii

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Execution Version

10.4	Cooperation	49
10.5	Enforcement of Reata Patent Rights against Infringement in the Territory	49
10.6	Defense of Infringement Claims	51
ARTICLE XI CONFIDENTIALITY, PUBLICATION AND PUBLICITY		52
11.1	Confidentiality	52
11.2	Disclosure of this Agreement	53
11.3	Disclosure of RTA 402 Class License	53
11.4	Publications	53
11.5	Publicity	54
11.6	Employees and Consultants	54
ARTICLE XII REPRESENTATIONS AND WARRANTIES		54
12.1	Mutual Representations and Warranties	54
12.2	Kyowa Kirin’s Representations and Warranties	55
12.3	Reata’s Representations and Warranties	55
12.4	Limitation on Warranties; No Implied Warranties	57
ARTICLE XIII OTHER COVENANTS AND AGREEMENTS		58
13.1	Compliance with Law	58
13.2	Maintenance of Current License Agreements; No Inconsistent Rights	58
13.3	Reata Restrictive Covenants	58
13.4	Kyowa Kirin Covenants	59
13.5	Coordination of Uses Outside the Field	59
13.6	Marketing Rights Outside of the Territory	60
13.7	Third Party Licenses	61
13.8	Compliance with Dartmouth License	61
13.9	Formal Notice of Identification of Backup Compound Required	62
13.10	Performance Through Affiliates	62
ARTICLE XIV INDEMNIFICATION AND INSURANCE		62
14.1	Indemnity By Kyowa Kirin	62
14.2	Indemnity by Reata	63
14.3	Procedure for Indemnification	63
14.4	Insurance	64
ARTICLE XV TERM AND TERMINATION		64
15.1	Term	64
15.2	Termination by Reata	64
15.3	Termination by Kyowa Kirin At Will	64

iii

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Execution Version

15.4	Termination by Either Party for Breach or Insolvency	64
15.5	Disputes Over Right to Terminate	65
15.6	Effect of Expiration or Termination of this Agreement for Any Reason	65
15.7	Effect of Expiration at End of Royalty Term	66
15.8	Effect of Certain Terminations	66
15.9	Remedies Cumulative and Nonexclusive	68
15.10	Rights In Bankruptcy	68
ARTICLE XVI DISPUTE RESOLUTION		68
16.1	Disputes	68
16.2	Informal Negotiation	69
16.3	Mediation	69
16.4	Agreement to Arbitrate	69
16.5	Number and Appointment of Arbitrators	69
16.6	Conduct of Arbitration	70
16.7	Place of Arbitration	70
16.8	Powers of the Arbitrators, Limitations on Remedies	70
16.9	Arbitration Award	70
16.10	Confidentiality	70
16.11	Costs	71
16.12	Injunctive or Other Interim Relief	71
16.13	Continued Performance	71
16.14	Governing Law; Jurisdiction; Venue	71
16.15	Separability and Survival of the Agreement to Arbitrate	71
ARTICLE XVII OTHER PROVISIONS		71
17.1	Non-Solicitation of Employees	71
17.2	Force Majeure	72
17.3	Exclusions of Consequential Damages	72
17.4	Assignment	72
17.5	Severability	73
17.6	Notices	73
17.7	Entire Agreement; Amendments	73
17.8	Headings	74
17.9	Independent Contractors	74
17.10	Waiver	74
17.11	Counterparts	74
17.12	Waiver of Rule of Construction	74
17.13	Third Party Beneficiaries	74
17.14	Further Assurances	74
17.15	Construction of Agreement	74

iv

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

Exhibits:

Exhibit A – Reata Patent Rights

Exhibit B – Third Party License Agreements

v

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

EXCLUSIVE LICENSE AND SUPPLY AGREEMENT

This Exclusive License and Supply Agreement (this “ Agreement ”) effective as of December 24, 2009 (the “ Effective Date ”), is by and between Reata Pharmaceuticals, Inc., a corporation organized and existing under the laws of Delaware, USA, with an address at 2801 Gateway Drive, Suite 150, Irving, Texas 75063 (“ Reata ”), and Kyowa Hakko Kirin Co., Ltd., a company organized and existing under the laws of Japan, with an address at 1-6-1 Ohtemachi, Chiyoda-ku, Tokyo, 100-8185, Japan (“ Kyowa Kirin ”). Reata and Kyowa Kirin are sometimes hereinafter referred to each as a “ Party ” and collectively as the “ Parties .”

WITNESSETH:

WHEREAS, Reata has developed, and currently has in the United States ongoing studies that the United States Food and Drug Administration has indicated could serve as a Phase III pivotal clinical trial for, a proprietary compound known as bardoxolone methyl, or as RTA 402, that is useful for the treatment of renal, cardiovascular and metabolic diseases, and

WHEREAS Reata owns or has the right to license certain intellectual property rights and the use of clinical trial and development and manufacturing data with respect thereto; and

WHEREAS, Kyowa Kirin wishes to obtain exclusive rights to develop, market and sell RTA 402 in the Territory, as more fully described below, and Reata wishes to grant such rights to Kyowa Kirin as set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions . When used in this Agreement, capitalized terms will have the meanings as defined below and throughout the Agreement.

1.1.1 “ Adverse Event ” means any adverse medical occurrence in a patient or clinical investigation subject to whom a Licensed Compound is administered and which could but does not necessarily have a causal relationship with the Licensed Compound, including any unfavorable and unintended sign (including an abnormal laboratory finding, for example), symptom, or disease temporally associated with the administration of the Licensed Compound, whether or not considered related to Licensed Compound administration.

1.1.2 “ Affiliate ” with respect to a Party means an individual, trust, business trust, joint venture, partnership, corporation, association or other legal entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with that Party. For purposes of this definition only, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means (a) the possession, directly or indirectly,

1

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

of the power to direct the management or policies of a legal entity, whether through the ownership of voting securities or by contract relating to voting rights or corporate governance, or (b) the ownership, directly or indirectly, of 50% or more of the voting securities or other ownership interest of a legal entity; provided, that if local law restricts foreign ownership, control will be established by direct or indirect ownership of the maximum ownership percentage that may, under such local law, be owned by foreign interests.

1.1.3 “ Applicable Laws ” means any federal, state, local, national and supra-national laws, statutes, rules and/or regulations, including any rules, regulations, guidance, guidelines or requirements of Regulatory Authorities, national securities exchanges or securities listing organizations, that may be in effect from time to time during the Term and apply to a particular activity hereunder and including laws, regulations and guidelines governing the import, export, development, manufacture, marketing, distribution and/or sale of any Licensed Product in or for the Territory.

1.1.4 “ Backup Compound ” means the alternative molecule (if any) that Reata (or its Affiliate, licensee or collaboration partner) develops and that Reata specifically identifies, pursuant to Section 13.9, as an alternative molecule to replace RTA 402 (or to replace any previous Backup Compound) for Indications in the Field, together with any of its salt, free base, acid, polymorph, hydrate, solvate, chelate, stereoisomer, enantiomer, racemate, or tautomer forms.

1.1.5 “ Business Day ” means a day that is not a Saturday, Sunday or a day on which banking institutions in either Tokyo, Japan, or Dallas, Texas, are required by law to remain closed.

1.1.6 “ Calendar Quarter ” means the period beginning on the Effective Date and ending on the last day of the Calendar Quarter in which the Effective Date falls, and thereafter each successive period of three (3) consecutive calendar months ending on March 31, June 30, September 30 or December 31.

1.1.7 “ Calendar Year ” means the period beginning on the Effective Date and ending on the last day of the Calendar Year in which the Effective Date falls, and thereafter each successive period of twelve (12) months commencing on January 1 and ending on December 31.

1.1.8 “ Commercialization Regulatory Approval ” means, with respect to any Licensed Product, all Regulatory Approvals (including pricing approvals and reimbursement approvals) required by Applicable Laws to market and sell such Licensed Product for use within the Field if applicable, in a country or region in the Territory.

1.1.9 “ Commercialize ,” or “ Commercialization ” means any and all activities relating to seeking, obtaining and/or maintaining any Regulatory Approval for a Licensed Product in the Field in the Territory, or relating to any registration, importing, manufacturing, distributing, marketing, selling, non-clinical and clinical development or testing of a Licensed Product in the Field in the Territory, including labeling, packaging, finishing, promotion, advertising, launching, marketing, sales, distribution, development for label extensions, and conducting Medical Affairs Studies, whether conducted by a Party or for such Party by another, and “ Commercialization ” will be interpreted accordingly. Clinical Development Activities, Regulatory Activities, and Sales and Marketing Activities are Commercialization activities.

2

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

1.1.10 “ Commercially Reasonable Efforts ” means, with respect to a Party in the performance of its obligations hereunder in relation to Licensed Products, the application by or on behalf of such Party of a level of efforts that a similarly-situated pharmaceutical or biotechnology company, as the case may be, would apply to such activities in relation to a similar pharmaceutical product owned by it or to which it has rights, which product is at a similar stage in its development or product life and is of similar market potential, profit potential and strategic value (in each case as compared to the Licensed Product) taking into account efficacy, safety, expected labeling, the competitiveness of alternative products in the marketplace, the patent and other proprietary position of the product, the likelihood of regulatory approval given the regulatory structure involved, the profitability of the product including the royalties payable to licensors, or patent or other intellectual property rights, alternative products and other relevant factors, based on conditions then prevailing. The Parties acknowledge and agree that failure to Commercialize, or the cessation of active Commercialization of, the Licensed Product with respect to a particular country in the Territory, where such Commercialization of such Licensed Product in such country is not commercially reasonable or would have a negative impact on the value of such Licensed Product Territory-wide that outweighs the benefits of pursuing such Commercialization in such country (due to, for example and without limitation, concerns with market or regulatory conditions, re-importation and grey market goods, pricing, or sufficient risk of harm to other more profitable countries), may not constitute under the circumstances a failure to use Commercially Reasonable Efforts and therefore such Commercialization with respect to a particular country may not be required under the Commercially Reasonable Efforts standard.

1.1.11 “ Confidential Information ” means information of a confidential or proprietary nature disclosed by a Party to the other Party hereunder, whether disclosed in oral, written, graphic or electronic form, in connection with this Agreement or the performance of its obligations hereunder, including any such information related to any scientific, clinical, engineering, manufacturing, marketing, financial or personnel matters relating to a Party, or related to a Party’s present or future products, sales, suppliers, customers, employees, investors, business plans, Know-How, regulatory filings, data, compounds, research projects, work in progress, future developments or business, in all such cases whether disclosed in oral, written, graphic or electronic form, and whether or not specifically marked as confidential or proprietary, where under the circumstances in which such disclosure was made or the nature of information disclosed, such information would be reasonably expected to be confidential by the disclosing party; provided, however, that in any event, Confidential Information excludes any information that (a) is known by recipient at the time of its receipt, and not through a prior disclosure by or on behalf of the disclosing Party, as documented by contemporaneous business records; (b) is or becomes properly in the public domain through no fault of the recipient; (c) is subsequently disclosed to the recipient by a Third Party who may lawfully do so and is not directly or indirectly under an obligation of confidentiality to the disclosing Party, as documented by written business records in existence prior to the receipt of such information from the disclosing Party; or (d) is developed by the recipient independently of, and without reference to or use of, the information received from the disclosing Party.

3

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

1.1.12 “ Control ” means with respect to any Know-How, patent, or other intellectual property right, possession of the right, whether directly or indirectly, and whether by ownership, license or otherwise, to grant a license, sublicense or other right to or under, such Know-How, patent or other intellectual property right as provided for herein without violating the terms of any agreement or other arrangements with any Third Party at the time when such license, sublicense or other right is first granted hereunder.

1.1.13 “ Dartmouth License ” means collectively (a) the Exclusive Patent License Agreement among the University of Texas M.D. Anderson Cancer Center, Dartmouth College, and Reata dated July 15, 2004, a copy of which has been provided to Kyowa Kirin, and (b) the Reata Pharmaceuticals, Inc. – Dartmouth Exclusive License Agreement dated December 16, 2009, a copy of which has been provided to Kyowa Kirin, as each may be amended, supplemented or restated from time to time in accordance with Section 13.2.

1.1.14 “ Development Plan ” means the plan for obtaining Commercialization Regulatory Approval (including the Clinical Development Activities and Regulatory Activities with respect thereto), as amended or updated hereunder.

1.1.15 “ Effective Date ” will have the meaning set forth in the preamble.

1.1.16 “ FDA ” means the United States Food and Drug Administration or any successor agency thereto.

1.1.17 “ Field ” means all human therapeutic, preventative, mitigation, prophylactic, curative, and diagnostic uses for any Indication.

1.1.18 “ First Commercial Sale ” means, with respect to a country in the Territory, the first commercial sale of any Licensed Product to a Third Party for use, consumption or resale in that country after obtaining Commercialization Regulatory Approval in that country. For the avoidance of doubt, sales of Licensed Products to an Affiliate of Kyowa Kirin shall not constitute a First Commercial Sale unless such Affiliate is an end user of the Licensed Product.

1.1.19 “ GAAP ” means generally accepted accounting principles applicable to a Party in a particular country (e. g., Japanese Accounting Standards or U.S. Generally Accepted Accounting Principles) as consistently applied throughout the applicable periods indicated herein by or on behalf of the relevant Party.

1.1.20 “GMP” means the then-current good manufacturing practices required by the FDA and as set forth in the laws and regulations in the United States with respect thereto, for the manufacture and testing of pharmaceutical materials, and comparable Applicable Laws and requirements of Regulatory Authorities applicable to the manufacture and testing of pharmaceutical materials in jurisdictions within the Territory, as they may be updated from time to time, including applicable rules and guidelines promulgated under the International Conference on Harmonization.

4

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

1.1.21 “ IND ” means an Investigational New Drug Application filed with the FDA pursuant to 21 CFR 312.20, or the corresponding filing required for the clinical testing in humans of a pharmaceutical product in any country or regulatory jurisdiction other than the United States.

1.1.22 “ Indication ” means (a) any and all renal, cardiovascular and diabetes indications, including (i) renal insufficiency, chronic kidney disease, acute kidney failure, ischemia-reperfusion injury of the kidney, glomerulonephritis, and all other forms of nephritis (whether acute or chronic); (ii) atherosclerosis, heart failure, myocardial infarction, acute coronary syndrome, myocarditis, angina, restenosis, aneurysms, vasculitis, complications of vascular surgery and heart surgery, thrombosis, phlebitis, peripheral vascular disease, and hypertension; and (iii) the following metabolic diseases: type II diabetes, insulin resistance, complications of diabetes (including retinopathy, neuropathy, and ulcers), obesity, metabolic syndrome, hypercholesterolemia, and hyperlipidemia, and (b) any indications added to this Agreement in accordance with Section 13.5.1. For the avoidance of doubt, unless added to this Agreement in accordance with Section 13.5.1, Indication does not include any indications for: (i) any forms of cancer; (ii) any forms of organ failure (other than renal failure or heart failure); (iii) respiratory disorders; (iv) allergies and autoimmune diseases; (v) neurological, psychiatric, or neuropsychiatric disorders (other than diabetic neuropathy); (vi) infectious diseases; (vii) skin diseases (other than diabetic ulcers); (viii) gastrointestinal disorders; (ix) bone or cartilage disorders; (x) musculoskeletal disorders; (xi) eye diseases (other than diabetic retinopathy); (xii) human immunodeficiency virus-associated complications; and (xiii) sepsis; provided that the foregoing exclusions will not limit Kyowa Kirin from marketing or selling Licensed Products for licensed Indications, even if the use of a Licensed Product may have an incidental therapeutic benefit for one of the excluded indications, but in no event shall Kyowa Kirin be authorized to seek separate regulatory approval for any indication that is outside the licensed Indications.

1.1.23 “ Initiation ” means, with respect to a human clinical trial, the first date that a subject or patient is dosed in such clinical trial.

1.1.24 “ Invention ” means any Reata Invention or Kyowa Kirin Invention.

1.1.25 “ Know-How ” means any non-public knowledge, experience, know-how, technology, information, and data, including clinical and non-clinical study data, trade secrets, formulas and formulations, processes, techniques, unpatented inventions, methods, discoveries, specifications, formulations, compositions, materials, ideas, and developments, test procedures, and results, together with all documents and files embodying the foregoing, but excluding, in any event, any patent rights in any of the foregoing.

1.1.26 “ Knowledge ” of a Party means the actual or constructive knowledge of the chief executive officer, the president, the executive vice-president, any vice president, the senior director of regulatory affairs, the senior patent counsel, the general counsel or the chief medical officer of a Party, or any personnel holding positions equivalent to such job titles (but only to the extent such positions exist at such Party).

5

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

1.1.27 “ Kyowa Kirin Invention ” means any invention or discovery that relates to a Licensed Product and that is conceived, made or generated during the Term in the performance of activities undertaken pursuant to this Agreement by employees, agents, or independent contractors of Kyowa Kirin or its Affiliates or Permitted Sublicensees (including any enhancement or modification of a Licensed Product’s use, dosage form or formulation).

1.1.28 “ Kyowa Kirin Regulatory Data ” means all Regulatory Filings made by or on behalf of Kyowa Kirin (including its Affiliates and sublicensees) with respect to Licensed Products and all data generated by or on behalf of Kyowa Kirin (including its Affiliates and sublicensees) in the performance of Clinical Development Activities or Regulatory Activities, including any information contained in any Regulatory Filings with respect to Licensed Products and the results of, and all information generated in connection with, any Clinical Development Activities or Regulatory Activities performed by or on behalf of Kyowa Kirin pursuant to this Agreement.

1.1.29 “ Kyowa Kirin Trademark ” means any trademark or trade name, and registrations and applications therefor, owned or Controlled by Kyowa Kirin in the Territory and covering Kyowa Kirin’s (or its Affiliate’s) corporate name or company logo.

1.1.30 “Licensed Compound” means (a) RTA 402 and (b) any Backup Compound designated by Reata pursuant to Section 13.9.

1.1.31 “Licensed Product ” means any formulation or product that is comprised of, in whole or in part, or containing a Licensed Compound and any dosage, strength or size thereof.

1.1.32 “ Licensed Technology ” means the Reata Patents Rights and the Reata Know-How. For the avoidance of doubt, all Reata Inventions (including Reata’s rights to any jointly owned Inventions) shall be included within the Licensed Technology.

1.1.33 “Manufacturing Cost ” means:

(a) With respect to Licensed Product or API, as applicable, manufactured by Reata and supplied to Kyowa Kirin hereunder, [***].

(b) With respect to Licensed Product or API, as applicable, manufactured for Reata by one or more Third Party Manufacturers and supplied to Kyowa Kirin hereunder, [***].

1.1.34 “ Medical Affairs Activities ” means: (a) the coordination of medical information requests and field based medical liaisons in the Territory with respect to Licensed Products commercially launched in the Territory; and (b) those clinical studies conducted in or for

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Execution Version

the Territory after Commercialization Regulatory Approval of a Licensed Product has been obtained which are neither intended nor designed to support a Regulatory Filing including medical affairs studies, post marketing studies and investigator and physician-initiated studies, in all such cases initiated by or under the control or direction of Kyowa Kirin.

1.1.35 “ Milestone Payments ” means Regulatory Milestone Payments and Sales Milestone Payments.

1.1.36 “ NDA ” means a new drug application (as defined in Title 21 of the United States Code of Federal Regulations, as amended from time to time) filed with the FDA seeking regulatory approval to market and sell Licensed Product in the United States for a particular Indication or, with respect to each Licensed Product in a particular country or region in the Territory, an application seeking Commercialization Regulatory Approval from the Regulatory Authority in such country or region, including such an application submitted to Japan’s Ministry of Health, Labor and Welfare (“ MHLW ”), to market and sell Licensed Product in such particular country or region.

1.1.37 “ Net Sales ” means with respect to any Licensed Product, the gross amounts invoiced by Kyowa Kirin or its Affiliates or its Permitted Sublicensees to any Third Party for sales of Licensed Products in the Territory, less the following items, provided that they are bona fide:

(a) actual credits, refunds or allowances to Third Party customers for spoiled, damaged, rejected, recalled, outdated and reasonably returned Licensed Product;

(b) discounts, including cash, volume, quantity and other trade discounts, charge-back payments, and rebates and allowances actually granted, incurred or allowed in the ordinary course of business, as well as government-required discounts and allowances (including government rebates and other price reductions), and other reductions, concessions and allowances that effectively reduce the selling price to Kyowa Kirin or its Affiliates or such sublicensees;

(c) transportation charges, freight, postage and insurance (but only insurance related to protecting the particular shipment against physical loss or damage) if shown separately in the invoice; and

(d) sales, use or excise Taxes and import/export duties or tariffs and similar governmental charges actually due or incurred in connection with the sales of such Licensed Product, if shown separately in the invoice.

Components of Net Sales shall be determined in the ordinary course of business in accordance with GAAP, consistently applied. For purposes of determining when a sale of any Licensed Product occurs for purposes of calculating Net Sales, the sale will be deemed to occur on the earlier of (a) the date the Licensed Product is shipped or (b) the date of the invoice to the purchaser of the Licensed Product. No deductions shall be made for commissions paid to individuals or agents, nor shall any deductions be permitted for the cost of collections. For purposes of

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Execution Version

determining Net Sales, a “sale” shall not include transfers or dispositions, at no cost or below cost, of Licensed Products for charitable, pre-clinical, clinical or regulatory purposes or for promotional samples or free goods. Amounts invoiced by Kyowa Kirin or its Affiliates or its Permitted Sublicensees for the sale of Licensed Products to or among such Affiliates or Permitted Sublicensees for resale shall not be included in the computation of Net Sales hereunder.

In the event that Kyowa Kirin sells a Licensed Product (a) to a Third Party in a bona fide arm’s length transaction, for material consideration, in whole or in part, other than cash (but excluding, for the avoidance of doubt, consideration in the form of non-financial legal terms and conditions incident to sale), (b) to a Third Party in other than a bona fide arm’s length transaction, or (c) with discounts of Licensed Products that are disproportional to the discounts of other products sold by Kyowa Kirin in conjunction with such Licensed Products, the Net Sales price for such Licensed Product shall be deemed to be the standard invoice price then being invoiced by Kyowa Kirin in an arm’s length transaction with similar customers in the same country within the Territory. In the event that Kyowa Kirin includes one or more Licensed Product as part of a bundle of products, the price for such Licensed Product shall be deemed to be the standard invoice price for such Licensed Product when sold separately and not as part of a bundle of products.

If a Licensed Product either (i) is sold in the form of a combination product containing both a Licensed Compound and one or more independently therapeutically active pharmaceutical molecules other than a Licensed Compound or (ii) is sold in a form that contains (or is sold bundled with) a delivery device therefor (in either case of (i) or (ii), a “ Combination Product ”), the Net Sales of such Licensed Product for the purpose of calculating royalties owed under this Agreement for sales of such Combination Product, shall be determined as follows: first, Kyowa Kirin shall determine the actual Net Sales of such Combination Product (using the above provisions) and then such amount shall be multiplied by the fraction A/(A+B), where A is the invoice price of the Licensed Product containing only the Licensed Compound, if sold separately, and B is the total invoice price of any other active pharmaceutical molecule or delivery device in the combination if sold separately. If any other active pharmaceutical molecule or delivery device in the combination is not sold separately, Net Sales shall be calculated by multiplying actual Net Sales of such Combination Product by a fraction A/C where A is the invoice price of the Licensed Product containing only the Licensed Compound if sold separately, and C is the invoice price of the Combination Product. If neither the Licensed Product containing only the Licensed Compound nor any other active pharmaceutical molecule or delivery device in the Combination Product is sold separately, the adjustment to Net Sales shall be determined by the Parties in good faith to reasonably reflect the fair market value of the contribution of the Licensed Product containing only the Licensed Compound in the Combination Product to the total market value of such Combination Product.

1.1.38 “ Party ” will have the meaning set forth in the preamble.

1.1.39 “ Permitted Sublicensee ” means either an Affiliate of Kyowa Kirin or a Third Party, in each case who is granted a sublicense by Kyowa Kirin to any of the Licensed Technology pursuant to Section 2.1.2 and Section 2.3.1.

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Execution Version

1.1.40 “ Person ” means any individual, corporation, association, partnership (general or limited), joint venture, trust, estate, limited liability company, limited liability partnership, unincorporated organization, government (or any agency or political subdivision thereof) or other legal entity or organization.

1.1.41 “ Phase 1 Clinical Trial ” means a human clinical trial performed in accordance with the Applicable Laws in the Territory that provides for the first introduction of a Licensed Product into humans for the purpose of determining human toxicity, metabolism, biomarker, absorption, elimination and other pharmacological action.

1.1.42 “ Phase 2 Clinical Trial ” means a human clinical trial performed in accordance with the Applicable Laws in patients with a particular disease or condition which is designed to establish the safety, appropriate dosage, efficacy, and tolerability of a Licensed Product given its intended use and to initially explore its efficacy for such disease or condition and will include such a clinical trial intended to be a pivotal trial.

(a) For purposes of triggering a Milestone Payment obligation, a “ Phase 2a Clinical Trial ” includes a Phase 2 Clinical Trial that is specifically designed to assess, in whole or in part, dosing requirements for a Licensed Product for an Indication.

(b) For purposes of triggering a Milestone Payment obligation, a “ Phase 2b Clinical Trial ” includes a Phase 2 Clinical Trial that is specifically designed to assess, in whole or in part, the efficacy of a Licensed Product for an Indication.

1.1.43 “ Phase 3 Clinical Trial ” means a registration or pivotal clinical trial performed in accordance with the Applicable Laws and conducted in subjects with a particular disease or condition which is designed in a randomized, controlled fashion to establish the efficacy and safety of a Licensed Product given its intended use and to define warnings, precautions and adverse events that are associated with Licensed Product in the dosage range intended to be prescribed.

1.1.44 “ Product Trademarks ” means any trademarks for the Licensed Product itself selected by the JSC for use in connection with the Commercialization of Licensed Products in the Territory in the Field (excluding, in any event, any trademarks, service marks, names or logos that include any corporate name or logo of the Parties or their Affiliates).

1.1.45 “ Reata Invention ” means any invention or discovery that relates to a Licensed Product and that is conceived, made or generated during the Term in the performance of activities undertaken pursuant to this Agreement by employees, agents, or independent contractors of Reata or its Affiliates (including any enhancement or modification of (a) a Licensed Product’s use, dosage form or formulation or (b) the process or method for the manufacture of a Licensed Product). Reata has no obligation to include within Reata Inventions any inventions made or conceived solely by Reata’s licensees or development partners.

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Execution Version

1.1.46 “Reata Know-How” means Know-How owned or Controlled by Reata or its Affiliates as of the Effective Date or during the Term regarding or specifically related to a Licensed Compound or Licensed Products, or the manufacture, development, commercialization or use thereof. For the avoidance of doubt, Know-how regarding or specifically related to Reata’s (i) research activities, (ii) medicinal chemistry efforts, or (iii) other efforts aimed at identification or characterization of, or synthesizing or optimizing, molecules, other than with respect to Licensed Compounds in all such cases of (i), (ii) and/or (iii), are excluded from “Reata Know-How.”

1.1.47 “ Reata Patent Rights ” means all patents and patent applications owned or Controlled by Reata or its Affiliates as of the Effective Date or during the Term which claim, or, but for the license granted herein, would be infringed by, a Licensed Compound or Licensed Products, or the manufacture, use or sale thereof, including the patents and patent applications listed on Exhibit A attached hereto, and any and all substitutions, divisionals, continuations, continuations-in-part, reissues, renewals, registrations, confirmations, re-examinations, or extensions of such patents and patent applications, and any foreign counterparts of the foregoing, and any patents issuing therefrom within the Territory.

1.1.48 “ Reata Regulatory Data ” means all regulatory filings made by or on behalf of Reata (including by its Affiliates and licensees other than Kyowa Kirin) with respect to Licensed Products and all data generated by or on behalf of Reata (including by its Affiliates and licensees) in the performance of non-clinical and clinical development activities or regulatory activities, including any information contained in any regulatory filings with respect to Licensed Products and the results of, and all information generated in connection with, any non-clinical or clinical studies or regulatory activities performed by or on behalf of Reata with respect to Licensed Products.

1.1.49 “ Reata Trademark ” means any trademark or trade name, including registrations and applications therefor, owned or Controlled by Reata covering Reata’s corporate name and/or company logo.

1.1.50 “ Regulatory Approvals ” means, with respect to any country or region in the Territory, any approval, product and establishment license, registration or authorization of any Regulatory Authority required for the manufacture, use, storage, or Commercialization of a Licensed Product in such country or region.

1.1.51 “ Regulatory Authority ” means any applicable government regulatory authority involved in granting approvals for the manufacture, Commercialization, reimbursement and/or pricing of Licensed Product in the Territory. “Regulatory Authority” in the Territory includes the MHLW in Japan or the applicable governmental regulatory authority for each other country in the Territory, or any successor agency of the foregoing having regulatory jurisdiction over the manufacture, distribution and sale of drugs in any country or region in the Territory.

1.1.52 “ Regulatory Filings ” means any filings that may be required for any Regulatory Approval or otherwise filed or submitted to a Regulatory Authority in the Territory in an effort to comply with Applicable Laws with respect to the Commercialization of Licensed Products in the Territory.

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Execution Version

1.1.53 “ Royalty Term ” means, with respect to each country in the Territory, the period of time commencing on the date of the First Commercial Sale in that country and continuing until the later of (a) the expiration of the last to expire Valid Claim in that country covering the manufacture, use or sale of such Licensed Product in such country, or (b) ten (10) years from the date of the First Commercial Sale in that country.

1.1.54 “ RTA 402 ” means bardoxolone methyl, also known as methyl 2-cyano-3,12-dioxooleana-1,9(11)-dien-28-oate (CDDO methyl ester), together with any of its salt, free base, acid, polymorph, hydrate, solvate, chelate, stereoisomer, enantiomer, racemate, or tautomer forms.

1.1.55 “ RTA 402 Class ” means any compound that is structurally related to RTA 402 and that is claimed by, or the manufacture, use or sale of which, but for the licenses granted herein, would infringe, any patents or patent applications in the Territory listed in Exhibit A as of the Effective Date (or any patent or patent application in the Territory claiming priority back to any such patents or patent applications).

1.1.56 “ Specifications ” means the specifications of Licensed Product and API, as determined and updated in accordance with Section 8.5, that include the minimum shelf life therefore and the tests, references to analytical procedures, and appropriate acceptance criteria that (a) are numerical limits, ranges, or other criteria for the tests, analytical procedures and other criteria described, and (b) establish the set of criteria to which the Licensed Product or API should conform when tested by the tests, analytical procedures and acceptance criteria listed in the Specification.

1.1.57 “ Specification Update Costs ” means all reasonable costs incurred by Reata and directly associated with (and reasonably allocable to) Specification change requests by Kyowa Kirin in accordance with Section 8.5.2, including manufacturing change costs, labeling change costs, packaging change costs, and costs associated with obtaining Regulatory Approval for the modifications.

1.1.58 “ Tax ” or “ Taxes ” means (a) any taxes, assessments, fees, including income, profits, gross receipts, net proceeds, sales, alternative or add on minimum, ad valorem, turnover, property, personal property (tangible and intangible), environmental, stamp, leasing, lease, user, duty, franchise, capital stock, transfer, registration, license, withholding, social security (or similar), unemployment, disability, payroll, employment, social contributions, fuel, excess profits, occupational, premium, windfall profit, severance, estimated, or other charge of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not and (b) any liability of for the payment of any amounts of the type described in clause (a) as a result of the operation of law or any express obligation to indemnify any other person.

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Execution Version

1.1.59 “ Territory ” means Japan, China (including Hong Kong and Macao), South Korea, Taiwan, Thailand, Singapore, Philippines, Malaysia, Indonesia, Brunei, Vietnam, Laos, Myanmar, and Cambodia, unless and solely in the event any such country is removed from the Territory in accordance with the express terms and conditions of Section 5.9 or Section 15.4 of this Agreement.

1.1.60 “ Third Party ” means a Person other than Kyowa Kirin, Reata or their respective Affiliates.

1.1.61 “ Valid Claim ” means any of the method of use claims stated in any of the patents or patent applications listed on Exhibit A as of the Effective Date, or any method of use claims stated in any future patent or patent application claiming priority back to a patent application listed on Exhibit A as of the Effective Date, or any composition of matter claim, in all such cases which claims are claims of (i) an issued and unexpired patent within the Reata Patent Rights, which patent (a) has not been finally cancelled, withdrawn, abandoned or rejected by any administrative agency or other body of competent jurisdiction whose ruling is unappealable or unappealed within the time allowed for appeal, (b) has not been permanently revoked, held invalid, or declared unpatentable or unenforceable in a decision of a court or other body of competent jurisdiction whose ruling is unappealable or unappealed within the time allowed for appeal, (c) has not been rendered unenforceable through disclaimer, and (d) is not lost through an interference or opposition proceeding, which proceeding is unappealable or unappealed within the time allowed for appeal; or (ii) a pending patent application within the Reata Patent Rights listed on Exhibit A as of the Effective Date, or filed in the future and claiming priority back to a patent or patent application listed on Exhibit A as of the Effective Date, solely to the extent any such claim therein is itself still pending, and not withdrawn, abandoned, finally rejected or otherwise no longer pending, in the course of prosecution of such patent application. Valid Claims are limited to claims described above that would preclude using or selling Licensed Compounds and/or Licensed Product in the Territory or, but for the licenses granted in this Agreement, would be infringed by Kyowa Kirin (or its Affiliates or Permitted Sublicensees) by the development, manufacture, commercialization, use or sale of Licensed Compounds and/or Licensed Products.

1.2 Additional Definitions . In addition, each of the following definitions will have the respective meanings set forth in the section of this Agreement indicated below:

Definitions	Section
Agreement		Preamble
API		8.5.1
Chairman		16.5
CKD		3.4.4(a)
Clinical Development Activities		4.1
Combination Product		1.1.37
Commercial Supply Agreement		8.3.1
Delivery		8.2.3
Dispute		16.1

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Execution Version

Definitions	Section
Effective Date		Preamble
Financing Sources		11.1.3
ICC		16.3
Indemnifying Party		14.3
Indemnitee		14.3
In-License Agreements		12.3.10
Insolvent Party		15.10.1
JSC		3.1
Kyowa Kirin		Preamble
Kyowa Kirin Clinical Data		4.2.1
Kyowa Kirin Indemnitees		14.2
Losses		14.1
Marketing Plan		6.2
Mediation Rules		16.3
Medical Affairs Plan		6.7
MHLW		1.1.36
Notice		17.6
Notice of Disagreement		3.4.2
Publication		11.4.1
Reata		Preamble
Reata Clinical Data		4.2.3
Reata Indemnitees		14.1
Regulatory Activities		5.1.1
Regulatory Milestone Payments		7.2.1
Rules		16.4
Sales and Marketing Activities		6.1
Sales Milestone Payments		7.2.2
Sales Royalties		7.3
Technical Review Panel		3.4.4
Term		15.1
Third Party Manufacturer		8.4.1
Trademark License		2.1.1
Tribunal		16.5
Upfront Payment		7.1
USBC		15.10.1
VAT		7.8.2

1.3 Financial Terms . All financial and accounting terms not otherwise defined in this Agreement, whether capitalized or not, will have the meanings assigned to them in accordance with GAAP.

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Execution Version

ARTICLE II

LICENSES

2.1 Licenses Regarding Licensed Compounds and Licensed Products .

2.1.1 Subject to the terms and conditions of this Agreement and to Dartmouth College’s reservation of rights in the Dartmouth License, Reata hereby grants to Kyowa Kirin an exclusive, royalty-bearing (as described in ARTICLE VII) license under the Licensed Technology to research, develop, use, sell, offer for sale, import, and export (and to have such actions taken on its behalf by its agents, contractors, service providers or authorized representatives in accordance with this Agreement) Licensed Compounds and Licensed Products in the Field in the Territory.

2.1.2 Subject to the terms and conditions of this Agreement and to Dartmouth College’s reservation of rights in the Dartmouth License, Reata hereby grants Kyowa Kirin the right to sublicense the rights granted under Section 2.1.1 to its Affiliates and to Third Parties, subject to the following conditions and requirements:

(a) With respect to sublicenses to one of its Affiliates, Kyowa Kirin must provide Reata with prior Notice of the name and country of the Affiliate and the rights to be sublicensed, and such Affiliate must agree in writing to comply with the terms and conditions of this Agreement that are applicable to such sublicensee’s activities. Kyowa Kirin shall remain fully liable for the performance of such sublicensee in accordance with this Agreement. Any sublicense granted by Kyowa Kirin to one of its Affiliates shall terminate if such entity is no longer an Affiliate of Kyowa Kirin and Reata’s approval is not obtained for the continuation of such sublicense in accordance with subsection (b) below.

(b) With respect to Third Parties, (i) Kyowa Kirin’s proposed sublicensee must be approved in writing and in advance by Reata, such approval not to be unreasonably withheld; (ii) each sublicensee must agree in writing to comply with the term and conditions of this Agreement that are applicable to such sublicensee’s activities; (iii) Kyowa Kirin shall remain fully liable for the performance of such sublicensee in accordance this Agreement; and (iv) Kyowa Kirin shall not have the right to sublicense to any Third Party any of its rights to make or have made the Licensed Products or Licensed Compounds under Section 2.1.3.

2.1.3 Subject to the terms and conditions of this Agreement and to Dartmouth College’s reservation of rights in the Dartmouth License as of the Effective Date, Reata hereby grants to Kyowa Kirin and its Affiliates a nonexclusive license under the Licensed Technology to make and have made (anywhere in the world) Licensed Compounds and Licensed Products solely for Commercialization in the Field in the Territory; provided, however, Kyowa Kirin agrees that it will not exercise such manufacturing rights except to the extent provided for in Sections 8.3.3, 8.4.6, and/or 8.5 (and/or pursuant to the corresponding terms and conditions of the Commercial Supply Agreement).

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Execution Version

2.2 License Regarding RTA 402 Class .

2.2.1 Subject to Sections 2.2.2 and 4.6 and the terms and conditions of this Agreement and to Dartmouth College’s reservation of rights in the Dartmouth License, Reata hereby grants to Kyowa Kirin an exclusive, royalty-bearing (as described in ARTICLE VII) license under the Licensed Technology to use, sell, offer for sale, import, and export (and to have such actions taken on its behalf by its agents, contractors, service providers or authorized representatives) compounds within the RTA 402 Class, and products containing compounds within the RTA 402 Class, in the Field in the Territory.

2.2.2 Kyowa Kirin covenants that it will not, nor will it sublicense to any Third Party the right under the license granted in Section 2.2.1 to, sell, offer for sale, make or have made, in the Field in the Territory any compound within the RTA 402 Class other than the Licensed Compound; provided, however, notwithstanding the foregoing, Kyowa Kirin may enforce its rights hereunder to prevent Third Parties from using, selling, offering for sale, making or having made any compound within the RTA 402 Class in the Field in the Territory.

2.3 Reata Trademarks .

2.3.1 Reata grants to Kyowa Kirin a non-exclusive license to use the Reata Trademarks solely in connection with Kyowa Kirin’s exercise of the license granted to it pursuant to Section 2.1 above, including the limited right to sublicense to Permitted Sublicensees as provided for in such license (the “ Trademark License ”). Kyowa Kirin will use the Reata Trademarks (a) solely in the manner specified in this Agreement in connection with Licensed Product and not for any other goods or services, and (b) only in the form and manner as reasonably prescribed in writing to Kyowa Kirin in advance from time to time by Reata (provided, however, that Kyowa Kirin shall have a reasonable period of time to modify any of its promotional, marketing, regulatory or other practices, including in light of Applicable Laws, and/or cease use of the Reata Trademarks, as may be reasonably necessary to comply with any such form and manner prescriptions and/or any changes thereto). Without limiting the foregoing, any use by Kyowa Kirin of a Reata Trademark for Licensed Product should be accompanied by a trademark notice that states that such Reata Trademark is a trademark (or a registered trademark, if applicable) of Reata Pharmaceuticals, Inc. Any use by Kyowa Kirin of the Reata Trademarks, and Reata’s maintenance of the Reata Trademarks, shall be in compliance with all Applicable Laws, including those relating to the licensing of trademarks, in the Territory. Kyowa Kirin agrees to promptly correct any failure to comply with this Section 2.3. For the avoidance of doubt, (x) Kyowa Kirin shall have no responsibility or obligation for (and Reata shall be solely responsible for) the maintenance, registration, prosecution and enforcement of the Reata Trademarks, which shall be at Reata’s sole cost and expense, and (y) Kyowa Kirin shall have no obligation hereunder to use the Reata Trademarks (any such use, in accordance with the foregoing, shall be at Kyowa Kirin’s sole option, to be exercised or not at Kyowa Kirin’s sole discretion).

2.3.2 Kyowa Kirin acknowledges Reata’s ownership of all right, title and interest in and to the Reata Trademarks, and agrees that it will do nothing inconsistent with such ownership, that all use of the Reata Trademarks by Kyowa Kirin will inure to the benefit of and be

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Execution Version

on behalf of Reata, and that any goodwill associated with the use of any Reata Trademark by Kyowa Kirin will inure to the benefit of Reata. Kyowa Kirin agrees that nothing in this Agreement will give Kyowa Kirin any right, title or interest in the Reata Trademarks other than the right to use the Reata Trademarks in accordance with this Agreement. Anything in this Agreement to the contrary notwithstanding, if by virtue of Kyowa Kirin’s use of the Reata Trademarks, Kyowa Kirin acquires any equity, title or other rights in or to the Reata Trademarks, Kyowa Kirin hereby agrees all such equity, title or other rights in or to the Reata Trademarks belong to Reata upon creation of the value, and Kyowa Kirin agrees to and hereby does assign and transfer any such Reata Trademark rights to Reata. Kyowa Kirin agrees not to use or file any application to register any trademark or trade name that is confusingly similar to any Reata Trademark.

2.4 Kyowa Kirin Trademarks . Reata acknowledges Kyowa Kirin’s ownership of all right, title and interest in and to the Kyowa Kirin Trademarks, and agrees that it will do nothing inconsistent with such ownership. Kyowa Kirin reserves the right to use Kyowa Kirin Trademarks for Licensed Products in the Territory. Reata agrees not to use or file any application to register any trademark or trade name that is confusingly similar to any Kyowa Kirin Trademark.

2.5 Product Trademarks . Subject to the JSC’s review, approval, and oversight of the Development Plan as provided in Section 3.2, Kyowa Kirin will coordinate and collaborate with Reata to secure all rights to Reata or Kyowa Kirin, as determined by the JSC (taking into account Applicable Law and the requirements of applicable Regulatory Authorities), in the Product Trademarks for use in connection with the Commercialization of Licensed Products in the Territory for use in the Field (which Product Trademarks may or may not be the same as the names, marks and logos used for the Licensed Product outside the Territory). The JSC will discuss the selection of the Product Trademark and also discuss (without decision-making authority) the names, marks and logos to be used for the Licensed Products outside the Territory so that the Parties can discuss and consider the prospect of having a global brand. Reata shall consider recommendations provided by Kyowa Kirin to Reata regarding the selection of the names, marks and logos to be used for Licensed Products outside the Territory for purposes of selecting such names, marks and logos that can also be used within the Territory as part of a global brand, but Reata is under no obligation to adopt or use any such recommendations. The Party determined by the JSC to own the Product Trademarks by the JSC will be responsible for (and shall control) the filing, prosecution, maintenance and defense of all registrations of the Product Trademarks in the Territory, and will be responsible for the payment of any costs incurred by such Party relating to filing, prosecution, maintenance, defense and enforcement of the Product Trademarks in the Territory; provided, however, that the non-owning Party may elect at its expense to participate in the defense or enforcement of the Product Trademarks in the Territory (and shall have the right to lead such defense or enforcement in the event the owning Party fails to do so). In any event, each Party will provide to the other Party prompt written Notice of any actual or threatened infringement of Product Trademarks in the Territory. In the event Reata owns the Product Trademarks in the Territory, Reata hereby grants to Kyowa Kirin an exclusive license to use the Product Trademarks solely in connection with Kyowa Kirin’s exercise of the license granted to it pursuant to Section 2.1, including the limited right to sublicense provided for in such license.

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Execution Version

2.6 Reservation of Rights . Except for the rights and licenses specifically granted in this Agreement, Reata reserves all rights to the Licensed Technology, Confidential Information of Reata, and Reata Regulatory Data, and any regulatory filings owned or held by Reata, and, except for such specifically granted rights and licenses, this Agreement does not include the grant of any right or license, express or implied, to any other intellectual property or other rights owned or Controlled by Reata. Notwithstanding any provision to the contrary, Reata retains any rights under the Licensed Technology, Confidential Information of Reata, and Reata Regulatory Data, and any regulatory filings owned or held by Reata, as may be required for Reata to perform its express obligations under this Agreement. Except for the rights and licenses specifically granted in this Agreement, Kyowa Kirin reserves all rights to the Confidential Information of Kyowa Kirin, and the Kyowa Kirin Regulatory Data, and any Regulatory Filings owned or held by Kyowa Kirin and, except for such specifically granted rights and licenses, this Agreement does not include the grant of any right or license, express or implied, to any other intellectual property or other rights owned or Controlled by Kyowa Kirin.

ARTICLE III

JOINT STEERING COMMITTEE

3.1 Establishment and Membership . Within thirty (30) days of the Effective Date, the Parties will establish a joint steering committee (the “ JSC ”), to coordinate and oversee the development and commercialization of Licensed Products hereunder.

3.2 Purpose of JSC . The purposes of the JSC will be (a) to coordinate the management and implementation of the Parties’ activities hereunder, including the Clinical Development Activities, Regulatory Activities, and Sales and Marketing Activities; (b) to review, approve, and oversee the Development Plan, (c) to review, approve, and oversee the Marketing Plan, (d) create and oversee any subcommittees or working groups as the JSC may deem appropriate, it being understood that there shall be at least one such subcommittee or working group specifically for Licensed Product clinical and regulatory development matters, (e) to address any issues expressly delegated to the JSC under this Agreement (for example and without limitation, the selection of Product Trademarks under Section 2.5), and (f) to consult and coordinate with respect to License Product development and commercialization outside the Territory (but neither the JSC nor Kyowa Kirin shall have any decision-making authority with respect to such activities and matters outside the Territory). Kyowa Kirin will submit a Development Plan to the JSC for its approval, with respect to anticipated Clinical Development Activities and Regulatory Activities with respect to Licensed Products for use in the Field, within [***] of the Effective Date of this Agreement, which Development Plan will include Kyowa Kirin’s preliminary development plans for China. Kyowa Kirin may thereafter periodically submit updates or modified versions of the Development Plan to the JSC for its review and approval.

3.3 Membership and Procedures .

3.3.1 Membership . Each Party will designate an equal number of representatives, to be three (3) each unless the Parties agree otherwise, with appropriate expertise to serve as members of the JSC. Each Party may replace its representatives on the JSC at any time upon written Notice to the other Party.

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Execution Version

3.3.2 Administrative Chair . One member of the JSC will serve as Administrative Chair. The Administrative Chair will be responsible for organizing meetings and preparing and circulating an agenda in advance of each meeting of the JSC and preparing minutes of each meeting, to be approved by both the Parties. For the first year, [***] will appoint the Administrative Chair of the JSC. Thereafter, [***] will appoint the Administrative Chair for an initial one year term; and thereafter [***] will appoint the Administrative Chair on an annual basis unless [***] wishes to appoint such chair, in which case [***] may appoint the Administrative Chair for a twelve (12) month term, and thereafter the Parties will alternate in appointing the Administrative Chair for twelve (12) month terms.

3.3.3 Meetings . During the first year after the Effective Date, the JSC will hold meetings on a [***] basis; and thereafter the JSC will hold meetings at least [***] (i.e., roughly [***]), or more frequently as the Parties may agree; provided that either Party may also call a special meeting of the JSC on an ad hoc basis upon at least seven (7) days prior Notice to address urgent matters which cannot be reasonably postponed until the next JSC meeting. The first two (2) meetings will be held in person; one (1) meeting in the United States and one (1) meeting in Japan. Subsequent meetings may be held in person or by means of telecommunication (telephone, video, or web conferences). Other employees of each Party involved in the development, manufacture or Commercialization of Licensed Products may attend meetings of the JSC as non-voting participants, and, with the consent of each Party, consultants, representatives, or advisors involved in the development, manufacture or commercialization of the Licensed Product may attend meetings as non-voting observers; provided, however , that any such Third Party JSC meeting attendees are under obligations of confidentiality and non-use applicable to the Confidential Information of each Party that are at least as stringent as those set forth in ARTICLE XI. Following any JSC meeting, the Administrative Chair will be responsible for preparing and issuing minutes of such meeting within thirty (30) days thereafter. Such minutes will not be finalized until a representative of the other Party has reviewed and confirmed the accuracy of such minutes in writing. If a disagreement regarding the accuracy of such minutes cannot be resolved, the minutes will reflect such disagreement.

3.3.4 Limitations of Powers . The JSC will have only such powers as are specifically delegated to it hereunder and will not be a substitute for the rights of the Parties. Without limiting the generality of the foregoing, the JSC will not have any power to amend this Agreement (without limiting its right to approve amendments to the Development Plans) and the JSC is otherwise subject to the express terms and conditions of this Agreement. Any amendment to the terms and conditions of this Agreement may only be implemented pursuant to Section 17.7 below.

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3.4 Decision-Making .

3.4.1 Subject to the terms of this Section 3.4, the JSC will take action by [***] with each Party having [***], irrespective of the number of representatives actually in attendance at a meeting, or by a written resolution signed by the designated representatives to the JSC of each of the Parties. The JSC members shall use good faith efforts to reach agreement on any and all matters submitted to it. If the JSC fails to reach unanimous consent on a particular matter within thirty (30) days of a Party having requested a formal vote on such matter (or, if such matter is urgent, within seven (7) days of such request), then such dispute will be subject to the resolution procedures described in Section 3.4.2.

3.4.2 In the event of any dispute in the JSC that is not resolved pursuant to the terms of Section 3.4.1, either Party may provide written Notice of such failure (a “ Notice of Disagreement ”) to the other Party in order to refer such dispute to the Chief Executive Officer of Reata and the Chief Operating Officer or Kyowa Kirin for potential resolution. Following any such Notice of Disagreement, the Chief Executive Officer of Reata and the Chief Operating Officer of Kyowa Kirin will meet at least once in person or by means of live telecommunication (telephone, video, or web conferences) to discuss the matter on which the JSC failed to reach unanimous consent and use their good faith efforts to resolve the matter within thirty (30) days after receipt of the Notice of Disagreement by the applicable Party. If any such disagreement is not resolved by the Chief Executive/Operating Officers or their designees within such thirty (30) day period, then, subject to the restrictions in Section 3.4.4 below, [***] will have the final decision-making authority with respect to any such disagreement relating to any Commercialization in the Territory. In making any such final decision, [***] shall reasonably consider, in good faith, any issues raised by [***] concerning risks that such decision could have a material adverse effect on [***].

3.4.3 Notwithstanding this Section 3.4, any dispute regarding the interpretation of this Agreement, the performance or alleged nonperformance of a Party’s obligations under this Agreement, or any alleged breach of this Agreement will be resolved in accordance with the terms of ARTICLE XVI and shall not be subject to the JSC decision-making.

3.4.4 With respect to any and all JSC decisions regarding clinical studies for Licensed Products within the Field by Kyowa Kirin, the following shall apply:

(a) For clinical studies within the protocols already established in studies by Reata (subject to variations in dose and dosing within the parameters of subsections (i) and (ii) below) and related to the development of Licensed Product for the treatment of chronic kidney disease (“CKD”), [***] shall have final decision-making authority to conduct any such clinical studies that [***];

(b) For clinical studies for the Indication of CKD, but outside of the protocols and parameters described in Section 3.4.4(a), Kyowa Kirin shall provide summaries of such clinical studies and their proposed protocols to Reata. Upon review, if Reata reasonably believes those studies have the potential to adversely affect the safety profile of the Licensed Compound or to adversely impact patient safety, then Reata shall have the right to require an independent panel of medical and scientific reviewers evaluate the proposed study (the “ Technical Review Panel ”), at Reata’s expense. The Technical Review Panel shall be comprised of three unaffiliated, independent members, and will act by majority vote. The members of the

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Execution Version

Technical Review Panel will be appointed as follows: (i) within [***] days of Reata’s request for a Technical Review Panel, each Party shall designate (in its sole discretion) an expert with technical expertise in the relevant area to be a member of the Technical Review Panel; (ii) within [***] days of each Party making their member designation, those designated members shall designate another expert with technical expertise in the relevant area to be the third member of the Technical Review Panel, who will serve as the chairman of the panel. Within [***] days of the designation of the entire three-member Technical Review Panel, each Party shall submit a written statement detailing its positions with respect to the safety concerns of Reata that prompted the request for a review by the Technical Review Panel. Promptly after the submission of each Party’s written statements, the Technical Review Panel shall deliver to the Parties, in writing, the Technical Review Panel’s conclusions regarding the safety concerns of Reata, and its recommendations (if any) for modification of Kyowa Kirin’s proposed protocol to address such safety concerns (taking into consideration the requirements for Commercialization Regulatory Approval). In the event the Technical Review Panel agrees with Reata’s safety concerns, [***].

(c) For any animal studies proposed by Kyowa Kirin, and for all proposed Kyowa Kirin clinical studies outside of the CKD indication, Kyowa Kirin shall provide summaries of such clinical studies and their proposed protocols to Reata. Upon review, Reata has final authority to veto the studies if Reata determines, in its sole but reasonable discretion, that Reata has a reasonable basis to believe that the proposed studies present a risk of adversely affecting the safety profile of the Licensed Compound or adversely impacting patient safety.

3.5 Expenses . Each Party will be responsible for all of its own travel and other costs and expenses for its respective members, designees and non-JSC invitees to attend meetings of, and otherwise participate on, the JSC and any subcommittees or working groups.

3.6 Relationship of Parties . Nothing contained in this Agreement shall be deemed to constitute any member of the JSC (or any other committees or sub-teams of the JSC) a partner, agent or legal representative of the other Party, or to create any fiduciary relationship for any purpose whatsoever. Except as may be explicitly provided in this Agreement, no member of the JSC (or any other committee or sub-team of the JSC) shall have any authority to act for, or to assume any obligation or responsibility on behalf of, any other member of the JSC (or any other committee of sub-team of the JSC) of the other Party. For the avoidance of doubt, this Agreement is not intended to create and may not be construed to create a partnership, joint venture, or entity of any kind between the Parties.

ARTICLE IV

CLINICAL DEVELOPMENT

4.1 Kyowa Kirin Clinical Development Activities . Subject to, and in accordance with, the terms and conditions of this Agreement and the requirements of all Applicable Laws, Kyowa Kirin will be responsible for, [***], and will use Commercially Reasonable Efforts to conduct (or have conducted), all pre-clinical and clinical trial activities necessary (and those determined by the JSC to be useful and worth pursuing under the circumstances) for the Commercialization of Licensed Product in each country in the Territory as overseen by the JSC in accordance with ARTICLE III (“ Clinical Development Activities ”). [***].

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Execution Version

4.2 Clinical Development Data .

4.2.1 Obligations of Kyowa Kirin . All results of all Clinical Development Activities for Licensed Products and any and all other information or data generated by Kyowa Kirin, its Affiliates, Permitted Sublicensees, or any Third Party on behalf of Kyowa Kirin with respect to and in the course of conducting any Clinical Development Activities for Licensed Products, including all data collected or analyzed with respect thereto, and all study reports analyzing such data (collectively, “ Kyowa Kirin Clinical Data ”) will be (a) used by or for Kyowa Kirin and its Affiliates (and Third Parties acting on their behalf) to support necessary Regulatory Approvals and Commercialization in the Territory, as and to the extent applicable, and (b) provided to Reata (in electronic form if requested by Reata and in or reasonably convertible to such electronic form) by Kyowa Kirin in a reasonable manner (subject to Applicable Laws), which in any event shall not require translation thereof into English by Kyowa Kirin.

4.2.2 Use of Kyowa Kirin Clinical Data . Kyowa Kirin hereby agrees that Reata may use Kyowa Kirin Clinical Data for the performance of its obligations and exercise of its rights under this Agreement and that Reata and its Affiliates, licensees and development partners will have a right of access, a right of reference and a right to use and incorporate all Kyowa Kirin Clinical Data in any regulatory filings for Licensed Products or for other uses with respect to Licensed Products in accordance with Applicable Laws, outside the Territory. For the avoidance of doubt, Reata may provide the foregoing information (and extend the foregoing rights) to its licensees or development partners.

4.2.3 Obligations of Reata . During the Term, and subject to Applicable Laws, Reata will provide Kyowa Kirin with copies (in electronic form if requested by Kyowa Kirin and in or reasonably convertible to such electronic form) of all information or data with respect to Licensed Product (including non-clinical and clinical study data and results, and including all other information or data with respect to and generated in the course of conducting any clinical development activities for Licensed Products, together with all data collected or analyzed with respect thereto, and all study reports analyzing such data) that is (or was prior to the Effective Date) generated by Reata or any Affiliates or licensees or development partners of Reata, or by any Third Parties acting on their behalf, which is necessary or useful for Kyowa Kirin to conduct Clinical Development Activities, obtain any required Regulatory Approvals or perform such other Regulatory Activities under this Agreement or as otherwise reasonably requested in writing by Kyowa Kirin (collectively “ Reata Clinical Data ”). Reata Clinical Data generated by any Reata Affiliates, licensees or development partners will be provided to Kyowa Kirin reasonably promptly upon receipt by Reata after completion by such Affiliate, licensee or development partner of the final study reports (including individual patient listings) for the relevant data set (and Reata shall require its Affiliates, licensees and development partners to provide such Reata Clinical Data to Reata so as to facilitate such timing and otherwise on a reasonable basis), provided that any Reata Clinical Data generated by an Affiliate, licensee or development partner that is not connected to any such final study reports and not otherwise provided pursuant to other provisions of this Agreement shall be provided to Kyowa Kirin within a reasonable time.

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Execution Version

4.2.4 Use of Reata Clinical Data and Other Licensee Clinical Data. Reata hereby agrees that Kyowa Kirin may use Reata Clinical Data for the performance of its obligations and exercise of its rights under this Agreement and that Kyowa Kirin will have a right of access, a right of reference and a right to use and incorporate all Reata Clinical Data in any Regulatory Filings or for other uses with respect to Licensed Products in accordance with Applicable Laws and this Agreement (including to perform its obligations and exercise its rights hereunder), in the Territory. For the avoidance of doubt, Kyowa Kirin may provide the foregoing information (and extend the foregoing rights) to its Permitted Sublicensees for use within the scope of the permitted sublicense to such Permitted Sublicensee.

4.3 No Debarred Personnel . In performing the Clinical Development Activities, Kyowa Kirin will not use the services of any employee or consultant, who has been debarred by the FDA or any Regulatory Authority, or, to the best of Kyowa Kirin’s Knowledge, is the subject of debarment proceedings by the FDA or any other Regulatory Authority.

4.4 Use of Animals . In connection with any development or Commercialization activities, including Clinical Development Activities undertaken by Kyowa Kirin in connection with Licensed Product, Kyowa Kirin will comply with all Applicable Laws regarding the care and use of experimental animals. All animals used by Kyowa Kirin to evaluate Licensed Compounds will be provided humane care and treatment in accordance with applicable codified veterinary practices in the jurisdiction where such animals are used.

4.5 Development Outside the Territory . As between Kyowa Kirin and Reata, Reata shall be solely responsible and shall have sole discretion and control (at Reata’s sole cost and expense) for all non-clinical, clinical and other development or commercialization activities (including regulatory activities) with respect to Licensed Products outside the Territory. Reata, through the JSC, will keep Kyowa Kirin reasonably informed of all material events and developments, including any Adverse Events, occurring in the course of the non-clinical, clinical and other development activities for Licensed Products outside the Territory. Reata will consider recommendations that Kyowa Kirin may make to Reata regarding aspects of non-clinical and clinical trial and other development activities for Licensed Products outside the Territory that would be particularly helpful in obtaining Commercialization Regulatory Approval for Licensed Products within the Territory, provided, however, Reata shall be under no obligation to accept or act on any such recommendations, and Reata shall have the final decision-making authority with respect thereto. [***].

4.6 Development of the Licensed Compound . Kyowa Kirin agrees that it shall only conduct Clinical Development Activities and other Commercialization activities in the Field in the Territory under this Agreement (and the licenses granted hereunder) for the Licensed Compound and formulations of Licensed Compounds (and Licensed Products comprised of or containing such Licensed Compounds). Reata acknowledges that the exact form of RTA 402 or any Backup Compound, or formulation thereof, may vary, as circumstances warrant, from the exact forms and

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Execution Version

formulation developed or commercialized outside the Territory. Kyowa Kirin agrees that the Development Plan shall reflect the foregoing, and Reata has full veto rights to halt development by Kyowa Kirin or its Affiliates or Permitted Sublicensees of any compound that is not a Licensed Compound or a formulation thereof.

ARTICLE V

REGULATORY MATTERS

5.1 Regulatory Activities .

5.1.1 Regulatory Activities . Subject to, and in accordance with, the terms and conditions of this Agreement and the requirements of all Applicable Laws, Kyowa Kirin, at its sole cost and expense, will use Commercially Reasonable Efforts to (a) take (or have taken) all actions necessary and file (or have filed) all Regulatory Filings with respect to Licensed Product required to obtain Commercialization Regulatory Approvals in each country in the Territory; (b) respond in a timely fashion to requests for data and information from Regulatory Authorities with respect to Licensed Product; and (c) meet with officials of Regulatory Authorities at such times as may be requested by such Regulatory Authorities with respect to Licensed Product (“ Regulatory Activities ”). [***]. Without limiting the applicability of the foregoing and the remainder of this ARTICLE V, Kyowa Kirin, through the JSC, will keep Reata reasonably informed of all material events and developments occurring in the course of the Regulatory Activities, including scheduled Kyowa Kirin regulatory strategy discussions and meetings with Regulatory Authorities in the Territory relating to Licensed Product.

5.1.2 Reata Assistance . Upon written request of Kyowa Kirin, Reata will use Commercially Reasonable Efforts to assist Kyowa Kirin in connection with any meetings with, or requests from, Regulatory Authorities in the Territory related to Licensed Product.

5.2 Kyowa Kirin Regulatory Data and Regulatory Approvals .

5.2.1 Regulatory Filings .

(a) Review . The JSC shall create a subcommittee or working group to coordinate communication and the exchange of information between the Parties with respect to Regulatory Filings to be prepared and submitted by or for Kyowa Kirin in the Territory; and without limiting the foregoing, Kyowa Kirin will provide Reata with summaries, overviews or excerpts (including the framework or description of any protocols to be included in such filings) (in English) of all Regulatory Filings prior to filing thereof. It is acknowledged by the Parties that given time constraints, the Regulatory Filing actually submitted by Kyowa Kirin to a Regulatory Authority may vary from the matters discussed by the Parties in the JSC subcommittee or working group because of changes resulting from interactions with Regulatory Authorities and from continued work on such filings by Kyowa Kirin’s regulatory personnel.

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(b) Accelerated Reporting . In the event that Applicable Laws require Kyowa Kirin to report information related to any Regulatory Activity on an accelerated basis such that Kyowa Kirin is unable to comply with Section 5.2.1(a), Kyowa Kirin will nonetheless provide to Reata a prompt and detailed description of the event that triggered the accelerated reporting obligation as soon as reasonably practicable, but in no event later than three (3) Business Days after Kyowa Kirin obtains actual knowledge of such triggering event.

(c) Copies . Subject to Applicable Laws, Kyowa Kirin will provide to Reata: (i) compact discs containing each Regulatory Filing as submitted to Regulatory Authorities and all Kyowa Kirin Regulatory Data specific thereto (in the original language in which it was filed) promptly following such submission, (ii) synopses (in English) of material written communications to Kyowa Kirin from any Regulatory Authority in the Territory with respect to Regulatory Filings, reasonably promptly following receipt thereof (taking into account the time required to prepare such summaries after such submission of such Regulatory Filings), and (iii) a brief statement of any material changes in the final Regulatory Filings from the summaries previously provided by Kyowa Kirin to Reata. Reata will have a right of access, a right of reference and the right to use and incorporate all Kyowa Kirin Regulatory Data in connection with Licensed Products and in a manner consistent with the terms of this Agreement (e.g., outside the Territory except to the extent required to perform any of its obligations hereunder). For the avoidance of doubt, Reata may provide copies of Regulatory Filings (and extend its right of access, right of reference and the right to use and incorporate all Kyowa Kirin Regulatory Data in connection with Licensed Products into regulatory submissions outside of the Territory) to its licensees or development partners with respect to Licensed Products.

5.2.2 Regulatory Meetings in the Territory . Kyowa Kirin will provide Reata (through the JSC) with advance notice of any formal, scheduled meetings with any Regulatory Authority in the Territory (including any meetings related to the final positioning of labeling and safety claims within the original and subsequent regulatory submissions), and Kyowa Kirin will provide a brief description of the topics to be presented or discussed at that meeting. Subject to Applicable Laws, Kyowa Kirin shall allow Reata to attend any such meeting as an observer (without any obligation on Reata to do so).

5.2.3 Ownership of Kyowa Kirin Regulatory Data . Kyowa Kirin will hold title to all Kyowa Kirin Regulatory Data, including Regulatory Filings and Regulatory Approvals; provided, that, Kyowa Kirin will file for and obtain Regulatory Filings and Regulatory Approvals in such manner as may be required under (but solely to the extent reasonably practicable under) the Applicable Laws of the applicable countries within the Territory to allow for (if reasonably practicable) the expeditious transfer thereof to Reata or Reata’s designee pursuant to Section 15.8 upon certain terminations of this Agreement.

5.3 Provision of Regulatory Information to Kyowa Kirin . Reata will use Commercially Reasonable Efforts to assist Kyowa Kirin in connection with its conduct of all Regulatory Activities. Without limiting the foregoing, Reata shall (a) provide Kyowa Kirin with copies of any United States and European (including for both the EU and for countries within Europe) regulatory filings for Licensed Product filed by or on behalf of Reata as necessary or useful for Kyowa Kirin to make Regulatory Filings for Licensed Product in the Territory, (b) provide Kyowa Kirin with copies of any United States and European (including for both the EU

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Execution Version

and for countries within Europe) regulatory filings for Licensed Product filed by or on behalf of Reata’s licensees or development partners as necessary or useful for Kyowa Kirin to make Regulatory Filings for Licensed Product in the Territory, and (c) supply, and grant Kyowa Kirin the right to reference to, any other data that is Controlled by Reata or its licensees or development partners (anywhere in the world) that is necessary or required by Applicable Laws to allow Kyowa Kirin to meet its regulatory filing obligations with respect to Licensed Products in the Territory. Kyowa Kirin will have a right of access, a right of reference and the right to use and incorporate all regulatory filings and information provided to it pursuant to this Section 5.3 and any other Reata Regulatory Data solely to support Kyowa Kirin’s Regulatory Activities and Commercialization of Licensed Product in the Territory (and otherwise perform its obligations and exercise its rights hereunder) and in accordance with the terms of this Agreement. For the avoidance of doubt, Kyowa Kirin may provide the foregoing information (and extend the foregoing rights) to its Permitted Sublicensees for use within the scope of the permitted sublicense to such Permitted Sublicensee.

5.4 Safety; Adverse Event Reporting .

5.4.1 Pharmacovigilance and Drug Safety Data . Kyowa Kirin will be responsible, at its sole cost and expense, for: (a) collecting all pharmacovigilance and other drug safety data for Licensed Product in the Territory as required by Applicable Laws; and (b) reporting any such data, including Adverse Events in the Territory, to the applicable Regulatory Authorities in the Territory, as appropriate to be in compliance with all Applicable Laws, including entry into the global safety database in CIOMS format (in English). Kyowa Kirin will provide Notice, including by email or by notification systems built into such database, to Reata of such global database entries within the time period required by FDA regulations for the type of event involved. Kyowa Kirin expressly acknowledges Reata can and will provide information received by Reata pursuant to this Section 5.4 to any Affiliates, licensees or development partners engaged in commercialization activities outside of the Territory. Upon reasonable prior notice and during normal business hours (and no more than once per year), Reata has the right to review Kyowa Kirin’s internal processes and procedures for the collection and processing of safety data relating to Licensed Product. Reata will set up, hold and maintain (at Reata’s sole cost and expense) the global safety database for Licensed Products. Reata shall enter into such database all pharmacovigilance and other drug safety data for Licensed Product (including Adverse Events) outside the Territory as required by Applicable Laws (including any such data collected by licenses and collaboration partners). Reata shall provide Kyowa Kirin with ready access to such database, including to the Adverse Event information contained therein and Reata expressly acknowledges that Kyowa Kirin can and will provide information received by Kyowa Kirin from such database to any Permitted Sublicensees engaged in Commercialization activities in the Territory.

5.4.2 Safety Agreement . Within [***] months of the Effective Date of this Agreement, the JSC will develop a mutually acceptable safety agreement (to be agreed upon and executed by both Parties) setting forth the Parties’ respective obligations in detail regarding pharmacovigilance and the exchange of drug safety data.

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Execution Version

5.5 Recalls and Voluntary Withdrawals .

5.5.1 For each country in the Territory, Kyowa Kirin and Reata will, through the JSC, confer and coordinate regarding their respective internal standard operating procedures (and any changes thereto) regarding product recalls and the treatment of and response to product complaints and inquiries as to safety, quality or efficacy that would be relevant to the Licensed Products.

5.5.2 If either Party becomes aware of information about a Licensed Product indicating that it may not conform to the Specifications or that there are potential adulterations, misbranding and/or other material adverse issues regarding safety of a Licensed Product (or otherwise that a recall or withdrawal of a Licensed Product is potentially at issue), it will as soon as practical (but in any event within such period as the Parties may mutually establish to ensure their respective compliance with Applicable Law) so notify the other Party. With respect to the Territory, the Parties will promptly meet to discuss such circumstances and to consider appropriate courses of action, including Licensed Product recalls. Unless agreed by the Parties in writing, Kyowa Kirin will make any decisions regarding, and implement and be responsible, at its sole expense (except as provided below), for all recalls of Licensed Product in the Territory, and will maintain complete and accurate records of any Licensed Product recall for such periods as may be required by legal requirements. Notwithstanding the foregoing, Reata shall reimburse Kyowa Kirin for the reasonable and necessary out-of-pocket expenses incurred by Kyowa Kirin for any recalls of Licensed Products (or API) manufactured or supplied by or for Reata to Kyowa Kirin hereunder to the extent attributable to the failure of such Licensed Product or API to conform to the Specifications or to be manufactured in compliance with Applicable Laws, which failure was due to negligence or was known to Reata (or its suppliers) or could reasonably have been discovered by Reata (or its suppliers) with the application of reasonable and customary quality assurance and quality control practices or the application of GMPs, and such failure could not have been identified or detected by Kyowa Kirin (or if applicable its Permitted Sublicensees) through its application of reasonable and customary quality assurance and quality control practices, or other inspections or activities required under Applicable Law with respect to such Licensed Products, prior to distribution of the Licensed Product in the Territory.

5.6 Inspection Rights . Not more than [***], if Reata has any reasonable concerns regarding Kyowa Kirin’s storage or handling of any Licensed Products, Reata will have the right, at Reata’s expense and on not less than [***] days prior notice, to inspect the facilities where Kyowa Kirin or its Affiliates store or handle, or have stored or handled, any Licensed Products and to audit the procedures of Kyowa Kirin or its Affiliates for the storage and handling of Licensed Products for purposes of quality control.

5.7 Governmental Inspections and Inquiries . Kyowa Kirin will advise Reata promptly, but in no event later than [***] days after Kyowa Kirin’s receipt of notice thereof, of any planned Regulatory Authority visit to the portion of the facilities of Kyowa Kirin or its Affiliates where Licensed Product is stored or handled or any material written inquiries by a Regulatory Authority concerning such facilities, the procedures of Kyowa Kirin or its Affiliates for the storage or handling of Licensed Products, or the Commercialization of Licensed Product in the Territory.

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Execution Version

If the Regulatory Authority makes an unannounced or unplanned visit, or if Kyowa Kirin does not have at least [***] days notice of the visit, Kyowa Kirin will inform Reata of the visit as soon as reasonably practicable, but in no event later than [***] Business Days after Kyowa Kirin obtains actual knowledge of the visit. Kyowa Kirin will inform Reata, as soon as practicable, regarding the purpose and result of such visit or inquiry, and will provide to Reata copies of any minutes of the inspection generated by Kyowa Kirin (in English if available, without any obligation to translate) promptly following such inspection and any report or correspondence (in English if available, without any obligation to translate) provided by Kyowa Kirin, or any Affiliate, as the case may be, to the Regulatory Authority or issued by or provided by the Regulatory Authority to Kyowa Kirin, or any Affiliate, as the case may be, in connection with such visit or inquiry. If English translations of these materials are not available, then Kyowa Kirin will advise Reata of the material aspects of such minutes and correspondence at the JSC meetings.

5.8 Regulatory Matters Outside the Territory . Reata, through the JSC, will keep Kyowa Kirin reasonably informed of all material events and developments occurring in the course of the regulatory activities with respect to Licensed Products outside the Territory, including the overall content and outcome of any strategy discussions and meetings with applicable regulatory authorities outside the Territory relating to Licensed Product.

5.9 Development in China . Within [***] of the approval of the NDA for the Licensed Product in the United States and the FDA’s issuance of the Certificate of Pharmaceutical Product for such Licensed Product (with such [***] period commencing on the first date when both of the foregoing events has occurred), or within such other time period as agreed between the Parties, Kyowa Kirin shall file an IND in China for the Licensed Product within the Field and thereafter Kyowa Kirin shall use Commercially Reasonable Efforts to obtain Regulatory Approval of such Licensed Product in China. In the event that Kyowa Kirin has not submitted an IND within the [***] period specified above (and Kyowa Kirin has failed to cure such breach within [***] days following notice thereof), or in the event that Kyowa Kirin has breached its obligation to use Commercially Reasonable Efforts to obtain Regulatory Approval of such Licensed Product in China (and Kyowa Kirin has failed to cure such breach following notice thereof in accordance with Section 15.4), and in either case Reata elects to regain its rights under this Agreement as to China, Reata will provide Notice to Kyowa Kirin and reversion of all rights granted under this Agreement, as to China (but with no effect on the rest of the Territory hereunder), will be immediately effective upon the giving of such notice.

ARTICLE VI

SALES AND MARKETING; DILIGENCE OBLIGATIONS

6.1 Sales and Marketing Activities . Subject to, and in accordance with, the terms and conditions of this Agreement and the requirements of all Applicable Laws, Kyowa Kirin, at its sole cost and expense, will have the sole responsibility, and will use Commercially Reasonable Efforts, to develop (or have developed) a sales force and to market and sell (or have marketed and sold) the Licensed Product(s) in each country in the Territory (“ Sales and Marketing Activities ”); and in any event Kyowa Kirin will achieve the First Commercial Sale in each country in the Territory reasonably promptly after obtaining Commercialization Regulatory Approval for such Licensed Product in such country.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

6.2 Marketing Plan . Without limiting the generality of the other provisions of this ARTICLE VI, Kyowa Kirin will prepare and submit to Reata a plan containing the strategy and proposed activities (described generally) for marketing and selling Licensed Product in each country in the Territory (as updated pursuant to this Section 6.2, the “ Marketing Plan ”). Kyowa Kirin will submit a proposed draft of the Marketing Plan for a country to the JSC for approval by the JSC no later than [***] prior to the anticipated date of the First Commercial Sale of any Licensed Product in such country. Kyowa Kirin will deliver to the JSC an update of the relevant sections of the Marketing Plan from time to time during the Term, and in no case less than [***] during the [***] following the First Commercial Sale in the applicable country. Updates to the Marketing Plan will reflect, among other things, each new Indication in the Field for which the Licensed Product has received Commercialization Regulatory Approval. All decisions regarding the day-to-day conduct of Sales and Marketing Activities within the Territory in a manner consistent with the Marketing Plan will be determined solely by Kyowa Kirin.

6.3 Sales Forecasts . Pursuant to ARTICLE VIII, Kyowa Kirin will provide certain forecasts with respect to its commercial requirements for sale of Licensed Products in the Territory in accordance with the terms and conditions therein.

6.4 Pricing . Kyowa Kirin will have full authority to determine prices for the sale of Licensed Products in the Territory.

6.5 Labeling and Patent Rights Marking . Subject to Applicable Law, Kyowa Kirin will identify Reata as the licensor or manufacturer of the Licensed Product using the Reata Trademarks designated by Reata for such use in certain mutually agreed promotional materials for Licensed Product in the Territory where such identification is appropriate, in a manner approved in advance in writing by both Parties and in accordance with (and subject to) the Trademark License set forth in Section 2.3. To the extent reasonably and customary in the industry for such products, Kyowa Kirin will mark all Licensed Product sold by Kyowa Kirin with appropriate Product Trademarks and patent numbers to the extent permitted by Applicable Law in the country within the Territory where such Licensed Product is sold. Kyowa Kirin may, in its sole discretion, include any Kyowa Kirin Trademarks on the Licensed Products, and on the labels, packaging, promotional materials and other materials therefor.

6.6 Medical Affairs Activities . Subject to, and in accordance with, the terms and conditions of this Agreement and the requirements of all Applicable Laws, Kyowa Kirin will be responsible for and will bear all costs of execution of all Medical Affairs Activities in the Territory performed by or for Kyowa Kirin. Such activities will be conducted in a manner consistent with the Medical Affairs Plan and coordinated by the JSC in accordance with ARTICLE III. Except as required or permitted by Applicable Law, Kyowa Kirin acknowledges that it cannot conduct an investigation or initiate a post-marketing clinical study that is not specifically related to any Indication in the Field included on the label or in the package insert for Licensed Products.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

6.7 Medical Affairs Plan . Kyowa Kirin will prepare and submit to the JSC for JSC’s review a plan containing the strategy and proposed Medical Affairs Activities (described generally) in the Territory with respect to Licensed Products for use in the Field (as updated pursuant to this Section 6.7, the “ Medical Affairs Plan ”). Kyowa Kirin will submit a proposed draft of the Medical Affairs Plan to the JSC no later than [***] prior to the anticipated date of the First Commercial Sale of each Licensed Product and will submit an updated Medical Affairs Plan to the JSC no later than [***] prior to the anticipated date of the First Commercial Sale of each Licensed Product. Kyowa Kirin will deliver an update of the relevant sections of the Medical Affairs Plan from time to time during the Term, and in no case less than [***] following the First Commercial Sale. Updates to the Medical Affairs Plan will reflect, among other things, each new Indication in the Field for which the Licensed Product has received Commercialization Regulatory Approval and countries within the Territory in which Medical Affairs Activities will be conducted for Licensed Product. The Medical Affairs Plan and all updates will be reviewed and discussed by the JSC. Kyowa Kirin will in good faith consider the reasonable comments provided by Reata to the Medical Affairs Plan in light of potential risks that such Medical Affairs Plan; and if such risks could have, or are having, a material adverse scientific, clinical, medical, regulatory or commercial impact on (a) obtaining regulatory approval for the manufacture, use or sale of Licensed Product outside the Territory, or (b) commercialization of Licensed Product outside of the Territory, then subject to Section 3.4, the JSC may decide to revise the applicable Medical Affairs Plan to address such concerns and resubmit it to the JSC for review in the same manner. Kyowa Kirin will make Commercially Reasonable Efforts to carry out and perform the plan, strategy and activities set forth in the Medical Affairs Plan within any applicable timelines contained therein. Kyowa Kirin will not engage in any Medical Affairs Activities with respect to Licensed Product in a manner that is inconsistent with or outside the scope of the Medical Affairs Plan.

6.8 Marketing and Promotional Literature . All marketing and promotional literature related to Licensed Product and prepared for use in the Territory by Kyowa Kirin will be prepared in a manner consistent with Applicable Laws. In certain marketing and promotional literature (as provided for in Section 6.5), Reata will be presented and described as the Party who developed the Licensed Product.

6.9 Marketing and Sales and Medical Affairs Outside the Territory . Beginning [***], Reata, through the JSC, will keep Kyowa Kirin reasonably informed of all material activities and developments with respect to the marketing and sale of Licensed Products outside the Territory. Furthermore, Reata will provide to Kyowa Kirin (a) summaries of marketing plans of Reata (but excluding those of its Third Party licensees and collaboration partners) containing the strategy and proposed activities (described generally) for marketing and selling Licensed Products outside the Territory (together with updates at least [***]), and (b) summaries of medical affairs plans of Reata (but excluding those of its Third Party licensees and collaboration partners) containing the strategy and proposed medical affairs activities (described generally) outside the Territory with respect to Licensed Products for use in the Field (together with updates from time to time). Reata shall reasonably discuss and consult with Kyowa Kirin through the JSC with respect to the foregoing activities and such marketing and medical affairs plans.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

ARTICLE VII

FINANCIAL TERMS

7.1 Upfront Payment . Within fifteen (15) Business Days after the Effective Date of this Agreement, Kyowa Kirin will pay to Reata a non-refundable, non-creditable, initial license fee of thirty-five million United States dollars (US$35,000,000) (“ Upfront Payment ”).

7.2 Milestone Payments .

7.2.1 Regulatory Milestones . In consideration for the rights granted to Kyowa Kirin under this Agreement, Kyowa Kirin will make the following one-time, non-refundable, non-creditable payments to Reata within thirty (30) days after the first achievement by Kyowa Kirin or its Affiliate of each of the following milestone events for a Licensed Product (each a “ Regulatory Milestone Payment ”). If any given Regulatory Milestone Payment is due (except for any of the Regulatory Milestone Events for countries other than Japan, which shall not trigger any of the preceding milestones), and one or more preceding Regulatory Milestone Payments have not been paid for any reason, then payment of all preceding unpaid Regulatory Milestone Payments will be paid at such time as well. For the avoidance of doubt, each of the following milestones (and corresponding Regulatory Milestone Payment) shall be payable only once.

Regulatory Milestone Event	Regulatory Milestone Payment (US$)
[***]	$	[***]
[***]	$	[***]
[***]	$	[***]
[***]	$	[***]
[***]	$	[***]
[***]	$	[***]
[***]	$	[***]

7.2.2 Sales Milestones . In addition to the milestone payments contemplated by Section 7.2.1, Kyowa Kirin will make each of the following one-time, non-refundable, non-creditable payments to Reata within sixty (60) days from the end of the Calendar Quarter in which the Milestone Event (each a “ Sales Milestone Payment ”) described in the table below is first achieved by Kyowa Kirin and its Affiliates with respect to Net Sales of Licensed Products. If two or more of the following events occur within the same Calendar Year, the later Milestone

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

Event will be deemed to be achieved on the first day of the next Calendar Year and the corresponding payments will be made within sixty (60) days of that date. For the avoidance of doubt, each of the following milestones (and corresponding Sales Milestone Payment) shall be payable only once.

Sales Milestone Event (US$)	Sales Milestone Payment (US$)
[***]	$	[***]
[***]	$	[***]
[***]	$	[***]
[***]	$	[***]

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

7.3 Sales Royalties . During the Royalty Term for each country in the Territory, Kyowa Kirin will pay to Reata royalties (“ Sales Royalties ”) based on the aggregate Net Sales of Licensed Products in each Calendar Year at the rates set forth below (annual Net Sales are determined on a Calendar Year basis):

Annual Net Sales in Japan ( Japanese ¥)	Royalty (%)
[***]		[***]
[***]		[***]
[***]		[***]
[***]		[***]

Annual Net Sales in China (US$)	Royalty (%)
[***]		[***]
[***]		[***]
Annual Net Sales in other countries in the Territory (not including Japan and China) (US$)	Royalty (%)
[***]		[***]

Each royalty payment will be non-refundable and non-creditable against any other payments due hereunder. Kyowa Kirin will make royalty payments to Reata hereunder in arrears, within sixty (60) days from the end of each Calendar Quarter in which the underlying Net Sales occur. Each royalty payment will be accompanied by a report for each country in the Territory in which sales of any Licensed Products occurred in the Calendar Quarter, specifying: (a) the gross sales (if available) and Net Sales (including a statement of the aggregate deductions taken from gross sales in the calculation of Net Sales) on a Licensed Product-by-Licensed Product and country-by-country basis, in each country’s currency; (b) the applicable royalty rate under this Agreement; (c) the royalties payable in the country’s currency where the Net Sales occurred; (d) the applicable exchange rate to convert from each country’s currency to United States dollars under Section 7.7; and (e) the royalties payable in United States dollars. For the avoidance of doubt, no royalties shall be due or payable by Kyowa Kirin with respect to Net Sales of Licensed Products in a given country after the end of the Royalty Term in such country.

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Execution Version

7.4 Royalty Adjustments . The Sales Royalties payable by Kyowa Kirin hereunder shall be reduced in certain circumstances as follows:

7.4.1 Adjustments For Generic Competition. If a Generic Product (as defined below) is commercially launched or sold in a country in the Territory, and the sales of such Generic Product (in terms of quantities of units sold) in such country reaches or exceeds a specified percentage (“ Specified Percentage ”) of the quantities of Licensed Products sold by Kyowa Kirin or its Affiliates in such country (as measured by IMS data or similar metrics) in a given Calendar Quarter, then the Sales Royalties payable with respect to any Net Sales of Licensed Products in such country shall be reduced in the Calendar Quarter in which the Specified Percentage is first reached and in all subsequent Calendar Quarters during the Royalty Term for such country, by reducing the base royalty rate otherwise applicable in Section 7.3 by the percentage amount specified below as follows:

Specified Percentage	Reduction in Base Royalty Rate
Below [***]%		[***]	%
At [***]% and between [***]% and [***]%		[***]	%
At [***]% and between [***]% and [***]%		[***]	%
At or above [***]%		[***]	%

The reduced royalty rate will be rounded to the nearest [***]% when calculating the Sales Royalties due hereunder.

Examples:

If the Specified Percentage is [***]% in Japan, then the applicable royalty rate for Japan for the first tier of sales would be reduced from [***]% to [***]% (a [***]% reduction); and the royalty rates for Japan for the other tiers would be reduced similarly. Royalty rates in other countries would not be affected.

If the Specified Percentage later increases to [***]% in Japan, then the applicable royalty rate for Japan for the first tier of sales would be reduced from [***]% to [***]% (a [***]% reduction); and the royalty rates for Japan for the other tiers would be reduced similarly. Royalty rates in other countries would not be affected.

If the Specified Percentage reaches [***]% in Japan, then the applicable royalty rates for Japan for all tiers would be reduced to [***] (a [***]% reduction) and [***] royalties shall be due for Japan. Royalty rates in other countries would not be affected.

For purposes of the foregoing, a “ Generic Product ” means a Third Party product (a) that contains the same Licensed Compound as the applicable Licensed Product; and (b) has received Commercialization Regulatory Approval through an expedited regulatory approval process governing approval of generic products.

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Execution Version

7.4.2 Third Party Royalty; Anti-Royalty Stacking Adjustment. Reata shall be solely responsible for any and all amounts due to any Third Party under any agreement entered into by and between Reata and such Third Party, including under the Dartmouth License and any other agreements listed on Exhibit B hereto. Except as otherwise provided in Section 13.7, with respect to royalties payable by Kyowa Kirin or its Permitted Sublicensees to a Third Party under a license for a patent that claims or covers the Licensed Product, on account of sales of such Licensed Product in a particular country, Kyowa Kirin may offset up to [***] percent ([***]%) of such Third Party royalties against the Sales Royalty payments that would otherwise have been payable by Kyowa Kirin to Reata with respect to Net Sales of such Licensed Product in such country pursuant to Section 7.3 above, provided that the maximum reduction effected pursuant this Section 7.4.2 shall not exceed [***] percent ([***]%) of the royalties otherwise payable to Reata under such Section 7.3 above after application of any additional reductions under Section 7.4.1 above (if any).

7.5 Method of Payment . Unless otherwise expressly provided, each Party will make payments owed to the other Party hereunder in arrears, within thirty (30) days from the end of each calendar month in which such payment accrues. All payments due to Reata hereunder, including Upfront Payments, Milestone Payments, Sales Royalties and Licensed Product supply payments, will be made by wire transfer of immediately available funds in United States dollars to a bank account or bank accounts designated by Reata.

7.6 Interest on Overdue Payments . Any amounts not paid by either Party when due under this Agreement will be subject to interest from and after the date payment is due through and including the date upon which such Party makes such payment in immediately available funds at an annual rate equal to the sum of [***] basis points over the prime rate of interest quoted in the Money Rates section of the Wall Street Journal (New York Edition), calculated daily on the basis of a three hundred sixty (360) day year, or similar reputable data source, or if lower, the maximum rate permitted by Applicable Law.

7.7 Foreign Currency Exchange . For any currency conversion from the currency of one country in which Licensed Products are sold into United States dollars (or another currency if applicable) required in determining the amount of Net Sales or any royalties due hereunder, such conversion shall be calculated at the conversion rate as reported in the Wall Street Journal (New York Edition) (or if that is no longer published, at the exchange rate reported by The Bank of Tokyo-Mitsubishi UFJ, Ltd.) on the last Business Day of the applicable quarterly period in which the Net Sales are determined.

7.8 Taxes .

7.8.1 No Withholdings . All payments required to be made by one Party to the other Party under this Agreement shall be made free and clear of, and without reduction for, withholding Tax or similar Taxes; provided, however, that if a Party or any of its Affiliates shall be

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

required to deduct or withhold any such Taxes from payments made under this Agreement under Applicable Law, then such Party or its Affiliates, as applicable, shall make such deduction or withholding form such payment and pay the full amount deducted or withheld to the relevant governmental authority in accordance with Applicable Law. If under Applicable Law such Tax is required to be deducted or withheld, the paying Party or its Affiliates will promptly furnish the other Party with reasonable evidence of such deduction or withholding and payment thereof to the relevant governmental authority, in electronic or written form. The Parties will reasonably cooperate in completing and filing documents required under the provisions of any Applicable Law in connection with the making of any required Tax payment or withholding payment, or in connection with any claim to an exemption from, reduction of, or a refund of or credit for any such payment to the extent available under Applicable Law.

7.8.2 Other Tax Liability . Except as provided to the contrary in this Agreement, each Party shall be solely responsible for all federal, state and local Tax liability arising from this Agreement imposed on such Party by the taxing authority of a jurisdiction in which such Party is resident or is otherwise subject to such Tax liability. In the case of value added or similar taxes incurred by a Party with respect to payments made to a Party hereunder or the activities underlying such payments (“ VAT ”), each Party and their Affiliates will use Commercially Reasonable Efforts to secure available exemption(s) from VAT and/or to cooperate with the other Party’s efforts to obtain maximum recovery of VAT paid or incurred by such Party or any Affiliate, to the extent permitted by Applicable Law.

7.8.3 Payments Treated as Royalties for Tax Purposes . The Parties agree that, to the extent consistent with Applicable Law, the Upfront Payment, the Milestone Payments, and the Sales Royalties are payments received as consideration for the use of, or the right to use, a patent or patents, a secret process, or information concerning industrial, commercial or scientific experience within the meaning of the Income Tax Convention for the Avoidance of Double Taxation between Japan and the United States. Accordingly, the Upfront Payment, the Milestone Payments, and the Sales Royalties constitute “royalties” for Tax purposes, and the Parties intend and agree (to the extent consistent with Applicable Law) to treat them as such for Tax purposes.

7.9 Prohibited Payments . Notwithstanding any of the provision of this Agreement, if Kyowa Kirin is prevented from paying any payments by virtue of the statutes, laws, codes or governmental regulations of the country from which the payment is to be made, then such payment may be paid by depositing funds in the currency in which it accrued to Reata’s account in a bank reasonably acceptable to Reata in the country whose currency is involved.

ARTICLE VIII

REATA SUPPLY OF LICENSED PRODUCT; SPECIFICATIONS

8.1 Reata Obligation to Supply Licensed Product . Kyowa Kirin will obtain [***] percent ([***]%) of its and its Affiliates’ requirements of Licensed Product for Commercialization in the Territory from Reata, and Reata agrees to manufacture or have manufactured and supply to Kyowa Kirin [***] of Kyowa Kirin’s and its Affiliates’ requirements of Licensed Product for Commercialization in the Territory, in all such cases except to the extent otherwise provided in, and in any event subject to and in accordance with, the terms of, this ARTICLE VIII.

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Execution Version

8.2 Supply of Licensed Product for Development . Subject to the terms and conditions of this Agreement, Reata shall use Commercially Reasonable Efforts to supply Kyowa Kirin with quantities of Licensed Product required for Kyowa Kirin’s and its Affiliates’ development of Licensed Products in the Territory (including for use in Clinical Development Activities and non-clinical studies) in accordance with Kyowa Kirin’s forecasts and orders therefor, as provided below. Kyowa Kirin shall use Licensed Product supplied by Reata under this provision solely to conduct its development activities in accordance with the terms and conditions of this Agreement, and shall not use such Licensed Product for any other purpose.

8.2.1 Forecasts and Orders. Kyowa Kirin shall keep Reata reasonably informed of its anticipated requirements of Licensed Products for Clinical Development Activities and other development activities in the Territory through the JSC and the Development Plan. Kyowa Kirin shall order Licensed Products for use in development from Reata by providing Reata with a binding purchase order (consistent with the terms and conditions of this Agreement) indicating the quantities of Licensed Products ordered for development purposes, the requested delivery date (at least [***] days after the date of the purchase order) and the destination delivery location. Upon receipt of any such binding purchase order, Reata shall use reasonable efforts to manufacture and supply the Licensed Products in accordance therewith. Within [***] business days of receiving a binding purchase order, Reata shall notify Kyowa Kirin with confirmation of such purchase order and also with the expected shipping and delivery dates (using reasonable efforts to designate such expected delivery dates close to the delivery dates requested by Kyowa Kirin). Reata shall make deliveries of Licensed Product as soon as practicable, and shall use reasonable efforts to meet any expedited dates requested by Kyowa Kirin, provided that Kyowa Kirin shall be liable for any additional costs related to any requested expedited delivery schedule.

8.2.2 Cost of Supply of Licensed Product for Development . The price for Licensed Product provided by Reata to Kyowa Kirin for use in development (including Clinical Development Activities) in the Territory shall be at [***], plus applicable sales tax (if any).

8.2.3 Delivery by Reata . Reata shall (a) deliver the Licensed Products FCA Reata’s or the Third Party Manufacturer’s facility (Incoterms 2000), (b) if requested by Kyowa Kirin arrange delivery of Licensed Product to the location designated in Kyowa Kirin’s order and arrange insurance covering Licensed Product during delivery pursuant to Kyowa Kirin’s written instructions and obtain any necessary export permits for such delivery, at Kyowa Kirin’s sole expense, (c) deliver all Licensed Product by the delivery dates established under Section 8.2.1 and otherwise in conformance with Kyowa Kirin’s order (except that Reata may elect to split the order into multiple shipments so long as the delivery dates for the entire order are not materially delayed thereby). Title to and risk of loss in Licensed Product shall pass to Kyowa Kirin upon delivery to the common carrier for delivery to Kyowa Kirin (each, a “ Delivery ”), and Kyowa Kirin shall be responsible for freight, delivery and insurance charges incurred in delivering the Licensed Product to Kyowa Kirin’s designated delivery destination(s) (to the extent not already included in the Manufacturing Costs). Reata shall provide appropriate documentation (including certificates of analysis, GMP declaration statements and other documentation required by Regulatory Authorities or otherwise to comply with Applicable Laws) with all shipments of Licensed Products hereunder.

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Execution Version

8.2.4 Responsibility of Kyowa Kirin . Kyowa Kirin shall have the responsibility, at its own expense, for (a) obtaining any necessary permits for the import into the Territory; (b) all customs, duties and other governmental charges relating to import of Licensed Product from the manufacturing site to Kyowa Kirin; (c) the importation and sale of Licensed Product in the Territory; (d) storing and clearing Licensed Product through all customs and importation requirements for the Territory; (e) having Licensed Product delivered to Kyowa Kirin’s labeling and packaging facility; and (f) conducting quality control testing, retention of samples and lot release, labeling and packaging of Licensed Product for distribution in the Territory, and conducting any and all release testing required in the Territory, all in full compliance with all Applicable Laws.

8.2.5 Manufacturing Compliance and Quality Assurance by Reata . Reata shall manufacture or have manufactured all Licensed Products in accordance with GMP and other Applicable Laws. For all Licensed Products delivered to Kyowa Kirin under this Section 8.2, Reata will conduct quality control, or will cause its Third Party Manufacturing contractor to conduct such testing, for compliance with Specifications and testing required for compliance with Applicable Laws, including GMP. Reata will conduct a quality assurance review of all applicable documents and activities for compliance with Applicable Laws, including GMP, with respect to Licensed Products prior to shipment thereof.

8.2.6 Limited Warranties. Reata represents and warrants to Kyowa Kirin that the Licensed Product supplied pursuant to this Section 8.2 shall (a) be manufactured in accordance with GMP and other Applicable Laws, and (b) conform with the Specifications therefore in all material respects.

8.2.7 Nonconforming Licensed Product .

(a) Acceptance and Rejection by Kyowa Kirin . Each shipment of Licensed Product shall contain such quality control certificates and other documentation as are necessary to show that Licensed Product conforms to the Specifications in all material respects at the time of Delivery and were manufacturing in compliance with GMP and other Applicable Laws. In the event that Kyowa Kirin determines within [***] days of Kyowa Kirin’s receipt of each shipment of Licensed Products that any such Licensed Product did not materially conform with the Specifications at the time of Delivery or otherwise comply with the product warranty in Section 8.2.6 or the requirements of the order (such as matching the quantities ordered), Kyowa Kirin shall provide Notice to Reata thereof, and, if requested by Reata, ship a sample portion of the affected Licensed Products to Reata or its designated Third Party manufacturing site, freight prepaid and properly insured, along with a reasonably detailed statement of the claimed non-conformity and copy of Reata’s invoice therefor. Kyowa Kirin shall retain the balance of the Licensed Product that is subject to review subject to resolution of the rejection and further disposition in accordance with this Section.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

(b) Replacement by Reata . In the event that Reata agrees that the returned Licensed Product was non-conforming (or such non-conformance is confirmed under Section 8.2.7(c) below), Reata shall replace all of such non-conforming units of Licensed Product, at no cost to Kyowa Kirin, and Reata shall as soon as practicable deliver to Kyowa Kirin, freight prepaid, all replacement units of Licensed Product, along with reimbursement of the shipment and insurance charges for return of the non-conforming Licensed Product. Kyowa Kirin shall dispose of all non-conforming Licensed Product at its own expense, or return such non-conforming Licensed Product to Reata at Reata’s expense, as directed by Reata in its sole discretion. In the event that the quantities of Licensed Products delivered to Kyowa Kirin (in one or more shipments) do not match the quantity ordered in any material respect, Kyowa Kirin may, at its option, (i) reject the entire shipment if Reata fails to correct such error within a reasonable period of time after its receipt of Notice of such error, in which case it shall have no obligation to pay for it and, upon Reata’s request and at Reata’s sole expense, such shipment shall be returned to Reata, (ii) accept the entire shipment (and pay for the quantities shipped in accordance with this Agreement) and, if (and only if) Kyowa Kirin so requests in the event of a shortfall in such shipment, Reata shall promptly ship (such shipping at Reata’s sole expense) the additional Licensed Products required to make up such shortfall, or (iii) if the amount shipped exceeds the amount ordered by a material amount, accept only the amount ordered, in which case upon Reata’s request and at Reata’s sole expense, such additional quantities shall be returned to Reata.

(c) Disputes Over Non-Conforming Licensed Product . In the event that Reata disagrees with Kyowa Kirin’s rejection because the Licensed Products are in fact conforming, the Parties shall cooperate to have both Kyowa Kirin’s returned samples and Reata’s retained samples from the same production batch of Licensed Products in dispute analyzed by a mutually acceptable independent testing laboratory of recognized reputation in the pharmaceutical industry, using the analytical methods, tests and criteria for conformance set forth in the Specifications. The out-of-pocket external costs of such arrangement shall be shared equally by the Parties, unless and until an alternative determination is made as provided below. The results of such laboratory testing shall be conclusive and binding on the Parties on the issue of compliance of such units of Licensed Product with the Specifications at the time of Delivery. If such independent testing laboratory determines that Kyowa Kirin’s returned samples of such Licensed Product conform to the Specifications, then (i) the applicable Licensed Product shall be deemed to have been improperly rejected by Kyowa Kirin, and (ii) Kyowa Kirin shall bear the cost of the independent laboratory testing and, solely if Kyowa Kirin so requests the return shipment thereof, all out-of-pocket external costs and expenses of returning the improperly rejected Licensed Product to Kyowa Kirin. If such independent testing laboratory determines that Kyowa Kirin’s returned samples of such Licensed Product did not conform to the Specifications and that such returned samples conform to the samples for such batch retained by Reata, then Reata shall bear the cost of the laboratory testing, as well as the costs associated with properly-rejected Licensed Product described in subsection 8.2.7(b) above. If such independent testing laboratory determines that Kyowa Kirin’s returned samples do not meet the Specifications but are different than the Reata retained samples, then additional samples shall be tested, or the Parties will mutually establish alternative tests to determine if the Licensed Product delivered to Kyowa Kirin was conforming or not.

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Execution Version

(d) Sole Remedy . The remedies expressly provided in this Section 8.2.7 shall be Kyowa Kirin’s sole and exclusive remedy for the breach of Section 8.2.6 as a result of the delivery by Reata of non-conforming Licensed Product.

(e) No Liability for Subsequent Events . In no event shall Reata be liable under this Section 8.2.7 for Licensed Product that conformed to the Specifications at the time of Delivery but that ceased to so conform as a result of any event or occurrence, or any action or omission by Kyowa Kirin, its Affiliate or a Third Party, following Delivery of such License Product.

8.2.8 Invoice and Payment . Reata shall invoice Kyowa Kirin for each shipment of Licensed Product upon shipment to Kyowa Kirin at a price equal to the Manufacturing Costs of such Licensed Product. Kyowa Kirin shall pay each invoice within [***] days of the date of the invoice, unless rejected before such due date in accordance with Section 8.2.7 (in which case no payment shall be due therefore unless and until conforming replacement products are delivered).

8.3 Commercial Supply of Licensed Product . Subject to the terms and conditions of this Agreement, Kyowa Kirin and its Affiliates and Permitted Sublicensees shall purchase, and Reata shall supply Kyowa Kirin and its Affiliates and Permitted Sublicensees, with [***] quantities of Licensed Product required for Kyowa Kirin’s and its Affiliates’ and Permitted Sublicensees’ marketing and sale (including post-approval studies) of Licensed Products in the Territory. Kyowa Kirin shall use Licensed Product supplied by Reata under this provision solely to conduct its Commercialization activities, in accordance with the terms and conditions of this Agreement, and shall not use such Licensed Product for any other purpose.

8.3.1 Commercial Supply Agreement. Prior to the Initiation of the final Phase III Clinical Trial for a Licensed Product in the Territory, the Parties shall negotiate and execute a definitive commercial supply agreement ( “Commercial Supply Agreement” ) for the supply of Licensed Products to Kyowa Kirin and its Affiliates for marketing and sale (including post-approval studies) of such Licensed Products in the Territory. Such Commercial Supply Agreement shall contain the terms and conditions set forth in this Section 8.3, terms and conditions consistent with those set forth in the remainder of this ARTICLE VIII (except as provided otherwise in this Section 8.3) and other reasonable and customary terms and conditions. In the event the Parties fail to enter into such a commercial supply Agreement prior to the Initiation of the final Phase III Clinical Trial for a Licensed Product in the Territory, and without diminishing the Parties’ obligation to enter into such agreement, Kyowa Kirin shall be obligated to purchase from Reata, and Reata shall be obligated to sell to Kyowa Kirin, [***] of the requirements of Kyowa Kirin and its Affiliates and Permitted Sublicensees for Licensed Products pursuant to the terms of this ARTICLE VIII, and either Party may refer the matter for resolution as a Dispute under ARTICLE XVI so that any unresolved issues in the negotiation of such a Commercial Supply Agreement can be determined with the end result being a binding Commercial Supply Agreement between the Parties.

8.3.2 Commercial Supply Price . During the Term of this Agreement, Reata shall supply Licensed Product to Kyowa Kirin and its Affiliates for use in marketing and sales (including post-approval studies) in the Territory at [***]. After the Term of this Agreement, the price for the Licensed Products shall be [***].

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Execution Version

8.3.3 Term . The term of Commercial Supply Agreement will be co-terminus with the Term of this Agreement (plus any extensions as described below), unless the Parties mutually agree to extend the term to cover periods after this Agreement is terminated or expires. The Commercial Supply Agreement will provide that the term of that agreement will be automatically extended on an annual basis after the end of the Term of this Agreement, unless either Party elects to terminate such Commercial Supply Agreement with at least [***] years advance notice (e.g., if either Party wants the Commercial Supply Agreement to end at the end of the Term of this Agreement, such Party must notify the other Party at least [***] years prior to the end of such Term); provided that Reata’s obligation to supply Licensed Product thereunder shall expire upon the earlier of the end of such [***]-year notice period or the date on which Kyowa Kirin has transitioned the manufacture of Licensed Products to a new facility or manufacturer. If Kyowa Kirin so requests within [***] days of any such [***]-year notice of termination, Reata shall provide the manufacturing technology transfer and assistance described in Section 8.4.6(b) (except at Kyowa Kirin’s expense) so that Kyowa Kirin can continue to manufacture or have manufactured Licensed Products.

8.3.4 Supply and Sales Forecasts . At least [***] months prior to the anticipated date of the First Commercial Sale of Licensed Products in the Territory, Kyowa Kirin will provide Reata with a sales forecast which sets forth its projected monthly requirements for the supply of Licensed Products and the projected monthly sales (by quantity and estimated Net Sales) of each Licensed Product in the Territory, in each case for the [***] month period commencing upon the anticipated date of the First Commercial Sale (and, with respect to supply requirements, for any portion of the pre-launch period for which Licensed Products will be ordered and delivered to Kyowa Kirin). Thereafter, Kyowa Kirin will update and provide to Reata such supply requirements and sales forecast at least Calendar Quarterly (though Kyowa Kirin may update such forecast as often as monthly) covering a rolling [***] month basis. The first [***] months of such forecast (solely with respect to forecasted amounts to be ordered and purchased from Reata) shall represent binding purchase commitments with the latter months of such forecast being subject to variable degrees of adjustment before becoming binding, all as to be mutually agreed to by the Parties in the Commercial Supply Agreement.

8.3.5 Equal Priority Status . To the extent the available supply of, or capacity to manufacture, Licensed Products is less than the requirements of Kyowa Kirin and its Affiliates hereunder together with the requirements of Reata and its Affiliates and their licensees, Reata shall allocate the available Licensed Product [***].

8.3.6 Second Source Supply . The Commercial Supply Agreement shall contain arrangements for Reata to establish a second source supplier for the Licensed Products as well as certain inventory buffers and other mechanisms to support security of supply. A portion of the costs of such arrangement incurred by Reata that is reasonably allocable to the proportion of Licensed Products made for the Territory as compared to outside the Territory, shall be included in [***].

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Execution Version

8.4 General Manufacturing and Supply Provisions .

8.4.1 Third Party Manufacturer . Kyowa Kirin hereby acknowledges and agrees that Reata shall be entitled, in its sole discretion, to perform any or all of its obligations under this ARTICLE VIII by subcontracting any or all of such obligations to Third Party manufacturers (each, a “ Third Party Manufacturer ”) in any country. Any such subcontracting arrangement shall be subject to the following: (a) such Third Party Manufacturer (excluding any Third Party Manufacturer already used by Reata as of the Effective Date) shall be subject to Kyowa Kirin’s prior approval, not to be unreasonably withheld; (b) any use of a Third Party Manufacturer shall not limit Reata’s obligations hereunder and Reata shall remain fully liable to Kyowa Kirin for its obligations under this ARTICLE VIII and for all actions or omissions of any such Third Party Manufacturer; (c) Reata shall enter into an agreement with such Third Party Manufacturer that is subject to and consistent with the terms and conditions of this Agreement, under which such Third Party Manufacturer agrees to be subject to the applicable terms and conditions of this Agreement and which allows Reata to fully comply with its obligations hereunder, including by providing for any data, information or intellectual property generated by such Third Party Manufacturer with respect to Licensed Products to be included within the rights and licenses granted to Kyowa Kirin hereunder, by requiring the applicable provisions of this ARTICLE VIII to apply to such Third Party Manufacturer (including Kyowa Kirin’s back-up manufacturing rights and other provisions of this Section 8.4), and by imposing confidentiality restrictions at least to the extent provided for in ARTICLE XI.

8.4.2 Inspections and Records . Upon Kyowa Kirin’s prior written notice, Reata shall, and shall cause its Third Party Manufacturer to, during normal business hours, permit Kyowa Kirin or its designee to audit the facilities, systems and personnel involved in manufacturing Licensed Product supplied to Kyowa Kirin hereunder. Such audits shall occur a maximum of once per [***] period; provided, however that Kyowa Kirin (or its designee) shall have the right to conduct additional audits on an ad hoc basis in the event that a significant defect in the Licensed Product arises and/or a Regulatory Authority requires an audit to be conducted by Kyowa Kirin, provided that Kyowa Kirin uses commercially reasonable efforts to co-ordinate and align any such audit with any audit it undertakes pursuant to the preceding sentence. Reata shall consider in good faith any guidance given by Kyowa Kirin based on such audit in respect of manufacture of Licensed Product for Kyowa Kirin hereunder, however Reata is not obligated to follow or adopt such guidance except to correct departures from GMPs or other failures to comply with Applicable Laws. Reata shall (and shall cause its Third Party Manufacturers to) also permit Regulatory Authorities (and the FDA) to audit the facilities, systems and personnel involved in manufacturing Licensed Product supplied to Kyowa Kirin hereunder and make any corrections or improvements, and take any actions, required as a result of such audit. Reata shall maintain (and shall cause its Third Party Manufacturers to maintain), all records and documents necessary to comply with all Applicable Laws (including GMP) relating to the manufacture of Licensed Products (including all manufacturing records, standard operating procedures, equipment log books, batch records, laboratory notebooks and all raw data relating to the manufacture of Licensed Product), which shall be retained for such period as may be required by Applicable Laws.

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Execution Version

8.4.3 Audit of Manufacturing Costs . Reata shall prepare and maintain (for a period of at least [***] years or such longer period as required by Applicable Laws) complete and accurate records in sufficient detail to permit the Kyowa Kirin to confirm the accuracy of the calculation of Manufacturing Cost under this Agreement. Upon reasonable prior notice, such records for prior periods covering no more than the last [***] full calendar years shall be available during regular business hours for examination by Kyowa Kirin at Kyowa Kirin’s expense, and not more often than [***], by an independent certified public accountant selected by Kyowa Kirin and reasonably acceptable to Reata, for the sole purpose of verifying the accuracy of the Manufacturing Cost and associated payments by Kyowa Kirin for any Licensed Product supplied pursuant to this Agreement. Subject to Reata’s right to dispute such findings, any amounts shown to have been overpaid by Kyowa Kirin as a result of such audit shall be refunded by Reata to Kyowa Kirin within [***] days from the accountant’s report, or, at Kyowa Kirin’s sole option in its discretion, shall be credited against future invoices to Kyowa Kirin for Licensed Product. Kyowa Kirin shall bear the full cost of such audit unless such audit discloses an overpayment by Kyowa Kirin for Licensed Product during the applicable Calendar Year of more than [***] percent ([***]%), in which case Reata shall bear (and reimburse Kyowa Kirin for) the reasonable out-of-pocket cost of such independent accountant.

8.4.4 Manufacturing Regulatory Filings . Reata shall assist Kyowa Kirin and its Affiliates in preparing (including by providing required documentation, information and materials), the manufacturing portions of any Regulatory Filings or related documents in Territory as required for obtaining Regulatory Approvals for Licensed Products in the Territory. Kyowa Kirin shall reimburse Reata’s external, out-of-pocket costs and expenses in connection with such preparation and assistance.

8.4.5 Quality Agreement . Within [***] months following the Effective Date but in any event prior to [***], the Parties shall enter into a reasonable and customary GMP quality agreement with respect to Licensed Product to be manufactured by or for Reata and supplied to Kyowa Kirin hereunder for use in development of the Licensed Product in the Territory.

8.4.6 Back-Up Manufacturing Rights .

(a) Notification. Should Reata or any of its Third Party Manufacturers experience manufacturing difficulties that, or have reason to believe that it is likely to experience difficulties that would, result in a significant delay in delivery of Licensed Products to Kyowa Kirin or make Reata otherwise unable to supply [***] Kyowa Kirin’s requirements in a given Calendar Quarter, Reata shall promptly notify Kyowa Kirin of such delay or shortage and work together with Kyowa Kirin in good faith to develop a manufacturing difficulty resolution to minimize such delay or shortage and any impact thereof.

(b) Kyowa Kirin Back-up Manufacturing Rights. In the event that Reata fails to supply [***] of Kyowa Kirin’s requirements of Licensed Products up to the amounts forecast by Kyowa Kirin, and Reata’s failure is not cured within [***] days of its receipt of a Notice from Kyowa Kirin that it wants to exercise its rights under this Section to manufacture Licensed Products, then upon Kyowa Kirin’s written request and direction, Reata shall (and shall

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Execution Version

cause any of its Third Party Manufacturers) to reasonably cooperate with Kyowa Kirin and/or its designated manufacturers to transfer manufacturing of Licensed Products and provide information, know-how, documentation and reasonable assistance as may be required for Kyowa Kirin and/or its designated manufacturer to manufacture Licensed Products for Kyowa Kirin’s requirements of Licensed Product for the Territory. If Kyowa Kirin exercises such back-up manufacturing right (by written notice thereof), then promptly following Kyowa Kirin’s written request, Reata shall, subject to Applicable Laws, transfer to Kyowa Kirin or its designee such manufacturing technology (including protocols, analytical methods, materials, and processes) that is necessary for Kyowa Kirin or its designee to replicate the process(es) employed by or on behalf of Reata (and its Third Party Manufacturers) to manufacture Licensed Product to enable Kyowa Kirin or its designee ability to manufacture Licensed Product, and Reata shall, subject to Applicable Laws, provide reasonable consultation and process transfer and assistance to Kyowa Kirin in respect of such transfer. The costs incurred by Reata in relation to the above activities will be borne by Reata. The foregoing provisions of this Section shall apply regardless of whether Reata itself is manufacturing Licensed Product or whether an Affiliate, licensee or Third Party Manufacturer is manufacturing Licensed Product. Reata shall be responsible for ensuring that any such Affiliates or Third Parties take such actions as are required for Reata to comply with this Section. If circumstances so warrant (e.g., Reata’s failure to supply triggering the foregoing backup manufacturing rights is of a temporary nature and Reata has presented Kyowa Kirin with a reasonable plan to resume supplying Kyowa Kirin in a reasonable time so that Kyowa Kirin can implement an interim, rather than permanent, back-up manufacture and supply arrangement, such as using a Third Party manufacturer who can easily switch back and forth from Kyowa Kirin to Reata as the primary contractor), Kyowa Kirin will not unreasonably withhold its consent to transition manufacture and supply of Kyowa Kirin’s requirements for Licensed Products back to Reata when Reata is able to resume such responsibilities (provided, however, that Kyowa Kirin shall not be required to transition back such manufacture and supply responsibilities if Kyowa Kirin has made a significant investment in manufacturing capacity for the Licensed Products in the absence of a reasonable and credible plan from Reata (at the time of the initial transition of manufacturing to Kyowa Kirin) to resume manufacture and supply in a reasonable period of time).

8.5 Specifications . The JSC will work diligently to, as soon as is practical, finalize Specifications for the Licensed Product for the Territory (subject to the final approval of both Parties, not to be unreasonably withheld), which such Specifications shall in any event shall be based on Reata’s current specifications for the Licensed Product and shall be consistent with Applicable Laws and the Development Plan and requirements for obtaining Commercialization Regulatory Approval. The Specifications shall include methods of analysis required to confirm conformance of the Licensed Product as well as the minimum shelf life of the Licensed Product.

8.5.1 Changes by Reata .

(a) Subject to the conditions herein, Reata shall be entitled, at its sole cost, to change the Specifications and/or the manufacturing processes for Licensed Products if such change is necessary to keep the specifications and/or manufacturing processes of all units of Licensed Product consistent or identical as between the Territory and countries outside of the

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Execution Version

Territory. Before making a decision to proceed with any such change in Specifications or any material change in manufacturing process for the Licensed Product (including the raw materials used to make Licensed Products) and/or the active pharmaceutical ingredient form of the Licensed Compound (“ API ”) therein, regardless of whether before or after the First Commercial Sale, such change must first be discussed at the JSC to enable a thorough assessment of its impact, including potential unexpected or unintended ramifications.

(b) If such change is ultimately deemed necessary or advisable by Reata in its sole but reasonable discretion, Reata shall regardless of whether before or after the First Commercial Sale, give advance written Notice of implementation of such change to Kyowa Kirin with a lead time reasonably sufficient for Kyowa Kirin to apply for, and obtain, required approval of such change from the Regulatory Authority. If after using Commercially Reasonable Efforts Kyowa Kirin is unable to obtain such approval from Regulatory Authorities in any country in the Territory for such change, or if Kyowa Kirin declines to seek such approval in a given country in the Territory because such change would have a substantial adverse impact on the marketability or commercial viability of such Licensed Product in such country in the Territory, Kyowa Kirin will provide written Notice thereof to Reata.

(c) If after [***] days from receipt of such Notice Reata determines conclusively that it cannot continue to supply Licensed Product according to the Specifications and/or manufacturing processes in effect prior to such proposed change, Kyowa Kirin shall have the right to obtain from a Third Party (or manufacture or have manufactured such Licensed Product in accordance with Section 8.4.6) Licensed Product only for the jurisdiction(s) in which Kyowa Kirin is unable to obtain (or so declines to obtain as provided above) approval for modified Specifications and/or manufacturing processes from Regulatory Authorities. In such a case: (i) Reata shall continue to supply Licensed Product to Kyowa Kirin in accordance with the prior Specifications until Kyowa Kirin (using Commercially Reasonable Efforts) is able to secure such supply of Licensed Products from its own, or such Third Party’s, manufacturing efforts; (ii) Reata shall supply Licensed Products to Kyowa Kirin under the new Specifications for those countries in the Territory where Kyowa Kirin did obtain the required approvals (or where Kyowa Kirin did not need to obtain any approvals and did not decline to implement the new Specifications for the reasons described above), and (iii) so that Kyowa Kirin can manufacture or have manufactured Licensed Products under the prior Specifications for the applicable countries in the Territory, Reata shall transfer its manufacturing-related Know-How to Kyowa Kirin or a Third Party designated by Kyowa Kirin, at Kyowa Kirin’s expense and subject to the terms of this Agreement (and Reata shall provide the manufacturing technology transfer and assistance described in Section 8.4.6(b) in connection therewith, except at Kyowa Kirin’s expense), with any such Third Party manufacturer subject to confidentiality restrictions at least as protective as those contained herein. Subject to the foregoing, Reata shall not be required to manufacture or deliver to Kyowa Kirin any units of Licensed Product that do not conform to the Specifications, as modified by Reata and Kyowa Kirin’s rights to make or have made Licensed Products under this Section 8.5.1 shall be limited to Licensed Products which conform (or which were intended to conform) in all material respects to (I) the Specifications as modified by Reata, (II) the Specifications as they existed prior to such modification, and/or (III) the Specifications as subsequently modified by

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Execution Version

Kyowa Kirin upon prior notice to Reata (in which case Kyowa Kirin shall reasonably consider providing Reata an opportunity to resume manufacture and supply of Licensed Products for the applicable countries in the Territory in accordance with such newly modified Specifications if reasonable under the circumstances).

8.5.2 Change Requests by Kyowa Kirin .

(a) At any time and from time to time during the Term, Kyowa Kirin may request changes to the Specifications for one or more countries within the Territory based on the requirements of a Regulatory Authority in such country(ies) in the Territory or based on marketing requirements in such country(ies). Following receipt of such request, Reata shall notify Kyowa Kirin whether such changes are technically feasible, commercially feasible and/or consistent with requirements of Regulatory Approvals in countries outside the Territory. If the changes, in Reata’s sole but reasonable discretion, are technically and commercially feasible, Reata shall notify KHK thereof, provide good faith estimates for the complete implementation of the changed specifications, and change the Specifications accordingly for Licensed Products to be sold in such country(ies) and the Specification Update Costs therefore shall be paid by Kyowa Kirin. In such event, the Specifications as revised may not be consistent with the Specifications of the Licensed Products sold outside the Territory or in other country(ies) within the Territory for which no request for changes to the Specifications was made by Kyowa Kirin.

(b) If the change is not technically and commercially feasible, Reata will provide written Notice thereof to Kyowa Kirin, and Kyowa Kirin shall have the right to obtain from a Third Party (or manufacture or have manufactured such Licensed Product in accordance with Section 8.4.6) Licensed Product only for the jurisdiction(s) in which Kyowa Kirin requests updated Specifications based on the requirements of a Regulatory Authority or marketing requirements in the Territory. In such a case: (i) Reata shall continue to supply Licensed Product to Kyowa Kirin in accordance with the prior Specifications for those countries in the Territory where Kyowa Kirin did not request changes to the Specifications, and (iii) so that Kyowa Kirin can manufacture or have manufactured Licensed Products under the new changed Specifications for the applicable countries in the Territory, Reata shall transfer its manufacturing-related Know-How to Kyowa Kirin or a Third Party designated by Kyowa Kirin, at Kyowa Kirin’s expense and subject to the terms of this Agreement (and Reata shall provide the manufacturing technology transfer and assistance described in Section 8.4.6(b) in connection therewith, except at Kyowa Kirin’s expense), with any such Third Parry manufacturer subject to confidentiality restrictions at least as protective as those contained herein. Subject to the foregoing in Section 8.5.2(a), Reata shall not be required to manufacture or deliver to Kyowa Kirin any units of Licensed Product that reflect the newly changed Specifications requested by Kyowa Kirin under this Section 8.5.2 and Kyowa Kirin’s rights to make or have made Licensed Products under this Section 8.5.2 shall be limited to Licensed Products which conform (or which were intended to conform) in all material respects to (I) the Specifications as changed by Kyowa Kirin, (II) the Specifications as they existed prior to such modification, and/or (III) the Specifications as subsequently modified by Kyowa Kirin upon prior notice to Reata (in which case Kyowa Kirin shall reasonably consider providing Reata an opportunity to resume manufacture and supply of Licensed Products for the applicable countries in the Territory in accordance with such newly modified Specifications if reasonable under the circumstances).

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Execution Version

ARTICLE IX

RECORDS AND REPORTING

9.1 Reports .

9.1.1 In addition to the reports regarding Net Sales and Sale Royalties to be provided in accordance with Section 7.3, Kyowa Kirin will provide reports to Reata within [***] during the Term summarizing Kyowa Kirin’s Commercialization activities under this Agreement [***], including a general description of any Clinical Development Activities, Regulatory Activities, and Sales and Marketing Activities by Kyowa Kirin [***], and the date of the First Commercial Sale in a country (if applicable) , if such occurred [***].

9.1.2 Reata will provide reports to Kyowa Kirin within [***] during the Term summarizing development and commercialization activities with respect to Licensed Products outside the Territory, including a general description of any clinical development activities, regulatory activities, and sales and marketing activities with respect to Licensed Products outside the Territory [***].

9.2 Royalty Records . Kyowa Kirin will keep and maintain, and shall cause its Permitted Sublicensees to maintain, complete and accurate books and records necessary to permit calculation and verification of Sales Royalties due under Section 7.3. Kyowa Kirin will maintain such books and records for [***] years after the applicable book or record was created, or such longer period as may be required by Applicable Law.

9.3 Audits .

9.3.1 Upon not less than [***] days prior written Notice to Kyowa Kirin, Reata may have an independent certified public accountant selected by Reata and reasonably acceptable to Kyowa Kirin, examine during regular business hours the books and records required to be maintained under Section 9.2 of Kyowa Kirin and its Permitted Sublicensees at Reata’s expense, [***], for the sole purpose of verifying the accuracy of the Sales Milestone Events and Sales Royalties payable to Reata hereunder and the associated reports furnished by Kyowa Kirin with respect thereto solely for prior periods covering no more than the last [***] full calendar years. Any amounts shown to be owed but unpaid as a result of such audit shall be paid within [***] days from the accountant’s report (plus interest on such amounts pursuant to Section 7.6), unless challenged as provided below. Any amounts shown to have been overpaid shall be refunded to Kyowa Kirin within [***] days from the accountant’s report. Reata shall bear the full cost of such audit unless such audit discloses an underpayment of the amount of Sales Royalties actually owed during the applicable Calendar Year of more than [***] percent ([***]%) or a Sales Milestone Event for which Kyowa Kirin failed to make the corresponding Sales Milestone Payment, in which case Kyowa Kirin shall bear the full out-of-pocket, external cost of such audit.

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Execution Version

9.3.2 If Kyowa Kirin challenges the results of the audit in good faith, Kyowa Kirin shall be entitled at its own cost and expense to obtain a second independent certified public accountant to confirm the accuracy of the first audit. If the results of the confirmatory audit are substantially similar to the results of the first audit, any amounts owed or overpaid by the Audited Party shall be paid or refunded in accordance with the procedures above. If the results of the confirmatory audit are not substantially similar to the results of the first audit, each Party shall cause its respective auditors to identify the discrepancy and to agree on a final amount owed or overpaid (as the case may be) by Kyowa Kirin that shall be final and binding on the Parties. If the auditors cannot resolve the discrepancy, the Parties shall mutually agree on a third independent certified public accountant (the cost of which shall be shared by the Parties) to audit the discrepancy and provide a final amount owed or overpaid (as the case may be) by Kyowa Kirin, which shall be binding on the Parties. The costs of such third audit shall be shared equally by the Parties. Amounts owed or overpaid as determined by such final audit shall be paid or refunded in accordance with the procedures above.

ARTICLE X

INTELLECTUAL PROPERTY PROVISIONS

10.1 Patent Prosecution and Maintenance . Reata will have the option but not the obligation to prepare, file, prosecute and maintain the Reata Patent Rights at Reata’s sole cost and expense. Reata will consider in good faith the requests and suggestions of Kyowa Kirin with respect to strategies for filing and prosecuting the Reata Patent Rights in the Territory and will keep Kyowa Kirin informed of progress with regard to the preparation, filing, prosecution and maintenance of Reata Patent Rights, including by providing Kyowa Kirin with a copy of material communications to and from any patent authority in the Territory regarding such Reata Patent Rights, and by providing Kyowa Kirin drafts of any material filings or responses to be made to such patent authorities in the Territory sufficiently in advance of submitting such filings or responses so as to allow for a reasonable opportunity for Kyowa Kirin to review and comment thereon. In the event that Reata decides not to prepare, file, prosecute or maintain a Reata Patent Right in the Territory, Reata will provide reasonable prior written Notice to Kyowa Kirin of such intention (which notice will, in any event, be given no later than [***] days prior to the next deadline for any action that may be taken with respect to such Reata Patent Right in the Territory), and subject to the rights of Dartmouth under the Dartmouth License, Kyowa Kirin will thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution and maintenance of such Reata Patent Rights in the Territory on Reata’s behalf, and the costs of such preparation, filing, prosecution and maintenance shall be the sole responsibility of Kyowa Kirin. In such event, Reata shall reasonably cooperate with Kyowa Kirin with respect to the preparation, filing, prosecution and maintenance of such Reata Patent Rights in the Territory, and such Reata Patent Rights and all claims therein shall be excluded from Valid Claims hereunder for purposes of determining the Royalty Term and Sales Royalties hereunder.

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Execution Version

10.2 Ownership of Inventions .

10.2.1 Reata will retain ownership of all Reata Inventions and Kyowa Kirin shall retain ownership of all Kyowa Kirin Inventions, except that both Parties shall retain joint ownership of any Inventions that are conceived, made or generated jointly by both Parties. The Parties shall reasonably cooperate with respect to, and share the out-of-pocket external cost of, the preparation, filing, prosecution and maintenance of any patents or patent applications on any such jointly-owned Inventions based on the Territory involved (i.e., Kyowa Kirin pays such costs for prosecution and maintenance in the Territory and Reata pays such costs for prosecution and maintenance outside the Territory, and the Parties share equally any such costs that are not attributable to any particular territory). In connection with the foregoing, the Parties shall agree upon a lead Party to administer such filing, prosecution and maintenance of any such patent applications or patents on jointly-owned Inventions and the Parties shall provide the non-lead Party a reasonably opportunity to review, comment on and approve (not to be unreasonably withheld) in advance any material filings and correspondence with applicable patent offices with respect thereto. Subject to the licenses granted to each Party hereunder in their respective territories, each Party shall have full rights to exploit and license such jointly-owned Inventions (and any patent rights therein), without any obligation or requirement of an accounting to the other Party and each Party hereby consents to such exploitation and licensing of the other Party for jointly-owned Inventions. For the avoidance of doubt, all Reata Inventions (including Reata’s rights to any jointly-owned Inventions) shall be included within the Licensed Technology hereunder and licensed to Kyowa Kirin under Section 2.1.

10.2.2 Subject to the terms and conditions of this Agreement, Kyowa Kirin hereby grants to Reata and its Affiliates a non-exclusive, royalty-free, sublicenseable (except as provided below) license under the Kyowa Kirin Inventions (including Kyowa Kirin’s rights to any jointly-owned Inventions) to develop, use, sell, offer for sale, make, import, and export (and to have such actions taken on its behalf by agents, contractors and other Third Party service providers) Licensed Compounds and Licensed Products for all indications and all fields solely outside the Territory. The foregoing license shall not be sublicenseable by Reata (directly or indirectly) to any Third Party licensee or collaboration partner of Reata that does not grant to Reata a reciprocal license to such licensee’s and partner’s inventions and discoveries with respect to Licensed Products which license is sublicenseable to Kyowa Kirin hereunder.

10.2.3 Each Party will cause all Persons who perform clinical development activities or regulatory activities for such Party under this Agreement (or outside of this Agreement with respect to Reata’s development and regulatory activities for Licensed Products outside the Territory) to be under an obligation to assign their rights in any inventions resulting therefrom to such Party, except where Applicable Law requires otherwise and except in the case of governmental, not-for-profit and public institutions which have standard policies against such an assignment (in which case a suitable license, or right to obtain such a license, shall be obtained).

10.3 Disclosure . Each Party will promptly disclose to the other Party, in writing, and will cause its Affiliates, agents, and independent contractors to so disclose to the other Party, any Inventions conceived, made or generated by such Party which are, in such Party’s reasonable judgment, potentially patentable.

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Execution Version

10.4 Cooperation . Each Party agrees to cooperate fully in the preparation, filing, prosecution and maintenance of the Reata Patent Rights in the Territory under this Agreement and in the obtaining and maintenance of any patent extensions, supplementary protection certificates and the like with respect to the Reata Patent Rights in the Territory. Such cooperation includes, but is not limited to: (i) executing all papers and instruments, or requiring its employees or contractors, to execute such papers and instruments, so as to effectuate the ownership of Inventions set forth in Section 10.2, and Patents claiming or disclosing such Inventions, and to enable the other Party to apply for and to prosecute patent applications in any country, to the extent provided for in this Agreement; (ii) consistent with this Agreement, assisting in any license registration processes with applicable governmental authorities that may be available in the Territory for the protection of a Party’s interests in this Agreement; and (iii) promptly informing the other Party of any matters coming to such Party’s attention that may materially affect the preparation, filing, prosecution or maintenance of any such Reata Patent Rights in the Territory. Kyowa Kirin agrees to provide support services, including technical translation and administrative support, for the preparation, filing, prosecution, and maintenance of the Reata Patent Rights in the Territory, with the out-of-pocket costs and expenses thereof to be shared equally between the Parties. Kyowa Kirin also agrees to use reasonable efforts to promptly provide to Reata Notice and copies of (or citations to) any publications that Kyowa Kirin’s intellectual property personnel (and Kyowa Kirin’s scientific and technical personnel working with such intellectual property personnel) involved in either the intellectual property diligence review conducted by Kyowa Kirin in anticipation of executing this Agreement, or involved in the patent prosecution or enforcement related activities provided for in this Agreement, reasonably believe would constitute prior art required to be disclosed in any patent applications within the Reata Patent Rights (to the extent not already disclosed therein) to the extent such personnel become reasonably aware of such publications and their relationship to the Reata Patent Rights.

10.5 Enforcement of Reata Patent Rights against Infringement in the Territory .

10.5.1 Initiation . Kyowa Kirin and Reata will each promptly notify the other in writing of any alleged or threatened infringement of the Reata Patent Rights by a Third Party, or any alleged or threatened assertion of invalidity of any of the Reata Patent Rights by a Third Party, in all such cases in the Territory and of which such Party becomes aware (including infringement based on the development, commercialization or an application to market a product containing a Licensed Compound in the Territory). Reata will have the first right, but not the obligation, to prosecute any such infringement at its own expense. Kyowa Kirin shall have the right to join as a party to such suit to recover its damages and participate with its own counsel; provided that Reata shall retain control of the prosecution of such suit. If Reata does not commence an infringement action against the alleged or threatened infringement (i) within ninety (90) days following the first notice provided above with respect to such alleged infringement, or (ii) provided such date occurs after the first such notice of infringement is provided, ten (10) Business Days before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, whichever comes first, then, subject to Dartmouth’s rights under the Dartmouth Agreement, Kyowa Kirin may commence litigation with respect to the alleged or threatened infringement at its own expense. Notwithstanding any of the foregoing to the contrary, to the extent the Dartmouth License or other Third Party license agreement entered into after the Effective Date restricts or does not allow Kyowa Kirin to initiate an enforcement action in the Territory with respect to any patent within the

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Execution Version

Reata Patent Rights licensed thereunder (whether by itself, on Reata’s behalf or otherwise), Reata agrees to take such reasonable actions (such as initiating or conducting such enforcement action on Kyowa Kirin’s behalf and at Kyowa Kirin’s expense or obtaining consents or clarifications from the applicable licensor to effectuate such enforcement rights of Kyowa Kirin) as are required to afford Kyowa Kirin the benefits of the foregoing enforcement rights to the maximum extent allowed for under such Dartmouth License and/or Third Party license agreement, in the event Kyowa Kirin elects to exercise such enforcement rights. Unless Kyowa Kirin declines to exercise its enforcement rights above (and without limiting the foregoing sentence), Reata shall not waive or decline to exercise its enforcement rights under the Dartmouth License so as to allow the licensors under the Dartmouth License to settle and/or grant licenses under the infringed Reata Patent Rights with and/or to an infringing Third Party in the Territory (in accordance with the provisions of the Dartmouth License).

10.5.2 Cooperation . In the event a Party brings an infringement action pursuant to this Section 10.5, the other Party will cooperate fully, including, if required to bring such action, the furnishing of a power of attorney solely for such purpose or to join or be named as a party such action as a necessary party. Neither Party will have the right to settle any patent infringement litigation under this Section 10.5 in a manner that diminishes the rights or interest of the other Party , or in a manner that imposes any costs or liability on, or involves any admission by, the other Party without the express written consent of such other Party, not to be unreasonably withheld. The Party commencing the litigation will provide the other Party with copies of all pleadings and other documents filed with the court (with Kyowa Kirin also providing, at no cost to Reata, upon Reata’s request, English translations of all such material documents (or reasonable summaries thereof) if Kyowa Kirin is the Party commencing the litigation) and will consider reasonable input from the other Party during the course of the proceedings.

10.5.3 Recovery . Subject to the relevant provisions of the Dartmouth License and except as otherwise agreed by the Parties in connection with a cost sharing arrangement, any recovery realized as a result of such litigation described in Section 10.5.1 (whether by way of settlement or otherwise) will be (a) first, allocated to reimbursement of unreimbursed legal fees and expenses incurred by the Party initiating the proceeding, then toward reimbursement of any of unreimbursed legal fees and expenses of the other Party reasonably incurred in connection with such proceeding, (b) second, allocated to reimbursement of any monies due to Dartmouth College, if any, according to the relevant provisions of the Dartmouth License, and (c) third, the remainder will be divided between the Parties as follows: (i) settlements, damages or other monetary awards recovered pursuant to a suit, action or proceeding brought by Reata will be [***], except that any quantities awarded to Reata on the basis of [***], will be [***] and will be allocated and paid [***], less the [***] due thereon to Reata in accordance with [***]; and (ii) settlements, damages or other monetary awards recovered pursuant to a suit, action or proceeding brought by Kyowa Kirin, or awarded to Kyowa Kirin in connection with its participation in any suit brought by Reata pursuant to this Agreement, will be [***] except that any quantities awarded to Kyowa Kirin on the basis of [***], or will be [***] and subject to the [***] obligations set forth in [***].

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10.6 Defense of Infringement Claims .

10.6.1 If the manufacture, sale or use of a Licensed Product pursuant to this Agreement results in, or may result in, any claim, suit, or proceeding by a Third Party alleging patent infringement by Kyowa Kirin (or its Affiliates), Kyowa Kirin will promptly notify Reata thereof in writing. Subject to the provisions of Section 10.6.2, Kyowa Kirin will have the first right, but not the obligation to defend and control the defense of any such claim, suit or proceeding at its own expense, using counsel of its own choice. Reata may participate in any such claim, suit or proceeding with counsel of its choice at its own expense. If Kyowa Kirin elects (in a written communication submitted to Reata within a reasonable amount of time after notice of the alleged patent infringement) not to defend or control the defense of, or otherwise fails to initiate and maintain the defense of, any such claim, suit or proceeding, within such time periods so that Reata is not prejudiced by any delays, Reata may conduct and control the defense of any such claim, suit or proceeding at its own expense. Each Party will keep the other Party reasonably informed of all material developments in connection with any such claim, suit, or proceeding. Each Party agrees to provide the other Party with copies of all pleadings filed in such action and to allow the other Party reasonable opportunity to participate in the defense of the claims. If Kyowa Kirin is controlling the defense of any such claim, suit or proceeding, it agrees to provide English translations, or summaries thereof, of all pleadings, discovery-requests, and key documents filed with the court reasonably promptly. Kyowa Kirin shall be entitled to deduct [***] percent ([***]%) of the out-of-pocket costs of defending such claim, suit or proceeding from the Sales Royalties due to Reata pursuant to Section 7.3 of this Agreement; provided that such deductions (together with the reductions under Section 7.4.2 if applicable) shall in no event exceed either [***]% cap set forth in Section 7.4.2, and if any such costs cannot be applied (due to such cap or the absence of Sales Royalties in the applicable period) such unapplied amounts shall accrue and be used to reduce Sales Royalties in future periods subject to the same overall cap until all such costs are applied against the Sales Royalties. Any recoveries by Kyowa Kirin of attorneys fees or cost in defense of a claim under this Section 10.6, and any sanctions awarded to Kyowa Kirin and against a party asserting a claim being defended under this Section 10.6, shall be divided evenly between the parties.

10.6.2 In addition to the Kyowa Kirin obligations set out in the preceding paragraph, and regardless of whether Reata elects to participate as a Party in the claim, suit or proceeding, Kyowa Kirin further agrees that, in the event the claim, suit or preceding under 10.6.1 is brought by a Third Party that is pursuing or has threatened in writing to the knowledge of Kyowa Kirin to pursue similar claims outside the Territory against Reata, its Affiliates, agents or marketing or development partners and such claim is related to any Licensed Compound or member of the RTA 402 Class, including any form or formulation thereof, Kyowa Kirin shall: (i) provide to Reata English translation drafts of all official papers or other statements (whether written or oral) prior to their submission to the court in the lawsuit, in sufficient time to allow Reata to review, consider and substantively comment thereon; (ii) reasonably consider taking action to incorporate Reata comments on all such official papers and statements, (iii) not take positions in its defense that are inconsistent or at odds with positions that Reata is taking in defense, or anticipated defense, of related claims outside the Territory, to the extent such positions

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Execution Version

have been communicated to Kyowa Kirin; (iv) allow Reata the opportunity to participate in preparation of witnesses or other participants in the claim, suit or proceeding; (v) not settle any such claim, suit or proceeding without Reata’s prior consent, which consent shall not be unreasonably withheld or delayed, and (vi) enter into a reasonable and customary joint defense agreement with Reata, upon request to do so by Reata.

ARTICLE XI

CONFIDENTIALITY, PUBLICATION AND PUBLICITY

11.1 Confidentiality . All Confidential Information disclosed by or on behalf of one Party to the other Party hereunder will be maintained in confidence by the receiving Party and will not be disclosed to a Third Party or used for any purpose other than for purposes of exercising a Party’s rights or performing a Party’s obligations hereunder pursuant to the terms of this Agreement, except as follows:

11.1.1 If a Party reasonably believes that the Confidential Information is required to be disclosed to governmental or other regulatory agencies in order to obtain patents, to obtain approval to conduct clinical trials or to market Licensed Product (or to otherwise perform a Party’s obligations hereunder), or to comply with applicable NASDAQ, Securities Exchange or Securities and Exchange Commission regulations (or the regulations of counterpart agencies within the Territory), then such disclosure may be made only to the extent reasonably necessary to obtain patents or approval, to perform such Party’s obligations or to comply with regulations as appropriate, and such receiving Party seeks confidential treatment to the extent reasonably practicable;

11.1.2 If a Party reasonably believes it is necessary or useful to be disclosed to employees, agents, consultants, Affiliates and/or other Third Parties for the purpose of conducting activities permitted or required under this Agreement in accordance with this Agreement, Confidential Information may be disclosed to such employees, agents, consultants, Affiliates and/or other Third Parties only to the extent necessary, and only if such Persons agree to be bound by confidentiality obligations at least as protective of such Confidential Information as the terms herein;

11.1.3 If a Party reasonably believes Confidential Information is necessary to be disclosed to actual or prospective investors, lenders, real estate or equipment lessors or acquirers or other potential or current financing sources of a Party (collectively “ Financing Sources ”), such Confidential Information may be disclosed to such Financing Sources provided that the Financing Sources agree to be bound by confidentiality obligations at least as protective of such Confidential Information as the terms herein; or

11.1.4 If a Party reasonably believes that Confidential Information is required to be disclosed by law or court order, then provided that, to the extent reasonably practicable, Notice of such disclosure is promptly delivered to the disclosing Party in order to provide an opportunity to challenge or limit the disclosure obligations, and provided further that the receiving Party works in good faith with the disclosing Party to seek confidential treatment of such disclosure and to disclose only to the extent reasonably necessary to comply with the applicable law or court order, such Confidential Information may be disclosed to the extent legally required.

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11.2 Disclosure of this Agreement . Neither Party will release to any Third Party or publish in any way any non-public information regarding the terms and conditions of this Agreement without the prior written consent of the other Party, which consent will not be unreasonably withheld, conditioned or delayed, except for the disclosure to Financing Sources who are subject to a signed confidentiality agreement, and except pursuant to Section 11.4 and except to the extent required to comply with Applicable Laws.

11.3 Disclosure of RTA 402 Class License . Notwithstanding anything in this Agreement to the contrary, Reata shall have the right to fully disclose to any third party the terms of the rights granted herein as to the RTA 402 Class, including Sections 2.2, 4.6, 13.9, and definitions related to those sections.

11.4 Publications .

11.4.1 Peer Reviewed Journal Submissions . Both Parties will submit any proposed publication or presentation containing material information regarding clinical or non-clinical trial results for, or similar information regarding, the safety or efficacy of, the Licensed Products (a “ Publication ”) to the other Party at least thirty (30) days prior to submitting it to any Third Party (including any editing Person) for publication in a peer reviewed journal. For the avoidance of doubt, Publications exclude marketing materials.

11.4.1.1 The other Party will have twenty (20) days after receipt of the draft Publication to review and comment on such draft.

11.4.1.2 Upon Notice within such twenty (20) day period by the other Party that it reasonably believes the Publication would amount to the public disclosure of such other Party’s Confidential Information and/or negatively impact such other Party’s intellectual property position, submission of the concerned Publication to Third Parties will be delayed for a sixty (60) day period from the date of said Notice for appropriately deleting Confidential Information from the proposed Publication or drafting and filing a patent application with respect to any subject matter to be made public in such Publication. Notwithstanding the foregoing, neither Party shall be restricted hereunder from making any publication or disclosure to extent required to comply with Applicable Law.

11.4.2 Other Publications . For all other Publications, including but not limited to poster presentations, abstract submissions, investor presentations and the like, both Parties will submit such proposed Publications at least ten (10) Business Days prior to submitting it to any Third Party (including any editing Person) for publication or disclosure. For the avoidance of doubt, Publications exclude marketing materials.

11.4.2.1 The other Party will have five (5) Business Days after receipt of the draft Publication to review and comment on such draft.

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11.4.2.2 Upon Notice within such five (5) Business Day period by the other Party that it reasonably believes the Publication would amount to the public disclosure of such other Party’s Confidential Information and/or negatively impact such other Party’s intellectual property position, submission of the concerned Publication to Third Parties will be delayed for a sixty (60) day period from the date of said Notice for appropriately deleting Confidential Information from the proposed Publication or drafting and filing a patent application with respect to any subject matter to be made public in such Publication. Notwithstanding the foregoing, neither Party shall be restricted hereunder from making any publication or disclosure to extent required to comply with Applicable Law.

11.4.3 For all proposed Publications, each Party will cooperate in good faith with the other Party to achieve the business objectives of the proposed Publication and the publishing Party will in good faith take into account reasonable comments from the other Party.

11.5 Publicity . Reata and Kyowa Kirin will issue a press release in a form mutually agreed to by the Parties within thirty (30) days of the execution of this Agreement. Any other publication, news release or other public announcement regarding this Agreement or the terms hereof that either Party wishes to release will first be provided to the other Party for review at least seven (7) days in advance, and the submitting Party will in good faith take into account reasonable comments from the other Party. Notwithstanding any other provision of this Agreement, (a) each Party will have the right, without consent of the other Party, to make disclosures regarding any matter related to this Agreement that such Party reasonably believes is required to comply with Applicable Law, and (b) the requirement that a publication, news release or other public announcement be provided to the other Party for review seven (7) days in advance will not apply if such Party reasonably believes that regulatory requirements require the issuance thereof sooner than seven (7) days and such Party is unable to contact the other Party in the required time, provided that such disclosure may only be made to the extent reasonably necessary to comply with Applicable Law as appropriate.

11.6 Employees and Consultants . Each Party hereby agrees and covenants that all of its employees and consultants and all of the employees and consultants of its Affiliates who participate in any activities under the this Agreement or have access to any Confidential Information are or will, prior to their participation or access, be bound by written obligations to maintain such Confidential Information in confidence and not to use or transfer such information or materials except as expressly permitted hereunder. Each Party agrees to use, and to cause its Affiliates to use, reasonable commercial efforts to enforce such obligations.

ARTICLE XII

REPRESENTATIONS AND WARRANTIES

12.1 Mutual Representations and Warranties . Each Party hereby represents and warrants to the other Party that as of the Effective Date:

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Execution Version

12.1.1 Corporate Existence and Power . It is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as contemplated in this Agreement, including the right to grant the licenses granted hereunder.

12.1.2 Authority and Binding Agreement . (a)It has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder; (b) it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder; and (c) this Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid and binding obligation of such Party that is enforceable against it in accordance with its terms.

12.1.3 No Conflict . It has not entered into any agreement with any Third Party that is in conflict with the rights granted to the other Party under this Agreement, and has not taken any action that would in any way prevent it from granting the rights granted to the other Party under this Agreement, or that would otherwise materially conflict with or adversely affect the rights granted to the other Party under this Agreement. Its performance and execution of this Agreement will not result in a breach of any other contract to which it is a Party.

12.1.4 No Litigation . It is aware of no action, suit, inquiry or investigation instituted by any Third Party which questions or threatens the validity or enforceability of this Agreement.

12.1.5 Consents . All necessary consents, approvals and authorizations of all governmental authorities and other persons or entities required to be obtained by such Party in connection with the execution and delivery of this Agreement have been obtained.

12.2 Kyowa Kirin’s Representations and Warranties . Kyowa Kirin hereby represents and warrants to Reata that as of the Effective Date Kyowa Kirin has no Knowledge of any pending filing, complaint, matter or action against or involving either Kyowa Kirin or its Affiliates with any Regulatory Authority that could be reasonably anticipated to have a material adverse effect on its ability to obtain Regulatory Approvals for the Licensed Products in any country or region of the Territory.

12.3 Reata’s Representations and Warranties . Reata hereby represents and warrants to Kyowa Kirin as of the Effective Date:

12.3.1 Reata Patent Rights; Licensed Technology . Reata owns, or has an exclusive license to, the Reata Patent Rights listed on Exhibit A , and Exhibit A is a complete list of all patents and patent applications owned or Controlled by Reata as of the Effective Date which claim or cover Licensed Compounds, or the manufacture or use thereof in the Territory. Reata does not own and has not licensed any intellectual property that in each case would otherwise qualify as Licensed Technology hereunder but for the fact that such intellectual property is not licensable to Kyowa Kirin hereunder and therefore not Controlled by Reata (i.e., due solely to such lack of Control despite owning or holding a license thereto, does not meet the definition of Licensed Technology).

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12.3.2 Title; Encumbrances. Reata has sufficient legal and/or beneficial title, ownership or license, free and clear from any mortgages, pledges, liens, security interests, conditional and installment sale agreements, encumbrances, charges or claims of any kind, of the Licensed Technology to grant the licenses to Kyowa Kirin as purported to be granted pursuant to this Agreement.

12.3.3 No Conflict. Reata has not granted any assignment, license, covenant not to sue, or other similar interest or benefit, exclusive or otherwise, to any Third Party relating to any patent, know-how or other proprietary right that conflicts with or limits the rights granted to Kyowa Kirin hereunder or which falls within the scope of the licenses granted in ARTICLE II.

12.3.4 Non-Infringement of Reata Technology by Third Parties. To its Knowledge, Reata is not aware of any activities by Third Parties that would constitute infringement or misappropriation of the Licensed Technology within the Territory.

12.3.5 Non-Infringement of Third Party Rights . To Reata’s actual knowledge, the development, manufacture, use and sale of RTA402 in the Field in the Territory does not actually infringe any existing patent of a Third Party, or misappropriate any trade secrets of a Third Party, however, Reata makes no representations or warranties with respect to patents or other information that was disclosed to Kyowa Kirin by Reata in connection with Kyowa Kirin’s due diligence review of RTA 402.

12.3.6 No Claims of Third Party Rights. Reata has not received any written notice, claim or demand from any person or entity (a) asserting that the research, development, manufacture, use and sale of any Licensed Product infringes a Third Party patent or misappropriates any trade secrets of a Third Party, or (b) challenging the validity, enforceability or ownership of any patents issued from the Reata Patent Rights

12.3.7 No Action or Claim. To Reata’s Knowledge, there are no actual, pending, alleged or threatened adverse actions, suits, claims, interferences or formal governmental investigations involving the Licensed Product, Licensed Compounds and/or the Licensed Technology by or against Reata, any of its Affiliates, distributors, licensees or contractors in or before any court, governmental entity or Regulatory Authority. In particular, to Reata’s Knowledge, there is no pending or threatened product liability action involving the Licensed Product.

12.3.8 Compliance . To Reata’s Knowledge, Reata, its Affiliates, distributors, licensees and contractors have performed in all material respects development work, including manufacturing, supply, packaging, and distribution of clinical supplies, in compliance with all Applicable Laws (including GMP); and there is no actual, pending, alleged or threatened adverse action of any Regulatory Authority or IRB, with respect to the Licensed Products, the Licensed Compounds, the Licensed Technology and/or any development work.

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Execution Version

12.3.9 Regulatory Materials. To Reata’s Knowledge, no Regulatory Authority has commenced or threatened to initiate any action or proceeding to refuse to file, reject, not approve, or withdraw any regulatory filings related to Licensed Compounds and/or Licensed Products, nor has Reata received any notice to such effect; and to Reata’s Knowledge, Reata is not in violation of any Applicable Laws that could reasonably be expected to form the basis for such an action.

12.3.10 Third Party Agreements. Exhibit B contains a complete list of all agreements under which rights to a Licensed Technology are granted, licensed or otherwise provided to Reata or its Affiliates as of the Effective Date (the “In-License Agreements” ). All In-License Agreements and all other manufacturing, clinical trial and service agreements of Reata and its Affiliates relating to the Licensed Technology or Licensed Products are in full force and effect and no material breach has occurred thereunder (and Reata and its Affiliates, licensees and contractors have not received any notice of any such breach thereunder).

12.3.11 Licenses to Additional Dartmouth Patents . All patents and patent applications which (a) claim or, but for the licenses granted in this Agreement would be infringed by, Licensed Products or RTA 402, (b) are owned by Dartmouth College and/or University of Texas M.D. Anderson Cancer Center as of the Effective Date, and (c) were invented, generated or created under any agreements with Reata or otherwise subject to options or rights to license under such agreements (including [***] and corresponding PCT), have been exclusively licensed to Reata as of the Effective Date and are subject to the licenses granted to Kyowa Kirin hereunder.

12.3.12 License Compound Data . Reata has made available to Kyowa Kirin all material clinical and pre-clinical data and regulatory filings with respect to RTA 402 in Reata’s possession which data and filings Reata has provided, or is obligated to provide, to the FDA.

12.4 Limitation on Warranties; No Implied Warranties . EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH PARTY MAKES NO AND EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES WITH RESPECT TO LICENSED PRODUCT, THE LICENSED TECHNOLOGY, THE REATA PATENT RIGHTS OR ANY OTHER SUBJECT MATTER OF THIS AGREEMENT, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. EXCEPT TO THE EXTENT EXPRESSLY PROVIDED FOR HEREIN, NOTHING IN THIS AGREEMENT WILL BE CONSTRUED AS A REPRESENTATION OR WARRANTY BY REATA THAT THE REATA PATENT RIGHTS OR THE LICENSED TECHNOLOGY IS NOT INFRINGED BY ANY THIRD PARTY OR THAT THE PRACTICE OF SUCH RIGHTS DOES NOT INFRINGE ANY PUBLISHED INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY.

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Execution Version

ARTICLE XIII

OTHER COVENANTS AND AGREEMENTS

13.1 Compliance with Law .

13.1.1 Kyowa Kirin will comply with all Applicable Laws related to its Commercialization of the Licensed Products. Without limiting the generality of the foregoing, Kyowa Kirin will not promote any of the Licensed Products in a manner that would conflict with Applicable Law.

13.1.2 Kyowa Kirin will conduct all Medical Affairs Activities in a manner consistent with Licensed Product labeling, including all package inserts for Licensed Product, except to the extent otherwise required by Applicable Law, and will conduct all Medical Affairs Activities in accordance with Applicable Law.

13.1.3 Reata will comply with all Applicable Laws related to its development (including clinical and non-clinical studies), regulatory activities, marketing and sale of the Licensed Products. Without limiting the generality of the foregoing, Reata will not promote any of the Licensed Products outside the Territory in a manner that would conflict with Applicable Law.

13.2 Maintenance of Current License Agreements; No Inconsistent Rights . For the Term of this Agreement, Reata shall maintain its rights, and comply with its obligations, under any license agreements under which it receives rights or licenses to any of the Reata Patent Rights or other Licensed Technology that exist as of the Effective Date (including the Dartmouth License), including the payment of any fees or royalties due thereunder. Reata shall not terminate, modify or amend any such agreements, or any In-License Agreement, in a manner that would reduce, limit or restrict the rights and licenses granted to Kyowa Kirin hereunder (or in a manner that would increase any obligations of Kyowa Kirin hereunder). Reata shall promptly notify Kyowa Kirin regarding any notices of breach or termination received by Reata with respect to any license agreements under which Reata receives rights or licenses to any of the Reata Patent Rights or other Licensed Technology and shall reasonably consult with Kyowa Kirin with respect thereto. Without limiting the foregoing, if the Dartmouth License is terminated for any reason, Reata shall promptly notify Kyowa Kirin thereof and shall facilitate Kyowa Kirin becoming a successor to Reata under such Dartmouth License (in accordance with the terms and conditions thereof) if Kyowa Kirin so requests, provided that Kyowa Kirin, in its sole discretion consents in writing to be bound by all the terms and conditions of the Dartmouth License in the event of such termination. Reata covenants to Kyowa Kirin that, during the Term, it shall not grant a lien or other encumbrances on any of the subject matter of this Agreement or on any of Reata’s rights, benefits, or obligations hereunder or on any of the Licensed Technology, which would conflict with the rights or licenses granted to Kyowa Kirin under this Agreement.

13.3 Reata Restrictive Covenants . During the Term, Reata agrees that (a) it will not knowingly sell, market, develop or distribute any Licensed Product in the Territory for use in the Field (or, except as otherwise provided in Section 13.5, for use outside the Field) nor license or authorize any Affiliates or Third Parties to do so; (b) it will not appoint any Person, other than

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Kyowa Kirin, as a licensee of Licensed Product in the Territory for use in the Field (or, except as otherwise provided in Section 13.5, for use outside the Field) during the Term; (c) it will not provide any Licensed Product to any Third Party or Affiliate if Reata has actual Knowledge or reasonably believes that such Third Party or Affiliate, either directly or indirectly, is selling, or intends to sell such Licensed Product inside the Territory; and (d) except as otherwise provided in Section 13.5, it will not develop any Licensed Product for indications outside the Field for sale in the Territory.

13.4 Kyowa Kirin Covenants . Kyowa Kirin agrees it will Commercialize the Licensed Products solely within the Territory for use in the Field pursuant to the authority, rights and licenses granted to Kyowa Kirin under this Agreement. Kyowa Kirin agrees and acknowledges that it has not been granted any rights to any Licensed Technology or Licensed Products under this Agreement outside of the Territory (except for limited right to manufacture or have manufactured Licensed Products outside the Territory in certain circumstances solely for use or sale of such Licensed Products within the Territory as provided for herein), and consequently Kyowa Kirin agrees that (except for such aforementioned limited manufacturing rights) during the Term it will not (a) Commercialize any Licensed Product outside of the Territory or within the Territory for sale by or for Kyowa Kirin outside of the Territory, (b) provide any Licensed Product to any Third Party or Affiliate if Kyowa Kirin has actual Knowledge or reasonably believes that such Third Party or Affiliate, either directly or indirectly, is selling, or intends to sell such Licensed Product outside the Territory; and (c) it will not Commercialize any Licensed Product in a manner intentionally directed for use of such Licensed Product outside the Field for sale anywhere in the world.

13.5 Coordination of Uses Outside the Field .

13.5.1 If either Party has an interest in developing any Licensed Product within the Territory for any indications outside the Field, then it will promptly provide written Notice to the other Party describing in reasonable detail the indication(s) outside the Field for which it is interested and other relevant information that is available. If the other Party is interested in pursuing the mutual development of Licensed Products for such additional indication(s), then the Parties will engage in good faith, exclusive negotiations related to such mutual development for such indication(s) within the Territory. Neither Party will be under any obligation to reach an agreement on such mutual development. If the Parties fail to reach a mutual agreement for such development of Licensed Product for such additional indication(s) for sale within the Territory, then neither Party will have the right to (and both Parties shall not) pursue the use, development or sale of the Licensed Products for such other indication(s) (or any other indication(s) outside the Field) in the Territory (whether by themselves or through Affiliates or Third Parties) or license or authorize Third Parties to do so, except as provided in Section 13.5.2.

13.5.2 If Reata or its Affiliates or licensees elects to initiate human clinical trials for Licensed Products for any indication(s) outside the Field outside the Territory, Reata shall notify Kyowa Kirin thereof and, at Kyowa Kirin’s option in its sole discretion, Kyowa Kirin may elect enter into good faith negotiations with Reata to add such indication(s) to the Indications hereunder. If Kyowa Kirin so elects, each Party will negotiate in good faith regarding such

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additional consideration for such new indications (including new regulatory and sales milestone payments and royalties applicable to the new indications), but otherwise the terms and conditions of this Agreement will govern such new indications if added hereto through a mutually agreeable amendment.

13.5.3 Reata shall keep Kyowa Kirin reasonably informed through the JSC of material developments with respect to any pre-clinical development or plans for clinical development of Licensed Products for indications outside the Field outside the Territory.

13.6 Marketing Rights Outside of the Territory .

13.6.1 Rights of Notice and Negotiation . If Reata has an interest in licensing to any Third Party any rights to sell, market or distribute any Licensed Product outside of the Territory for use in the Field, then it will promptly provide written Notice to Kyowa Kirin describing the countries for which it is interested for such sales and marketing activities. [***]. If Reata receives an offer (which would include sending or responding to a term sheet or draft agreement) from a Third Party regarding any sales or marketing rights for Licensed Products outside the Territory, whether solicited or unsolicited, then Reata will inform Kyowa Kirin of its receipt of such offer (but will not be obligated to advise Kyowa Kirin of any of the terms or conditions of such offer), and will advise Kyowa Kirin of Reata’s anticipated timing of its consideration of such offer. Prior to entering into any license or similar agreement granting a Third Party rights (including an option, right of first refusal or similar right) to sell, market or distribute Licensed Products outside of the Territory for use in the Field, [***].

13.6.2 Consistency with this Agreement . In any event, if development and/or marketing, sales or other commercialization of Licensed Products in the Field outside the Territory is conducted by an Affiliate or licensee (or other collaboration partner) of Reata rather than Reata itself, Reata shall ensure that such arrangement is done in a manner that is consistent with this Agreement and in a manner that allows Reata to fully comply with its obligations hereunder. Reata will not be obligated to provide such licensee’s marketing or commercialization plan or other confidential information (except for any information expressly required to be shared under this Agreement) to Kyowa Kirin, and similarly, Reata will not provide Kyowa Kirin’s marketing or commercialization plan or other confidential information (except for any information expressly required to be shared under this Agreement) to such licensee. Further, in accordance with Section 10.2.2 herein, Reata shall not provide (directly or indirectly) to any Third Party licensee or collaboration partner outside of the Territory, a sublicense to any Kyowa Kirin Invention, unless that Third Party licensee or collaboration partner grants to Reata a reciprocal license to such licensee’s and partner’s inventions and discoveries with respect to Licensed Products which license is sublicenseable to Kyowa Kirin hereunder. For the avoidance of doubt, any non-clinical and clinical data and regulatory filings with respect to Licensed Products shall be made available (and as applicable, licensed) to Kyowa Kirin hereunder (under the terms and conditions of this Agreement) to the same extent as if directly made or generated by Reata.

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13.7 Third Party Licenses . In the event that either Party believes, in its reasonable discretion, that it is required to obtain a license from a Third Party under such Third Party’s patent(s) in order to manufacture, use, or sell Licensed Products for the Territory during the Term without infringing such patent(s), such Party shall notify the other Party and the Parties shall discuss the same in good faith. If Reata decides to obtain such license, Kyowa Kirin may elect (in its sole discretion) to take a sublicense thereto (if available to be negotiated) or to exclude such sublicense from the license granted hereunder (at any time). If Kyowa Kirin elects to take such a sublicense, unless and until subsequently disclaiming such sublicense hereunder by written notice to Reata, Kyowa Kirin will reimburse Reata [***]% of all payments made by Reata under such license to the extent such payments are directly attributable or reasonably allocable to the Territory, including royalties on sales in the Territory and an allocable portion of licensee fees and milestone payments (proportional to the size of the market in the Territory as compared to the size of the market outside the Territory), and all such reimbursement amounts shall be subject to the reduction of Sales Royalties under Section 7.4.2 (as described more fully below); provided that Reata shall not negotiate financial terms that are disproportionately allocated to the Territory in an unreasonable manner. For purposes of applying the foregoing to the reduction of Sales Royalties under Section 7.4.2, all such reimbursement amounts paid to Reata shall be treated as Third Party royalties under Section 7.4.2, and, to the extent such amounts are not applied to a reduction of Sales Royalties due to the absence of Sales Royalties at the time of such reimbursement payments to Reata or due to the [***]% cap in Section 7.4.2, any such unapplied amounts shall accrue and be used to reduce Sales Royalties in future periods until all such reimbursement amounts paid to Reata are applied to reduce Sales Royalties under Section 7.4.2. Reata will keep Kyowa Kirin reasonably informed of all material developments regarding negotiations with, and payments to, Third Parties regarding such reimbursable payments (and Reata shall provide Kyowa Kirin with at least one draft of any such agreements for review and comment prior to execution thereof, as well as a copy of the executed version of any such agreements, which copies may be redacted to remove commercial terms not relevant to the calculation of such offset, the scope of the license granted thereby or the terms and conditions applicable to sublicensees). All material matters relating to such Third Party reimbursable payments and calculations will be discussed in good faith between the Parties. Nothing herein shall restrict Kyowa Kirin from seeking, negotiating or obtaining any license from any Third Party; however, if Kyowa Kirin obtains a license to Third Party patents related to the Licensed Product without first following the procedures of this Section 13.7 (it being understood that if Reata does not obtain a sublicenseable license to such patents within [***] days of the first notice thereof, Kyowa Kirin’s subsequent entering into of a license thereto shall be deemed to be following the procedures of this Section 13.7), then Kyowa Kirin shall not be entitled to the royalty reduction provisions of Section 7.4.2 with respect to any royalties or other amounts paid under such license that was obtained without first following such procedures.

13.8 Compliance with Dartmouth License . Kyowa Kirin covenants that, with respect to its role and responsibilities as a sublicensee thereunder, it will not act in a manner that is inconsistent with Reata’s obligations under the Dartmouth License, as such agreement exists and was disclosed to Kyowa Kirin as of the Effective Date.

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13.9 Formal Notice of Identification of Backup Compound Required . In the event of a significant development failure of RTA 402, Reata (or its Affiliate or licensee, if authorized by Reata) may, in its sole discretion, elect to pursue development of an alternative compound. Any such compound will only be considered a Backup Compound under this Agreement upon Reata sending formal Notice to Kyowa Kirin designating that compound as a “Backup Compound” under this Agreement, such Notice to include information regarding the identity and clinical profile of such Backup Compound (“Notice of Identification of Backup Compound”). Reata agrees to provide a Notice of Identification of Backup Compound to Kyowa Kirin with respect to a given alternative compound promptly after Reata (or its Affiliate, licensee or collaboration partner) files an IND for such alternative compound. In all events, if there is a failure (or otherwise a decision to delay development) of RTA 402, and Reata (or its Affiliate, licensee or collaboration partner) subsequently files an IND for a compound in the RTA 402 Class, in the Field, then Reata shall designate such compound as a Backup Compound and provide a Notice of Identification of Backup Compound with respect thereto.

13.10 Performance Through Affiliates . Each Party may discharge any obligation and exercise any right hereunder through any of its Affiliates (without an assignment of this Agreement); provided that with respect to Kyowa Kirin, Section 2.1.2(a) shall apply with respect to Kyowa Kirin’s exercise of any of its licensed rights hereunder.

ARTICLE XIV

INDEMNIFICATION AND INSURANCE

14.1 Indemnity By Kyowa Kirin . Kyowa Kirin hereby agrees to defend, hold harmless and indemnify Reata and its Affiliates, agents, directors, officers and employees (the “ Reata Indemnitees ”) from and against any and all Third Party suits, claims, actions and proceedings and associated expenses (including court costs, legal expenses and attorneys’ fees) and damages and recoveries awarded with respect thereto (collectively “ Losses ”) incurred by a Reata Indemnitee in connection with any and all Third Party claims arising or resulting from: (a) any misrepresentation (or alleged misrepresentation) or breach (or alleged breach) of any of the representations, warranties, covenants or agreements made by Kyowa Kirin under this Agreement, or (b) any injury, damage or health complication suffered (or alleged to be suffered) as a result of the Commercialization of Licensed Product by or for Kyowa Kirin or its Permitted Sublicensees in the Territory, or Kyowa Kirin’s use of any Reata Trademarks in connection with any Commercialization of any Licensed Product in the Territory, except, in the case of either (a) or (b), to the extent such Losses arise from Reata’s breach of its representations, warranties or covenants under this Agreement or from Reata’s failure to supply Licensed Products hereunder in conformance with the Specifications therefore and in compliance with Applicable Laws (including GMP) and such failure could not have been identified or detected by Kyowa Kirin (or if applicable its Permitted Sublicensees) through its application of reasonable and customary quality assurance and quality control practices, or other inspections or activities required under Applicable Law with respect to such Licensed Products, prior to distribution of the Licensed Product in the Territory, but in any event REGARDLESS OF THE CAUSE OF OR REASON FOR ANY SUCH LOSS(ES), INCLUDING BREACH OF WARRANTY, STRICT LIABILITY, OR THE SOLE OR CONCURRENT NEGLIGENCE, WHETHER ACTIVE OR PASSIVE, OF THE PARTY INDEMNIFIED .

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14.2 Indemnity by Reata . Reata hereby agrees to defend, hold harmless and indemnify Kyowa Kirin and its Affiliates agents, directors, officers and employees (the “ Kyowa Kirin Indemnitees ”) from and against any and all any and all Losses incurred by a Kyowa Kirin Indemnitee in connection with any and all Third Party claims arising or resulting from (a) any misrepresentation (or alleged misrepresentation) or breach (or alleged breach) of any of the representations, warranties, covenants or agreements made by Reata under this Agreement other than such Losses arising from Reata’s failure to supply Licensed Products hereunder in conformance with the Specifications therefore and in compliance with Applicable Laws (including GMP) where such failure could have identified or detected by Kyowa Kirin (or if applicable its Permitted Sublicensees) through its application of reasonable and customary quality assurance and quality control practices, or other inspections or activities required under Applicable Law with respect to such Licensed Products, prior to distribution of the Licensed Product in the Territory, or (b) any injury, damage or health complication suffered (or alleged to be suffered) as a result of the development, commercialization, use, promotion, marketing, distribution or sale of Licensed Product by or for Reata or its Affiliates or licensees outside the Territory, except, in the case of either (a) or (b), to the extent such Losses arise from Kyowa Kirin’s breach of its representations, warranties or covenants, but in any event REGARDLESS OF THE CAUSE OF OR REASON FOR ANY SUCH LOSS(ES), INCLUDING BREACH OF WARRANTY, STRICT LIABILITY, OR THE SOLE OR CONCURRENT NEGLIGENCE, WHETHER ACTIVE OR PASSIVE, OF THE PARTY INDEMNIFIED .

14.3 Procedure for Indemnification . If a Reata Indemnitee or a Kyowa Indemnitee (as the case may be, an “ Indemnitee ”) wishes to seek indemnification hereunder, such Indemnitee will inform the Party obligated to indemnify the Indemnitee hereunder (the “ Indemnifying Party ”) of the Third Party claim giving rise to the obligation to indemnify as soon as reasonably practicable after receiving Notice of such Third Party claim. The Indemnifying Party will have the right to assume and control the defense of any such Third Party claim for which it is obligated to indemnify the Indemnitee under this Agreement. The Indemnitee will cooperate with the Indemnifying Party (and its insurer) as the Indemnifying Party may reasonably request, and at the sole cost and expense of the Indemnifying Party. The Indemnitee will have the right to retain its own counsel, at the expense of the Indemnifying Party, if representation of such Indemnitee by the counsel retained by the Indemnifying Party would be inappropriate because of actual or potential differences in the interests of such Indemnitee and any other Party represented by such counsel. In all other cases, the Indemnitee will have the right to participate in such defense, subject to the Indemnifying Party’s control, using its own counsel at its own expense. The Indemnifying Party will have no obligation to indemnify any Indemnitee in connection with any settlement made without the Indemnifying Party’s prior written consent; provided, that the Indemnifying Party does not unreasonably withhold or delay any such written consent. The Indemnifying Party shall seek the prior written consent of the Indemnified Party for any settlement of a Third Party claim subject to indemnification hereunder (such consent to not be unreasonably withheld, delayed or conditioned) if such settlement would materially diminish or materially adversely affect the scope, exclusivity or duration of any intellectual property licensed under this Agreement, would require any payment by such Indemnified Party, would require an admission of legal wrongdoing in any way on the part of an Indemnified Party, or would effect an amendment of this Agreement

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(otherwise, no such consent shall be required). If the Indemnifying Party does not assume and conduct the defense of the Third Party claim as provided above, (a) the Indemnitee may defend against, and consent to the entry of any judgment or enter into any settlement with respect to the claim in any manner the Indemnitee may deem reasonably appropriate (and the Indemnitee need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith), and (b) the Indemnifying Party will remain responsible to indemnify the Indemnitee as provided in this ARTICLE XIV.

14.4 Insurance . Each Party will procure and maintain, at its sole cost and expense, comprehensive general liability insurance (which may be self insurance), including product liability insurance, with bodily injury, death and property limits and amounts of coverage consistent with industry standards, including contractual liability and product liability coverage. It is understood that such insurance will not be construed to create a limit of a Party’s liability with respect to its indemnification obligations hereunder. Each Party shall provide the other Party with written evidence of such insurance upon request.

ARTICLE XV

TERM AND TERMINATION

15.1 Term . The term (“ Term ”) of this Agreement will commence on the Effective Date and, unless earlier terminated as expressly provided below in this ARTICLE XV, will expire on the date that the Royalty Term has expired in all countries in the Territory.

15.2 Termination by Reata . Reata may terminate this Agreement upon the failure of Kyowa Kirin to pay any amount due hereunder, but solely in the event and after such failure continues for [***] days after Reata has provided Kyowa Kirin with written Notice of such failure, and (b) an additional [***] Business Days after Reata has provided Kyowa Kirin with a second written Notice with respect to such failure (but no such termination shall occur if Kyowa Kirin cures such failure prior to the end of such additional three-Business Day period), and in any event subject to Section 15.5. If the failure to pay at issue is specific to China or Japan and provided that such failure to pay does not materially and adversely affect any other country in the Territory or this Agreement as a whole, Reata’s right to terminate under this Section 15.43 shall be either to terminate the Agreement just as to China or Japan, or to terminate the Agreement as a whole.

15.3 Termination by Kyowa Kirin At Will . Kyowa Kirin shall have the right to terminate this Agreement in its entirety, or solely with respect to a given country or countries in the Territory, for any or no reason, upon [***] days prior written notice to Reata.

15.4 Termination by Either Party for Breach or Insolvency . Either Party will have the right to terminate this Agreement prior to the expiration of the Term upon the occurrence of any of the following:

15.4.1 Upon the material breach of any representations, warranties or obligations by the other Party if the breaching Party has not cured such breach within [***] day after written Notice thereof (describing such breach in reasonable detail) by the non-breaching Party; and

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15.4.2 Immediately upon written Notice, if the other Party has filed a petition in bankruptcy, or if an involuntary petition in bankruptcy has been filed against the other Party and such petition will not be dismissed within sixty (60) days, or if a receiver or guardian has been appointed for the other Party, or upon or after the cessations of operations of the other Party.

Notwithstanding the foregoing, in the event the alleged breach in question under Section 15.4.1 is not reasonably capable of cure within the foregoing [***] days, the breaching Party may submit a reasonable cure plan prior to the end of such initial [***] day period, in which case, the other Party shall not have the right to terminate under this Section 15.4 with respect to such alleged breach for so long as the breaching Party is diligently implementing such cure plan, provided, however, that if the breaching Party fails to cure such breach (even if diligently implementing a cure plan) within [***] from the date of the written notice identifying the material breach in reasonable detail, then the non-breaching Party may terminate under this Section 15.4 upon expiration of the [***] period. If the material breach at issue is specific to a country and provided that such material breach does not materially and adversely affect any other country in the Territory or this Agreement as a whole, each Party’s right to terminate under this Section 15.4 shall be limited to the termination of this right with respect to such country.

15.5 Disputes Over Right to Terminate . With respect to efforts to terminate this Agreement for non-payment, breach, insolvency or otherwise under Sections 15.2 or 15.4, if the alleged breaching Party (which includes Kyowa Kirin for alleged non-payment under Section 15.2 or insolvency under Section 15.4.2) disputes in good faith the existence of a breach specified in a Notice provided by the other Party and/or the right to terminate this Agreement, then the non-breaching Party shall not have the right to terminate this Agreement hereunder unless and until the arbitrator(s), in accordance with ARTICLE XVI, has determined that the alleged breaching Party has materially breached this Agreement and until such Party fails to cure such breach within [***] days following such decision of such arbitrator(s) (except to the extent such breach involves the failure to make a payment when due, which breach must be cured within [***] days following such decision of such arbitrator(s)). It is understood and agreed that during the pendency of such dispute, all of the terms and conditions of this Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder.

15.6 Effect of Expiration or Termination of this Agreement for Any Reason . Upon the expiration or termination of this Agreement by either Party for any reason, the following provisions will apply:

15.6.1 Each Party will return the originals and any copies of the other Party’s Confidential Information; provided, that, each Party may retain copies of any Confidential Information that is subject to a continuing license hereunder and one copy of the other Party’s Confidential Information in possession of its legal counsel for the purposes of monitoring its obligations hereunder and exercising any surviving rights and complying with Applicable Laws;

15.6.2 Neither Party will be relieved of any liability or obligation of such Party that accrued, or which arose during or relates to any period, prior to the effective date of such termination, including any payment obligations; and

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15.6.3 The provisions of ARTICLE I, ARTICLE XI, ARTICLE XIV (excluding Section 14.4), ARTICLE XVI, and ARTICLE XVII, and Sections 9.2 (solely for the limited period provided for therein), 9.3 (solely for the limited period provided for therein), 10.2, 15.6, 15.7, and 15.8, and 15.10 as applicable will survive any expiration or termination of this Agreement and remain in full force and effect in accordance with their terms.

15.7 Effect of Expiration at End of Royalty Term . If this Agreement expires as provided for in Section 15.1, then the following shall apply:

15.7.1 After expiration of this Agreement, Kyowa Kirin shall have an exclusive, royalty-free license, under the Licensed Technology to research, develop, use, sell, offer for sale, import, and export (and to have such actions taken on its behalf by its agents, contractors, service providers or authorized representatives in accordance with this Agreement) Licensed Compounds and Licensed Products in the Field in the Territory, and furthermore:

15.7.1.1 Any sublicenses granted under Section 2.1.2 prior to such expiration shall survive such expiration and Kyowa Kirin shall have the right to grant further sublicenses after such expiration in accordance with Section 2.1.2.

15.7.1.2 Kyowa Kirin’s manufacturing rights under Section 2.1.3 shall survive such expiration.

15.7.1.3 Any license to Kyowa Kirin to Product Trademarks under Section 2.5 shall survive such expiration.

15.7.2 The Parties obligation under the following provisions of this Agreement shall continue so long as the Licensed Product is Commercialized by Kyowa Kirin:

15.7.2.1 Sections 4.2, 5.4, and 5.5 (with respect to sharing of certain data and information regarding the Licensed Products); and

15.7.2.2 Section 8.3.3.

15.8 Effect of Certain Terminations . Upon the termination of this Agreement by Reata pursuant to Section 15.2, by Kyowa Kirin pursuant to Section 15.3 or by Reata for breach or insolvency by Kyowa Kirin pursuant to Section 15.4, the following provisions of this Section 15.8 will apply (in addition to the provisions of Section 15.6). To the extent any such early termination concerns only a specific country or countries, the following shall apply solely with respect to such country(ies) and the Agreement shall otherwise remain in effect in accordance with its terms for all non-terminated countries:

15.8.1 The rights and licenses granted by Kyowa Kirin to Reata hereunder will terminate;

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15.8.2 Kyowa Kirin will immediately (a) cease conducting any Commercialization activities with respect to Licensed Product, and (b) discontinue making any representation regarding its status as a licensee or distributor of Reata in the Territory for Licensed Product, subject, in either such case, to requirements of Applicable Laws and to a reasonable wind-down and transition period (not to exceed [***] days);

15.8.3 Kyowa Kirin will grant to Reata as of the effective date of the termination an exclusive sublicenseable license to use the Product Trademarks that were actually used during the Term in the Commercialization of Licensed Product in the Territory (and Reata shall thereupon be fully responsible for all costs and expenses of, and shall have the right to control, the prosecution, maintenance, defense and enforcement of such Product Trademarks).

15.8.4 Kyowa Kirin will promptly (but in any event subject to Applicable Laws):

(a) transfer to Reata or Reata’s designee all Regulatory Filings and Regulatory Approvals owned by Kyowa Kirin for the Commercialization of Licensed Products, if such transfer is possible, or, if such transfer is not possible, then at Reata’s discretion (i) withdraw any such Regulatory Filings and Regulatory Approvals for the Commercialization of Licensed Products in its name and take all actions necessary or useful to support Reata’s or Reata’s designee’s submission of Regulatory Filings and the achievement of Regulatory Approvals in the name of Reata or Reata’s designee with respect to the Commercialization of Licensed Products or (ii) provide Reata with access to, and grant Reata the right and license to use and to reference, such Regulatory Filings and Regulatory Approvals then in its name applicable to the Commercialization of Licensed Products;

(b) provide Reata with copies of all material correspondence between Kyowa Kirin and Regulatory Authorities with respect to such Regulatory Filings and Regulatory Approvals for Licensed Products any and all other clinical and non-clinical data, records and tabulations, in all such cases with respect to Licensed Products, that Kyowa Kirin holds as of the date of termination with respect to Licensed Products;

(c) assign to Reata all agreements specific to the conduct of clinical trials for Licensed Product (to the extent assignable and excluding any such agreements that also involve clinical trials for other Kyowa Kirin products that are not Licensed Products), including agreements or contracts with contract research organizations, clinical sites and investigators, between Kyowa Kirin and any Third Party, subject to any consent required by such Third Party, which consent Kyowa Kirin will use Commercially Reasonable Efforts to obtain on behalf of Reata; and

(d) provide Reata with copies of all reports and data obtained by Kyowa Kirin or its Affiliates pursuant to this Agreement (solely to the extent in Kyowa Kirin’s possession or Control as of the date of termination and solely to the extent not previously provided to Reata) regarding the Commercialization of Licensed Products, including any Kyowa Kirin Clinical Data not already provided to Reata hereunder. Kyowa Kirin hereby acknowledges and agrees that Reata will not be obligated to treat any information received pursuant to this Section 15.8.4(d) as Kyowa Kirin Confidential Information and may use such information, data and Know-How for any purpose at Reata’s discretion.

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As promptly as possible after any such termination, Kyowa Kirin will execute any and all documents of any Regulatory Authorities, so as to allow Reata to make immediate use of any data, records, and Regulatory Filings transferred by Kyowa Kirin to Reata pursuant to this Section 15.8.4.

15.9 Remedies Cumulative and Nonexclusive . All of the non-breaching Party’s remedies will be cumulative, and the exercise of one remedy hereunder by the non-breaching Party will not be deemed to be an election of remedies.

15.10 Rights In Bankruptcy .

15.10.1 In case of termination by Reata pursuant to Section 15.4.2 based on Kyowa Kirin becoming an “insolvent party” (hereinafter “ Insolvent Party ”) as defined under applicable bankruptcy law, Reata’s rights under this Agreement will include, without limitation, those rights afforded by 11 U.S.C. § 365(n) of the United States Bankruptcy Code (“ USBC ”) and any successor thereto, if applicable. If the bankruptcy trustee of the Insolvent Party as a debtor or debtor-in-possession rejects this Agreement under 11 U.S.C. § 365(o) of the USBC, Reata may elect to retain its rights licensed from the Insolvent Party hereunder (and any other supplementary agreements hereto) for the duration of this Agreement and avail itself of all rights and remedies to the full extent contemplated by this Agreement and 11 U.S.C. § 365(n) of the USBC, and any other relevant laws. The same will apply under any similar provisions of Japanese law, mutatis mutandis.

15.10.2 In case of termination by Kyowa Kirin pursuant to Section 15.4.2 based on Reata becoming an Insolvent Party, Kyowa Kirin’s rights under this Agreement will include, without limitation, those rights afforded by 11 U.S.C. § 365(n) of the USBC. If the bankruptcy trustee of the Insolvent Party as a debtor or debtor-in-possession rejects this Agreement under 11 U.S.C. § 365(o) of the USBC, Kyowa Kirin may elect to retain its rights licensed from the Insolvent Party hereunder (and any other supplementary agreements hereto) for the duration of this Agreement and avail itself of all rights and remedies to the full extent contemplated by this Agreement and 11 U.S.C. § 365(n) of the USBC, and any other relevant laws. The same will apply under any similar provisions of Japanese law, mutatis mutandis.

ARTICLE XVI

DISPUTE RESOLUTION

16.1 Disputes. The Parties recognize that disagreements as to certain matters may from time to time arise out of this Agreement. Parties agree that such disagreements are to be governed in accordance with this ARTICLE XVI. Disagreements that are claims, counterclaims, demands, causes of action, disputes or controversies both arising out of this Agreement and related to the performance, enforcement, breach or termination of this Agreement are each, a “ Dispute. ” For the avoidance of doubt, Dispute does not include any claims, counterclaims, demands, causes of action, disputes or controversies regarding a Party’s use of any intellectual property rights of the other Party, where such use is not expressly granted by the licenses hereunder, including (with respect to uses by Kyowa Kirin) any such use outside of the Territory.

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Execution Version

16.2 Informal Negotiation . It is the objective of the Parties to establish procedures to facilitate the resolution of Disputes in an expedient manner by mutual cooperation and without resort to litigation. To accomplish this objective, the Parties agree that Disputes will be discussed first by the Chief Executive Officer of Reata and the Chief Operating Officer of Kyowa Kirin (or an executive officer of either Party designated by such Chief Executive/Operating Officer). Either Party may, by written Notice to the other Party, have a Dispute referred to its respective Chief Executive/Operating Officer (or executive officer designee, if applicable) for attempted resolution by good faith negotiations within [***] days after such Notice is received. If the Chief Executive/Operating Officers (or designees if applicable) are not able to resolve such Dispute within such [***] day period, either Party may pursue the resolution of the issue pursuant to Section 16.3.

16.3 Mediation . Subject to Section 16.1 and 16.2, if a Dispute remains unresolved, either Party may submit that Dispute to mediation administered by the International Chamber of Commerce (“ ICC ”) in accordance with the ICC ADR Rules (the “ Mediation Rules ”). Unless otherwise agreed by the Parties, the mediator will be selected in accordance with the Mediation Rules within ten (10) days of the initiation of mediation. If the Parties are unable to resolve such controversy or claim within thirty (30) days following the date on which such mediator is first available, or within such other period as the parties may agree in writing, either Party may declare the mediation procedure terminated and refer the Dispute to arbitration pursuant to this ARTICLE XVI.

16.4 Agreement to Arbitrate . If the Parties fail to resolve any Dispute pursuant to Sections 16.2 and 16.3, either party may submit that Dispute for final resolution by binding arbitration administered by the International Chamber of Commerce in accordance with its Rules of Arbitration (the “ Rules ”) then in force, to the extent such Rules are not inconsistent with the provisions of this Agreement. Each Party irrevocably stipulates that this Section 16.4 will satisfy the requirements for an agreement in writing pursuant to Article II of the United Nation Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on June 10, 1958. Each Party irrevocably stipulates that this Agreement and the relationship created thereby is commercial and that this provision constitutes an agreement in writing to arbitrate for an international commercial dispute.

16.5 Number and Appointment of Arbitrators . Except as provided by this clause, the appointment and confirmation of the arbitrators shall be made in accordance with the relevant provisions of the Rules. The arbitral tribunal shall be composed of three arbitrators (the “ Tribunal ”) to be appointed in accordance with the Rules, except as expressly provided for herein. Each Party shall select one (1) arbitrator from the list of available ICC arbitrators and such arbitrators shall jointly appoint the third arbitrator who shall act as the chairman of the Tribunal (the “ Chairman ”). In the event any arbitrator becomes unable to serve, that arbitrator will be replaced in the same manner in which he or she was appointed. If either Party fails to appoint an

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Execution Version

arbitrator within thirty (30) days of the initiation of arbitration, the other Party may request the ICC to appoint such co-arbitrator (for the non-responsive Party). Such appointment shall be binding on the Parties. If the arbitrators selected by the Parties cannot agree on a Chairman within thirty (30) days after they have been selected, then either Party may request that the ICC to appoint the Chairman.

16.6 Conduct of Arbitration . The arbitration shall be conducted and the award rendered in the English language. The Parties agree that discovery and evidence in the arbitration shall be governed by the International Bar Association Rules on the Taking of Evidence in International Commercial Arbitration then in force to the extent such rules are not inconsistent with the provisions of this Agreement or the Rules. Responses or objections to a document request will be served ten (10) days after receipt of the request. The Tribunal shall resolve any discovery disputes. If a Party fails or refuses to comply with an order for discovery, the Tribunal may take that failure into account when deciding the issues and may infer that the documents not produced would have supported the opposing Party’s claims. Nothing herein will prevent the Parties from settling any dispute by mutual agreement at any time.

16.7 Place of Arbitration . The arbitration shall be held at the location to which the Parties agree; if the Parties cannot agree to an arbitration location, the arbitration shall be held in northern California, at a location mutually established by the Parties, or failing such agreement, in San Francisco, California.

16.8 Powers of the Arbitrators, Limitations on Remedies . The Tribunal shall have the power to award all remedies available under the Applicable Law, by a vote of at least two of the three arbitrators. The Tribunal shall not decide the Dispute ex aqueo et bono or as amiable compositeur or by reliance on any other doctrine or principle that would permit the Tribunal to avoid the application of this Agreement and/or the governing law. The Tribunal shall not have the authority to modify or amend any term or provision of this Agreement.

16.9 Arbitration Award . The Tribunal shall make all reasonable efforts to render a written, reasoned decision within forty-five (45) days following the closing of the hearing. The decision of the Tribunal shall be final and binding on the Parties, and judgment upon the decision may be confirmed in, and judgment upon the award entered by, any court having jurisdiction over the Parties.

16.10 Confidentiality . Except to the extent necessary for proceedings relating to enforcement of the arbitration agreement, the award, or other related rights of the Parties, the fact of the arbitration, the arbitration proceeding itself, all evidence, written statements or other documents exchanged or used in the arbitration and the Tribunal’s award shall be maintained in confidence by the Parties to the fullest extent permitted by law. However, a violation of this covenant shall not affect the enforceability of this agreement to arbitrate or of the Tribunal’s award.

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Execution Version

16.11 Costs . Each Party shall bear its own costs and expenses in connection with any Dispute resolution under this ARTICLE XVI and shall share equally the fees, costs and expenses of the Tribunal and related Third Party arbitration expenses. Notwithstanding the foregoing, the prevailing Party may, as determined by the Tribunal under the circumstances, be awarded its attorneys’ fees, costs and expenses of the arbitration, including the arbitrators’ fees and expenses, in full. The Tribunal may also fix such costs and expenses proportionate to the extent each Party prevails in the arbitration, as the circumstances may warrant. If a Party fails to proceed with arbitration, unsuccessfully challenges the arbitration award, or fails to comply with the arbitration award, the other Party is entitled to costs, including reasonable attorneys’ fees and disbursements, for having to compel arbitration or defend or enforce the award.

16.12 Injunctive or Other Interim Relief . Notwithstanding the provisions of this ARTICLE XVI, the Parties agree that irreparable harm might accrue with respect to a Dispute absent a temporary injunctive or other interim relief and the Parties therefore shall have the right to seek such injunctive or interim relief in a court of competent jurisdiction pending the outcome of Dispute resolution hereunder. In the event interim or injunctive relief is sought by a Party as to a Dispute, and a court of competent jurisdiction grants such interim or injunctive relief, the Parties shall continue to be bound under this ARTICLE XVI to resolve by arbitration such Dispute that is the subject of interim or injunctive relief.

16.13 Continued Performance . Pending resolution of any Dispute covered by this ARTICLE XVI, both Parties will continue their performance under this Agreement of any obligations (including payment obligations) that are not the subject of such Dispute.

16.14 Governing Law; Jurisdiction; Venue . Resolution of all Disputes arising out of or related to this Agreement or the performance, enforcement, breach or termination of this Agreement and any remedies relating thereto, shall be governed by and construed under the substantive laws of the State of Delaware, U.S.A., without reference to any choice of law principles thereof that would cause the application of the laws of a different jurisdiction. Without limiting the exclusivity of the alternative dispute resolution provisions of Sections 16.1 through 16.11 (including the arbitration of all unresolved Disputes under Section 16.4), the Parties consent to the non-exclusive personal jurisdiction and venue of the federal and state courts located in Delaware, U.S.A., solely for effectuating the provisions of Sections 16.9 and 16.12.

16.15 Separability and Survival of the Agreement to Arbitrate . The provisions of this agreement to arbitrate are independent of the remaining provisions of this Agreement and the Parties intend that the remaining provisions shall continue in effect even though one or more of the provisions of the Agreement shall be determined to be null and void. This agreement to arbitrate shall also survive the termination or expiration of this Agreement.

ARTICLE XVII

OTHER PROVISIONS

17.1 Non-Solicitation of Employees . During the Term, neither Party nor its Affiliates shall, directly or through its representatives or agents, solicit for employment or hire any officer, director, or employee of the other Party or its Affiliates with whom it has had contact in connection with, or who otherwise is known by it to participate in, the subject matter of this Agreement or the

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Execution Version

development of a Licensed Compound or a Licensed Product; provided, however, a Party shall not be prohibited from soliciting and hiring through general public advertisement or other solicitation that is not directed toward the employees of the other Party, and a Party may hire any former employee of the other Party as long as the discussions with the former employee are initiated after termination of employment by the other Party.

17.2 Force Majeure . Both Parties will be excused from the performance of their obligations under this Agreement, other than the obligation to make monetary payments, and neither Party will be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement, to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides Notice thereof to the other Party. Such excuse will be continued so long as the condition constituting a force majeure event continues and the nonperforming Party uses reasonable efforts to remove the condition. For purposes of this Agreement, a force majeure event will include conditions beyond the reasonable control and without the fault of a Party, such as an act of God, voluntary or involuntary compliance with any regulation, law or order of any government, war, an act of terrorism, civil commotion, labor strike or lock-out, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe, inability to procure necessary raw materials in a commercially reasonable manner or default of suppliers or sub-contractors; provided, however, the payment of invoices due and owing hereunder may not be delayed by the payor because of a force majeure affecting the payor.

17.3 Exclusions of Consequential Damages . EXCEPT IN THE CASE OF A PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR LOST PROFITS OR FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES OF THE OTHER PARTY IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY, AND WHETHER OR NOT SUCH PARTY HAD PRIOR NOTICE THEREOF.

17.4 Assignment . Neither this Agreement nor any obligation of a Party hereunder may be assigned by either Party without the prior written consent of the other Party; provided, however, that either Party may assign this Agreement in its entirety without such consent, to any of its Affiliates, to any purchaser of all, or substantially all, of its assets or to any successor corporation resulting from any merger, consolidation, share exchange, or other similar transaction, and provided further that either Party may assign or sell its rights to receive any amounts due hereunder. This Agreement will inure to the benefit of Kyowa Kirin and Reata and their respective successors and permitted assigns. Any assignment of this Agreement that is not made in accordance with this Section 17.4 shall be null and void and of no legal force or effect.

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Execution Version

17.5 Severability . In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) frustrates the purpose of this Agreement (in which case the Parties will attempt to replace such invalidated provision with an enforceable provision that most clearly implements such purpose). The Parties will in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) that, insofar as practical, implement the purposes of this Agreement.

17.6 Notices . All notices, consents, approvals and other legally operative communications that are required or permitted hereunder ( “Notice” ) will be in writing in the English language and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

Reata Pharmaceutical, Inc.

2801 Gateway Drive, Suite 150

Irving, Texas 75063

Attention: Business Development Department

Tel: (972) 865-2219

Fax: (800) 998-3206

Kyowa Hakko Kirin Co., Ltd.

1-6-1 Ohtemachi

Chiyoda-ku, Tokyo, 100-8185, Japan

Attention: Business Development Department

Tel: +81-3-3282-0093

Fax: +81-3-3282-0107

or to such other address as the Party to who Notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such communication will be deemed delivered (i) if sent by mail, as aforesaid, on the date upon which the return receipt is signed or delivery is refused or the Notice is designated by the postal authorities as not deliverable, as the case may be, (ii) if sent by facsimile, as aforesaid, when sent (with confirmation of receipt), and (iii) if sent by courier or hand delivered, as aforesaid, when received. The cost of any translation into English of any communication, document or Notice will be borne solely by the Party providing such communication, document or Notice.

17.7 Entire Agreement; Amendments . This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof. All express or implied agreements and understandings, either oral or written, heretofore made are expressly superseded by this Agreement. Except as expressly set forth in this Agreement, this Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by both Parties.

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Execution Version

17.8 Headings . The captions to the several Articles and Sections hereof are not a part of this Agreement, but are merely guides or labels to assist in locating and reading the several Articles and Sections hereof.

17.9 Independent Contractors . It is expressly agreed that Reata and Kyowa Kirin will be independent contractors and that the relationship between the two Parties will not constitute a partnership, joint venture or agency. Neither Reata nor Kyowa Kirin will have the authority to make any statements, representations or commitments of any kind, or to take any action, which will be binding on the other, without the prior consent of the other Party.

17.10 Waiver . The waiver by either Party hereto of any right hereunder or the failure to perform or of a breach by the other Party will not be deemed a waiver of any other right hereunder or of any other breach or failure by said other Party whether of a similar nature or otherwise.

17.11 Counterparts . This Agreement may be executed in identical duplicate copies exchanged by facsimile transmission. The Parties agree to execute two identical original copies of this Agreement after exchanging signed facsimile versions. Each identical counterpart will be deemed an original, but all of which together will constitute one and the same instrument.

17.12 Waiver of Rule of Construction . Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement will be construed against the drafting Party will not apply.

17.13 Third Party Beneficiaries . Except as otherwise expressly provided in this Agreement, nothing herein expressed or implied is intended or will be construed to confer upon or to give to any Third Party any rights or remedies by reason of this Agreement. Except as otherwise expressly provided in this Agreement, there are no intended Third Party beneficiaries under or by reason of this Agreement.

17.14 Further Assurances . Upon the other Party’s request hereunder, each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

17.15 Construction of Agreement . Unless context otherwise clearly requires, whenever used in this Agreement: (i) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;” (ii) the word “day” or “year” means a calendar day or calendar year unless otherwise specified; (iii) the word “notice” means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other legally operative communications contemplated under this Agreement; (iv) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement (including all Exhibits); (v) the word “or” shall be construed as the inclusive meaning identified with the phrase “and/or;” (vi) provisions that require that a Party, the Parties or any committee or team hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (vii)

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Execution Version

words of any gender include the other gender; (viii) references to any specific Applicable Law or article, section or other division thereof shall be deemed to include the then-current amendments thereto or any replacement Applicable Law thereof; and (ix) references to either Party include the successors and permitted assigns of that Party. If the terms of this Agreement conflict with the terms of any Exhibit, then the terms of this Agreement will govern.

[Remainder of this page is intentionally left blank.]

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Execution Version

IN WITNESS WHEREOF , the Parties have executed this License Agreement to be effective as of the Effective Date.

KYOWA HAKKO KIRIN CO., LTD.		REATA PHARMACEUTICALS, INC.
By:	/s/ Yazuru Matsuda	By:	/s/ J. Warren Huff
Name:	Yazuru Matsuda	Name:	J. Warren Huff
Title:	Executive Director of the Board	Title:	President and
	President and Chief Executive Officer		Chief Executive Officer
Date:	Dec. 24 2009	Date:	Dec. 23, 2009

Signature Page

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

EXHIBIT A

Reata Patent Rights

“Reata Patent Rights” shall include the following patents and applications:

[***]

[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]

[***]

[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]

[***]

[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]
[***]	[***]	[***]
[***]	[***]	[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Execution Version

EXHIBIT B

Third Party License Agreements

1. The Dartmouth License (as defined in Section 1.1.13).

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EX-10.28

Exhibit 10.28

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

LICENSE AGREEMENT

between

REATA PHARMACEUTICALS, INC.

and

ABBOTT PHARMACEUTICALS PR LTD.

Dated as of September 21, 2010

TABLE OF CONTENTS

ARTICLE 1	DEFINITIONS	1
ARTICLE 2	COLLABORATION MANAGEMENT	20
2.1	Joint Development Committee	20
2.2	Joint Marketing Committee	22
2.3	General Provisions Applicable to Joint Committees	23
ARTICLE 3	DEVELOPMENT AND REGULATORY	25
3.1	Initial Development Activities	25
3.2	Joint Development Activities	26
3.3	Collaboration Candidates	27
3.4	Collaboration Costs	29
3.5	Limitations on Development	31
3.6	Regulatory Matters	32
3.7	Unilateral Development	34
3.8	Compliance	38
3.9	Regulatory Records	38
ARTICLE 4	COMMERCIALIZATION	39
4.1	In General	39
4.2	Diligence	39
4.3	Global Brand Elements	39
4.4	Off-Label Sales	40
4.5	Statements and Compliance with Applicable Law	40
4.6	Sales and Distribution	40
4.7	Product Trademarks	40
4.8	Markings	40
4.9	Supply of Licensed Products	41
4.10	Technology Transfer	41
4.11	Co-Promotion Right	43
4.12	Participation in Expert Meetings in Licensee Territory	44
ARTICLE 5	GRANT OF RIGHTS	44
5.1	Grants to Licensee	44
5.2	Grants to Licensor	45
5.3	Retention of Rights	47
5.4	Sublicenses	47
5.5	Access to Regulatory Documentation and Cooperation	48
5.6	No Implied Rights	48

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

5.7	Licensor Exclusivity	48
5.8	Licensee Exclusivity	50
5.9	Commercialization Arrangements in the Licensor Territory	52
5.10	Backup Compounds	54
ARTICLE 6	PAYMENTS AND RECORDS	55
6.1	Milestone Payments	55
6.2	Royalties	60
6.3	Royalty Payments and Reports	62
6.4	Mode of Payment	63
6.5	Taxes	63
6.6	Interest on Late Payments	64
6.7	Financial Records	64
6.8	Audit	64
6.9	Audit Dispute	65
6.10	Confidentiality	65
6.11	Diagnostic or Veterinary Products	65
ARTICLE 7	INTELLECTUAL PROPERTY	65
7.1	Ownership of Intellectual Property	65
7.2	Maintenance and Prosecution of Patents	67
7.3	Enforcement of Patents	70
7.4	Infringement Claims by Third Parties	72
7.5	Invalidity or Unenforceability Defenses or Actions	74
7.6	Third Party Licenses	75
7.7	Product Trademarks	75
ARTICLE 8	PHARMACOVIGILANCE	76
8.1	Pharmacovigilance	76
8.2	Global Safety Database	76
ARTICLE 9	CONFIDENTIALITY AND NON-DISCLOSURE	77
9.1	Confidentiality Obligations	77
9.2	Permitted Disclosures	78
9.3	Use of Name	79
9.4	Public Announcement	79
9.5	Publications	79
9.6	Return of Confidential Information	80
ARTICLE 10	REPRESENTATIONS AND WARRANTIES	81

- 2 -

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

10.1	Mutual Representations and Warranties	81
10.2	Additional Representations of Licensor	81
10.3	DISCLAIMER OF WARRANTIES	86
ARTICLE 11	INDEMNITY	86
11.1	Indemnification of Licensor	86
11.2	Indemnification of Licensee	86
11.3	Certain Losses	87
11.4	Notice of Claim	88
11.5	Control of Defense	88
11.6	Special, Indirect, and Other Losses	90
11.7	Insurance	90
ARTICLE 12	TERM AND TERMINATION	90
12.1	Term	90
12.2	Termination for Cause	90
12.3	Termination by Licensee	92
12.4	Termination for Insolvency	92
12.5	Rights in Bankruptcy	92
12.6	Termination in Entirety	92
12.7	Termination of Terminated Territory	94
12.8	Reverse Royalty	95
12.9	Remedies	96
12.10	Accrued Rights; Surviving Obligations	96
ARTICLE 13	MISCELLANEOUS	96
13.1	Force Majeure	96
13.2	Export Control	97
13.3	Assignment	97
13.4	Severability	97
13.5	Governing Law, Jurisdiction, Service	98
13.6	Dispute Resolution	98
13.7	Notices	101
13.8	Antitrust Filing	102
13.9	Entire Agreement	103
13.10	English Language	103
13.11	Equitable Relief	103
13.12	Waiver and Non-Exclusion of Remedies	103
13.13	No Benefit to Third Parties	103
13.14	Further Assurance	104
13.15	Relationship of the Parties	104
13.16	Counterparts; Facsimile Execution	104

- 3 -

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

13.17	References	104
13.18	Construction	104

SCHEDULES

Schedule 1.38	Corporate Names
Schedule 1.74	Initial Development Plan
Schedule 1.148	Regions
Schedule 1.165	Target CKD Profile [to be revised]
Schedule 2.1.1	Initial Members of the JDC
Schedule 2.2.1	Initial Members of the JMC
Schedule 6.1.2(iv)	Licensor EMA Delivery Obligations
Schedule 9.4	Press Releases
Schedule 10.2.1	Existing Patents
Schedule 13.6.4	ADR Procedures

Schedule of Exceptions

- 4 -

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

LICENSE AGREEMENT

This License Agreement (this “ Agreement ”) is made and entered into effective as of September 21, 2010 (the “ Effective Date ”) by and between Reata Pharmaceuticals, Inc., a Delaware corporation (“ Licensor ”), and Abbott Pharmaceuticals PR Ltd., a Bermuda corporation (“ Licensee ”). Licensor and Licensee are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties .”

RECITALS

WHEREAS , Licensor and Licensee are parties to that certain Securities Purchase Agreement, of even date herewith (the “ Securities Purchase Agreement ”), and those certain Ancillary Documents (as defined in the Securities Purchase Agreement), also each of even date herewith, pursuant to which Licensee has agreed to purchase from Licensor, and Licensor has agreed to sell Licensee, certain capital stock of Licensor;

WHEREAS , Licensor controls certain intellectual property rights with respect to the Initial Licensed Compound (as defined herein), Licensed Products (as defined herein), Backup Candidates (as defined herein), and Collaboration Candidates (as defined herein) in the Licensee Territory (as defined herein); and

WHEREAS , Licensor wishes to grant a license to Licensee, and Licensee wishes to obtain, a license under such intellectual property rights to develop, manufacture and commercialize Licensed Products in the Licensed Indications in and for the Licensee Territory, in each case in accordance with the terms and conditions set forth below.

NOW, THEREFORE , in consideration of the premises and the mutual promises and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

ARTICLE 1

DEFINITIONS

Unless otherwise specifically provided herein, the following terms shall have the following meanings:

1.1 “ Active Indication ” shall mean a Licensed Indication ( i.e. , the Renal Indication, the Cardiovascular Indication, or the Metabolic Indication) with respect to which, as of the time of such determination: (i) Licensee has previously exercised its Collaboration Candidate Option for a Collaboration Compound and with respect to which Development activities are continuing, (ii) the Parties are conducting Joint Development Activities for a Licensed Compound, or (iii) Licensee is Commercializing a Licensed Product in the Licensee Territory in accordance with Section 4.4 with respect to which the Royalty Term has not expired.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.2 “ Additional Indication ” shall mean, with respect to any Licensed Product, each Licensed Indication other than the Initial Indication with respect to such Licensed Product.

1.3 “ Active Indication Exclusivity Restriction ” shall have the meaning set forth in section 5.8.1(ii).

1.4 “ Adverse Ruling ” shall have the meaning set forth in Section 12.2.1.

1.5 “ Affiliate ” shall mean, with respect to a Party, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Party. For purposes of this definition, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” shall mean (i) the possession, directly or indirectly, of the power to direct the management or policies of a business entity, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, or otherwise, or (ii) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a business entity (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity). Neither of the Parties to this Agreement shall be deemed to be an “Affiliate” of the other solely as a result of their entering into this Agreement.

1.6 “ ADR ” shall have the meaning set forth in Section 13.6.1.

1.7 “ Agreement ” shall have the meaning set forth in the preamble hereto.

1.8 “ Applicable Law ” shall mean applicable laws, rules, and regulations, including any rules, regulations, guidelines, or other requirements of the Regulatory Authorities, that may be in effect from time to time.

1.9 “ Arbitrator ” shall have the meaning set forth in Section 6.9.

1.10 “ Backup Candidate ” shall have the meaning set forth in Section 5.10.1.

1.11 “ Backup Compound ” shall have the meaning set forth in Section 5.10.2.

1.12 “ Bayh-Dole Act ” shall mean the Patent and Trademark Law Amendments Act of 1980, as amended, codified at 35 U.S.C. §§ 200-212, as amended, as well as any regulations promulgated pursuant thereto, including in 37 C.F.R. Part 401.

1.13 “ Breaching Party ” shall have the meaning set forth in Section 12.2.1.

1.14 “ Business Day ” shall mean a day other than a Saturday or Sunday on which banking institutions in New York, New York are open for business.

1.15 “ Calendar Quarter ” shall mean each successive period of three (3) calendar months commencing on January 1, April 1, July 1 and October 1.

1.16 “ Calendar Year ” shall mean each successive period of twelve (12) calendar months commencing on January 1 and ending on December 31.

1.17 “ Cardiovascular Indication ” shall mean the prevention, treatment, or amelioration of any cardiovascular disease or condition, including atherosclerosis, heart failure, myocardial infarction, acute coronary syndrome, myocarditis, angina, restenosis, aneurysms, vasculitis, complications of vascular surgery and heart surgery, thrombosis, phlebitits, peripheral vascular disease, and hypertension.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.18 “ Clinical Data ” shall mean all Information with respect to Licensed Products, Licensed Compounds or Collaboration Candidates made, collected, or otherwise generated under or in connection with the Clinical Studies or Phase IV Studies, including any data, reports, and results with respect thereto.

1.19 “ Clinical Studies ” shall mean Phase I, Phase II, Phase III, and such other tests and studies in human subjects that are required by Applicable Law, or otherwise recommended by the Regulatory Authorities, to obtain or maintain Regulatory Approvals for a Licensed Product or Collaboration Candidate for an indication, including tests or studies that are intended to expand the Product Labeling for such Licensed Product with respect to such indication.

1.20 “ Co-Promotion Agreement ” shall have the meaning set forth in Section 4.11.3.

1.21 “ Collaboration Candidate ” shall have the meaning set forth in Section 3.1.1(i).

1.22 “ Collaboration Candidate Cost Statement ” shall have the meaning set forth in Section 3.7.5(ii).

1.23 “ Collaboration Candidate Development Plan and Budget ” shall have the meaning set forth in Section 3.3.1(ii).

1.24 “ Collaboration Candidate Option ” shall mean, with respect to any Collaboration Candidate, Licensee’s right to designate such Collaboration Candidate (and any metabolite, salt, hydrate, solvate, enantiomer, free acid form, free base form, crystalline form, co-crystalline form, amorphous form, pro-drug (including ester pro-drug) form, racemate, polymorph, chelate, stereoisomer, tautomer, or optically active form thereof) as a Licensed Compound pursuant to Section 3.3.2.

1.25 “ Collaboration Candidate Option Period ” shall mean, with respect to each Collaboration Candidate, the period commencing on the date of delivery to Licensee of all Information and data with respect to such Collaboration Candidate required pursuant to the first sentence of Section 3.3.1(i) and ending on the [***] day following the day that Licensor provides to Licensee a copy of the minutes from the End of Phase II meeting with the FDA, which minutes do not prohibit the Initiation of the first Phase III Clinical study for a product containing such Collaboration Candidate.

1.26 “ Collaboration Candidate Statement Cut-Off Date ” shall have the meaning set forth in Section 3.7.5(ii).

1.27 “ Collaboration Candidate Subsequent Statement ” shall have the meaning set forth in Section 3.7.5(iii).

1.28 “ Collaboration Compound ” shall have the meaning set forth in Section 3.3.2.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.29 “ Collaboration Costs ” shall mean the FTE Costs (charged in accordance with Section 3.4.2) incurred, and the direct out-of-pocket costs recorded as an expense in accordance with GAAP, by or on behalf of a Party or any of its Affiliates after the Effective Date and during the Term that are specifically identifiable or reasonably allocable to Joint Development Activities or Initial Development Activities, as the case may be, in accordance with the applicable Development Plan and Budget. Except in the case of Collaboration Costs incurred in accordance with Section 1.1.1, Collaboration Costs shall be limited to Joint Development Activities or Initial Development Activities, as the case may be, that are specifically identified in the applicable Development Plan and Budget; provided, however , that such costs shall be included in “Collaboration Costs” only to the extent less than or equal to the amounts set forth in the applicable Development Plan and Budget for such Joint Development Activities or Initial Development Activities, as the case may be (subject to permitted overruns pursuant to Section 3.4.4). Subject to the foregoing, Collaboration Costs shall include such costs in connection with the following activities, as applicable:

1.29.1 pre-clinical and non-clinical activities such as toxicology and formulation development, test method development, stability testing, quality assurance, quality control development, and statistical analysis;

1.29.2 Clinical Studies for a Licensed Product, including (i) the preparation for and Conduct of clinical trials; (ii) data collection and analysis and report writing; (iii) clinical laboratory work; (iv) regulatory activities in direct connection with such studies, including adverse event recordation and reporting, but not including regulatory activities relating generally to a Licensed Product and not directly related to such studies, such as regulatory activities relating to Drug Approval Applications;

1.29.3 preparation of the common technical document to be used by both Parties in connection with the preparation of Regulatory Documentation for Licensed Products;

1.29.4 Manufacturing Costs for (i) a Licensed Product for use in Clinical Studies or other Development activities for such Licensed Product; (ii) the manufacture, purchase or packaging of comparators or placebo for use in Clinical Studies for a Licensed Product (with the manufacturing costs for comparators or placebo to be determined in the same manner as Manufacturing Costs are determined for such Licensed Product) and (iii) costs and expenses of disposal of drugs and other supplies used in such Clinical Studies or other Development activities;

1.29.5 Losses incurred in connection with Third Party Claims described in Section 11.3 to the extent such Losses are to be included in Collaboration Costs in accordance with Section 11.3; and

1.29.6 Costs for the development of the manufacturing process for a Licensed Product, scale-up, manufacturing process validation, Manufacture of registration batches, manufacturing improvements, and qualification and validation of Third Party contract manufacturers.

Notwithstanding the foregoing, Collaboration Costs shall not include any (i) FTE costs or other costs and expenses that are specifically identifiable or reasonably allocable to Unilateral Activities of either Party, or (ii) any filing fees in connection with the filing of applications for Regulatory Approval; (iii) FTE costs for regulatory personnel in either Party except as otherwise expressly provided in Sections 1.29.2 or 1.29.3; or (iv) Manufacturing Costs for commercial supply of any Licensed Product.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.30 “ Combination Product ” shall mean a Licensed Product that is comprised of or contains any Licensed Compound as an active pharmaceutical ingredient together with one or more other active pharmaceutical ingredients and is sold either as a fixed dose or as separate doses in a single package.

1.31 “ Commercialization ” shall mean any and all activities directed to the preparation for sale of, offering for sale of, or sale of a Licensed Product, including activities related to marketing, promoting, distributing, and importing such Licensed Product, conducting Medical Affairs Activities, conducting Phase IV Studies, and interacting with Regulatory Authorities regarding the foregoing. When used as a verb, “ to Commercialize ” and “ Commercializing ” shall mean to engage in Commercialization, and “ Commercialized ” has a corresponding meaning.

1.32 “ Commercially Reasonable Efforts ” shall mean, with respect to the performance of Development, Commercialization, or Manufacturing activities with respect to a Licensed Product by a Party, the carrying out of such activities using efforts and resources comparable to the efforts and resources that such Party would typically devote to products of similar market potential at a similar stage in development or product life, taking into account all scientific, commercial, and other factors that the Party would take into account, including issues of safety and efficacy, expected and actual cost and time to develop, expected and actual profitability (including royalties and other payments required hereunder), expected and actual competitiveness of alternative Third Party products (including generic products) in the marketplace, the nature and extent of expected and actual market exclusivity (including patent coverage and regulatory exclusivity), the expected likelihood of regulatory approval, the expected and actual reimbursability and pricing, and the expected and actual amounts of marketing and promotional expenditures required. “Commercially Reasonable Efforts” shall be determined on a country-by-country (or region-by-region, where applicable) and indication-by-indication basis, except that the Party may consider the impact of its efforts and resources expended with respect to any country (or region) on any other country (or region).

1.33 “ Completion Notice ” shall mean, with respect to any Unilateral Activities, a report summarizing the Clinical Data and other Information resulting from or with respect to such Unilateral Activities as of the date of delivery of such report.

1.34“Compound Failure ” shall mean, with respect to a Licensed Compound (whether such Licensed Compound is the Initial Licensed Compound or a Backup Compound deemed to be a Licensed Compound pursuant to Section 5.10.2 following a previous Compound Failure), that, due to Clinical Study results or actions taken by any Regulatory Authority after the Effective Date, the JDC determines (subject to the dispute resolution procedures set forth in Section 13.6) it is unlikely that the Parties will be able to obtain Regulatory Approval in the European Union of a Licensed Product containing such Licensed Compound for the Renal Indication that is expected by the Parties, in good faith, on the basis of market data from a recognized provider such as IMS Health (subject to the dispute resolution procedures set forth in Section 13.6 if the Parties do not agree), to have aggregate annual Net Sales in the Major Markets in any [***] of the [***] full Calendar Years immediately following the commercial launch of such Licensed Product of at least [***] Dollars ($[***]) per Calendar Year.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.35 “ Conduct ” shall mean, with respect to any Clinical Study, to (i) sponsor or conduct, directly or indirectly through a Third Party, such Clinical Study; or (ii) provide to a Third Party funding for, or clinical supplies (including placebos) for use in, such Clinical Study.

1.36 “ Confidential Information ” shall have the meaning set forth in Section 9.1.

1.37 “ Control ” shall mean, with respect to any item of Information, Regulatory Documentation, material, Patent, or other intellectual property right, possession of the right, whether directly or indirectly, and whether by ownership, license or otherwise (other than by operation of the license and other grants in Section 5.1 or 5.2), to grant a license, sublicense or other right (including the right to reference Regulatory Documentation) to or under such Information, Regulatory Documentation, material, Patent, or other intellectual property right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.

1.38 “ Corporate Names ” shall mean the Trademarks and logos identified on Schedule 1.38 and such other names and logos as Licensor may designate in writing from time to time.

1.39 “ CREATE Act ” shall have the meaning set forth in Section 7.1.5.

1.40 “ Dartmouth ” shall mean Trustees of Dartmouth College.

1.41 “ Dartmouth Agreement ” shall mean that certain Exclusive License Agreement between Dartmouth and Licensor dated December 16, 2009, a redacted copy of which has been provided to Licensee, as may be amended, supplemented or restated from time to time as permitted hereunder.

1.42 “ Default Notice ” shall have the meaning set forth in Section 12.2.1.

1.43 “ Developing Party ” shall have the meaning set forth in Section 3.7.1(i).

1.44 “ Development ” shall mean all activities related to research, preclinical and other non-clinical testing, test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, qualification and validation, quality assurance/quality control, Clinical Studies, including Manufacturing in support thereof, statistical analysis and report writing, the preparation and submission of Drug Approval Applications, regulatory affairs with respect to the foregoing and all other activities necessary or reasonably useful or otherwise requested or required by a Regulatory Authority as a condition or in support of obtaining or maintaining a Regulatory Approval. When used as a verb, “ Develop ” shall mean to engage in Development. Development shall exclude Phase IV Studies.

1.45 “ Development Plan and Budget ” shall mean a development plan setting forth in reasonable detail specific Clinical Studies and related Party Development Activities to be performed with respect to a Licensed Product or Collaboration Candidate and the budget for such Development activities, which plan shall assign responsibility for such Clinical Studies and related Party Development Activities between the Parties.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.46 “ Diabetic CKD Study ” shall mean the Phase III Clinical Study in patients with Stage 3b or Stage 4 chronic kidney disease and type 2 diabetes identified in the Initial Development Plan.

1.47 “ Dispute ” shall have the meaning set forth in Section 13.6.

1.48 “ Dollars ” or “ $ ” shall mean United States Dollars.

1.49 “ Drug Approval Application ” shall mean a New Drug Application (an “ NDA ”) as defined in the FFDCA and the regulations promulgated thereunder (including all additions, supplements, extensions, and modifications thereto), or any corresponding foreign application in the Territory, including, with respect to the European Union, a Marketing Authorization Application (a “ MAA ”) filed with the EMA pursuant to the centralized approval procedure or with the applicable Regulatory Authority of a country in Europe with respect to the mutual recognition or any other national approval procedure.

1.50 “ Effective Date ” shall have the meaning set forth in Section 13.8.2.

1.51 “ EMA ” shall mean the European Medicines Agency and any successor agency thereto.

1.52 “ European Union ” shall mean the economic, scientific, and political organization of member states as it is constituted as of the Execution Date, which consists of Austria, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom of Great Britain and Northern Ireland, and that certain portion of Cyprus included in such organization.

1.53 “ Existing Patents ” shall have the meaning set forth in Section 10.2.1.

1.54 “ Existing Regulatory Documentation ” shall mean the Regulatory Documentation Controlled by Licensor or any of its Affiliates as of the Effective Date.

1.55 “ Exploit ” shall mean to make, have made, import, use, sell, or offer for sale, including to research, develop, commercialize, register, manufacture, have manufactured, hold, or keep (whether for disposal or otherwise), have used, export, transport, distribute, promote, market, or have sold or otherwise dispose of.

1.56 “ Exploitation ” shall mean the act of Exploiting a product or process.

1.57 “ FCPA ” shall have the meaning set forth in Section 4.5.

1.58 “ FDA ” shall mean the United States Food and Drug Administration and any successor agency thereto.

1.59 “ FFDCA ” shall mean the United States Federal Food, Drug, and Cosmetic Act, as amended from time to time.

1.60 “ Field ” shall mean all human and non-human diagnostic, prophylactic, and therapeutic uses for any Licensed Indications.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.61 “ First Commercial Sale ” shall mean, with respect to a pharmaceutical product and a country, the first sale for monetary value for use or consumption by the end user of such product in such country after Regulatory Approval for such product, such as so-called “treatment IND sales,” “named patient sales,” and “compassionate use sales,” shall not be construed as a First Commercial Sale.

1.62 “ FTE ” shall mean the equivalent of the work of one (1) employee full time for one (1) Calendar Year (consisting of at least a total of [***] hours per Calendar Year) of work directly related to the Development of a Licensed Product. No additional payment shall be made with respect to any person who works more than [***] hours per Calendar Year and any person who devotes less than [***] hours per Calendar Year (or such other number as may be agreed by the JDC) shall be treated as an FTE on a pro rata basis based upon the actual number of hours worked divided by [***].

1.63 “ FTE Costs ” shall mean, with respect to a Party for any period, the applicable FTE Rate multiplied by the applicable number of FTEs of such Party performing Development activities during such period in accordance with the applicable Development Plan and Budget.

1.64 “ FTE Rate ” shall mean [***] dollars ($[***]), increased or decreased on January 1 of each Calendar Year beginning January 1, 2012, to correspond with the total percentage change in the Consumer Price Index for All Urban Consumers (CPI-U) for the U.S. City Average, 1982-84 = 100, calculated by the Bureau of Labor Statistics over the twelve (12)-month period preceding each such January 1.

1.65 “ GAAP ” shall mean United States generally accepted accounting principles consistently applied.

1.66 “ Generic Product ” shall mean, with respect to a Licensed Product, any pharmaceutical product that: (i) is sold by a Third Party under a Drug Approval Application granted by a Regulatory Authority to such Third Party, which Third Party is not a licensee or Sublicensee of Licensee or its Affiliates, or any of their licensees or sublicensees, and has not obtained such Licensed Product from a chain of distribution including Licensee, its Affiliates or any of their licensees or sublicensees, and (ii) contains the applicable Licensed Compound as an active pharmaceutical ingredient; and (iii) is approved in reliance, in whole or in part, on the prior approval of such Licensed Product as determined by the applicable Regulatory Authority (pursuant to 21 U.S.C. 355(b)(2), an ANDA, a separate NDA, compendia listing, other drug approval application or otherwise, including foreign equivalents of the foregoing). A Licensed Product licensed or produced by Licensee ( i.e. , an authorized generic product) will not constitute a Generic Product.

1.67 “ Global Brand Elements ” shall have the meaning set forth in Section 4.3.

1.68 “ IND ” shall mean an investigational new drug application filed with the FDA for authorization to commence Clinical Studies and its equivalent in other countries or regulatory jurisdictions.

1.69 “ Indemnification Claim Notice ” shall have the meaning set forth in Section 11.4.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.70 “ Indemnified Party ” shall have the meaning set forth in Section 11.4.

1.71 “ Information ” shall mean all technical, scientific, and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and other material, including: biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre-clinical, clinical, safety, manufacturing and quality control data and information, including study designs and protocols; assays and biological methodology; (whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now known or hereafter developed.

1.72 “ Initial Development Activities ” shall mean the Party Development Activities set forth in the Initial Development Plan to be performed by Licensor (or, pursuant to Section 3.1.2 or 5.10.3, Licensee) in order to obtain Product Approval for the Initial Licensed Compound (or any Backup Compound pursued in its stead pursuant to Section 5.10) for the applicable Initial Indication in the Major Markets and in the United States.

1.73 “ Initial Development Costs ” shall mean [***] ($[***]).

1.74 “ Initial Development Plan ” shall mean the Development Plan and Budget covering the Initial Development Activities attached as Schedule 1.74 , as the same may be amended from time to time in accordance with the terms hereof.

1.75 “ Initial Indication ” shall mean (i) with respect to a Licensed Product containing the Initial Licensed Compound or a Licensed Product containing a Backup Compound, the Renal Indication, and (ii) with respect to a Licensed Product containing a Collaboration Compound, the Licensed Indication ( i.e. , the Renal Indication, the Cardiovascular Indication, or the Metabolic Indication) for which such Licensed Product initially obtains Regulatory Approval in a country in the Licensee Territory.

1.76 “ Initial Licensed Compound ” shall mean the pharmaceutical compound bardoxolone methyl, and any metabolite, salt, hydrate, solvate, enantiomer, free acid form, free base form, crystalline form, co-crystalline form, amorphous form, pro drug (including ester pro drug) form, racemate, polymorph, chelate, stereoisomer, tautomer, or optically active form thereof.

1.77 “ Initiation ” or “ Initiate ” means, with respect to a Clinical Study, the first dosing of the first human subject in such Clinical Study.

1.78 “ In-Licensed Patents ” shall have the meaning set forth in Section 10.2.3

1.79 “Investigator-Sponsored Trial” is a human clinical study initiated by an investigator and for which the investigator serves as the Sponsor-Investigator under 21 C.F.R. 312.3(b), or its foreign equivalent.

1.80 “ Joint Committee ” shall have the meaning set forth in Section 2.2.1.

1.81 “ Joint Development Activities ” shall have the meaning set forth in Section 3.2.1.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.82 “ Joint Development Committee ” or “ JDC ” shall have the meaning set forth in Section 2.1.1.

1.83 “ Joint Intellectual Property Rights ” shall have the meaning set forth in Section 7.1.2.

1.84 “ Joint Know-How ” shall have the meaning set forth in Section 7.1.2.

1.85 “ Joint Marketing Committee ” or “ JMC ” shall have the meaning set forth in Section 2.2.1.

1.86 “ Joint Patents ” shall have the meaning set forth in Section 7.1.2.

1.87 “ Knowledge ” shall mean the actual knowledge of the chief executive officer, the president, the executive vice-president, any vice president, including the vice president for research, the vice president for product development, the vice president for clinical development, and the vice president for intellectual property, the head of regulatory affairs, the senior patent counsel, the general counsel, or the chief medical officer of a Party, or any personnel holding positions equivalent to such job titles (but only to the extent such positions exist at such Party).

1.88 “ Kyowa ” shall mean Kyowa Hakko Kirin Co. Ltd.

1.89 “ Kyowa Agreement ” shall mean that certain Exclusive License Agreement, between Licensor and Kyowa, dated as of December 24, 2009, as in effect on the Execution Date.

1.90 “ LIBOR ” shall mean the London Interbank Offered Rate for deposits in United States Dollars having a maturity of one month published by the British Bankers’ Association, as adjusted from time to time on the first London business day of each month.

1.91 “ Licensed Compound ” shall mean (i) the Initial Licensed Compound, (ii) any Backup Compound selected pursuant to Section 5.10.2 as a Licensed Compound, and (iii) any Collaboration Compound with respect to which Licensee has exercised its Collaboration Candidate Option.

1.92 “ Licensed Indications ” shall mean each of the Renal Indication, the Cardiovascular Indication, and the Metabolic Indication. Licensed Indications does not include any indication not included in the Renal Indication, the Cardiovascular Indication, or the Metabolic Indication, including the prevention, treatment, or amelioration of: (i) any forms of cancer; (ii) any forms of organ failure (other than renal failure or heart failure); (iii) respiratory disorders; (iv) allergies and autoimmune diseases (other than lupus nephritis); (v) neurological, psychiatric, or neuropsychiatric disorders (other than diabetic neuropathy); (vi) infectious diseases; (vii) skin diseases (other than diabetic ulcers); (viii) gastrointestinal disorders; (ix) bone or cartilage disorders; (x) musculoskeletal disorders; (xi) eye diseases (other than diabetic retinopathy); (xii) human immunodeficiency virus-associated complications; and (xiii) sepsis; provided that the foregoing exclusions ((i) through (xiii)) shall not limit Licensee from marketing or selling Licensed Products for the Renal Indication, the Cardiovascular Indication, or the Metabolic Indication, even if the use of a Licensed Product may have an incidental therapeutic benefit for one of the excluded diseases or conditions set forth in clauses (i) through (xiii).

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.93 “ Licensed Indication Exclusivity Restriction ” shall have the meaning set forth in Section 5.8.1(i).

1.94 “ Licensed Product ” shall mean any pharmaceutical product containing a Licensed Compound, alone or in combination with one or more other therapeutically active ingredients, in any and all forms, presentations, dosages, and formulations.

1.95 “ Licensee ” shall have the meaning set forth in the preamble hereto.

1.96 “ Licensee Know-How ” shall mean all Information (including Regulatory Data) Controlled by Licensee or any of its Affiliates during the Term that is developed or acquired by Licensee or any of its Affiliates or Sublicensees after the Effective Date and during the Term as a result of performance under this Agreement, that is not generally known and is reasonably necessary or useful for the Development, Manufacture, or Commercialization of a Licensed Product, but excluding any Information to the extent covered or claimed by published Licensee Patents or Joint Patents or any Joint Know-How. Notwithstanding the foregoing, as used in the context of license grant back in Section 12.6.3 and Section 12.7.2, Licensee Know-How shall mean all Information Controlled by Licensee or any of its Affiliates as of the date of such license grant back that has been incorporated in a Licensed Product or is necessary or reasonably useful for the Development, Manufacture, or Commercialization of such Licensed Product, as such Licensed Product exists at the time of the grant-back.

1.97 “ Licensee Patents ” shall mean all of the Patents Controlled by Licensee or any of its Affiliates during the Term that claim or cover inventions made or conceived by Licensee or any of its Affiliates or Sublicensees after the Effective Date and during the Term as a result of performance under this Agreement, which Patents are reasonably necessary or useful (or, with respect to patent applications, would be reasonably necessary or useful if such Patent applications were to issue as patents) for the Development, Manufacture, or Commercialization of a Licensed Product in the Territory, but excluding any Joint Patents. Notwithstanding the foregoing, as used in the context of license grant back in Section 12.6.3 and Section 12.7.2, Licensee Patents shall mean all Patents Controlled by Licensee or any of its Affiliates as of the date of such license grant back that claim or cover the composition or formulation of, or the method of making or using, a Licensed Product in the Territory, as such Licensed Product exists at the time of the grant-back.

1.98 “ Licensee Prosecuted Infringement ” shall have the meaning set forth in Section 7.3.1

1.99 “ Licensee Territory ” shall mean the entire world other than the Licensor Territory.

1.100 “ Licensor ” shall have the meaning set forth in the preamble hereto.

1.101 “ Licensor EMA Deliverable Obligations ” shall have the meaning set forth in Section 6.1.2(iv).

1.102 “ Licensor Know-How ” shall mean all Information (including Regulatory Data) Controlled by Licensor or any of its Affiliates as of the Effective Date or at any time during the Term that is not generally known and is reasonably necessary or useful for the Development, Manufacture, or Commercialization of a Licensed Product, but excluding any Information to the extent covered or claimed by published Licensee Patents or Joint Patents or any Joint Know-How.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.103 “ Licensor Patent Infringement ” shall have the meaning set forth in Section 7.3.1.

1.104 “ Licensor Patents ” shall mean all of the Patents Controlled by Licensor or any of its Affiliates as of the Effective Date or at any time during the Term that are reasonably necessary or useful (or, with respect to Patent applications, would be reasonably necessary or useful if such Patent applications were to issue as Patents) for the Development, Manufacture or Commercialization of a Licensed Product, but excluding any Joint Patents. The Licensor Patents include the Existing Patents.

1.105 “ Licensor Territory ” shall mean (i) the United States and the Out-Licensed Territory, (ii) each Major Market with respect to which this Agreement is terminated by Licensor pursuant to Section 12.2.2, and (iii) each Region with respect to which this Agreement is terminated by Licensee pursuant to Section 12.3.2.

1.106 “ Losses ” shall have the meaning set forth in Section 11.1.

1.107 “ MAA ” shall have the meaning set forth in Section 1.49.

1.108 “ Major Market ” shall mean each of [***].

1.109 “ Major Regulatory Filing ” shall have the meaning set forth in Section 3.6.1(iv).

1.110 “ Manufacture ” and “ Manufacturing ” shall mean all activities related to the production, manufacture, processing, filling, finishing, packaging, labeling, shipping, and holding of Licensed Compound, Licensed Products, or any intermediate thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial manufacture and analytic development, product characterization, stability testing, quality assurance, and quality control.

1.111 “ Manufacturing Cost ” shall mean (i) with respect to Licensed Compounds or Licensed Product that is Manufactured directly by a Party or its Affiliate, the cost of direct labor and direct materials, product testing costs incurred in connection with Manufacturing, start-up and on-going validation costs directly associated with the Manufacture of the Licensed Product, facility costs including depreciation, and overhead, such calculation being based upon accepted industry standards and GAAP; and (ii) with respect to Licensed Compounds or Licensed Product that is Manufactured by a Third Party, the actual purchase price paid by a Party or its Affiliate to such Third Party for such Licensed Compounds or Licensed Product, without markup.

1.112 “ Manufacturing Process ” shall have the meaning set forth in Section 4.910.1.

1.113 “ Markings ” shall have the meaning set forth in Section 4.8.

1.114 “ Material Adverse Effect ” shall mean, with respect to a Party, a material adverse effect on the Development or Commercialization of a Licensed Product in such Party’s part of the Territory.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.115 “ Material Amendment ” shall means any amendment to the Initial Development Plan that (i) would increase the aggregate budget for all Initial Development Activities to an amount greater than [***] Dollars ($[***]), (ii) would add, delete or change any material Initial Development Activity, or (iii) could reasonably be expected to have a Material Adverse Effect on Licensee.

1.116 “ Medical Affairs Activities ” shall mean the coordination of medical information requests and field based medical liaisons with respect to Licensed Products that have been commercially launched in the applicable country.

1.117 “ Metabolic Indication ” shall mean the prevention, treatment, or amelioration of any of the following metabolic diseases or conditions: type II diabetes, insulin resistance, complication of diabetes (including retinopathy, neuropathy, and ulcers), obesity, metabolic syndrome, hypercholesterolemia, and hyperlipidemia.

1.118 “ Mono Product ” shall have the meaning set forth in Section 1.120.

1.119 “ NDA ” shall have the meaning set forth in the definition of “Drug Approval Application.”

1.120 “ Net Sales ” shall mean, with respect to a Licensed Product for any period, the total amount billed or invoiced on sales of such Licensed Product during such period by Licensee, its Affiliates, or Sublicensees in the Licensee Territory to Third Parties (including wholesalers or distributors) in bona fide arm’s length transactions, less the following deductions (specifically excluding any royalty payments required to be made by Licensee to Licensor hereunder), in each case to the extent such deductions relate specifically to such Licensed Product and are actually allowed and taken by such Third Parties and are not otherwise recovered by or reimbursed to Licensee, its Affiliates, or Sublicensees:

(i) trade, cash and quantity discounts;

(ii) price reductions or rebates, retroactive or otherwise, imposed by, negotiated with or otherwise paid to governmental authorities;

(iii) taxes on sales (such as sales, value added, or use taxes) to the extent added to the sale price and set forth separately as such in the total amount invoiced;

(iv) freight, insurance, and other transportation charges to the extent added to the sale price and set forth separately as such in the total amount invoiced, as well as any fees for services provided by wholesalers and warehousing chains related to the distribution of such Licensed Product;

(v) amounts repaid or credited by reason of rejections, defects, one percent (1%) return goods allowance, recalls or returns, or because of retroactive price reductions, including rebates or wholesaler charge backs;

(vi) the portion of administrative fees paid during the relevant time period to group purchasing organizations, pharmaceutical benefit managers relating specifically to such Licensed Product; and

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(vii) any consideration actually paid or payable for any Delivery System related to a billed or invoiced sale of such Licensed Product, where for purposes of this Net Sales definition, a “Delivery System” shall mean any delivery system comprising equipment, instrumentation, one or more devices, or other components designed to assist in the administration of such Licensed Product.

Net Sales shall include the amount or fair market value of all other consideration received by Licensee, its Affiliates, or Sublicensees in respect of such Licensed Product, whether such consideration is in cash, payment in kind, exchange, or other form. Net Sales shall not include transfers or dispositions for charitable, promotional, pre-clinical, clinical, regulatory, or governmental purposes so long as such transfer or disposition is made at or below cost. Net Sales shall not include sales between or among Licensee, its Affiliates, or Sublicensees so long as such Affiliates or Sublicensees are not end-users of such Licensed Product. Subject to the above, Net Sales shall be calculated in accordance with the standard internal policies and procedures of Licensee, its Affiliates, or Sublicensees, which must be in accordance with GAAP. In the event a Licensed Product is a Combination Product, the Net Sales for such Combination Product will be calculated as follows:

a) If Licensee, its Affiliate, or Sublicensee separately sells in such country, (x) a Licensed Product containing as its sole active ingredient the Licensed Compound contained in such Combination Product (the “ Mono Product ”) and (y) products containing as their sole active ingredients the other active ingredients in such Combination Product, the Net Sales attributable to such Combination Product shall be calculated by multiplying actual Net Sales of such Combination Product by the fraction A/(A+B) where: A is Licensee’s (or its Affiliate’s or Sublicensee’s, as applicable) average Net Sales price during the period to which the Net Sales calculation applies for the Mono Product in such country and B is Licensee’s (or its Affiliate’s or Sublicensee’s, as applicable) average Net Sales price during the period to which the Net Sales calculation applies in such country, for products that contain as their sole active ingredients the other active ingredients in the Combination Product.

b) If Licensee, its Affiliate, or Sublicensee separately sells in such country the Mono Product but does not separately sell in such country products containing as their sole active ingredients the other active ingredients in such Combination Product, the Net Sales attributable to such Combination Product shall be calculated by multiplying the Net Sales of such Combination Product by the fraction A/C where: A is Licensee’s (or its Affiliate’s or Sublicensee’s, as applicable) average Net Sales price during the period to which the Net Sales calculation applies for the Mono Product in such country, and C is Licensee’s (or its Affiliate’s or Sublicensee’s, as applicable) average Net Sales price in such country during the period to which the Net Sales calculation applies for such Combination Product.

c) If Licensee, its Affiliates, and Sublicensees do not separately sell in such country the Mono Product but do separately sell products containing as their sole active ingredients the other active ingredients contained in such Combination Product, the Net Sales attributable to such Combination Product shall be calculated by multiplying the Net Sales of such Combination Product by the fraction (D-E)/D where: D is the average Net Sales price during the period to which the Net Sales calculation applies for the Combination Product in such country and E is the average Net Sales price during the period to which the Net Sales calculation applies for products that contain as their sole active ingredients the other active ingredients in such Combination Product.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

d) If Licensee, its Affiliates, and Sublicensees do not separately sell in such country both the Mono Product and the other active ingredient or ingredients in such Combination Product, the Net Sales attributable to such Combination Product shall be determined by the Parties in good faith based on the relative fair market value of such Mono Product and such other active ingredient or ingredients.

1.121 “ Neutral ” shall have the meaning set forth in Schedule 13.6.4 .

1.122 “ Non-Breaching Party ” shall have the meaning set forth in Section 12.2.1.

1.123 “ Ongoing Phase IIb Study ” shall mean the Clinical Study being conducted by Licensor as of the Effective Date titled “A 52-Week, Multi-center, Double-blind, Randomized, Placebo-controlled Phase IIb Trial to Determine the Effects of Bardoxolone methyl (RTA-402) on eGFR in Patients with Type 2 Diabetes and Chronic Kidney Disease with an eGFR of 20 – 45 mL/min/1.73m2, (Clinical Study Protocol 402-C-804).”

1.124 “ Opt-In ” shall have the meaning set forth in Section 3.7.4(i).

1.125 “ Opt-In Exercise Notice ” shall have the meaning set forth in Section 3.7.4(ii).

1.126 “ Opt-In Exercise Period ” shall have the meaning set forth in Section 3.7.4(i).

1.127 “ Opting-Out Party ” shall have the meaning set forth in Section 3.7.1(i).

1.128 “ Opt-Out ” shall have the meaning set forth in Section 3.7.1(i).

1.129 “ Out-Licensed Territory ” shall mean Japan, China (including Hong Kong and Macau), South Korea, Taiwan, Thailand, Singapore, Philippines, Malaysia, Indonesia, Brunei, Vietnam, Laos, Myanmar and Cambodia.

1.130 “ Owned Patents ” shall have the meaning set forth in Section 10.2.3.

1.131 “ Party ” and “ Parties ” shall have the meaning set forth in the preamble hereto.

1.132 “ Party Development Activities ” shall mean Development activities conducted in support of obtaining or maintaining Regulatory Approval of a Licensed Product or Collaboration Candidate in a country in the Licensee Territory and/or the United States.

1.133 “ Patents ” shall mean (i) all national, regional and international patents and patent applications, including provisional patent applications, (ii) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals and continued prosecution applications, (iii) any and all patents that have issued or in the future issue from the foregoing patent applications ((i) and (ii)), including utility models, petty patents and design patents and certificates of invention, (iv) any and

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((i), (ii), and (iii)) and (v) any similar rights, including so-called pipeline protection or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any of such foregoing patent applications and patents.

1.134 “ Payments ” shall have the meaning set forth in Section 6.5.

1.135 “ Person ” shall mean an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government.

1.136 “ Phase 1 Study Materials ” shall have the meaning set forth in Section 3.3.1.

1.137 “ Phase I ” shall mean a human clinical trial of a Licensed Product or Collaboration Candidate, the principal purpose of which is a preliminary determination of safety in healthy individuals or patients or similar clinical study prescribed by the Regulatory Authorities, including the trials referred to in 21 C.F.R. §312.21(a), as amended.

1.138 “ Phase II ” shall mean a human clinical trial of a Licensed Product or Collaboration Candidate, the principal purpose of which is a determination of safety and efficacy in the target patient population or a similar clinical study prescribed by the Regulatory Authorities, from time to time, pursuant to Applicable Law or otherwise, including the trials referred to in 21 C.F.R. §312.21(b), as amended.

1.139 “ Phase III ” shall mean a human clinical trial of a Licensed Product or Collaboration Candidate on a sufficient number of subjects that is designed to establish that a pharmaceutical product is safe and efficacious for its intended use and to determine warnings, precautions, and adverse reactions that are associated with such pharmaceutical product in the dosage range to be prescribed, which trial is intended to support marketing approval of such Licensed Product or Collaboration Candidate, including all tests and studies that are required by the FDA from time to time, pursuant to Applicable Law or otherwise.

1.140 “ Phase IV Study ” shall mean a post-marketing human clinical study for a Licensed Product with respect to any indication with respect to which Regulatory Approval has been received or for a use that is the subject of an investigator-initiated study program.

1.141 “ Pre-Clinical Compound ” shall have the meaning set forth in Section 5.7.5.

1.142 “ Product Approval ” shall mean, with respect to a Licensed Product in a country in the Territory, Regulatory Approval for such Licensed Product in such country, excluding any required pricing or reimbursement approval in such country for such Licensed Product.

1.143 “ Product Infringement ” shall have the meaning set forth in Section 7.3.1.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.144 “ Product Labeling ” shall mean, with respect to a Licensed Product in a country in the Territory, (i) the Regulatory Authority-approved full prescribing information for such Licensed Product for such country, including any required patient information and (ii) all labels and other written, printed or graphic matter upon a container, wrapper or any package insert utilized with or for such Licensed Product in such country.

1.145 “ Product Trademarks ” shall mean the Trademark(s) to be used for the Commercialization of Licensed Products in the Licensee Territory and any registrations thereof or any pending applications relating thereto in the Licensee Territory (excluding, in any event, any trademarks, service marks, names or logos that include any corporate name or logo of the Parties or their Affiliates).

1.146 “ Proposed Terms ” shall have the meaning set forth in Section 13.6.5.

1.147 “ Proposed Unilateral Activities ” shall have the meaning set forth in Section 3.7.1(i).

1.148 “ Region ” shall mean each of the regions set forth on Schedule 1.148 .

1.149 “ Regulatory Approval ” shall mean, with respect to a Licensed Product in a country in the Territory, any and all approvals (including Drug Approval Applications), licenses, registrations, or authorizations of any Regulatory Authority necessary to commercially distribute, sell, or market such Licensed Product in such country, including, where applicable, (i) pricing or reimbursement approval in such country, (ii) pre- and post-approval marketing authorizations (including any prerequisite Manufacturing approval or authorization related thereto), and (iii) labeling approval.

1.150 “ Regulatory Authority ” shall mean any applicable supra-national, federal, national, regional, state, provincial, or local regulatory agencies, departments, bureaus, commissions, councils, or other government entities regulating or otherwise exercising authority with respect to the Exploitation of Licensed Compounds or Licensed Products in the Territory.

1.151 “ Regulatory Data ” shall have the meaning set forth in Section 3.6.2(i).

1.152 “ Regulatory Documentation ” shall mean all (i) applications (including all INDs and Drug Approval Applications and other Major Regulatory Filings), registrations, licenses, authorizations, and approvals (including Regulatory Approvals), and (ii) correspondence and reports submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents with respect thereto, including all regulatory drug lists, advertising and promotion documents, adverse event files, and complaint files in each case ((i), and (ii)) relating to a Licensed Product.

1.153 “ Regulatory Exclusivity ” shall mean with respect to any country of the Territory, an additional market protection, other than Patent protection, granted by a Regulatory Authority in such country which confers an exclusive Commercialization period during which: Licensee or its Affiliates or Sublicensees have the exclusive right to market, price, and sell a Licensed Product in such country through a regulatory exclusivity right, such as new chemical entity exclusivity, new use or indication exclusivity, new formulation exclusivity, orphan drug exclusivity, pediatric exclusivity, or any applicable data exclusivity.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.154 “ Related Unilateral Activities ” shall have the meaning set forth in Section 3.7.4(i).

1.155 “ Renal Indication ” shall mean the prevention, treatment, or amelioration of any renal disease or condition, including renal insufficiency, chronic kidney disease, acute kidney failure, ischemia-reperfusion injury of the kidney, glomerulonephritis, and all other forms of nephritis (whether acute or chronic).

1.156 “ Restricted Product ” shall have the meaning set forth in Section 5.8.2.

1.157 “ Retained Indication ” shall mean all indications other than the Licensed Indications, including: (i) any forms of cancer; (ii) any forms of organ failure (other than renal failure or heart failure); (iii) respiratory disorders; (iv) allergies and autoimmune diseases (other than lupus nephritis); (v) neurological, psychiatric, or neuropsychiatric disorders (other than diabetic neuropathy); (vi) infectious diseases; (vii) skin diseases (other than diabetic ulcers); (viii) gastrointestinal disorders; (ix) bone or cartilage disorders; (x) musculoskeletal disorders; (xi) eye diseases (other than diabetic retinopathy); (xii) human immunodeficiency virus-associated complications; and (xiii) sepsis.

1.158 “ Reverse Royalty Term ” shall mean, with respect to each Licensed Product and each country in the Terminated Territory, the period beginning on the date of the first sale of such Licensed Product in such country after termination of this Agreement with respect to such country and ending on the later to occur of (i) the earlier of (A) the later of (1) the expiration of the last-to-expire Licensor Patent, Licensee Patent or Joint Patent that includes a Valid Claim that covers such Licensed Product in such country and (2) the expiration of Regulatory Exclusivity in such country for such Licensed Product and (B) the last day of the first Calendar Quarter in which unit sales of all Generic Products in such country exceed fifty percent (50%) of the sum of unit sales of such Licensed Product and all Generic Products in such country during such Calendar Quarter; and (ii) the tenth (10th) anniversary of the first sale of such Licensed Product in such country after termination of this Agreement. Solely for purposes of the Section 1.157, each reference in the definitions of “Regulatory Exclusivity” and “Generic Product” to (A) Licensee shall be deemed to be a reference to Licensor, and (B) a Sublicensee shall be deemed to be a reference to a licensee or sublicensee of Licensor or its Affiliates.

1.159 “ Royalty Term ” shall mean, with respect to each Licensed Product and each country in the Licensee Territory, the period beginning on the date of the First Commercial Sale of such Licensed Product in such country, and ending on the later to occur of (i) the earlier of (A) the later of (1) the expiration of the last-to-expire Licensor Patent that includes a Valid Claim that covers such Licensed Product in such country and (2) the expiration of Regulatory Exclusivity in such country for such Licensed Product and (B) the last day of the first Calendar Quarter in which unit sales of all Generic Products in such country exceed fifty percent (50%) of the sum of units sales of such Licensed Product and all Generic Products in such country during such Calendar Quarter; and (ii) the tenth (10th) anniversary of the First Commercial Sale of such Licensed Product in such country.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.160 “ Senior Officer ” shall mean, with respect to Licensor, its Chief Executive Officer or Chief Operating Officer, and with respect to Licensee, its Executive Vice President, Pharmaceutical Products Group.

1.161 “ Statement Cut-Off Date ” shall have the meaning set forth in Section 3.7.4(ii).

1.162 “ Sublicensee ” shall mean a Person, other than an Affiliate, that is granted a sublicense by Licensee or Licensor under the grants in Section 5.1 or 5.2 as provided in Section 5.4.1 or 5.4.2.

1.163 “ Subsequent Statement ” shall have the meaning set forth in Section 3.7.4(ii).

1.164 “ Support Memorandum ” shall have the meaning set forth in Section 13.6.5

1.165 “ Target CKD Approval Profile ” shall have the meaning set forth on Schedule 1.165 .

1.166 “ Target CKD Safety Conditions ” shall have the meaning set forth on Schedule 1.165 .

1.167 “ Target Phase IIb CKD Conditions ” shall have the meaning set forth on Schedule 1.165 .

1.168 “ Target Phase IIIb CDK Conditions ” shall have the meaning set forth on Schedule 1.165 .

1.169 “ Targeted AIM ” shall mean any small molecular antioxidant inflammation modulator, other than the Initial Licensed Compound, that activates the Nrfl or the Nrf2/Keap 1 pathway as its primary mechanism of action.

1.170 “ Technology Transfer ” shall have the meaning set forth in Section 4.10.

1.171 “ Term ” shall have the meaning set forth in ARTICLE 12.

1.172 “ Terminated Territory ” shall mean each Major Market with respect to which this Agreement is terminated by Licensor pursuant to Section 12.2.2, each Region with respect to which this Agreement is terminated by Licensee pursuant to Section 12.3.2, or, if this Agreement is terminated in its entirety, the entire Licensee Territory.

1.173 “ Territory ” shall mean the Licensor Territory and the Licensee Territory.

1.174 “ Third Party ” shall mean any Person other than Licensor, Licensee and their respective Affiliates.

1.175 “ Third Party Claims ” shall have the meaning set forth in Section 11.1.

1.176 “ Trademark ” shall include any word, name, symbol, color, designation or device or any combination thereof that functions as a source identifier, including any trademark, trade dress, brand mark, service mark, trade name, brand name, logo or business symbol, whether or not registered.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.177 “ Unilateral Activities ” shall have the meaning set forth in Section 3.7.1(i).

1.178 “ Unilateral Activity Cost Statement ” shall have the meaning set forth in Section 3.7.4(ii).

1.179 “ United States ” means the United States of America (including all possessions and territories thereof, including Puerto Rico).

1.180 “ U.S. Commercialization Partner ” shall have the meaning set forth in Section 5.9.1.

1.181 “ UT ” Shall mean the Board of Regents of The University of Texas System and The University of Texas M.D. Anderson Cancer Center.

1.182 “ UT Agreement ” shall mean that certain Exclusive Patent License Agreement among UT, Dartmouth, and Reata Discovery, Inc. dated July 15, 2004, a redacted copy of which has been provided to Licensee, as may be amended, supplemented, or restated from time to time as permitted hereunder.

1.183 “ Valid Claim ” shall mean a claim of any issued and unexpired patent whose validity, enforceability, or patentability has not been affected by any of the following: (i) irretrievable lapse, abandonment, revocation, dedication to the public, or disclaimer, or (ii) a holding, finding, or decision of invalidity, unenforceability, or non-patentability by a court, governmental agency, national or regional patent office, or other appropriate body that has competent jurisdiction, such holding, finding, or decision being final and unappealable or unappealed within the time allowed for appeal.

ARTICLE 2

COLLABORATION MANAGEMENT

2.1 Joint Development Committee.

2.1.1 Formation . The Parties shall establish a joint development committee (the “ Joint Development Committee ” or “ JDC ”). The JDC shall consist of three (3) representatives from each of the Parties, each with the requisite experience and seniority to enable such person to make decisions on behalf of the Parties with respect to the issues falling within the jurisdiction of the JDC. From time to time, each Party may substitute one or more of its representatives to the JDC on written notice to the other Party. Licensor shall select from its representatives the initial chairperson for the JDC. Each January 1 and July 1 during the Term, the Party for whom the then-current chairperson is not a representative shall select from its representatives the new chairperson for the JDC. From time to time during the term of any chairperson, the Party nominating such chairperson may change the representative who will serve as chairperson on written notice to the other Party. The initial members of the JDC are set forth in Schedule 2.1.1 .

2.1.2 Specific Responsibilities. The JDC shall develop the strategies for and oversee the Development of the Licensed Products in the Licensee Territory and the United States, and shall serve as a forum for the coordination of Development activities for the Licensed Products for the Licensee Territory and the United States. In particular, the JDC shall:

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(i) periodically ([***]) review the Initial Development Plan, and review and approve amendments thereto, including any Material Amendment;

(ii) serve as a forum for discussing proposed Joint Development Activities and Proposed Unilateral Activities;

(iii) periodically ([***]) review each Development Plan and Budget for Joint Development Activities and Unilateral Activities, and review and approve amendments thereto;

(iv) resolve any disputes regarding whether any Proposed Unilateral Activities, proposed Phase IV Studies, or proposed regulatory action could have a Material Adverse Effect on a Party;

(v) periodically review and serve as a forum for discussing Collaboration Candidate Development Plans and Budgets, and review and approve amendments thereto;

(vi) periodically review the conduct of Development activities under each Collaboration Candidate Development Plan and Budget;

(vii) oversee the conduct of Development activities under the Initial Development Plan;

(viii) oversee the conduct of Joint Development Activities and Unilateral Activities;

(ix) serve as a forum for discussing and coordinating strategies for obtaining Regulatory Approvals for the Licensed Products in the Licensee Territory and the United States;

(x) determine whether a Compound Failure has occurred; and

(xi) establish secure access methods (such as secure databases) for each Party to access the other Party’s Regulatory Documentation and other Information as contemplated under this Agreement; and

(xii) perform such other functions as are set forth herein or as the Parties may mutually agree in writing, except where in conflict with any provision of this Agreement.

2.1.3 Coordination on Development Activities for Early-Stage Compounds. From time to time prior to (i) the [***] ([***]) anniversary of the First Commercial Sale of a Licensed Product in a Major Market, but no less often than once every [***], Licensor shall provide to the JDC a report (in the form of a slide presentation or the like) setting forth all material Information regarding any Targeted AIM (other than compounds that are then Licensed Compounds) that is then Controlled by Licensor or an Affiliate (but excluding Targeted AIMs controlled by any Affiliate who becomes an Affiliate through any change of control or acquisition of Licensor, which Targeted AIMs were controlled by such Affiliate immediately prior to such change of control or acquisition) with respect to which Licensor or any Affiliate is then performing or proposes to perform any pre-clinical or clinical development for the Renal Indication; and (ii)

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

the [***] ([***]) anniversary of the Effective Date, but no less often than once every [***], Licensor shall provide to the JDC a report (in the form of a slide presentation or the like) setting forth all material Information regarding any Targeted AIM (other than compounds that are then Licensed Compounds) that is then Controlled by Licensor or an Affiliate (but excluding Targeted AIMs controlled by any Affiliate who becomes an Affiliate through any change of control or acquisition of Licensor, which Targeted AIMs were controlled by such Affiliate immediately prior to such change of control or acquisition) with respect to which Licensor or any Affiliate is then performing or proposes to perform any pre-clinical or clinical development for the Cardiovascular Indication or the Metabolic Indication. In each case ((i) and (ii)), Licensor shall provide to the JDC any further Information reasonably requested by Licensee’s representatives to the JDC, and shall make available to the JDC appropriate personnel to discuss such development activities. Nothing in this Section 2.1.3 shall be construed to (a) require Licensor to disclose to Licensee the structural information of any Targeted AIMs or new discoveries which are not yet the subject of a filed patent application or (b) limit Licensee’s rights under Section 3.3.

2.2 Joint Marketing Committee.

2.2.1 Formation . The Parties shall establish a joint marketing committee (the “ Joint Marketing Committee ” or “ JMC ”, and collectively with the JDC, “ Joint Committees ”). The JMC shall consist of three (3) representatives from each of the Parties, each with the requisite experience and seniority to enable such person to make decisions on behalf of the Parties with respect to the issues falling within the jurisdiction of the JMC. From time to time, each Party may substitute one or more of its representatives to the JMC on written notice to the other Party. Licensee shall select from its representatives the initial chairperson for the JMC. Each January 1 and July 1 during the Term, the Party for whom the then-current chairperson is not a representative shall select from its representatives the new chairperson for the JMC. From time to time during the term of any chairperson, the Party nominating such chairperson may change the representative who will serve as chairperson on written notice to the other Party. The initial members of the JMC are set forth in Schedule 2.2.1 .

2.2.2 Specific Responsibilities. The JMC shall develop the strategies for and oversee the Commercialization of the Licensed Products in the Licensee Territory and the United States. In particular, the JMC shall:

(i) oversee at a high level all Commercialization activities in the Licensee Territory and the United States, and with Kyowa’s consent, the Out-Licensed Territory, with respect to the Licensed Products;

(ii) develop, adopt, and amend the Global Brand Elements;

(iii) select the Product Trademarks;

(iv) serve as a forum for the coordination of the Parties’ global marketing and branding efforts; and

(v) Oversee any co-promotion of the Licensed Product by the Parties Undertaken as contemplated in Section 4.11; and

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(vi) perform such other functions as are set forth herein or as the Parties may mutually agree in writing, except where in conflict with any provision of this Agreement.

2.3 General Provisions Applicable to Joint Committees.

2.3.1 Meetings and Minutes. Each Joint Committee shall meet quarterly, or as otherwise agreed to by the Parties, with the location of such meetings alternating between locations designated by Licensor and locations designated by Licensee. The chairperson of the Joint Committee shall be responsible for calling meetings on no less than [***] Business Days notice. Each Party shall make all proposals for agenda items and shall provide all appropriate information with respect to such proposed items at least [***] Business Days in advance of the applicable meeting; provided that under exigent circumstances requiring input by the Joint Committee, a Party may provide its agenda items to the other Party within a shorter period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as the other Party consents to such later addition of such agenda items or the absence of a specific agenda for such meeting, such consent not to be unreasonably withheld or delayed. The chairperson of the Joint Committee shall prepare and circulate for review and approval of the Parties minutes of each meeting within thirty (30) days after the meeting. The Parties shall agree on the minutes of each meeting promptly, but in no event later than the next meeting of the Joint Committee.

2.3.2 Procedural Rules. Each Joint Committee shall have the right to adopt such standing rules as shall be necessary for its work, to the extent that such rules are not inconsistent with this Agreement. A quorum of the Joint Committee shall exist whenever there is present at a meeting at least one (1) representative appointed by each Party. Members of a Joint Committee may attend a meeting either in person or by telephone, video conference or similar means in which each participant can hear what is said by, and be heard by, the other participants. Representation by proxy shall be allowed. Each Joint Committee shall take action by consensus of the members present at a meeting at which a quorum exists, with each Party having a single vote irrespective of the number of representatives of such Party in attendance, or by a written resolution signed by at least one (1) representative appointed by each Party. Employees or consultants of either Party that are not members of a Joint Committee may attend meetings of such Joint Committee; provided, however, that such attendees (i) shall not vote or otherwise participate in the decision-making process of the Joint Committee and (ii) are bound by obligations of confidentiality and non-disclosure equivalent to those set forth in Article 9.

2.3.3 Dispute Resolution. If a Joint Committee cannot, or does not, reach consensus on an issue within a period of [***] Business Days or such other period as the Parties may agree, then the dispute resolution provisions set forth in Section 13.6 shall apply.

2.3.4 Limitations on Authority. Each Party shall retain the rights, powers, and discretion granted to it under this Agreement and no such rights, powers, or discretion shall be delegated to or vested in a Joint Committee unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing. No Joint Committee shall have the power to amend, modify, or waive compliance with this Agreement, which may only be amended or modified as provided in Section 13.89 or compliance with which may only be waived as provided in Section 13.12.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

2.4 Discontinuation of Participation on a Committee. Each Joint Committee shall continue to exist until the first to occur of: (a) the Parties mutually agreeing to disband the Joint Committee; or (b) Licensor providing to Licensee written notice of its intention to disband and no longer participate in such Joint Committee, provided that Licensor shall not give such written notice prior to the [***] ([***]) anniversary of the Effective Date. Notwithstanding anything herein to the contrary, once Licensor has provided such written notice, such Joint Committee shall be terminated and shall have no further rights or obligations under this Agreement, and thereafter any requirement of Licensor to provide such Information or other materials to such Joint Committee shall be deemed a requirement to provide such Information or other materials to Licensee and Licensee shall have the right to solely decide, without consultation with Licensor, all matters that are subject to the review or approval by such Joint Committee hereunder.

2.5 Coordination with Kyowa.

2.5.1 Global Coordination. At least [***] during the Term, representatives from Licensor and Licensee shall meet to discuss matters related to the Development and Commercialization of the Licensed Compounds and Licensed Products on a global basis and possibilities for coordination of such activities among Licensor and Licensee, and Licensor shall invite representatives of Kyowa to participate in such meetings. The location of such meetings shall rotate among locations designated by Licensor and Licensee (and, if Kyowa so participates, Kyowa), with the first location designated by Licensor.

2.5.2 Coordination on Development Activities in the Out-Licensed Territory. From time to time, but no less often than [***], Licensor shall provide to the JDC a report (in the form of a slide presentation or the like) setting forth all material Information then Controlled by Licensor or any of its Affiliates regarding Development activities for Licensed Compounds or Licensed Products in the Out-Licensed Territory and Phase IV Studies for Licensed Products in the Licensed Indications for the Out-Licensed Territory, to the extent Licensor has the right to do so under the Kyowa Agreement or to the extent Kyowa otherwise agrees. If Licensee reasonably believes, in its reasonable judgment, that any such Development activities or Phase IV Studies could reasonably be expected to have a Material Adverse Effect on Licensee, it may so inform Licensor, and in such circumstance Licensor shall consider in good faith Licensee’s objection, and shall, if Licensor believes in good faith that such a Material Adverse Effect could reasonably be expected, use commercially reasonable efforts to modify the Development activities or Phase IV Studies to minimize such potential Material Adverse Effect or use commercially reasonable efforts to cause such modification.

2.5.3 Three-Way Agreement with Kyowa. Licensee agrees that, at Licensor’s request, the Parties and Kyowa shall meet and negotiate in good faith and endeavor to agree on the terms of and enter into as soon as reasonably practical after such request, a commercially reasonable agreement by and between the Parties and Kyowa which may address sharing of Regulatory Data and other Information relating to the Licensed Products directly between Licensee and Kyowa, discussion of strategy and coordination of Development in their

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

respective territories between Licensee, Licensor and Kyowa, discussion amongst the Parties and Kyowa of ways to optimize the Development and Commercialization of Licensed Products worldwide, the possibility of each party attending advisory panel meetings with key opinion leaders held by each of the other parties in its territory, and joint meetings of the parties to explore possibilities for global clinical trials conducted jointly by Licensor, Licensee and Kyowa for Licensed Indications other than diabetic neuropathy, including the allocation of costs among the three parties based upon the estimated market of each of their respective territories in relation to the global market for such Licensed Product for such indication; provided that neither Party shall have any obligation to enter into any such agreement.

2.5.4 Compliance With Kyowa Agreement. Licensor has granted exclusive licenses to the Initial Licensed Compound, back-up compounds thereto, and certain related compounds and product containing the foregoing compounds to Kyowa pursuant to the Kyowa Agreement, a redacted copy of which has been delivered to Licensee. Licensee hereby consents to Licensor’s performance of its obligations to consult and coordinate with Kyowa regarding the worldwide Development and Commercialization of the Initial Licensed Compound and such other compounds and products containing such compounds, and to provide information to Kyowa regarding the Licensed Compounds and Licensed Products, all to the extent provided in the redacted Kyowa Agreement provided to Licensee as of the Execution Date.

ARTICLE 3

DEVELOPMENT AND REGULATORY

3.1 Initial Development Activities .

3.1.1 Initial Development Plan . The Parties shall conduct their Initial Development Activities in accordance with the Initial Development Plan. Either Party, directly or through its representatives on the JDC, may propose amendments to the Initial Development Plan to the JDC from time to time as appropriate, including in light of changed circumstances or to propose additional Initial Development Activities for a Licensed Product containing the Initial Licensed Compound or a Backup Compound. Any and all such changes and updates shall be subject to approval by the JDC, subject to the dispute resolution procedures set forth in Section 13.6. The Parties agree that the Initial Development Plan shall be amended by the JDC to include any additional Development activities necessary to satisfy any EMA recommendations or requirements to support obtaining Product Approval of a Licensed Product containing the Initial Licensed Compound for the stage 3b/4 CKD population in diabetic and non-diabetic patients in the Major Markets. If the JDC cannot agree on such amendments, the dispute shall be resolved pursuant to Section 13.6.

3.1.2 Initial Development Activities . Licensor shall perform the Initial Development Activities, and shall do so in accordance with the Initial Development Plan (including the budget set forth therein, subject to Section 3.4.4) by allocating sufficient time, effort, equipment, and skilled personnel to complete such Initial Development Activities successfully and promptly. If Licensor is in material breach of its obligation to perform any Initial Development Activities and fails to remedy such breach within [***] days after written notice thereof from Licensee, Licensee shall have the right, at Licensee’s sole election, to assume and

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

complete some or all of such Initial Development Activities. If Licensee so elects to assume and complete any of the Initial Development Activities, to the extent requested by Licensee in writing, Licensor shall assign to Licensee any or all Third Party agreements relating to such Initial Development Activities (including agreements with contract research organizations, clinical sites and investigators). In such event, with respect to all such Initial Development Activities that involve Clinical Studies, at Licensee’s option, Licensor shall either (i) end such clinical trials with respect to enrolled subjects in an orderly and prompt manner in accordance with Applicable Law, including any required follow up treatment with previously enrolled subjects or (ii) transfer control to Licensee or its designee of such clinical trials and cooperate with Licensee to ensure a smooth and orderly transition thereof that will not involve any disruption of such studies. Licensee understands and acknowledges that Licensor cannot guarantee the outcome or results of any studies within the Initial Development Plan. The Parties agree that the results of prior Clinical Studies included in the Initial Development Plant may affect the desirability of commencing later Clinical Studies included in the Initial Development Plan, and my require an amendment (including a Material Amendment) to the Development Plan. If the JDC is unable to agree upon whether any such amendment is required or the content of such amendment, the dispute shall be resolved pursuant to Section 13.6. In the event the JDC cannot agree whether a proposed amendment is a Material Amendment, such dispute shall be resolved pursuant to Section 13.6, and until such resolution, Licensor shall continue to carry out the Initial Development Plan then in effect, but shall not be required to commence any new Clinical Study.

3.1.3 Regulatory Diligence. Following the successful completion by Licensor of the Initial Development Activities in accordance with the Initial Development Plan, Licensee shall file for, prosecute and use Commercially Reasonable Efforts to obtain Regulatory Approvals for the initial Licensed Product for the Renal Indication in each Major Market.

3.2 Joint Development Activities .

3.2.1 Development Plan and Budget . If either Party (or its licensees or Sublicensees) wishes to Conduct one or more Clinical Studies in support of obtaining or maintaining Regulatory Approval of a Licensed Product in a Licensed Indication in the Licensee Territory and the United States or related Party Development Activities (other than the Initial Development Activities, or, in the case of a Collaboration Compound, other than the Development activities under the applicable Collaboration Candidate Development Plan and Budget), then such Party, through its representatives on the JDC, shall provide the other Party with a written summary of such proposed Clinical Study and related Party Development Activities and any Information with respect thereto. Each Party shall only propose such Clinical Studies that it believes in good faith are scientifically reasonable. If both Parties are interested in conducting such Clinical Studies and related Party Development Activities, then the Parties, through their representatives on the JDC, shall use good faith efforts to agree on a Development Plan and Budget with respect thereto, which plan shall assign responsibility for such Clinical Studies and related Party Development Activities between the Parties (such activities, “ Joint Development Activities ”). It is contemplated that all Joint Development Activities shall be structured so as to support the filing of Drug Approval Applications for the Licensed Product both in the Major Markets and the United States. The Parties shall Conduct Joint Development Activities in accordance with the terms and conditions of this Agreement and the applicable Development Plan and Budget. If only one Party

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

is interested in Conducting specific Clinical Studies in support of obtaining or maintaining Regulatory Approval of a Licensed Product in the Licensee Territory or the United States or related Party Development Activities, or the Parties are not able to agree on a Development Plan and Budget with respect thereto, then the interested Party, or in the absence of agreement each Party, shall have the right to Conduct such Clinical Studies or related Party Development Activities as Unilateral Activities as and to the extent provided in Section 3.7.1.

3.2.2 Amendments . The JDC shall review each Development Plan and Budget covering all Joint Development Activities at least [***] for the purpose of considering appropriate amendments thereto. In addition, either Party, through its representatives on the JDC, may propose amendments to any Development Plan and Budget for Joint Development Activities at any time.

3.2.3 Diligence . Each Party shall use Commercially Reasonable Efforts to perform the responsibilities assigned to it under each Development Plan and Budget for Joint Development Activities in accordance with the budget set forth therein by allocating sufficient time, effort, equipment, and skilled personnel to complete such Development activities successfully and promptly. In addition, and without limiting the foregoing, following the successful completion of the Joint Development Activities in accordance with the applicable Development Plan and Budget, Licensee shall file for, prosecute, and use Commercially Reasonable Efforts to obtain Regulatory Approval for the applicable Licensed Product in each Major Market for the relevant indication.

3.3 Development of Collaboration Candidates; Collaboration Compound Option .

3.3.1 Notification of Interest in Developing Potential Collaboration Compounds .

(i) Prior to the commencement by or on behalf of Licensor or any Affiliate of any Phase I Clinical Study of any Targeted AIM (other than compounds that are then Licensed Compounds) for (A) the Renal Indication, which Phase I Clinical Study is commenced at any time during the Term, (B) the Cardiovascular Indication, which Phase I Clinical Study is commenced during the period starting on the Effective Date and ending on the earlier of (1) the [***] ([***]) anniversary of the Effective Date and (2) the filing by or on behalf of Licensee or any Affiliate for regulatory approval of any Targeted AIM (other than a Licensed Compound) for the Cardiovascular Indication in a Major Market, or (C) the Metabolic Indication, which Phase I Clinical Study is commenced during the period starting on the Effective Date and ending on the earlier of (1) the [***] ([***]) anniversary of the Effective Date and (2) the filing by or on behalf of Licensee or any Affiliate for regulatory approval of any Targeted AIM (other than a Licensed Compound) for the metabolic Indication in a Major Market (each such Targeted AIM Controlled by Licensor or any Affiliate described in (A), (B) and (C), a “Collaboration Candidate” ), Licensor shall prepare and provide to Licensee, through the JDC, the complete pre-clinical data package for such Collaboration Candidate, along with a proposed protocol for such Phase I Clinical Study (the “Phase 1 Study Materials” ). Licensor through the JDC shall discuss and consider in good faith any comments that Licensee may have with respect to the Phase 1 Study Material. If within [***] days after delivery of the Phase 1 Study Materials Licensee does not exercise the Collaboration Candidate Option with respect to such Collaboration Candidate, Licensor shall have the right to proceed with such Phase 1 Study in accordance with the Phase I Study Material, at its own cost.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(ii) Prior to the commencement of the first Phase II Clinical Study of any Collaboration Candidate, Licensor shall prepare and provide to Licensee, through the JDC, a full pre-clinical and Clinical Data package therefor, along with (A) a proposed Development Plan and Budget setting forth in detail the proposed Clinical Studies and related Party Development Activities to be conducted by the Parties in order to obtain Product Approval in the United States and Major Markets of such Collaboration Candidate for such Licensed Indication (a “ Collaboration Candidate Development Plan and Budget ”); (B) a representation letter making to Licensee the same representations and warranties concerning Licensor’s intellectual property relating to the Collaboration Candidate as are set forth in Section 10.2 with respect to the Initial Licensed Compound and the Licensed Product containing the Initial Licensed Compound, except as noted in such letter or any schedule of exceptions thereto, and (C) such other information within Licensor’s or any Affiliate’s Control as of such time as Licensee may reasonably request in connection with its evaluation of the Collaboration Candidate Option with respect to such Collaboration Candidate. It is contemplated that such Clinical Studies and related Party Development Activities shall be structured, in general, so as to support the filing of Drug Approval Applications for a Licensed Product containing such Collaboration Candidate in both the United States and in the Major Markets. Licensor shall discuss and consider in good faith any comments that Licensee may have with respect to the Collaboration Candidate Development Plan and Budget. If within [***] days after delivery of all data and Information required by the preceding sentence Licensee does not exercise the Collaboration Candidate Option with respect to such Collaboration Candidate, Licensor shall have the right to proceed with the Collaboration Candidate Development Plan and Budget in accordance with the terms and conditions of this Agreement and such Collaboration Development Plan and Budget, at its own cost. Licensor may propose to the JDC amendments to such Development Plan and Budget at any time, for approval by the JDC. Licensor shall provide to the JDC, in advance of the applicable meeting thereof, a detailed report regarding all Development activities under such Collaboration Candidate Development Plan and Budget (including all costs incurred in connection therewith) and the Clinical Data and other Information with respect thereto (including a summary of the Licensor’s regulatory activities) at least once every [***] months during the Collaboration Candidate Option Period for such Collaboration Candidate. Each such report shall contain sufficient detail to enable the JDC to assess Licensor’s compliance with the Collaboration Candidate Development Plan and Budget. In addition, if requested by Licensee, Licensor shall provide Licensee (a) reasonable access to (with the ability to analyze and manipulate but not change) the electronic database that contains the Clinical Data with respect to Development activities for a Collaboration Candidate and (b) such additional Information and Regulatory Documentation with respect to such Development activities as may be reasonably requested by Licensee in order to evaluate such Development activities.

(iii) Licensor shall have no obligation to Develop any Collaboration Candidate, and Licensee shall have no right to conduct any pre-clinical or Clinical Study with respect to, nor have rights to, any Targeted AIM Controlled by Licensor or any Affiliate for any purpose, except for Licensed Compounds.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(iv) Following receipt of meeting minutes from the End of Phase II meeting with the FDA (which minutes do not prohibit the Initiation of the first Phase III study for a product containing the Collaboration Candidate), Licensor shall provide such meeting minutes to Licensee, and shall notify Licensee of the date on which the Collaboration Candidate Option Period expires.

(v) Licensor represents and warrants that neither it nor any Affiliate has commenced, or will commence prior to the Effective Date, and Phase I Clinical Study of any Targeted AIM for any Licensed Indication other than the Initial Licensed Compound for the Renal Indication.

3.3.2 Collaboration Candidate Option . With respect to each Collaboration Candidate, Licensee shall have the right, upon written notice given to Licensor at any time during the Collaboration Candidate Option Period for such Collaboration Candidate and without additional up-front consideration to Licensor, to have such Collaboration Candidate deemed a Licensed Compound for all purposes of this Agreement (such Collaboration Candidate, along with any metabolite, salt, hydrate, solvate, enantiomer, free acid form, free base form, crystalline form, co-crystalline form, amorphous form, pro-drug (including ester pro-drug) form, racemate, polymorph, chelate, stereoisomer, tautomer, or optically active form thereof, a “ Collaboration Compound ”), and upon delivery of such notice (i) such Collaboration Compound shall constitute a Licensed Compound for all purposes of this Agreement, (ii) the applicable Collaboration Candidate Development Plan and Budget shall thereafter be deemed a Development Plan and Budget for Joint Development Activities, and (iii) the Development activities to be undertaken thereunder after delivery of such notice shall be deemed to be Joint Development Activities for all purposes of this Agreement, including Section 3.2. and 3.4.1(ii); and (iv) Licensee shall become liable for payment of prior Development activities in accordance with Section 3.7.5.

3.3.3 Additional Development Activities with Respect to a Collaboration Compound . After the exercise by Licensee of its Collaboration Candidate Option with respect to a Collaboration Compound and such Collaboration Compound becoming a Licensed Compound, either Party may propose further Development activities (outside of the applicable Collaboration Candidate Development Plan and Budget) for such Licensed Compound and such proposal shall be deemed a proposal for further Joint Development Activities subject to Section 3.2.1.

3.4 Collaboration Costs .

3.4.1 Responsibility for Collaboration Costs .

(i) Licensor shall be solely responsible for and shall bear all Collaboration Costs (A) incurred by it and its Affiliates in connection with the performance of the Initial Development Activities (including any amended Initial Development Activities to Develop a Backup Compound pursuant to Section 5.10), and (B) incurred by Licensee and its Affiliates in

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

connection with Initial Development Activities that Licensee elects to assume and complete upon a material breach by Licensor pursuant to Section 3.1.2, in both cases ((A) and (B)), up to an aggregate amount equal to the Initial Development Costs. Subject to Section 5.10.3, each Party shall bear fifty percent (50%) of all Collaboration Costs incurred in connection with the performance of the Initial Development Activities in excess of the Initial Development Costs, if any. If the Initial Development Plan is amended, including in connection with the substitution of a Backup Compound for the Initial Licensed Compound following a Compound Failure, the determination of when Collaboration Costs exceed the Initial Development Costs shall take into account both the Collaboration Costs incurred in connection with Initial Development Activities prior to the amendment as well as Collaboration Costs incurred in connection with the Initial Development Activities following such amendment.

(ii) Each Party shall bear fifty (50%) percent of all Collaboration Costs incurred in connection with the performance of Joint Development Activities (including Development activities for a Collaboration Compound for which Licensee has exercised its Collaboration Candidate Option pursuant to Section 3.3.2, but solely with respect to Collaboration Costs for those Development activities that occur following such exercise), unless otherwise agreed by the Parties and set forth in the applicable Development Plan and Budget.

3.4.2 FTE Costs . Each Party shall record and account for its FTE Costs and its out-of-pocket costs for the Initial Development Activities and Joint Development Activities and shall report such costs to the JDC on a quarterly basis, in each case, in a manner that allocates costs to the extent possible to a specific activity in the applicable Development Plan and Budget. Out-of-pocket costs allocable to Collaboration Costs, but otherwise included within FTE Costs, shall not be charged separately as Collaboration Costs.

3.4.3 Reports . Each Party shall report to the other Party, within [***] days after the end of each Calendar Quarter, the Collaboration Costs incurred by such Party during such Calendar Quarter. Such report shall specify in reasonable detail all amounts included in such Collaboration Costs during such Calendar Quarter (broken down by activity) and shall be accompanied by invoices or other appropriate supporting documentation for any payments made by such Party to Third Parties that individually exceed $[***]. Each such report shall enable the receiving Party to compare the reported costs against the applicable Development Plan and Budget, on both a quarterly basis and a cumulative basis for each activity. The Parties shall seek to resolve any questions related to such accounting statements within [***] days following receipt by each Party of the other Party’s report hereunder.

3.4.4 Cost Overruns .

(i) Each Party shall promptly inform the other Party upon such Party determining that it is likely to overspend or underspend by more than ten percent (10%) its respective aggregate budgeted costs and expenses for Initial Development Activities or Joint Development Activities, as the case may be, set forth in each applicable Development Plan and Budget.

(ii) The portion of any overspend that is less than or equal to ten percent (10%) of a Party’s respective aggregate budgeted costs and expenses for Initial Development Activities or Joint Development Activities, as the case may be, set forth in an applicable Development Plan and Budget shall be included in Collaboration Costs and shared by the Parties pursuant to Section 3.4.1.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(iii) If a Party exceeds its aggregate budgeted costs and expenses by more than ten percent (10%), the Party that has so exceeded its budget shall provide to the JDC a full explanation for exceeding such aggregate budgeted costs under the applicable Development Plan and Budget. If and to the extent that any such overspend in excess of ten percent (10%) was outside the reasonable control of the applicable Party and not caused by the negligence or wilful misconduct of such Party, then provided that the applicable Party has promptly notified the other Party of such overspend and used reasonable efforts to mitigate the size of such overspend, such overspend shall be included in Collaboration Costs and shared by the Parties pursuant to Section 3.4.1.

(iv) To the extent that any overspend is not included in Collaboration Costs as provided in Section 3.4.4(ii) or 3.4.4(iii), the Party that has exceeded its budget shall be solely responsible for the overspend.

3.4.5 Payments . Collaboration Costs initially shall be borne by the Party incurring the cost or expense and thereafter shall be subject to reimbursement, if applicable, in accordance with Section 3.4.1 and this Section 3.4.5. Within [***] days after the end of each Calendar Quarter or, for the last Calendar Quarter of any Calendar Year, within [***] ([***]) days after the end of such Calendar Year, the Party that has paid less than its share of Collaboration Costs during such Calendar Quarter shall make reconciling payments to the other Party to achieve the appropriate allocation of Collaboration Costs provided in Section 3.4.1.

3.4.6 Accounting Procedures . For purposes of determining Collaboration Costs, any expense allocated by either Party to a particular category under Collaboration Costs shall not also be allocated to another category under Collaboration Costs. Each Party shall determine Collaboration Costs using its standard accounting procedures, consistently applied, to the maximum extent practicable as if the Licensed Product were a solely-owned product of the Party (provided that the application of such procedures results, on balance, in outcomes that are fair and equitable to both Parties taking into consideration the interests of both Parties as reflected in this Agreement). Each Party shall have the right to audit the other Party’s records to confirm the accuracy of the other Party’s costs and reports as provided in Section 6.8. The Parties also recognize that such procedures may change from time to time and that any such changes may affect the calculation of Collaboration Costs and such other expenses. Where the change is or would be material to the other Party, the Party proposing to make the change shall provide the other Party with an explanation of the proposed change and an estimation of the effect of the change on the relevant cost or expense category. The Parties shall use good faith efforts to negotiate any resulting changes to this Agreement so as to preserve as closely as reasonably possible the Parties’ respective economic interests under this Agreement. Transfers between a Party and its Affiliates (or between such Affiliates) shall not have any effect for purposes of calculating Collaboration Costs or other payments or expenses under this Agreement.

3.5 Limitations on Development. During the Term, except as expressly approved in advance in writing by the other Party, neither Party nor any of its Affiliates shall, directly or through any Third Party, sponsor, conduct or cause to be conducted, otherwise assist in,

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

supply any Licensed Compound or Licensed Product for use in connection with, fund or otherwise support any preclinical studies, non-clinical studies or Clinical Study (including without limitation, any Investigator-Sponsored Trial) using such Licensed Compound or Licensed Product for any Retained Indication in the Territory.

3.6 Regulatory Matters .

3.6.1 Regulatory Responsibilities .

(i) As between the Parties, Licensee shall have the sole right and responsibility for preparing, obtaining, and maintaining Drug Approval Applications (including the setting of the overall regulatory strategy therefor), other regulatory approvals and other submissions, and for conducting communications with the Regulatory Authorities, for Licensed Products in the Licensee Territory (which shall include filings of or with respect to INDs and other filings or communications with the Regulatory Authorities with respect to (A) Unilateral Activities of Licensor in the Licensee Territory ( provided that Licensor shall reimburse Licensee for its reasonable, fully-burdened costs for conducting such regulatory activities in support of Unilateral Activities of Licensor) and (B) Joint Development Activities).

(ii) As between the Parties, Licensor shall have the sole right and responsibility for preparing, obtaining, and maintaining Drug Approval Applications (including the setting of the overall regulatory strategy therefor), other regulatory approvals and other submissions, and for conducting communications with the Regulatory Authorities, for Licensed Products in the Licensor Territory (including the Out-Licensed Territory (which shall include filings of or with respect to INDs and other filings or communications with the Regulatory Authorities with respect to (A) Unilateral Activities of Licensee in the Licensor Territory ( provided that Licensee shall reimburse Licensor for its reasonable, fully-burdened costs for conducting such regulatory activities in support of Unilateral Activities of Licensee) and (B) Joint Development Activities).

(iii) All Regulatory Documentation (including Regulatory Approvals and Product Labelling) relating to the Licensed Products with respect to the Licensee Territory shall be owned by, and shall be the sole property of, Licensee or its designated Affiliate, Sublicensee or designee. Licensor hereby assigns to Licensee all of its right, title, and interest in and to all Existing Regulatory Documentation (including any existing Regulatory Approvals) with respect to the Licensee Territory, subject to Licensor’s right of access, reference and use of Regulatory Data and Regulatory Documentation pursuant to Section 5.2. Licensor shall assign to Licensee all of its right, title, and interest in and to all Regulatory Documentation (including any existing Regulatory Approvals) for each Collaboration Compound with respect to the Licensee Territory Controlled by Licensor or any of its Affiliates promptly after the exercise by Licensee of its Collaboration Candidate Option with respect to such Collaboration Compound.

(iv) Each Party shall provide the other Party with an opportunity to review and comment on all major regulatory filings and documents (including INDs, Drug Approval Applications, labelling supplements, Regulatory Authority meeting requests, and core data sheets) (collectively, “ Major Regulatory Filings ”) in the Territory, and all proposed material actions with respect to any Regulatory Approval in the Territory, for which such Party has responsibility pursuant to Section 3.6.1(i) or (ii), as the case may be (including, in the case of

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Licensor, the Out-Licensed Territory), prior to submission thereof or the taking of the action. Each Party shall provide access to interim drafts of the Major Regulatory Filings to the other Party via the access methods (such as secure databases) established by the JDC, and the other Party shall provide its comments on the then-current drafts of Major Regulatory Filings or of proposed material actions within [***] ([***]) ([***] ([***]) days for Drug Approval Applications), or such other longer period of time mutually agreed to by the Parties. In the event that a Regulatory Authority establishes a response deadline for a Major Regulatory Filing or material action shorter than such [***] ([***]) ([***] ([***]) day) period, the Parties shall work cooperatively to ensure the other Party has a reasonable opportunity for review and comment within such deadlines. Each Party shall, and shall cause its Affiliates, licensees and Sublicensees to, consider in good faith any such comments of the other Party. Neither Party shall, and each Party shall ensure that its Affiliates, licensees (including Kyowa and any other licensees of Licensor with respect to the Out-Licensed Territory), and Sublicensees do not, take any action with respect to any Regulatory Approval (including the filing of any Drug Approval Application) anywhere in its portion of the Territory that could reasonably be expected to have a Material Adverse Effect on the other Party. If the Parties disagree as to whether a particular action could reasonably be expected to have such a Material Adverse Effect, the dispute shall be resolved by the JDC (subject to the dispute resolution procedures set forth in Section 13.6.2).

(v) Subject to the immediately following sentence, each Party shall provide the other Party with (A) access to or copies of all material written or electronic correspondence (other than regulatory filings) relating to the Development or Commercialization of Licensed Products received by such Party or its Affiliates, licensees or Sublicensees from, or forwarded by such Party or its Affiliates, licensees or Sublicensees to, the Regulatory Authorities in the Territory and (B) copies of all meeting minutes and summaries of all meetings, conferences, and discussions held by such Party or its Affiliates, licensees or Sublicensees with the Regulatory Authorities in such Party’s portion of the Territory, including copies of all contact reports produced by such Party or its Affiliates, licensees or Sublicensees, in each case ((A) and (B)) within [***] Business Days of its receipt, forwarding or production of the foregoing, as applicable. If such written or electronic correspondence received from a Regulatory Authority relates to the withdrawal, suspension, or revocation of a Regulatory Approval for a Licensed Product, the prohibition or suspension of the supply of a Licensed Product, or the initiation of any investigation, review, or inquiry by such Regulatory Authority concerning the safety of a Licensed Product, such Party shall notify the other Party and provide the other Party with copies of such written or electronic correspondence as soon as practicable, but not later than one (1) Business Day after receipt of such correspondence. Licensor’s obligations under this Section 3.6.1(v) with respect to the Out-Licensed Territory shall be subject to Licensor’s rights and obligations under the Kyowa Agreement and Licensor’s receipt of Information from Kyowa.

(vi) Each Party shall provide the other Party with prior written notice, to the extent the Party has advance knowledge, of any meeting, conference, or discussion (including any advisory committee meeting) with a Regulatory Authority in the Licensee Territory (in the case of Licensee) or the United States (in the case of Licensor) relating to a Licensed Product, within [***] business days after the Party or its Affiliate, licensee or Sublicensee first receives notice of the scheduling of such meeting, conference, or discussion (or within such shorter period as may be necessary in order to give the other Party a reasonable opportunity to attend such meeting, conference, or discussion). The other Party shall have the right to attend as an observer (but not participate in) all such meetings, conferences, and discussions.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(vii) Each Party shall make every reasonable effort to notify the other Party promptly (but in no event later than [***]) following its determination that any event, incident, or circumstance has occurred that may result in the need for a recall, market suspension or market withdrawal of a Licensed Product in such Party’s portion of the Territory, and shall include in such notice the reasoning behind such determination, and any supporting facts. Each Party (or its licensee or Sublicensee) shall have the right to make the final determination whether to voluntarily implement any such recall, market suspension or market withdrawal in such Party’s portion of the Territory; provided that prior to any implementation of such a recall, market suspension or market withdrawal, the recalling Party shall consult with the other Party and shall consider the other Party’s comments in good faith. If a recall, market suspension or market withdrawal is mandated by a Regulatory Authority in a Party’s portion of the Territory, such Party (or its licensee or Sublicensee) shall initiate such a recall, market suspension or market withdrawal in compliance with Applicable Law. For all recalls, market suspensions or market withdrawals undertaken pursuant to this Section 3.6.1(vii), the Party (or its licensee or Sublicensee) responsible for the recall, market suspension or market withdrawal shall be solely responsible for the execution thereof, and the other Party shall reasonably cooperate in all such recall efforts. Subject to Article 11, each recalling Party shall be responsible for all of its costs incurred in connection with such conduct.

3.6.2 Regulatory Data .

(i) Subject to Section 3.7.3, each Party shall promptly provide to the other Party copies of or access to all non-clinical data, Clinical Data and other Information, results and analyses with respect to any Party Development Activities that are Controlled by such Party or any of its Affiliates, including any such data, results and analysis Controlled by such Party or any of its Affiliates and resulting from or relating to Unilateral Activities of such Party or any of its Affiliates (collectively “ Regulatory Data ”), when and as such Regulatory Data becomes available. Use of such Regulatory Data shall be subject to Section 3.7.3.

(ii) Subject to Section 3.7.3, each Party shall support the other, as may be reasonably necessary, in obtaining Regulatory Approval for the Licensed Products, including providing necessary documents or other materials required by Applicable Law to obtain Regulatory Approval, in each case in accordance with the terms and conditions of this Agreement and any applicable Development Plan and Budget.

3.7 Unilateral Development .

3.7.1 Unilateral Activities .

(i) Subject to this Section 3.7, if the JDC, or the Senior Officers of the Parties, are unable to agree to matters relating to the joint Conduct by the Parties (or their licensees or Sublicensees) of a Clinical Study in support of obtaining or maintaining Regulatory Approval of a Licensed Product (including Combination Product) for a Licensed Indication in the Territory or related Party Development Activities, or only one Party is interested in Conducting

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

specific Clinical Studies in support of obtaining or maintaining Regulatory Approval of a Licensed Product (including a Combination Product) for a Licensed Indication in the Territory or related Party Development Activities, a Party (or its licensee or Sublicensee) desiring to proceed with such activities (“ Proposed Unilateral Activities ”) shall prepare and provide to the JDC a proposed Development Plan and Budget with respect thereto; provided that the proposing Party shall have a good faith belief that any Proposed Unilateral Activities are scientifically reasonable. If either Party in good faith believes that any Proposed Unilateral Activities of the other Party could reasonably be expected to have a Material Adverse Effect on such first Party, the dispute shall be resolved by the JDC (subject to the dispute resolution procedures set forth in Section 13.6.2). If it is determined by the JDC or pursuant to such dispute resolution procedures that the Proposed Unilateral Activities could reasonably be expected to have a Material Adverse Effect on such first Party, the other Party (or its licensees or Sublicensees) shall not be permitted to conduct the Proposed Unilateral Activities. Upon the adoption of a Development Plan and Budget with respect to such Proposed Unilateral Activities, such activities shall constitute “ Unilateral Activities ” hereunder, and the Party proposing such activities (the “ Developing Party ”) shall have the right to proceed with such Unilateral Activities in accordance with the terms and conditions of this Agreement and such Development Plan and Budget. The other Party (the “ Opting-Out Party ”) shall be deemed to have opted-out (each an “ Opt-Out ”) with respect to such activities. The Developing Party may propose amendments to any Development Plan and Budget with respect to its Unilateral Activities at any time. The Developing Party shall provide to the JDC, in advance of the applicable meeting thereof, a detailed report regarding its Unilateral Activities and the Regulatory Data with respect thereto (and a summary of the Development Party’s regulatory activities) once every [***]. Each such report shall contain sufficient detail to enable the JDC to assess such Party’s compliance with the Development Plan and Budget.

(ii) If one Party (or its licensees or Sublicensees) proposes to Conduct a Phase IV Study, such Party shall prepare and provide to the JMC and JDC a proposed plan with respect thereto. If the other Party believes in good faith that such proposed Phase IV Study could reasonably be expected to have a Material Adverse Effect on the non-proposing Party, the dispute shall be resolved by the JDC (subject to the dispute resolution procedures set forth in Section 13.6.2). If it is determined by the JDC or pursuant to such dispute resolution procedures that such proposed Phase IV Study could reasonably be expected to have a Material Adverse Effect on such first Party, the other Party (or its licensees or Sublicensees) shall not be permitted to Conduct the Phase IV Study.

3.7.2 Costs of Unilateral Activities . Subject to Section 3.7.4, in the case of Unilateral Activities (i) the Developing Party with respect thereto shall bear the sole cost and expense of such Unilateral Activities, and (ii) the Opting-Out Party shall have no financial obligation to support or otherwise fund any efforts in respect of such Unilateral Activities.

3.7.3 Limitation of Rights to Clinical Data .

(i) With respect to any Unilateral Activities to support an application for Regulatory Approval for (A) an Additional Indication for a Licensed Product or (B) a Combination Product for any Licensed Indication, the Opting-Out Party, notwithstanding the right of reference granted in Sections 5.1.4 and 5.1.5, or 5.2.4 and 5.2.5, or the provision of such

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Regulatory Data pursuant to Section 3.6.2(i), as applicable, shall not have the right to use or reference any Regulatory Data or Regulatory Documentation resulting from such Unilateral Activities unless such Party Opts-In pursuant to Section 3.7.4, provided that if the inclusion or reference of such Clinical Data or Regulatory Documentation is required solely to comply with a requirement to report worldwide clinical studies to Regulatory Authorities or safety information with respect to a Licensed Product in a filing seeking or maintaining Regulatory Approval of such Licensed Product, the Opting-Out Party shall have the right to use or reference such Regulatory Data or Regulatory Documentation solely for such reporting purpose and such use shall not trigger an Opt-In or other cost-sharing pursuant to Section 3.7.4. The Opting-Out Party shall not, unless and until it Opts-In, use or reference such Regulatory Data or Regulatory Documentation for purposes of expansion of the Product Labelling or obtaining additional Regulatory Approval of any Licensed Product in its portion of the Territory. Notwithstanding the foregoing, Licensor shall have a limited license and right to access, use and reference, solely to grant a sublicense and provide a right of access, use and reference to Kyowa with respect to any such Regulatory Data or Regulatory Documentation pertaining to any Licensed Product containing the Initial Licensed Compound or any Backup Compound, as and to the extent required under the Kyowa Agreement as determined by Licensor in good faith.

(ii) Except as expressly set forth in Section 3.7.3(i), each Party shall have the right to use and reference, for any and all purposes, any Regulatory Data or Regulatory Documentation resulting from Unilateral Activities of the other Party, and such use or reference shall not trigger an Opt-In or other cost-sharing pursuant to Section 3.7.4.

3.7.4 Opt-In Rights .

(i) The Opting-Out Party shall have the right to opt-in (“ Opt-In ”) with respect to any Unilateral Activities for which such Party Opted-Out at any time within [***] days after receipt by the Opting-Out Party of a Completion Notice with respect thereto in accordance with this Section 3.7.4(i) (such period, the “ Opt-In Exercise Period ”); provided , that in each case the Opting-Out Party shall be required at the time of Opt-In with respect to any Unilateral Activities relating to a particular Additional Indication or Combination Product, to Opt-In with respect to (A) such Unilateral Activities, and (B) any other Party Development Activities with respect to such Additional Indication or Combination Product (including Clinical Studies with respect to such Additional Indication or Combination Product) that are being Conducted at such time or that were previously Conducted by the Developing Party (“ Related Unilateral Activities ”). The Opting-Out Party shall be permitted to Opt-In with respect to previously Conducted Related Unilateral Activities described in clause (B) of this Section 3.7.4(i), notwithstanding the fact that the Opt-In Exercise Period with respect to such Related Unilateral Activities may have earlier terminated without the Opting-Out Party’s having exercised an Opt-In with respect to such Related Unilateral Activities.

(ii) Promptly after (A) the completion of any Unilateral Activities Conducted by the Developing Party pursuant to a Development Plan and Budget or (B) a request in writing for a Completion Notice with respect to any Unilateral Activities delivered by the Opting-Out Party; provided that the Opting-Out Party may not request a Completion Notice with respect to Unilateral Activities performed pursuant to a specific Development Plan and

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Budget more than [***] times in any Calendar Year, in each case ((A) and (B)) the Developing Party shall provide to the Opting-Out Party (x) a Completion Notice and (y) reasonable access to (with the ability to analyze and manipulate but not change) the electronic database that contains the Regulatory Data with respect to such Unilateral Activities, to the extent not already provided pursuant to Section 3.6.2(i). The Completion Notice shall be accompanied by a written statement of costs and expenses (the “ Unilateral Activity Cost Statement ”) measured in the same manner as are measured Collaboration Costs, mutatis mutandis , incurred by the Developing Party in connection with such Unilateral Activities and any Related Unilateral Activities (including Losses described in Section 11.3) through the last day of the Calendar Quarter immediately preceding the Calendar Quarter in which such notice is provided (such date, the “ Statement Cut-Off Date ”). In addition, the Developing Party promptly shall provide to the Opting-Out Party such additional Information and Regulatory Documentation with respect to the Unilateral Activities described in a Completion Notice as may be reasonably requested by the Opting-Out Party in order to evaluate such Unilateral Activities. In the event that the Opting-Out Party desires to Opt-In with respect to any Unilateral Activities, it shall provide written notice thereof to the other Party within the applicable Opt-In Exercise Period (an “ Opt-In Exercise Notice ”), which Opt-In Exercise Notice shall, unless otherwise agreed by the Parties, be accompanied by a payment equal to one hundred percent (100%) of the Developing Party’s total costs and expenses with respect to such activity (and any Related Unilateral Activities) through the Statement Cut-Off Date as specified in such Unilateral Activity Cost Statement, measured in the same manner as are measured Collaboration Costs, mutatis mutandis . Thereafter, not later than [***] days after receiving the Opt-In Exercise Notice, the Developing Party shall provide to the Opting-Out Party a statement of costs and expenses incurred by the Developing Party in connection with such Unilateral Activities and any Related Unilateral Activities (including Losses described in Section 11.3) for the period commencing on the day after the Statement Cut-Off Date and ending on the date of receipt of the Opt-In Exercise Notice (the “ Subsequent Statement ”), and the Opting-Out Party shall within [***] days of the receipt of such statement make a payment to the Developing Party in an amount equal to one hundred percent (100%) of such costs and expenses as specified in such Subsequent Statement. From and after the Developing Party’s receipt of such Opt-In Exercise Notice, such Unilateral Activities shall cease to be Unilateral Activities and shall constitute Joint Development Activities hereunder, and the Parties shall share all costs and expenses with respect to such Joint Development Activities as Collaboration Costs in accordance with Section 3.3.1.

(iii) All costs and expenses incurred by a Developing Party in connection with any Unilateral Activities and any Related Unilateral Activities specified in any Unilateral Activity Cost Statement or Subsequent Statement shall be reasonable and verifiable and shall be subject to audit pursuant to Section 6.8.

3.7.5 Cost of Development Work for a Collaboration Candidate Deemed a Licensed Compound .

(i) Unless and until Licensee exercises the Collaboration Candidate Option for a Collaboration Candidate, Licensor shall bear the sole cost and expense of Development activities under the applicable Phase I Study materials or Collaboration Candidate Development Plan and Budget, and Licensee shall have no financial obligation to support or otherwise fund any efforts in respect of such Development activities.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(ii) Promptly after exercise by Licensee of its Collaboration Candidate Option for a Collaboration Candidate, Licensor shall provide Licensee a written statement of costs and expenses (the “ Collaboration Candidate Cost Statement ”) incurred by Licensor in connection with Development activities (including Losses described in Section 11.3) for such Collaboration Candidate through the last day of the Calendar Quarter immediately preceding the Calendar Quarter in which Licensee exercises such Collaboration Candidate Option (such date, the “ Collaboration Candidate Statement Cut-Off Date ”).

(iii) In the event that Licensee exercises its Collaboration Candidate Option with respect to a Collaboration Candidate, Licensee shall, unless otherwise agreed by the Parties, make a payment to Licensor equal to one hundred percent (100%) of Licensor’s total costs and expenses, measured in the same manner as are measured Collaboration Costs, mutatis mutandis , with respect to the Development activities undertaken pursuant to the applicable Collaboration Candidate Development Plan and Budget and Phase I Study Materials through the Collaboration Candidate Statement Cut-Off Date as specified in the applicable Collaboration Candidate Cost Statement. Licensee shall have no obligation to reimburse Licensor for the costs of any pre-clinical Development activities for a Collaboration Compound. Thereafter, not later than [***] days after exercising such Collaboration Candidate Option, Licensor shall provide to Licensee a statement of costs and expenses (measured in the same manner as are measured Collaboration Costs, mutatis mutandis ) incurred by Licensor in connection with such Development activities (including Losses described in Section 11.3) for the period commencing on the day after the Collaboration Candidate Statement Cut-Off Date and ending on the date of exercise of such Collaboration Candidate Option (the “ Collaboration Candidate Subsequent Statement ”), and Licensee shall within [***] days of the receipt of such statement make a payment to Licensor in an amount equal to one hundred percent (100%) of such costs and expenses as specified in such Collaboration Candidate Subsequent Statement. From and after the exercise of a Collaboration Candidate Option for a Collaboration Candidate, all Development activities for such Collaboration Compound shall be Joint Development Activities hereunder, and the Parties shall share all Collaboration Costs with respect to such Joint Development Activities in accordance with Section 4.3.1.

(iv) All costs and expenses incurred by Licensor in connection with any Development activities undertaken pursuant to the applicable Collaboration Candidate Development Plan and Budget specified in any Collaboration Candidate Cost Statement or Collaboration Candidate Subsequent Statement shall be reasonable and verifiable and shall be subject to audit pursuant to Section 6.8.

3.8 Compliance . Each Party shall perform or cause to be performed, any and all of its Party Development Activities, including Initial Development Activities, Unilateral Activities, and any Development activities undertaken pursuant to a Collaboration Candidate Development Plan and Budget) in a good scientific manner and in compliance with all Applicable Law.

3.9 Regulatory Records . Licensee and Licensor each shall maintain, or cause to be maintained, records of its respective Party Development Activities (including any Development activities undertaken pursuant to the applicable Collaboration Candidate

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Development Plan and Budget) in accordance with Applicable Law and in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall be complete and accurate and shall properly reflect all work done and results achieved in the performance of its respective Party Development Activities, and which shall be retained by such Party for at least [***] years after the termination of this Agreement, or for such longer period as may be required by Applicable Law. Each Party shall have the right, during normal business hours and upon reasonable notice, to inspect and copy any such records, except to the extent that a Party reasonably determines that such records contain Confidential Information that is not licensed to the other Party, or to which the other Party does not otherwise have a right hereunder.

ARTICLE 4

COMMERCIALIZATION

4.1 In General. Licensee shall have the sole right to Commercialize Licensed Products the Licensee Territory, and Licensor shall have the sole right to Commercialize Licensed Products in the Licensor Territory at its own cost and expense (except as otherwise expressly set forth herein).

4.2 Diligence. . Licensee shall use Commercially Reasonable Efforts to Commercialize each Licensed Product in each country in the Licensee Territory, following receipt of Regulatory Approval therefor in such country, including using an appropriate number of sales representatives to promote such Licensed Product in such country. In particular, and without limiting the foregoing, subject to Licensor’s performance of its obligations under Section 4.10 (including possible interim supply as required under Section 4.10.3), Licensee shall achieve First Commercial sale of the Licensed Product containing the Initial Licensed Compound for the Renal Indication in each Major Market reasonably promptly after, and in any case not later than [***] months after, the date on which Regulatory Approval is obtained for such Licensed Product in such Major Market; provided that such Licensed Product has achieved the Target CKD Approval Profile in such Major Market.

4.3 Global Brand Elements . The Parties, through their respective representatives on the JMC (and subject to the dispute resolution provisions of Section 13.6), shall develop and adopt the key distinctive colors, logos, images, and symbols, and the Trademarks (including the Product Trademarks) to be used in the Licensee Territory and the United States in connection with the Commercialization of each Licensed Product (such branding elements, collectively, the “ Global Brand Elements ”). Each Party shall Commercialize each Licensed Product in a manner consistent with the applicable Global Brand Elements in its respective part of the Licensee Territory and the United States. Either Party, through its representatives on the JMC, may propose amendments to the Global Brand Elements at any time. In discussing the Global Brand Elements, the Parties shall also consider the prospect of Commercializing the Licensed Products under the Global Brand Elements in the Licensor Territory, but Licensor shall be under no obligation to adopt any recommendations of Licensee with respect to the Trademarks to be used in the Licensor Territory.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

4.4 Off-Label Sales. Each Party (and its Affiliates) shall not knowingly promote or sell (or encourage or facilitate the sale of) any Licensed Product for use outside the approved indications for such Licensed Product, and in all cases, outside any Licensed Indication. Each Party and its Affiliates (and their respective Sublicensees) shall not provide funding to or otherwise support continuing education programs for sales representatives and/or medical professionals in which information is provided about the use of any Licensed Product for use outside the approved indications for such Licensed Product, and in all cases, outside any Licensed Indication, except in accordance with Applicable Law.

4.5 Statements and Compliance with Applicable Law. Each Party shall, and shall cause its Affiliates to, comply with all Applicable Law with respect to the Commercialization of Licensed Products. In particular, and without limiting the foregoing, each Party shall in all respects comply with all Applicable Laws and applicable guidelines concerning the advertising, sales and marketing of prescription drug products in Commercializing Licensed Products in its respective territory under this Agreement, including the Foreign Corrupt Practices Act of 1977, as amended ( “FCPA” ) and any applicable local anti-bribery laws. Licensee represents and warrants to Licensor that, (a) as of the Execution Date, Licensee and its Affiliates have a system of internal accounting controls in place that are sufficient to provide reasonable assurances of compliance as required by the FCPA, and (b) Licensee shall obtain certification from any Sublicensee or distributor it or its Affiliates may engage with respect to the Licensed Products to do the same, to bring any material non-compliance therewith (should it ever occur) by any of the foregoing entities to Licensee’ attention, and to promptly remedy any such non-compliance. Each Party and its Affiliates shall maintain such procedures throughout the Term and shall promptly notify the other Party in writing with respect to any material non-compliance regarding Commercialization of the Licensed Products.

4.6 Sales and Distribution in Licensee Territory. Licensee shall be solely responsible for invoicing and booking sales, establishing all terms of sale (including pricing and discounts) and warehousing and distributing the Licensed Products in the Licensee Territory and shall perform all related services, in each case, in a manner consistent with the terms and conditions of this Agreement. Licensee shall be solely responsible for handling all returns, recalls, or withdrawals, order processing, invoicing, collection, distribution, and inventory management with respect to the Licensed Products in the Licensee Territory.

4.7 Product Trademarks. Subject to the JMC’s approval, and Section 4.8, Licensee shall Commercialize the Licensed Products in the Licensee Territory solely under the Product Trademarks. Licensee shall not use or file any application to register any trademark or trade name in the Licensor Territory, the use of which would cause a likelihood of consumer confusion with: (i) the Product Trademarks; or (ii) the company name or logo of Kyowa, Reata or any Affiliate of either of them, provided that this restriction shall not apply to trademarks or trade names previously adopted, used, or registered by Licensee.

4.8 Markings. To the extent required by Applicable Law in a country in the Licensee Territory, the promotional materials, packaging, and Product Labeling for the Licensed Products used by Licensee and its Affiliates in connection with the Licensed Products in such country shall contain (i) the Corporate Name of Licensor, and (ii) the logo and corporate name of the manufacturer (if other than Licensee or an Affiliate) (collectively, the “ Markings ”). The manner in which the Markings are to be presented on promotional materials, packaging, and Product Labeling for the Licensed Products shall be subject to (A) prior review and approval by the JMC, and (B) Sections 5.1.6 and 7.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

4.9 Supply of Licensed Products. As between the Parties, Licensee shall be solely responsible, at its expense, to Manufacture (or have Manufactured) and supply Licensed Compounds and Licensed Products for clinical use and commercial sale in the Licensee Territory by Licensee and its Affiliates and Sublicensees except to the extent otherwise provided in any Development Plan and Budget.

4.10 Technology Transfer .

4.10.1 Licensor Technology Transfer. After the Effective Date and before Licensee commences Manufacturing of the Licensed Compounds and Licensed Products on its own behalf, Licensee shall have the right to require Licensor to effect a full transfer to Licensee or its designee (which designee may be an Affiliate or a Third Party manufacturer) of all Licensee Know-How relating to the then-current process for the Manufacture of Licensed Products and Licensed Compounds (the “ Manufacturing Process ”) and to implement the Manufacturing Process at facilities designated by Licensee (such transfer and implementation, as more fully described in this Section 4.10, the “ Technology Transfer ”). Licensor shall provide, and shall use commercially reasonable efforts to cause its Third Party manufacturers to provide (including by using commercially reasonable efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following Effective Date), all reasonable assistance requested by Licensee to enable Licensee (or its Affiliate or designated Third Party manufacturer, as applicable) to implement the Manufacturing Process at the facilities designated by Licensee. If requested by Licensee, such assistance shall include facilitating the entering into of agreements with applicable Third Party suppliers relating to the Licensed Products and Licensed Compounds. Without limitation to the foregoing, in connection with each Technology Transfer:

(i) After the Effective Date and before Licensee commences Manufacturing of the Licensed Compounds and Licensed Products on its own behalf, at Licensee’s reasonable request, Licensor shall make available, and shall use commercially reasonable efforts to cause its Third Party manufacturers to make available (including by using commercially reasonable efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following the Effective Date), to Licensee (or its Affiliate or designated Third Party manufacturer, as applicable), all of Licensor’s Manufacturing Know-How, Information and materials relating to the Manufacturing Process, and all documentation constituting material support, performance advice, shop practice, standard operating procedures, specifications as to materials to be used and control methods, that are reasonably necessary or useful to enable Licensee (or its Affiliate or designated Third Party manufacturer, as applicable) to use and practice the Manufacturing Process;

(ii) At Licensee’s reasonable request, Licensor shall cause all appropriate employees and representatives of Licensor and its Affiliates to meet with, and shall use commercially reasonable efforts to cause all appropriate employees and representatives of its Third Party manufacturers to meet with (including using commercially reasonable efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

entered into following the Effective Date), employees or representatives of Licensee (or its Affiliate or designated Third Party manufacturer, as applicable) at the applicable manufacturing facility at mutually convenient times to assist with the working up and use of the Manufacturing Process and with the training of the personnel of Licensee (or its Affiliate or designated Third Party manufacturer, as applicable) to the extent reasonably necessary or useful to enable Licensee (or its Affiliate or designated Third Party manufacturer, as applicable) to use and practice the Manufacturing Process;

(iii) Without limiting the generality of clause (ii) above, at Licensee’s reasonable request, Licensor shall cause all appropriate analytical and quality control laboratory employees and representatives of Licensor and its Affiliates to meet with, and shall use commercially reasonable efforts to cause all appropriate analytical and quality control laboratory employees and representative of its Third Party manufacturers to meet with (including by using commercially reasonable efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following the Effective Date), employees or representatives of Licensee (or its Affiliate or designated Third Party manufacturer, as applicable) at the applicable manufacturing facility and make available all necessary equipment, at mutually convenient times, to support and execute the transfer of all applicable analytical methods and the validation thereof (including, all applicable Know-How, methods, validation documents and other documentation, materials and sufficient supplies of all primary and other reference standards);

(iv) At Licensee’s reasonable request, Licensor shall take such steps, and shall use commercially reasonable efforts to cause its Third Party manufacturers to take such steps (including by using commercially reasonable efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following the Effective Date), as are reasonably necessary or useful to assist in reasonable respects Licensee (or its Affiliate or designated Third Party manufacturer, as applicable) in obtaining any necessary licenses, permits or approvals from Regulatory Authorities with respect to the Manufacture of the Licensed Products and Licensed Compounds at the applicable facilities; and

(v) At Licensee’s reasonable request, Licensor shall provide and shall use commercially reasonable efforts to cause its Third Party manufacturers to provide (including by using commercially reasonable efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following the Effective Date), such other assistance as Licensee (or its Affiliate or designated Third Party manufacturer, as applicable) may reasonably request to enable Licensee (or its Affiliate or designated Third Party manufacturer, as applicable) to use and practice the Manufacturing Process and otherwise to Manufacture the Licensed Products and Licensed Compounds.

Licensee shall pay to Licensor: (a) its reasonable, out-of-pocket costs and (b) to the extent of any of Licensor’s personnel travel outside Dallas, Texas to perform obligations under this Section 4.10, the FTE Costs incurred by Licensor in connection therewith (solely to the extent such FTE costs exceed One Hundred Forty Thousand Dollars ($140,000) during the Term), in each case of (a) and (b) incurred directly as a result of performing each Technology Transfer. Licensee shall make such payment within [***] days following Licensor providing Licensee with an invoice and reasonable supporting documentation (including receipts) therefor.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

4.10.2 Subsequent Technology Transfer. In the event either Party makes any invention, discovery or improvement relating to the Manufacture of a Licensed Compound or a Licensed Product during the Term, such Party shall promptly disclose such invention, discovery, or improvement to the other Party, and shall, at the other Party’s request, perform technology transfer with respect to such invention, discover or improvement in the same manner as provided in Section 4.10.1 above, applied mutatis mutandis .

4.10.3 Interim Supply. To the extent that and for so long as, notwithstanding Licensor’s exercise of commercially reasonable efforts, Licensor is unable to cause its Third Party manufacturers to take any steps set forth in Sections 4.10.1(i)-(v), with the result that Licensee is materially impeded from, either by itself or through a Third Party manufacturer, Manufacturing Licensed Products or Licensed Compounds, Licensor shall supply Licensee with its reasonable requirements of such Licensed Compounds or Licensed Products at a price equal to Licensor’s Manufacturing Costs for such Licensed Products or Licensed Compounds. Licensor’s obligation under this Section 4.10.3 shall be conditioned upon Licensee providing Licensor with reasonable notification of its need for such supply. Licensor shall not be required to allocate such supply to Licensee in a manner that would have an adverse effect on the quantity of Initial Licensed Compound available to Licensor as necessary to fulfill Licensor’s obligations under the Initial Development Plan.

4.11 Co-Promotion Right .

4.11.1 Option . Without limitation to Licensee’s rights under Section 5.4, Licensor shall have the non-exclusive right to co-promote in [***],[***],[***], and [***] the Licensed Product containing the first Licensed Compound for an indication other than the Renal Indication, solely for such indication.

4.11.2 Notice . In order to exercise such co-promotion right, no later than three (3) months after Licensor receives a written notification from Licensee of the filing with the EMA of the MAA for the Licensed Product containing the first Licensed Compound for an indication other than the Renal Indication, Licensor must provide Licensee with written notice of its election to exercise such co-promotion right with respect to any of [***],[***],[***], and [***]. Following delivery of such notice, the Parties shall negotiate the Co-Promotion Agreement reasonably and in good faith and with such diligence as is required to execute and deliver the Co-Promotion Agreement by the date that is [***] months following such filing, or such other period as the Parties may agree in writing. If Licensor does not provide the above election notice with respect to any of [***],[***],[***], and [***] within such [***] ([***])-month period, Licensor shall be deemed to have irrevocably waived its right to co-promote the Licensed Product hereunder in such country.

4.11.3 Terms of Co-Promotion Agreement .

(i) If Licensor exercises its co-promotion right for a country, such co-promotion by the Licensor’s sales force shall be operated and managed in a manner similar to the manner in which Licensee would operate and manage a co-promotion program with a contract sales force and Licensor’s sales force would commence promoting the Licensed Product at the same time that Licensee’s sales force commences such promotion. The terms and conditions of such co-promotion arrangement shall be set forth in a co-promotion agreement (the

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

“ Co-Promotion Agreement ”) to be entered into between the Parties as set forth in this Section 4.11.23. The Co-Promotion Agreement shall include such provisions as are usual and customary in Licensee’s contract sales force agreements, except that Licensor’s sole compensation for its detailing efforts shall be payment by Licensee to Licensor of an amount equal to fifty percent (50%) of its actual, reasonable sales force costs for such efforts. Under the Co-Promotion Agreement, Licensee shall have the right to make all final decisions with respect to the co-promotion arrangement, including the total number of sales representatives who will be performing details and their call plans and assigned territories, the promotional materials to be used, the training and testing applicable to such sales representatives, and restrictions with respect to the ability of such sales representatives to detail other products. For each rolling period of [***] Calendar Years during the term of the Co-Promotion Agreement (or such other reasonable period as the Parties may agree), Licensee shall inform Licensor, through the JMC, of the total number of sales representatives to be assigned for the applicable indication, and Licensor shall have the right to determine the percentage of promotional efforts it desires to contribute for such indication, with such percentage not to exceed twenty-five percent (25%). For purposes of this Section 4.11, “co-promote” or “co-promotion” shall mean the detailing of such Licensed Product by Licensor or its Affiliates under the relevant Regulatory Approval and the Product Trademarks, and shall not mean the sale or distribution of such Licensed Product by Licensor or its Affiliates.

(ii) If the Parties, despite good faith negotiations for a period of [***] days, cannot agree on the terms and conditions of such Co-Promotion Agreement, either Party may refer such issue for resolution pursuant to Section 13.6 after the end of such [***] day period. In the course of such dispute resolution, neither Party may propose terms and conditions for such Co-Promotion Agreement inconsistent with the terms and conditions set forth in this Section 4.11.

4.12 Participation in Expert Meetings in Licensee Territory. Licensee shall give Licensor written notice at least [***] days in advance of any advisory panel meetings with key opinion leaders with respect to the Licensed Products that are held by Licensee or its Affiliate in the Licensee Territory. Licensee agrees that Licensor may attend such meetings. Licensor shall give Licensee written notice at least [***] days in advance of any advisory panel meetings with key opinion leaders with respect to the Licensed Products that are held by Licensor or its Affiliate in the United States. Licensor agrees that Licensee may attend such meetings.

ARTICLE 5

GRANT OF RIGHTS

5.1 Grants to Licensee. Subject to Sections 3.7.3 and 5.3 and the other terms and conditions of this Agreement, Licensor (on behalf of itself and its Affiliates) hereby grants to Licensee:

5.1.1 an exclusive (including with regard to Licensor and its Affiliates) license (or sublicense), with the right to grant sublicenses in accordance with Section 5.4, under the Licensor Patents, the Licensor Know-How, and Licensor’s interests in the Joint Patents and the Joint Know-How, to (i) obtain, maintain, and hold Regulatory Approvals for Licensed Products in the Field in the Licensee Territory and (ii) Commercialize the Licensed Products in the Field in the Licensee Territory;

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

5.1.2 a non-exclusive license (or sublicense), with the right to grant sublicenses in accordance with

Section 5.4, under the Licensor Patents, the Licensor Know-How, and Licensor’s interests in the Joint Patents and the Joint Know-How, to Develop the Licensed Product in the Licensee Territory and in the United States solely for purposes of (i) obtaining, maintaining, and holding Regulatory Approvals for Licensed Products in the Field in the License Territory and (ii) Commercializing the Licensed Products in the Field in the Licensee Territory;

5.1.3 a non-exclusive license (or sublicense), with the right to grant sublicenses in accordance with Section 5.4, under the Licensor Patents, the Licensor Know-How, and Licensor’s interests in the Joint Patents and the Joint Know-How, to Manufacture (or have Manufactured) the Licensed Compounds and Licensed Products in the Licensee Territory and in the United States solely for purposes of (i) obtaining, maintaining, and holding Regulatory Approvals for Licensed Products in the Field in the License Territory and (ii) Commercializing the Licensed Products in the Field in the Licensee Territory, and (iii) Developing the Licensed Product in the Licensee Territory and in the United States solely for the purpose set forth in clauses (i) and (ii);

5.1.4 an exclusive (including with regard to Licensor and its Affiliates) license and right of reference, with the right to grant sublicenses and further rights of reference in connection with the grant of sublicenses in accordance with Section 5.4 under the grants in Section 5.1, under the Regulatory Approvals and any other Regulatory Documentation that Licensor or any of its Affiliates may Control with respect to the Licensed Products as necessary for purposes of (i) obtaining, maintaining, and holding Regulatory Approvals for Licensed Products in the Field in the License Territory and (ii) Commercializing the Licensed Products in the Field in the Licensee Territory (with Licensor retaining the exclusive rights under such Regulatory Approvals and such other Regulatory Documentation for any and all other purposes);

5.1.5 a non-exclusive license and right of reference, with the right to grant sublicenses and further rights of reference in connection with the grant of sublicenses in accordance with Section 5.4 under the grants in Section 5.1, under the Regulatory Approvals and any other Regulatory Documentation that Licensor or any of its Affiliates may Control with respect to the Licensed Products as necessary for purposes of (i) Developing the Licensed Products in the Licensee Territory and in the United States, and (ii) Manufacturing (or having Manufactured) the Licensed Compounds and Licensed Products in the Licensee Territory and in the United States, in each case ((i) and (ii)), solely for purposes of (a) obtaining, maintaining, and holding Regulatory Approvals for Licensed Products in the Field in the Licensee Territory and (b) Commercializing the Licensed Products in the Field in the Licensee Territory; and

5.1.6 subject to Sections 4.8 and 7, a non-exclusive license, without the right to grant sublicenses, except in connection with the grant of sublicenses pursuant to Section 5.4 under the grants in Section 5.1.1, to use Licensor’s Corporate Names solely as required to comply with Section 4.8 and for no other purpose.

5.2 Grants to Licensor. Subject to Section 3.7.3 and the other terms and conditions of this Agreement, Licensee (on behalf of itself and its Affiliates) grants to Licensor:

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

5.2.1 an exclusive (including with regard to Licensee and its Affiliates), royalty-free license, with the right to grant sublicenses in accordance with Section 5.4, under the Licensee Patents, the Licensee Know-How, and Licensee’s interests in the Joint Patents and the Joint Know-How, to (i) obtain, maintain, and hold Regulatory Approvals for Licensed Products in the Field in the Licensor Territory and (ii) Commercialize the Licensed Products in the Field in the Licensor Territory;

5.2.2 a non-exclusive, royalty-free license, with the right to grant sublicenses in accordance with Section 5.4, under the Licensee Patents, the Licensee Know-How, and Licensee’s interests in the Joint Patents and the Joint Know-How, to Develop the Licensed Product anywhere in the Territory solely for purposes of (i) obtaining, maintaining, and holding Regulatory Approvals for Licensed Products in the Field in the Licensor Territory and (ii) Commercializing the Licensed Products in the Field in the Licensor Territory;

5.2.3 a non-exclusive, royalty-free license, with the right to grant sublicenses in accordance with Section 5.4, under the Licensee Patents, the Licensee Know-How, and Licensee’s interests in the Joint Patents and the Joint Know-How, to Manufacture (or have Manufactured) the Licensed Compounds and Licensed Products anywhere in the Territory solely for purposes of (i) obtaining, maintaining, and holding Regulatory Approvals for Licensed Products in the Field in the Licensor Territory, (ii) Commercializing the Licensed Products in the Field in the Licensor Territory, and (iii) Developing the Licensed Product anywhere in the Territory solely for the purposes set forth in clauses (i) and (ii);

5.2.4 an exclusive (including with regard to Licensee and its Affiliates), royalty-free license and right of reference, with the right to grant sublicenses and further rights of reference in connection with the grant of sublicenses in accordance with Section 5.4 under the grants in Section 5.2, under the Regulatory Approvals and any other Regulatory Documentation that Licensee or any of its Affiliates may Control with respect to the Licensed Products as necessary for purposes of (i) obtaining, maintaining, and holding Regulatory Approvals for Licensed Products in the Field in the Licensor Territory and (ii) Commercializing the Licensed Products in the Field in the Licensor Territory (with Licensee retaining the exclusive right under such Regulatory Approvals and such other Regulatory Documentation for any and all other purposes); and

5.2.5 a non-exclusive, royalty free license and right of reference, with the right to grant sublicenses and further rights of reference in connection with the grant of sublicenses in accordance with Section 5.4 under the grants in Section 5.2, to all Regulatory Approvals and any other Regulatory Documentation that Licensee or any of its Affiliates may Control with respect to the Licensed Products as necessary for purposes of (i) Developing the Licensed Products anywhere in the Territory, and (ii) Manufacturing (or having Manufactured) the Licensed Compounds and Licensed Products anywhere in the Territory, in each case ((i) and (ii)), solely for purposes of (a) obtaining, maintaining, and holding Regulatory Approvals for Licensed Products in the Field in the Licensor Territory and (b) Commercializing the Licensed Products in the Field in the Licensor Territory.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

5.3 Retention of Rights.

5.3.1 Except as expressly provided herein, Licensor grants no other right or license, including any rights or licenses to the Licensor Patents, the Licensor Know-How, the Regulatory Documentation, the Licensor Corporate Names, or any other Patent or intellectual property rights not otherwise expressly granted herein. Without limiting the foregoing, all rights granted to Licensee hereunder are subject to Dartmouth’s and UT’s reservations of rights in the Dartmouth Agreement and the UT Agreement, and the other terms and conditions of the Dartmouth Agreement and UT Agreement, as applicable.

5.3.2 Except as expressly provided herein, Licensee grants no other right or license, including any rights or licenses to the Licensee Patents, the Licensee Know-How, the Regulatory Documentation, or any other Patent or intellectual property rights not otherwise expressly granted herein.

5.4 Sublicenses .

5.4.1 By Licensee to Third Parties . Subject to any approvals required from a Third Party licensor, Licensee shall have the right to grant sublicenses (or further rights of reference to Sublicensees) under the licenses granted in Section 5.1 to: (i) any of its Affiliates; or (ii) a Third Party through multiple tiers of Sublicensees, provided that any such sublicense granted to a Third Party to sell, promote or detail Licensed Products in any of the Major Markets shall require the prior written consent of Reata; further provided that (a) any such sublicenses shall be consistent with and subject to the terms and conditions of this Agreement; (b) each such Affiliate and Sublicensee must agree in writing to comply with the terms and conditions of this Agreement that are applicable to such Affiliate’s or Sublicensee’s activities, as applicable; (c) Licensee shall remain fully liable for the performance of such sublicense in accordance with this Agreement; and (d) Licensee must require, in each such sublicense agreement, that the Sublicensee grant to Licensee the royalty-free license under, and right of reference to, with rights to grant sublicenses and further rights of reference to Licensor and its Sublicensees under Section 5.2, (i) all Information (including all Regulatory Data) and Regulatory Documentation generated by or on behalf of such Sublicensee in connection with the Development of Licensed Products and (ii) all Patents owned or controlled by such Sublicensee with respect to the Licensed Products.

5.4.2 In the Out-Licensed Territory . Subject to any approvals required from a Third Party licensor, Licensor shall have the right to grant sublicenses (or further rights of reference) under the licenses granted by Licensee to Licensor in Section 5.2 solely to Third Parties holding licenses from Licensor to the one or more Licensed Products in the Out-Licensed Territory; provided (a) any such sublicenses shall be consistent with and subject to the terms and conditions of this Agreement; (b) each such Sublicensee entering such an agreement following the Effective Date must agree in writing to comply with the terms and conditions of this Agreement that are applicable to such Sublicensee’s activities; (c) Licensor shall remain fully liable for the performance of such sublicense in accordance with this Agreement; and (d) Licensor must require, in each such sublicense agreement, that the Sublicensee grant to Licensor the royalty-free license under, and right of reference to, with rights to grant sublicenses and further rights of reference to Licensee and its Sublicensees under Section 5.1, (i) all Information (including all Regulatory Data) and Regulatory Documentation generated by or on behalf of such Sublicensee in connection with the Development of Licensed Products and (ii) all Patents owned or controlled by such Sublicensee with respect to the Licensed Products. Notwithstanding the foregoing, Licensee agrees to the sublicense to Kyowa of the rights granted to Licensor under Section 5.2, as and to the extent such sublicense is already granted under the Kyowa Agreement.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

5.5 Access to Regulatory Documentation and Cooperation. Subject to Section 3.7.3, and to the extent not already provided under Sections 3.6.1 and 3.6.2, each Party promptly shall provide to the other Party, at the other Party’s cost and expense, copies of such Regulatory Data, Regulatory Approvals and other Regulatory Documentation Controlled by such Party or any of its Affiliates as shall be reasonably requested by the other Party solely for purposes of exercising its rights under the grants in Sections 5.1.1 and 5.2.1, as applicable. All such documents shall be provided in the format as submitted to the applicable Regulatory Authority, and also in Word, Excel or other source formats to permit analysis, editing, and inclusion in regulatory submissions in the other Party’s portion of the Territory.

5.6 No Implied Rights. Licensee and its Affiliates and Sublicensees shall have no right, express or implied, with respect to the Licensor Patents, the Licensor Know-How, the Regulatory Documentation, and the Licensor Corporate Names, and Licensor and its Affiliates shall have no right, express or implied, with respect to the Licensee Patents, the Licensee Know-How, the Regulatory Documentation except, in each case, as expressly provided in Sections 5.1 and 5.2.

5.7 Licensor Exclusivity .

5.7.1 Prior to Expiration of Option Period. Prior to the expiration of the Collaboration Candidate Option Period with respect to each Collaboration Candidate, Licensor shall not, and shall cause its Affiliates not to, (i) directly or indirectly (including by licensing, authorizing, appointing, or otherwise enabling any Third Party to do so), file for regulatory approval of or commercialize any pharmaceutical product containing such Collaboration Candidate as an active pharmaceutical ingredient in any country in the Licensee Territory for any Licensed Indication; or (ii) sell to a Third Party Licensor’s and its Affiliates’ rights to such Collaboration Candidate.

5.7.2 Following Expiration of Option Period. Following the expiration or lapse without exercise of the Collaboration Candidate Option Period with respect to each Collaboration Candidate, Licensor shall not, and shall cause its Affiliates not to, directly or indirectly (including by licensing, authorizing, appointing, or otherwise enabling any Third Party to do so), (i) commercialize any pharmaceutical product containing such Collaboration Candidate as an active pharmaceutical ingredient in any country in the Licensee Territory for any Licensed Indication, (ii) develop any such pharmaceutical product anywhere in the world for the purpose of obtaining or maintaining any regulatory approval for such pharmaceutical product in any country in the Licensee Territory for any Licensed Indication, or (iii) manufacture or have manufactured any such pharmaceutical product anywhere in the world in support of such commercialization or such development; provided that the restrictions set forth in clauses (i) – (iii) shall not apply with respect to any pharmaceutical product containing a Collaboration Candidate as an active pharmaceutical ingredient that satisfies both the following conditions ((A) – (B)): (A) the product is being commercialized, developed or manufactured only for (1) the Licensed Indication that was the subject of the expired Collaboration Candidate Option, which Licensed Indication cannot be

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(x) the Renal Indication or (y) another Licensed Indication that is an Active Indication at the time of the expiration of such Collaboration Candidate Option Period, or (2) any Retained Indication, and (B) the product is expected by the Parties, in good faith, on the basis of market data from a recognized provider such as IMS Health, to have aggregate annual net sales (calculated in accordance with the definition of “Net Sales” herein, mutatis mutandis ) in the major Markets in any [***] of the [***] full Calendar Years immediately following the commercial launch of the product of at least [***] Dollars ($[***]) per Calendar Year. If the parties do not agree on whether such nets sales in any of such Calendar Years are expected to be at least [***] Dollars ($[***]), then such dispute shall be resolved pursuant to Section 13.6. The commercialization, development or manufacture of any Collaboration Candidate for a Licensed Indication as permitted by this Section 5.7.2 (the “ Permitted Indication ”) shall not limit or affect Licensee’s rights or Licensor’s obligations under Section 3.3 with respect to the same Collaboration Candidate for any Licensed Indication other than such Permitted Indication.

5.7.3 With Respect to the Initial Licensed Compound. Until the end of the last-t-expire Royalty Term for a Licensed Product containing the Initial Licensed Compound (or a Backup Compound) as an active pharmaceutical ingredient, Licensor shall not, and shall cause its Affiliates not to, directly or indirectly (including by licensing, authorizing, appointing, or otherwise enabling any Third Party to do so), (i) Commercialize any Licensed Product containing the Initial Licensed Compound (or Backup Compound) as an active pharmaceutical ingredient in any country in the Licensee Territory for any Licensed Indication, except as set forth in Section 4.11; (ii) Develop any such Licensed Product anywhere in the world for the purpose of obtaining or maintaining Regulatory Approval for such Licensed Product in any country in the Licensee Territory for any Licensed Indication, except as expressly provided in the Initial Development Plan or any development Plan and Budget for Joint Activities; or (iii) Manufacture or have Manufactured any such Licensed Product anywhere in the world in support of such prohibited Commercialization or such prohibited Development, except as expressly provided in the Initial Development Plan or any Development Plan and Budget for Joint Activities.

5.7.4 Targeted AIMs Not Subject to the Collaboration Candidate Option. With respect to each Targeted AIM owned or controlled by Licensor or any of its Affiliates (other than a Licensed Compound) for which clinical development for the Cardiovascular Indication or the Metabolic Indication is commenced following expiration of Licensor’s obligation to offer such Targeted AIM to Licensee as a Collaboration Candidate during the period set forth in Section 3.3.1(i)(B) or (C), as applicable, (a) Licensor shall not, and shall cause its Affiliates not to, directly or indirectly (including by licensing, authorizing, appointing, or otherwise enabling any Third Party to do so), file for regulatory approval of or commercialize any pharmaceutical product containing such Targeted AIM as an active pharmaceutical ingredient in any country in the Licensee Territory: (1) for the Renal Indication, at any time during the Term; (2) for the Cardiovascular Indication, if as of the date of the Initiation of the first Phase III Clinical Study for such product for the Cardiovascular Indication, the Cardiovascular Indication is an Active Indication, or (3) for the Metabolic Indication, is as of the date of the Initiation of the first Phase III Clinical Study for such product for the Metabolic Indication, the Metabolic Indication is an Active Indication; and (b) if Licensor or any of its Affiliates sells to a Third Party its or their rights to such Targeted AIM, such sale shall include a restriction on such Third Party that

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

precludes such Third Party and its Affiliates from, directly or indirectly (including by licensing, authorizing, appointing, or otherwise enabling any other Third Party to do so), filing for regulatory approval of or commercializing any pharmaceutical product containing such Targeted AIM as an active pharmaceutical ingredient in any country in the Licensee Territory: (1) for the Renal Indication, at any time during the Term; (2) for the Cardiovascular Indication, if as of the date of the Initiation of the first Phase III Clinical Study for such product for the Cardiovascular Indication, the Cardiovascular Indication is an Active Indication, or (3) for the Metabolic Indication, if as of the date of the Initiation of the first Phase III Clinical Study for such product for the Metabolic Indication, the Metabolic Indication is an Active Indication.

5.7.5 Pre-Clinical Compounds. Licensor covenants that, during the Term, it shall not, and shall cause its Affiliates not to, license or otherwise grant, or sell, to any Third Party rights to develop or commercialize any Pre-Clinical Compound for any Licensed Indication in the Licensee Territory. As used herein, “ Pre-Clinical Compound ” means a Targeted AIM controlled or owned by Licensor or any of its Affiliates which has not at the time of license grant or sale to a Third Party been the subject of any Phase I Clinical Study. In the event that in order to comply with non-competition laws of any jurisdiction, Licensor, upon the advice of counsel, determines that it is required to grant to such Third Party such rights in the Licensed Indications, it shall do so only provided it also obtains from such Third Party a negative covenant that such Third Party shall not directly or indirectly (including by licensing, authorizing, appointing, or otherwise enabling any other Third Party to do so) (i) commercialize any pharmaceutical product containing such Pre-Clinical Compound as an active pharmaceutical ingredient in any country in the Licensee Territory for any Licensed Indication during the Term, (ii) develop any such pharmaceutical product anywhere in the world for the purpose of obtaining or maintaining any regulatory approval for such pharmaceutical product in any country in the Licensee Territory for any Licensed Indication during the Term, or (iii) manufacture or have manufactured any such pharmaceutical product anywhere in the world in support of such commercialization or such development in the Licensed Indications. Nothing in this Section 5.7.5 shall be construed as restricting Licensor’s right to (a) engage Third Party service providers or other vendors to perform research or development activities on behalf of Licensor, such as toxicology studies, chemistry, screening, manufacturing, process development, testing and assays, with respect to any Pre-Clinical Compound; (b) license, sell, or otherwise grant to any Third Party rights in and to any Pre-Clinical Compound for use outside the Licensed Indications, anywhere in the Territory, and (c) license or otherwise grant to any Third Party rights to any Collaboration Compound as to which Licensee has not exercised its Collaboration Candidate Option (subject at all times to the restrictions set forth in Section 5.7.2), or any Targeted AIM described in Section 5.7.4, subject at all times to the terms of Section 5.7.4.

5.8 Licensee Exclusivity.

5.8.1 Licensed Indications and Active Indications in Licensee Territory.

(i) Licensed Indications in Licensee Territory. Until the [***] anniversary of the Effective Date, Licensee shall not, and shall cause its Affiliates not to, directly or indirectly (except as permitted under Section 5.8.2(i) or (iii)), (i) commercialize any

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

pharmaceutical product containing a Targeted AIM (other than a Licensed Compound) as an active pharmaceutical ingredient in any country in the Licensee Territory for any Licensed Indication, or (ii) develop any such pharmaceutical product anywhere in the world for the purpose of obtaining or maintaining any regulatory approval for such pharmaceutical product in any country in the Licensee Territory for any Licensed Indication (it being understood and agreed that any development for the purpose of obtaining or maintaining any regulatory approval in any country outside of the Licensee Territory is permitted even if such development may also be useful for the purpose of obtaining or maintaining regulatory approval for a Licensed Indication in the Licensee Territory) (the “ Licensed Indication Exclusivity Restriction ”).

(ii) Active Indications in Licensee Territory. During the Term, Licensee shall not, and shall cause its Affiliates not to, directly or indirectly (except as permitted under Section 5.8.2(i) or (iii)), (i) commercialize any pharmaceutical product containing a Targeted AIM (other than a Licensed Compound) as an active pharmaceutical ingredient in any country in the Licensee Territory for any active Indication, (ii) develop any such pharmaceutical product anywhere in the world for the purpose of obtaining or maintaining any regulatory approval for such pharmaceutical product in any country in the Licensee Territory for any Active Indication, or (iii) manufacture or have manufactured any such pharmaceutical product anywhere in the world in support of such commercialization or such development (it being understood and agreed that any development for the purpose of obtaining or maintaining any regulatory approval in any country outside of the Licensee Territory is permitted even if such development may also be useful for the purpose of obtaining or maintaining regulatory approval for an Active Indication in the Licensee Territory) (the “ Active Indication Exclusivity Restriction ”).

(iii) Licensee shall notify Licensor promptly following the commencement by Licensee or any of its Affiliates of any Clinical Studies with respect to a Targeted AIM that is not a Collaboration Compound.

5.8.2 Options With Respect to Restricted Products. Notwithstanding Section 5.8.1, if Licensee or any of its Affiliates, either (x) as a result of a merger, acquisition, or similar transaction (including an acquisition of assets), or (y) as a result of internal efforts for an indication permitted under Section 5.8.1(ii) prior to such indication becoming an Active Indication, obtains ownership of or a license to, or is acquired by or otherwise merges with an entity that owns or has a license to, a pharmaceutical product that includes a Targeted AIM as an active pharmaceutical ingredient that would otherwise result in a violation of the Licensed Indication Exclusivity Restriction or the Active Indication Exclusivity Restriction (a “ Restricted Product ”), then Licensee or its Affiliate shall promptly notify Licensor in writing and shall be required to elect to take one of the following actions:

(i) pay to Licensor a royalty on such Restricted Product during the period that the sale of such Restricted Product would result in a violation of the Licensed Indication Exclusivity Restriction or the Active Indication Exclusivity Restriction calculated as follows: Licensor shall pay a royalty on the portion of annual net sales (calculated in accordance with the definition of “Net Sales” herein, mutatis mutandis ) of the Restricted Product in the Licensee Territory that exceed the amount of net sales of such product in the Licensee Territory during the twelve- (12-) month period immediately prior to the transaction resulting in the

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

acquisition of the Restricted Product (or, if internally developed, during the twelve- (12-) month period immediately prior to the event causing the Restricted Product to be in violation of the Active Indication Exclusivity Restriction) (with net sales of a product not yet commercialized being deemed equal to zero) at a royalty rate of ten percent (10%) (and none of such net sales shall be aggregated together with Net Sales of Licensed Products for the purposes of determining the royalty rates applicable to Licensed Products) ( e.g. , if net sales of the Restricted Product in the Licensee Territory during the twelve- (12-) month period immediately prior to the acquisition of the Restricted Product are $100,000,000, after such acquisition Licensee would pay a royalty under this Section 5.8.2(i) equal to ten percent (10%) of the portion, if any, of annual net sales of the Restricted Product in the Licensee Territory in excess of $100,000,000);

(ii) cease and refrain from (and cause its Affiliates to refrain from) commercializing the Restricted Product in the applicable country;

(iii) divest, or cause its relevant Affiliate to divest, whether by asset sale, license, or otherwise, the Restricted Product in the applicable country within [***] days (or for such longer period as Licensee or its relevant Affiliate is actively engaged in bona fide efforts to divest such Restricted Product), in which event the development or commercialization of such Restricted Product during such period shall not constitute a breach of the Licensed Indication Exclusivity Restriction or the Active Indication Exclusivity Provision; it being acknowledged and agreed by the Parties that: (A) Licensee or its Affiliate shall be entitled to receive fees, milestones, and royalties on sales of the Restricted Product divested through a license, to Manufacture such Restricted Product for the acquirer or licensee of the Restricted Product, and to provide technology transfer, transition services, and other support in connection with the sale or license; and (B) Licensee or its Affiliate shall have the right to take back rights to the Restricted Product in the applicable country (x) at any time when the Licensed Indication Exclusivity Restriction and the Active Indication Exclusivity Restriction no longer applies, or (y) at any other time in the event of a breach of any license granted by Licensee or its Affiliate as its means of divesting its interest in such Restricted Product by the licensee, in which event under clause (y) Licensee or its Affiliate shall be required again to refrain from such commercialization, dives, or terminate this Agreement pursuant to Section 5.8.2(iv); or

(iv) terminate this Agreement with respect to the applicable Region in which such country is located in accordance with Section 12.3.2.

5.8.3 Licensed Indication in the Licensor Territory. In the event Licensee launches any product containing a Targeted AIM for a Licensed Indication in the United States prior to the [***] ([***]) anniversary of the First Commercial Sale of the first Licensed Product in the United States, then Licensor shall have the option to (but not the obligation to) repurchase all or any portion of the Licensor’s equity then held by Licensee or any of its Affiliates in accordance with Section 4.3(b) of the Securities Purchase Agreement.

5.9 Commercialization Arrangements in the Licensor Territory.

5.9.1 United States. The Parties agree that, during the Term, as and to the extent Licensor seeks to engage or contract with a U.S. Commercialization Partner, Licensee shall have the sole and exclusive right to be such U.S. Commercialization Partner. A “ U.S. Commercialization Partner ” means any Person other than Licensor or its Affiliate with the right

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

to promote, co-promote, perform details, market, distribute, sell, or offer for sale, (a) the Licensed Product containing the Initial Licensed Compound (or a Backup Compound) for any Licensed Indication (except for a Licensed Indication for which Licensee has launched a product containing a Targeted AIM in the United States), or (b) any Licensed Product containing a Collaboration Compound as to which Licensee has exercised its Collaboration Candidate Option, for any Licensed Indication which is an Active Indication (except for a Licensed Indication for which Licensee has launched a product containing a Targeted AIM in the United States), in each case ((a) and (b)), in the United States (whether exclusively, co-exclusively with Licensor, or non-exclusively), but excludes any Person who is a contract sales organization, a contract Third Party logistics organization, or a contract provider of marketing services (in each case, as distinct from a pharmaceutical, specialty pharmaceutical, or biopharmaceutical company with products other than the Licensed Products in development or being commercialized by such Person) with whom Licensor contracts on an outsourcing basis and in lieu of using Licensor’s own employees or infrastructure. If Licensor during the Term desires to have a U.S. Commercialization Partner, it shall so notify Licensee in writing, which such notice shall set forth the nature of the services or expertise it seeks in such U.S. Commercialization Partner and upon receipt of such notice, Licensee shall have a period of [***] days to determine whether it wishes to provide such services or assistance, and if to, notify Licensor in writing. Upon receipt of such notice from Licensee, the Parties will enter into exclusive, good faith negotiations with respect to the terms under which Licensee would provide such services or expertise, for a period of up to [***] days. In the event the Parties are not able to agree on the terms of such arrangement by the end of such period, then either Party, following the end of the [***] day period may refer such issue for resolution pursuant to Section 13.6, following which resolution both Parties shall have the right to either elect to enter into an arrangement in accordance with the terms determined pursuant to such resolution, or decline to do so. If Licensee declines to enter into such arrangement, Licensor shall have the right to engage a Third Party as a U.S. Commercialization Partner on terms that are no less favorable to Licensor, taken as a whole than those determined pursuant to the resolution. If Licensor declines to enter into such arrangement, Licensor shall not have the right to engage a Third Party as a U.S. Commercialization Partner. Licensor shall not, and shall cause its Affiliates not to, enter into any arrangement with a U.S. Commercialization Partner during the Term, except as set forth in this Section 5.9.1. Licensee acknowledges and agrees that (i) Licensor has no obligation to engage Licensee as a U.S. Commercialization Partner and retains all rights to Commercialize Licensed Products and products containing Targeted AIMs in the United States itself or through its Affiliates or one or more contract service providers as and to the extent set forth above; (ii) Licensee has no right to be a U.S. Commercialization Partner with respect to any Licensed Indication for which Licensee has launched a product containing a Targeted AIM in the United States; (iii) Licensee has not right to be a U.S. Commercialization Partner with respect to any Collaboration Candidate as to which it has not exercised its Collaboration Candidate Option, it being further understood that unless and until Licensee exercises its Collaboration Candidate Option, Licensor has all rights to sublicense to any Third Party the rights to Develop, obtain Regulatory Approval for, or Commercialize such Collaboration Candidate in the United States and such Third Party shall not be deemed a U.S. Commercialization Partner for the purpose of this Section 5.9.1; provided that Licensor shall give Licensee notice at least [***] days prior to entering into any such arrangement with any Third Party.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

5.9.2 Licensed Product in the Out-Licensed Territory. In the event Licensor’s license to Kyowa for Licensed Products in any country of the Out-Licensed Territory terminates at any time within [***] years following the Effective Date, Licensor shall notify Licensee in writing as to the country(ies) in which such termination has occurred. Licensee shall advise Licensor in writing, within [***] days following receipt of such notice from Licensor, whether Licensee desires to negotiate commercialization rights for the Licensed Product containing the Initial Licensed Compound (or a Backup Compound) in the subject country(ies). If Licensee is interested in obtaining such commercialization rights, the Parties shall negotiate in good faith for a period of up to [***] days after Licensee’s delivery of such notice to determine whether mutually agreeable terms can be achieved. Licensor shall not execute a license or commercialization agreement with a Third Party granting any such commercialization rights for Licensed Products in such country(ies) without the consent of Licensee prior to the termination of such [***]- ([***]) day period of negotiation. The foregoing provision shall not require Licensor to negotiate exclusively with Licensee, and if the Parties do not reach agreement within such [***]- ([***]) day period of negotiation, Licensor shall be permitted to grant commercialization rights for Licensed Products in the subject country(ies) of the Out-Licensed Territory, free and clear of any obligations to Licensee; provided such rights are granted on terms that are no less favorable to Licensor, taken as a whole than those last offered by Licensor to Licensee, where such rights are granted within [***] of the termination or expiration of negotiations between Licensee and Licensor with respect to such license. This provision shall not apply to Licensed Products that are other than the Licensed Product containing the Initial Licensed Compound (or a Backup Compound).

5.10 Backup Compounds .

5.10.1 Notification of Backup Candidates . In the event of a Compound Failure as determined under Section 5.10.2, Licensor will provide Licensee with all material Information regarding any Targeted AIMs (other than compounds that are then Licensed Compounds) Controlled by Licensor or an Affiliate with respect to which Licensor or any Affiliate is then performing or proposes to perform any pre-clinical or clinical development for any Renal Indication (each such compound, a “ Backup Candidate ”).

5.10.2 Selection of Backup Compound . If at any time the JDC (subject to the dispute resolution procedures set forth in Section 13.6.2) determines that a Compound Failure has occurred, then Licensee shall have the right, upon written notification to Licensor and without additional consideration to Licensor under Section 6.1, to require the JDC to select a Backup Candidate to become a Licensed Compound (such Backup Candidate, along with any metabolite, salt, hydrate, solvate, enantiomer, free acid form, free base form, crystalline form, co-crystalline form, amorphous form, pro-drug (including ester pro-drug) form, racemate, polymorph, chelate, stereoisomer, tautomer, or optically active form thereof, the “ Backup Compound ”) (which selection shall be subject to the dispute resolution procedures set forth in Section 13.6.2), and upon such selection the Backup Compound shall constitute a Licensed Compound for all purposes of this Agreement. Promptly thereafter, the Parties shall, through their representatives on the JDC (subject to the dispute resolution procedures set forth in Section 13.6.2), amend the Initial Development Plan to terminate the Development of the Licensed

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Compound that is then the subject of the Initial Development Plan (whether such Licensed Compound is the Initial Licensed Compound or a Backup Compound deemed a Licensed Compound pursuant to this Section 5.10.2 following a previous Compound Failure), and to provide for the Development of the Backup Compound. Licensor shall in no event be required to offer to Licensee as a Backup Candidate any Targeted AIM that is then under clinical development for any Retained Indication by Licensor or any of its Affiliates or licensees.

5.10.3 Development of the Backup Compound . If, after the selection of a Backup Compound and the amendment of the Initial Development Plan in connection therewith, the total Collaboration Costs incurred in connection with the Initial Development Activities (as so amended) exceed Two Hundred Ninety-Eight Million Dollars ($298,000,000), Licensor shall have the right to elect, at its sole discretion, either: (a) to continue to co-fund the Initial Development Activities for such Backup Compound with Licensee pursuant to Section 3.4.1, in which case all terms and conditions of this Agreement shall apply to such Backup Compound without modification; or (b) to discontinue to co-fund the Initial Development Activities for such Backup Compound with Licensee pursuant to Section 3.4.1, in which case: (1) Licensee shall have the right (but not the obligation) to continue to Develop such Backup Compound in accordance with the terms of this Agreement at its sole expense; (2) the licenses and rights of references granted by Licensee to Licensor under Section 5.2 shall exclude (A) any Licensee Patents, Licensee Know-How, Joint Patents, Joint Know-How, Regulatory Approvals and other Regulatory Documentation generated by Licensee in the course of conducting such Development of such Backup Compound at its sole expense and (B) any license or right or reference to obtain, maintain and hold Regulatory Approvals for, Develop or Manufacture Licensed Products containing such Backup Compound, except that in both cases, Licensor shall have a limited license and right to access, use and reference, solely to grant a sublicense and provide a right of access, use and reference to Kyowa with respect to any such Licensee Patents, Licensee Know-How, Joint Patents, Joint Know-How, Regulatory Approvals and other Regulatory Documentation, as and to the extent required under the Kyowa Agreement as determined by Licensor in good faith; and (3) the royalty rates set forth in Section 6.2.1 for Licensed Products containing such Backup Compound shall be reduced by seventy-five percent (75%), such that (x) the royalty rate applicable to that portion of aggregate Net Sales of Licensed Products containing such Backup Compound that is less than $3,000,000,000 shall be five percent (5%), (y) the royalty rate applicable to that portion of aggregate Net Sales of Licensed Products containing such Backup Compound that is equal to or greater than $3,000,000,000 but less than $5,000,000,000 shall be six percent (6%), and (z) the royalty rate applicable to that portion of aggregate Net Sales of Licensed Products containing such Backup Compound that is equal to or greater than $5,000,000,000 shall be seven percent (7%).

ARTICLE 6

PAYMENTS AND RECORDS

6.1 Milestone Payments.

6.1.1 Upfront Amount . No later than thirty (30) days following the Effective Date, Licensee shall pay Licensor an upfront amount equal to One Hundred and Fifty Million Dollars ($150,000,000). Such payment shall be noncreditable against any other payments due hereunder.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

6.1.2 Milestone Payments for Renal Indication for Initial Licensed Compound .

(i) Phase IIb Data. Promptly following the completion of the analysis of the secondary end point of the [Ongoing Phase IIb Study], Licensor shall provide to Licensee a complete data package therefor, and such other information as Licensee may reasonably request in connection with its evaluation of such data. Within thirty (30) days after receipt of all such data and information, the Parties shall endeavor to reach agreement as to whether such Clinical Data indicates that the Target Phase IIb CKD Conditions were met. If the Parties cannot agree as to whether the Target Phase IIb CKD Conditions were met, then the dispute shall be resolved pursuant to Section 13.6. If it is determined (by the Parties or pursuant to Section 13.6) that the Target Phase IIb CKD Conditions were met, then no later than thirty (30) days following such determination, Licensee shall pay Licensor a milestone payment equal to One Hundred Million Dollars ($100,000,000). Such payment shall be noncreditable against any other payments due hereunder.

(ii) Patient Enrollment in the Licensee Territory . No later than thirty (30) days following Licensor’s notification to Licensee that it has enrolled at least fifty (50) patients at sites in [the Major Markets and Austria, Belgium and Sweden] combined for the [diabetic CKD Study], Licensee shall pay Licensor a milestone payment equal to Fifty Million Dollars ($50,000,000). Such payment shall be noncreditable against any other payments due hereunder.

(iii) Phase III Data. Promptly following the completion of the [Diabetic CKD Study], Licensor shall provide to Licensee a complete data package therefor. Within thirty (30) days after receipt of all such data and information, the Parties shall endeavor to reach agreement as to whether such Clinical Data indicates that the Target Phase III CKD Conditions were met. If the Parties cannot agree as to whether the Target Phase III CKD Conditions were met, then the dispute shall be resolved pursuant to Section 13.6. If it is determined (by the Parties or pursuant to Section 13.6) that the Target Phase III CKD Conditions were met, then no later than thirty (30) days following such determination, Licensee shall pay Licensor a milestone payment equal to One Hundred Million Dollars ($100,000,000). Such payment shall be noncreditable against any other payments due hereunder. If the milestone payment provided for in this Section 6.1.2(iii) is made, then the payment for the milestone event described under Section 6.1.2(v) shall be applicable, and no payment shall be due under Section 6.1.2(vi) or Section 6.1.7. If the milestone payment provided for in this Section 6.1.2(iii) is not made for failure to meet the Target Phase III CKD Conditions, then no payment shall be due under Section 6.1.2(v), but alternative payments shall be made as set forth in Sections 6.1.2(vi) and Section 6.1.7, subject to the conditions thereof.

(iv) EMA Filing. Set forth on Schedule 6.1.2(iv) is a description of the deliverables of Licensor required to enable the filing by Licensee of the first MAA with the EMA for a Licensed Product containing the Initial Licensed Compound for the Renal Indication (“ Licensor EMA Deliverables ”). No later than thirty (30) days following the filing by Licensee of the first MAA with the EMA for the Licensed Product containing the Initial Licensed Compound for the Renal Indication, Licensee shall pay Licensor a milestone payment equal to (a)

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

if Licensor has delivered the Licensor EMA Deliverables within ten (10) Business Days of the filing by Licensor with the FDA of an sNDA that includes event data from the Phase III Clinical Study “Bardoxolone Methyl Evaluation in Patients with Chronic Kidney Disease and Type 2 Diabetes: eGFR and the Occurrence of Renal Events (BEACON),” Fifty Million] Dollars ($50,000,000) or (b) if Licensor has delivered the Licensor EMA Deliverables following the tenth (10 th ) Business Day but within twenty (20) Business Days after such filing by Licensor, Twenty-Five Million Dollars ($25,000,000). No milestone payment shall be payable if Licensor has not delivered the Licensor EMA Deliverables within twenty (20) Business Days after such filing by Licensor. Any such payment shall be noncreditable against any other payments due hereunder.

(v) Regulatory Approvals. If the payment under Section 6.1.2(iii) was due, then, no later than thirty (30) days following the receipt by Licensee of Regulatory Approval in each [Major Market] for the first Licensed Product containing the Initial Licensed Compound that meets the Target CKD Approval Profile in each of the five (5) Major Markets, Licensee shall pay Licensor the following milestone payment for each such country. Such payments shall be made country-by-country without regard to whether approvals have yet been obtained in other Major Markets, and shall be noncreditable against any other payments due hereunder.

Major Market	Milestone Payment
[***]	$	[10 Million	]
[***]	$	[15 Million	]
[***]	$	[10 Million	]
[***]	$	[7.5 Million	]
[***]	$	[7.5 Million	]

(vi) First Commercial Sale. No later than [thirty (30)] days following the First Commerical Sale of a Licensed Product containing the Initial Licensed Compound for the Renal Indication in the third Major Market (after the First Commercial Sale of such Licensed Product has occurred in two (2) other Major Markets), if the milestone payment provided for in Section 6.1.2(iii) for Phase III data was not made for failure to meet the Target Phase III CKD Conditions, then Licensee shall pay Licensor a milestone payment equal to [Fifty Million] Dollars ($50,000,000). Such payment shall be noncreditable against any other payments due hereunder.

(vii) Generally. No milestone payment in this Section 6.1.2 will be made more than once irrespective of the number of Licensed Products that have achieved the milestone events set forth in this Section 6.1.2. If the Target Phase III CKD Conditions are met, then the maximum aggregate amount payable by Licensee pursuant to this Section 6.1.2 is Three Hundred Fifty Million Dollars ($350,000,000); if the Target Phase III CKD Conditions are not met, then the maximum aggregate amount payable by Licensee pursuant to this Section 6.1.2 is Two Hundred Fifty Million Dollars ($250,000,000).

.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

6.1.3 Milestone Payments for Cardiovascular Indication for a Collaboration Compound .

(i) Phase II CV Study. No later than thirty (30) days following the later of the Initiation by Licensor of the first Phsae II Clincial Study for a Collaboration Compound in the Cardiovascular Indication and Licensee’s exercise of the Collaboration Candidate Option for the Collaboration Compound that is the subject of the Phase II Clincial Study, Licensee shall pay Licensor a milestone payment equal to Fifty Million Dollars ($50,000,000). Such payment shall be noncreditable against any other payments due hereunder.

(ii) Phase III CV Study. No later than thirty (30) days following the Initiation by Licensor of the first Phase III Clincal Study for a Collaboration Compound in the Cardiovascular Indication, Licensee shall pay Licensor a milestone payment equal to One Hundred Million Dollars ($100,000,000); Such payment shall be noncreditable against any other payments due hereunder.

(iii) EMA Filing. No later than thirty (30) days following Licensee’s filing of the first MAA for a Licensed Product containing a Collaboration Compound for the Cardiovascular Indication with the EMA, Licensee shall pay Licensor a milestone payment equal to Fifty Million Dollars ($50,000,000). Such payment shall be noncreditable against any other payments due hereunder.

(iv) Regulatory Approvals. No later than thirty (30) days following the receipt by Licensee of Regulatory Approval in each Major Market for a Licensed Product containing a Collaboration Compound, which approval includes an approval for the Cardiovascular Indication, in each of the five (5) Major Markets, Licensee shall pay Licensor the following milestone payment for each such country. Such payments shall be made country-by-country without regard to whether approvals have yet been obtained in other Major Markets, and shall be noncreditable against any other payments due hereunder.

Major Markets	Milestone Payment
[France]	$	20 Million
[Germany]	$	30 Million
[Italy]	$	20 Million
[Spain]	$	15 Million
[United Kingdom]	$	15 Million

(v) Generally. No milestone payment in this Section 6.1.3(iv) will be made more than once irrespective of the number of Licensed Products that have achieved the milestone events set forth in this Section 6.1.3. The maximum aggregate amount payable by Licensee pursuant to this Section 6.1.3 is [Three Hundred Million] Dollars ($[300,000,000]).

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

6.1.4 Milestone Payments for Metabolic Indication for a Collaboration Compound .

(i) Phase II Metabolic Study. No later than thirty (30) days following the later of the Initiation by Licensor of the first Phase II Clinical Study for a Collaboration Compound in the Metabolic Indication and Licensee’s exercise of the Collaboration Candidate Option for the Collaboration Compound that is the subject of the Phase II Clinical Study, Licensee shall pay Licensor a milestone payment equal to Fifty Million Dollars ($50,000,000). Such payment shall be noncreditable against any other payments due hereunder.

(ii) Phase III Metabolic Study. No later than thirty (30) days following the Initiation by Licensor of the first Phase III Clinical Study for a Collaboration Compound for the Metabolic Indication, Licensee shall pay Licensor a milestone payment equal to One Hundred Million Dollars ($100,000,000). Such payment shall be noncreditable against any other payments due hereunder.

(iii) EMA Filing. No later than thirty (30) days following Licensee’s filing of the first MAA for a Licensed Product containing a Collaboration Compound for the Metabolic Indication with the EMA, Licensee shall pay Licensor a milestone payment equal to Fifty Million Dollars ($50,000,000). Such payment shall be noncreditable against any other payments due hereunder.

(iv) Regulatory Approvals. No later than thirty (30) days following the receipt by Licensee of Regulatory Approval for a Licensed Product containing a Collaboration Compound, which approval includes an approval for the Metabolic Indication, in each of the five (5) Major Markets, Licensee shall pay Licensor the following milestone payment for each such country. Such payments shall be made country-by-country without regard to whether approvals have yet been obtained in other Major Markets, and shall be noncreditable against any other payments due hereunder.

Major Market	Milestone Payment
[***]	$	20 Million
[***]	$	30 Million
[***]	$	20 Million
[***]	$	15 Million
[***]	$	15 Million

(v) Generally. No milestone payment in this Section 6.1.4 will be made more than once irrespective of the number of Licensed Products that have achieved the milestone events set forth in this Section 6.1.4. The maximum aggregate amount payable by Licensee pursuant to this Section 6.1.4 is Three Hundred Million Dollars ($300,000,000).

6.1.5 Interplay of Sections 6.1.3 and 6.1.4. If a Licensed Product containing a particular Collaboration Compound achieves a milestone under either Section 6.1.3 or Section 6.1.4, and thereafter achieves the equivalent milestone under the other of such Sections, no payment shall be due in respect of the second of such (i.e., equivalent) milestone achievements, so that Licensee’s aggregate milestone payment obligation with respect to any particular Collaboration Compound shall not exceed Three Hundred Million Dollars ($300,000,000). If the equivalent milestone events under Sections 6.1.3 and 6.1.4 are triggered by Licensed Products containing different Licensed Compounds, then milestone payments shall be due under each of Section 6.1.3 and Section 6.1.4 for such equivalent events

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

6.1.6 Milestone Payments for Backup Compounds . No milestone payments shall be payable with respect to: (i) any Licensed Product containing a Backup Compound, or (ii) any Licensed Product containing a Collaboration Compound for a Renal Indication.

6.1.7 Contingent Sales Milestone . In the event that the milestone payment for Phase III data in the Diabetic CKD Study under Section 6.1.2(iii) was not made for failure to meet the Target Phase III CKD Conditions, then Licensee shall pay to Licensor a one-time lump sum milestone payment of Fifty Million Dollars ($50,000,000) within ninety (90) days following the end of the first full Calendar Year in which aggregate Net Sales of a Licensed Product containing the Initial Licensed Compound in the Licensee Territory first exceeds One Billion Dollars ($1,000,000,000). The payment provided for in this Section 6.1.7 shall be payable no more than once, and shall not apply to any Licensed Product which does not contain the Initial Licensed Compound.

6.2 Royalties.

6.2.1 Royalty Rates . As further consideration for the rights granted to Licensee hereunder, subject to Section 5.10.3 and Section 6.2.3, commencing upon the date of the first Commercial Sale of a Licensed Product in the Licensee Territory, Licensee shall pay to Licensor a royalty on Net Sales of each Licensed Product in the Licensee Territory (excluding Net Sales of each Licensed Product in any country in the Licensee Territory for which the Royalty Term for such Licensed Product in such country has expired) during each Calendar Year at the following rates:

Net Sales in the Licensee Territory of all Licensed Products Containing the Same Licensed Compound	Royalty Rate
For that portion of aggregate Net Sales of all Licensed Products containing the same Licensed Compound in the Licensee Territory during a Calendar Year less than $3,000,000,000		20	%
For that portion of aggregate Net Sales of all Licensed Products containing the same Licensed Compound in the Licensee Territory during a Calendar Year equal to or greater than $3,000,000,000 but less than $5,000,000,000		24	%
For that portion of aggregate Net Sales of all Licensed Products containing the same Licensed Compound in the Licensee Territory during a Calendar Year equal to or greater than $5,000,000,000		28	%

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

The royalty tiers set forth in the table above shall apply separately to Licensed Products that contain different Licensed Compounds. For example, if Net Sales for all Licensed Products containing the Initial Licensed Compound in the Licensee Territory during a Calendar Year are $2,000,000,000, and Net Sales during for all Licensed Products containing a Licensed Compound different from the Initial Licensed Compound in the Licensee Territory during such Calendar Year are $2,500,000,000, then all such Net Sales for both sets of Licensed Products during such Calendar Year shall bear a royalty rate of 20%.

With respect to each Licensed Product in each country in the Licensee Territory, from and after the expiration of the Royalty Term for such Licensed Product in such country, Net Sales of such Licensed Product in such country shall be excluded for purposes of calculating the Net Sales thresholds and ceilings set forth in this Section 6.2.1.

6.2.2 Royalty Term . Licensee shall have no obligation to pay any royalty with respect to Net Sales of any Licensed Product in any country after the Royalty Term for such Licensed Product in such country has expired.

6.2.3 Reductions . Notwithstanding the foregoing:

(i) in the event that in any country in the Licensee Territory during the Royalty Term for a Licensed Product unit sales of all Generic Products in such country in a Calendar Quarter (A) exceed ten percent (10%) of the sum of unit sales of such Licensed Product and all Generic Products in such country, Net Sales of such Licensed Product in such country shall from the first day of such Calendar Quarter and thereafter during such Royalty Term be multiplied by seventy-five percent (75%) for purposes of calculating royalties and Net Sales thresholds and ceilings pursuant to Section 6.2.1, (B) exceed twenty percent (20%) of the sum of unit sales of such Licensed Product and all Generic Products in such country, Net Sales of such Licensed Product in such country shall from the first day of such Calendar Quarter and thereafter during such Royalty Term be multiplied by fifty percent (50%) for purposes of calculating royalties and Net Sales thresholds and ceilings pursuant to Section 6.2.1, and (C) exceed fifty percent (50%) of the sum of unit sales of such Licensed Product and all Generic Products in such country, Net Sales of such Licensed Product in such country shall from the first day of such Calendar Quarter and thereafter during such Royalty Term be multiplied by twenty-five percent (25%) for purposes of calculating royalties and Net Sales thresholds and ceilings pursuant to Section 6.2.1;

(ii) in the event that the Parties are unable to obtain Regulatory Approval (including pricing and reimbursement approval) in at least one (1) Major Market prior to [***], of a Licensed Product containing the Initial Licensed Compound, and provided that Licensee has complied with its diligence obligations with respect to its prosecution of the MAA for such Licensed Product and pursuit of all relevant pricing and reimbursement approvals, then the royalty rate set forth in the table in Section 6.2.1 for the Licensed Product containing the Initial Licensed Compound or any Backup Compound, for the first tier of sales (first $3 billion) shall be reduced at the rate of one percentage point (1%) ( e.g. , from twenty percent (20%) to nineteen percent (19 %)) for each full calendar month, or portion thereof, by which the date of such first Regulatory Approval (including pricing and reimbursement approval) in a Major Market is later than [***] (up to a maximum reduction of five percentage points (5%)); this clause (ii) shall not apply to the second or third tier of royalty rates (Net Sales above $3 billion) and shall not apply to Licensed Products other than those containing the Initial Licensed Compound or any Backup Compound;

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(iii) in the event that Licensee enters into an agreement with a Third Party in order to obtain a license under a Patent or intellectual property right Controlled by such Third Party in a particular country pursuant to Section 7.6.1, Licensee shall be entitled to deduct from any royalties payable hereunder with respect to that country fifty percent (50%) of all upfront payments, milestone payments, royalties, and other amounts paid to such Third Party in respect of such agreement;

(iv) In the event that a court or a governmental agency of competent jurisdiction requires Licensee or any of its Affiliates or Sublicensees to grant a compulsory license to a Third Party permitting such Third Party to make and sell a Licensed Product in a country in the Licensee Territory, then, for the purposes of calculating the royalties payable with respect to such Licensed Product under Section 6.2.1, fifty percent (50%) of the Net Sales of such Licensed Product in such country shall be disregarded; and

(v) Licensee shall have the right to deduct costs in accordance with Section 7.4.1;

Provided, however, that regardless of the adjustment mechanisms of clauses (i) – (v) above, the average royalty rate payable by Licensee, for all Net Sales within the Licensee Territory where the Royalty Term then remains in effect (without any diminution of the Net Sales calculation pursuant to clause (i)) shall not be less than eight percentage points (8%) in any single Calendar Year. Reductions in royalties pursuant to the adjustment mechanisms of clauses (i) – (v) above that are not used to reduce the royalties due to Licensor in a particular Calendar Quarter on account of the previous sentence shall be carried over to subsequent Calendar Quarters until fully used in accordance with clauses (i) – (v) above.

6.3 Royalty Payments and Reports . Licensee shall calculate all amounts payable to Licensor pursuant to Section 6.2 at the end of each Calendar Quarter, which amounts shall be converted to Dollars, in accordance with Section 6.4. Licensee shall pay to Licensor the royalty amounts due with respect to a given Calendar Quarter within [***] days after the end of such Calendar Quarter. Each payment of royalties due to Licensor shall be accompanied by a statement of the amount of gross sales and Net Sales (and the calculations thereof) of each Licensed Product in each country the Licensee Territory during the applicable Calendar Quarter (including such amounts expressed in local currency and as converted to Dollars) and a calculation of the amount of royalty payment due on such Net Sales for such Calendar Quarter. Without limiting the generality of the foregoing, Licensee shall require its Affiliates and Sublicensees to account for its Net Sales and to provide such reports with respect thereto as if such sales were made by Licensee. At Licensor’s reasonable request, Licensee shall provide Licensor with additional information necessary for Licensor to comply with its royalty reporting obligations under any Third Party license agreements.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

6.4 Mode of Payment All payments to either Party under this Agreement shall be made by deposit of Dollars in the requisite amount to such bank account as the receiving Party may from time to time designate by notice to the paying Party. For the purpose of calculating any sums due under, or otherwise reimbursable pursuant to, this Agreement (including the calculation of Net Sales expressed in currencies other than Dollars), a Party shall convert any amount expressed in a foreign currency into Dollar equivalents using its, its Affiliate’s or Sublicensee’s standard conversion methodology consistent with GAAP. Such standard conversion methodology shall be based upon the Monthly Average Exchange Rate. “Monthly Average Exchange Rate” means simple average of prior month-end Exchange Rate and current month-end Exchange Rate based on 9:00 AM Central Time Bloomberg screen on the penultimate Business Day of the corresponding month, and “Exchange Rate” means, with respect to a Business Day, the spot bid rate for X currencies and spot ask rate for non-X currencies for the conversion of the applicable country’s currency to Dollars as reported at 9:00 AM Central Time Bloomberg screen on the penultimate Business Day.

6.5 Taxes

6.5.1 Deduction or Withholding of Tax. The milestones and royalties payable by Licensee to Licensor pursuant to this Agreement (each a “ Payment ”) shall not be reduced on account of any taxes unless required by Applicable Laws. Licensee shall deduct or withhold from the Payments any taxes that it is required by Applicable Laws to deduct or withhold on Licensor’s behalf. If any Payment is subject to a deduction or withholding of tax, the Licensor and Licensee shall use commercially reasonable efforts to perform all acts (including by executing all appropriate documents) so as to enable Licensor to take advantage of any applicable double taxation agreement or treaty. In the event there is no applicable double taxation agreement or treaty, or if an applicable double taxation agreement or treaty reduces but does not eliminate such tax, Licensee shall pay the applicable tax to the appropriate government authority, shall deduct the amount paid from the amount due Licensor, and shall provide to Licensor evidence of such payment within [***] days following such payment. If Licensee has not received evidence, in a form satisfactory to Licensee, at least [***] days prior to the time that a Payment is due, of Licensor’s entitlement under an applicable treaty to a reduced rate or elimination of the applicable tax, Licensee may withhold with respect to such Payment as if no double taxation agreement or treaty applied.

6.5.2 Licensee Withholding Tax Action. Subject to Section 6.5.3, if Licensee (or Licensee’s Affiliates or successors) is required to make a Payment to Licensor subject to a deduction or withholding of tax, as described in Section 6.5.1, then if such deduction or withholding of tax obligation is increased solely as a result of the assignment or transfer of all or a portion of this Agreement by Licensee as permitted under Section 13.3, or there is a change, whether by corporate continuance, merger or other means, in the tax residency of Licensee from that represented in Section 10.1.6, or the Payments arise or are deemed to arise through a permanent establishment, branch or similar place of business of Licensee in a jurisdiction other than the country in which Licensee is organized (each a “ Licensee Withholding Tax Action ”), then notwithstanding Section 6.5.1, the Payment by Licensee (in respect of which such deduction and withholding of tax is required to be made) shall be increased by the amount necessary (the “ Additional Amount ”) to ensure that Licensor receives an amount equal to the same amount that it would have received had no Licensee Withholding Tax Action occurred. In the case where the sum of the Payment and the aggregate of Payments made on and after the Effective Date (the “ Aggregate Payments ”) exceed the Threshold Amount (as defined in Section 6.5.3) the

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Additional Amount shall be based solely on a portion of the Payment that is equal to the amount derived by subtracting the Aggregate Payments from the Threshold Amount. Furthermore, Licensor shall pay Licensee an amount equal to any reduction in tax realized by Licensor, or any of its Affiliates or successors, that is due to a deduction or credit for, or refund of, any withholding taxes that gave rise to the payment of an Additional Amount. The aggregate of all payments made by Licensor to Licensee pursuant to the preceding sentence, if any, shall not exceed the aggregate of the Additional Amounts paid by Licensee to Licensor. All payments due to Licensee pursuant to the two preceding sentences shall be paid not later than [***] days following the filing of the tax return or other report in which such deduction, credit or refund is claimed.

6.5.3 Payment of Additional Amount. Section 6.5.2 shall only apply if each of the following applies: (i) Licensor has not changed its tax residency from that represented in Section 10.1.6; (ii) Licensor is the beneficial owner of the Payments; and (iii) at the time a Payment is due, the aggregate of Payments (in the event not including such Payment) paid by the Licensee since the Effective Date does not exceed $250,000,000 (the “ Threshold Amount ”).

6.5.4 Indirect Taxes. Except as otherwise provided in this Section 6.5, each Party shall be liable for and shall pay the taxes which are imposed on it under Applicable Law arising from, or attributable to, any Payment.

6.6 Interest on Late Payments If any payment due to either Party under this Agreement is not paid when due, then such paying Party shall pay interest thereon (before and after any judgment) at an annual rate (but with interest accruing on a daily basis) of [***] basis points above LIBOR, such interest to run from the date on which payment of such sum became due until payment thereof in full together with such interest.

6.7 Financial Records Each Party shall, and shall cause its Affiliates to, keep complete and accurate books and records pertaining to Net Sales of Licensed Products, as applicable, and Development of the Licensed Products and Collaboration Candidates, including books and records of actual expenditures with respect to the budgets set forth in each Development Plan and Budget, in sufficient detail to calculate all amounts payable hereunder and to verify compliance with its obligations under this Agreement. Such books and records shall be retained by such Party and its Affiliates until the later of (i) [***] years after the end of the period to which such books and records pertain (or, with respect to costs and expenses reimbursed by the Opting-Out Party pursuant to Section 3.7.4 or reimbursed by Licensee pursuant to Section 3.7.5, [***] years after the date of reimbursement of such costs and expenses), and (ii) the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Applicable Law.

6.8 Audit At the request of the other Party, each Party shall, and shall cause its Affiliates to, permit an independent auditor designated by the other Party and reasonably acceptable to the audited Party, at reasonable times and upon reasonable notice, to audit the books and records maintained pursuant to Section 6.7 to ensure the accuracy of all reports and payments made hereunder. Such examinations may not (i) be conducted for any Calendar Quarter more than [***] years after the end of such quarter (or, with respect to costs and expenses reimbursed by the Opting-Out Party pursuant to Section 3.7.4 or by Licensee pursuant to Section 3.7.5, be conducted more than [***] years after the date of reimbursement of such costs and expenses), (ii) be

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

conducted more than [***] in any [***] period (unless a previous audit during such [***] period revealed an underpayment with respect to such period) or (iii) be repeated for any Calendar Quarter. Except as provided below, the cost of this audit shall be borne by the auditing Party, unless the audit reveals a variance of more than [***] percent ([***]%) from the reported amounts, in which case the audited Party shall bear the cost of the audit. Unless disputed pursuant to Section 6.9 below, if such audit concludes that (x) additional amounts were owed by the audited Party, the audited Party shall pay the additional amounts, with interest from the date originally due as provided in Section 6.6 or (y) excess payments were made by the audited Party, the auditing Party shall reimburse such excess payments, in either case ((x) or (y)), within [***] days after the date on which such audit is completed by the auditing Party.

6.9 Audit Dispute In the event of a dispute with respect to any audit under Section 6.8, Licensor and Licensee shall work in good faith to resolve the disagreement. If the Parties are unable to reach a mutually acceptable resolution of any such dispute within [***] days, the dispute shall be submitted for resolution to a certified public accounting firm jointly selected by each Party’s certified public accountants or to such other Person as the Parties shall mutually agree (the “ Arbitrator ”). The decision of the Arbitrator shall be final and the costs of such arbitration as well as the initial audit shall be borne between the Parties in such manner as the Arbitrator shall determine. Not later than [***] days after such decision and in accordance with such decision, the audited Party shall pay the additional amounts, with interest from the date originally due as provided in Section 6.6, or the auditing Party shall reimburse such excess payments, as applicable.

6.10 Confidentiality The receiving Party shall treat all information subject to review under this Article 6 in accordance with the confidentiality provisions of Article 9 and the Parties shall cause the Arbitrator to enter into a reasonably acceptable confidentiality agreement with the audited Party obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement.

6.11 Diagnostic or Veterinary Products . The royalties in Section 6.2 shall not apply to Development and Commercialization of Licensed Products for diagnostic or veterinary use, or for uses solely for screening patients who have been diagnosed with a disease, state, or condition for eligibility to be treated for such disease, state, or condition with a Licensed Product or for monitoring patients who are or have been treated with a Licensed Product. In the event that a Licensed Product is Developed for any such purposes, the Parties shall negotiate a downward adjustment to such royalties for the sale of such Licensed Product that reflects the commercial potential of such Licensed Product and standard commercial terms in the industry for diagnostic or veterinary products, as applicable.

ARTICLE 7

INTELLECTUAL PROPERTY

7.1 Ownership of Intellectual Property

7.1.1 Ownership of Technology. As between the Parties, each Party shall own and retain all right, title, and interest in and to any and all: (i) Information and inventions that are conceived, discovered, developed, or otherwise made by or on behalf of such Party (or its

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Affiliates or Sublicensees) under or in connection with this Agreement, whether or not patented or patentable, and any and all Patents and other intellectual property rights with respect thereto, except to the extent that any such Information or invention or any Patent or intellectual property rights with respect thereto, is Joint Know-How or Joint Patents, and (ii) other Information, inventions, Patents and other intellectual property rights that are owned or otherwise Controlled (other than pursuant to the license grants set forth in Sections 5.1 and 5.2) by such Party, its Affiliates or its licensees or Sublicensees. Each Party shall promptly disclose to the other Party in writing, and shall cause its Affiliates, licensees and Sublicensees to so disclose, the development, making, conception or reduction to practice of any such Information, inventions, Patents and other intellectual property rights that are conceived, discovered, developed, or otherwise made under or in connection with this Agreement pertaining to any Licensed Product or Collaboration Compound in any Licensed Indication

7.1.2 Ownership of Joint Patents and Joint Know-How. As between the Parties, the Parties shall each own an equal, undivided interest in any and all (i) Information and inventions that are conceived, discovered, developed or otherwise made: (a) by or on behalf of either Party or its Affiliates or Sublicensees in connection with the work conducted under or in connection with (1) Joint Development Activities or (2) Initial Development Activities conducted after the aggregate Collaboration Costs incurred with respect to Initial Development Activities exceeds the Initial Development Costs other than Initial Development Activities funded solely by Licensee pursuant to section 5.10.3 or (b) jointly by or on behalf of Licensor or its Affiliates or Sublicensees, on the one hand, and Licensee or its Affiliates, on the other hand, in connection with the work conducted under or in connection with this Agreement, in each case ((a) and (b)) whether or not patented or patentable (the “ Joint Know-How ”) and (ii) Patents (the “ Joint Patents ”) and other intellectual property rights with respect thereto (together with Joint Know-How and Joint Patents, the “ Joint Intellectual Property Rights ”). Each Party shall promptly disclose to the other Party in writing, and shall cause its Affiliates, licensees and Sublicensees to so disclose, the development, making, conception or reduction to practice of any Joint Know-How or Joint Patents. Subject to the licenses and rights of reference granted under Sections 5.1 and 5.2 and the Parties’ respective exclusivity obligations hereunder, each Party shall have the right to Exploit the Joint Intellectual Property Rights without a duty of seeking consent or accounting to the other Party.

7.1.3 United States Law. The determination of whether Information and inventions are conceived, discovered, developed, or otherwise made by a Party for the purpose of allocating proprietary rights (including Patent, copyright or other intellectual property rights) therein, shall, for purposes of this Agreement, be made in accordance with Applicable Law in the United States as such law exists as of the Effective Date irrespective of where such conception, discovery, development or making occurs.

7.1.4 Assignment Obligation. Each Party will cause all Persons who perform clinical development activities, Manufacturing process development activities or regulatory activities for such Party under this Agreement to be under an obligation to assign (or, if such Party is unable to case such Person to agree to such assignment obligation despite such Party’s using commercially reasonable efforts to negotiate such assignment obligation, provide a license under) their rights in any inventions resulting therefrom to such Party, except where Applicable Law requires otherwise and except in the case of governmental, not-for-profit and public institutions which have standard policies against such an assignment (in which case a suitable license, or right to obtain such a license, shall be obtained).

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

7.1.5 CREATE Act. Notwithstanding anything to the contrary in this Article 7, neither Party shall have the right to make an election under the Cooperative Research and Technology Enhancement Act of 2004, 35 U.S.C. 103(c)(2)-(c)(3) (the “ CREATE Act ”) when exercising its rights under this Article 7 without the prior written consent of the other Party. With respect to any such permitted election, the Parties shall coordinate their activities with respect to any submissions, filings, or other activities in support thereof. The Parties acknowledge and agree that this Agreement is a “joint research agreement” as defined in the CREATE Act.

7.1.6 Patent Listings. Licensee shall have the sole right to make all filings with Regulatory Authorities in the Licensee Territory with respect to Licensor Patents, Licensee Patents, and Joint Patents as required or allowed under the national implementations of Article 10.1(a)(iii) of Directive 2001/EC/83 or other international equivalents, provided that Licensee shall consult with Licensor to determine the course of action with respect to such filings. Licensor shall (i) provide to Licensee all Information, including a correct and complete list of Licensor Patents covering any Licensed Product or otherwise necessary or reasonably useful to enable Licensee to make such filings with Regulatory Authorities in the Licensee Territory with respect to such Patents, and (ii) cooperate with Licensee’s reasonable request in connection therewith, including meeting any submission deadlines, in each case, to the extent required or permitted by Applicable Law.

7.1.7 Ownership of Corporate Names. As between the Parties, Licensor shall retain all right, title and interest in and to its Corporate Names.

7.2 Maintenance and Prosecution of Patents .

7.2.1 Patent Prosecution and Maintenance of Licensor Patents. Licensor shall have the right, but not the obligation, through the use of internal or outside counsel reasonably acceptable to Licensee (which shall include Licensor’s current outside counsel as of the Execution Date), to prepare, file, prosecute, and maintain the Licensor Patents worldwide, at Licensor’s sole cost and expense. Licensor shall keep Licensee fully informed of all step with regard to the preparation, filing, prosecution, and maintenance of Licensor Patents, including by providing Licensee with a copy of material communications to and from any patent authority in the Territory regarding such Licensor Patents, and by providing Licensee drafts of any material filings or responses to be made to such patent authorities in the Licensee Territory sufficiently in advance of submitting such filings or responses so as to allow for a reasonable opportunity for Licensee to review and comment thereon. Licensor shall consider in good faith the requests and suggestions of Licensee with respect to such Licensor drafts and with respect to strategies for filing and prosecuting the Licensor Patents in the Licensee Territory. Notwithstanding the foregoing, Licensor shall promptly inform Licensee of any adversarial patent office proceeding or sua sponte filing, including a request for, or filing or declaration of, any interference, opposition, or reexamination relating to a Licensor Patent in the Territory. The Parties shall thereafter consult and cooperate to determine a course of action with respect to any such proceeding in the Licensee Territory and Licensor shall consider in good faith all comments, requests and suggestions

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

provided by Licensee. Licensor shall not initiate any such adversarial patent office proceeding relating to a Licensor Patent in the Licensee Territory without first consulting Licensee. In the event that Licensor decides not to prepare, file, prosecute, or maintain a Licensor Patent in a country in the Licensee Territory, Licensor shall provide reasonable prior written notice to Licensee of such intention (which notice shall, in any event, be given no later than [***] days prior to the next deadline for any action that may be taken with respect to such Licensor Patent in such country), and subject to the rights of Dartmouth and UT under the Dartmouth Agreement and the UT Agreement, Licensee shall thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution, and maintenance of such Licensor Patent in such country on Licensor’s behalf. Upon Licensee’s written acceptance of such option, Licensee shall assume the responsibility and control for the preparation, filing, prosecution, and maintenance of such specific Licensor Patent, as well as all costs that accrue in connection therewith. In such event, Licensor shall reasonably cooperate with Licensee in such country as provided under Section 7.2.4.

7.2.2 Patent Prosecution and Maintenance of Licensee Patents. Licensee shall have the right, but not the obligation, to prepare, file, prosecute, and maintain the Licensee Patents worldwide, at Licensee’s sole cost and expense. Licensee shall keep Licensor fully informed of all steps with regard to the preparation, filing, prosecution, and maintenance of Licensee Patents, including by providing Licensor with a copy of material communications to and from any patent authority in the Territory regarding such Licensee Patents, and by providing Licensor drafts of any material filings or responses to be made to such patent authorities in the Licensor Territory sufficiently in advance of submitting such filings or responses so as to allow for a reasonable opportunity for Licensor to review and comment thereon. Licensee shall consider in good faith the requests and suggestions of Licensor with respect to such Licensee drafts and with respect to strategies for filing and prosecuting the Licensor Patents in the Licensor Territory. In the event that Licensee decides not to prepare, file, prosecute, or maintain a Licensee Patent in a country in the Licensor Territory, Licensee shall provide reasonable prior written notice to Licensor of such intention (which notice shall, in any event, be given no later than [***] days prior to the next deadline for any action that may be taken with respect to such Licensee Patent in such country), and Licensor shall thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution, and maintenance of such Licensee Patent in such country. Upon Licensor’s written acceptance of such option, all right and title to such Licensee Patent in such country shall be transferred to Licensor, and thereafter, all costs of such preparation, filing, prosecution, and maintenance shall be the sole responsibility of Licensor. Licensor shall promptly provide Licensee with the appropriate documents for transfer of ownership of such Licensee Patent in such country and Licensee shall promptly execute all such documents at Licensor expense. Notwithstanding the foregoing transfer of ownership, Licensee shall reasonably cooperate with Licensor in such country as provided under Section 7.2.4.

7.2.3 Patent Prosecution and Maintenance of Joint Patents. The Parties shall share the out-of-pocket external cost of the preparation, filing, prosecution, and maintenance of any Joint Patents applications for Joint Patents based on the portion of the Territory involved ( i.e. , Licensee pays such costs for preparation, filing, prosecution, and maintenance in the Licensee Territory and Licensor pays such costs for preparation, filing,

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

prosecution, and maintenance in the Licensor Territory). In connection with the foregoing, Licensee shall administer each such filing, prosecution, and maintenance of any such applications for Joint Patents, or Joint Patents, in each country in the Licensee Territory, and Licensee shall provide Licensor a reasonable opportunity to review, comment on, and approve (not to be unreasonably withheld) in advance any material filings and correspondence with applicable patent offices with respect thereto. Licensor shall administer each such filing, prosecution, and maintenance of any such applications for Joint Patents, or Joint Patents, in each country in the Licensor Territory, and Licensor shall provide Licensee a reasonable opportunity to review, comment on, and approve (not to be unreasonably withheld) in advance any material filings and correspondence with applicable Patent offices with respect thereto. Licensee and Licensor shall reasonably cooperate as provided under Section 7.2.4, and shall endeavor to keep the other Party fully up-to-date with respect to such filing, prosecution, and maintenance efforts.

7.2.4 Cooperation. The Parties agree to cooperate fully in the preparation, filing, prosecution, and maintenance of the Licensor Patents, Licensee Patents, and Joint Patents in the Territory under this Agreement. Cooperation shall include:

(i) executing all papers and instruments, or requiring its employees or contractors, to execute such papers and instruments, so as to (A) effectuate the ownership of intellectual property set forth in Section 7.1.1 and 7.1.2, (B) enable the other Party to apply for and to prosecute Patent applications in the Territory, and (C) obtain and maintain any Patent extension, supplementary protection certificates, and the like with respect to the Licensor Patents, Licensee Patents, and Joint Patents in the Territory, each of (A), (B), and (C) to the extent provided for in this Agreement;

(ii) consistent with this Agreement, assisting in any license registration processes with applicable governmental authorities that may be available in the Territory for the protection of a Party’s interests in this Agreement; and

(iii) promptly informing the other Party of any matters coming to such Party’s attention that may materially affect the preparation, filing, prosecution, or maintenance of any such Licensor Patents, Licensee Patents, or the Joint Patents in the Territory.

In addition, Licensee agrees to use reasonable efforts to promptly provide to Licensor notice and copies of (or citations to) any publications that Licensee’s intellectual property personnel (and Licensee’s scientific and technical personnel working with such intellectual property personnel) involved in either the intellectual property diligence review conducted by Licensee in anticipation of executing this Agreement, or involved in the patent prosecution or enforcement related activities provided for in this Agreement, reasonably believe would constitute prior art required to be disclosed in any patent applications within the Licensor Patents (to the extent not already disclosed therein) to the extent such personnel become reasonably aware of such publications and their relationship to the Licensor Patents.

7.2.5 Patent Term Extension and Supplementary Protection Certificate. Upon receiving Regulatory Approval for a Licensed Product in any country in the Licensee Territory, the Parties shall coordinate the application for any patent term extension or supplementary protection certificates that may be available, and the Parties shall determine jointly for which Patent(s) the Parties shall apply for patent term extension for a particular Licensed

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Product in the Licensee Territory. If the Parties do not agree on the patents that should be the subject of the application for patent term extension in a particular country in the Licensee Territory, Licensee shall have the right to determine for which Patent(s) the Parties shall apply for patent term extension for a particular Licensed Product in the Licensee Territory; provided that with respect to each such determination, neither the effect of such decision on a Royalty Term hereunder nor the effect of such decision on sales, profit or market share of any o product (other than a Licensed Product) marketed or sold by Licensee or any of its Affiliates in the Licensee Territory shall be taken into account. Licensee shall have the primary responsibility of applying for any extension or supplementary protection certificate in the Licensee Territory. Licensee shall keep Licensor fully informed of its efforts to obtain such extension or supplementary protection certificate. Licensor shall provide prompt and reasonable assistance, as requested by Licensee, including by taking such action as patent holder as is required under any Applicable Law to obtain such patent extension or supplementary protection certificate. Licensee shall pay all expenses in regard to obtaining the extension or supplementary protection certificate in the Licensee Territory.

7.3 Enforcement of Patents

7.3.1 Licensor Patents. Each Party shall promptly notify the other Party in writing of any alleged or threatened infringement of the Licensor Patents by a Third Party in the Territory of which such Party becomes aware (the “Licensor Patent Infringement ”) (including alleged or threatened infringement based on the development, commercialization, or an application to market a product containing a Licensed Compound in the Territory (the “ Product Infringement ”)). As between the Parties but subject to the rights of Dartmouth under the Dartmouth Agreement and Dartmouth and UT under the UT Agreement, Licensee shall have the first right, but not the obligation, to prosecute any Product Infringement in the Licensee Territory (the “ Licensee Prosecuted Infringements ”) at its sole expense. In the event Licensee prosecutes any Licensee Prosecuted Infringement, Licensor shall have the right to joint as a party to such claim, suit or proceeding in the Licensee Territory and participate with its own counsel at its own expense, provided that Licensee shall retain control of the prosecution of such claim, suit or proceeding. During any such claim, suit or proceeding, Licensee shall: (i) provide Licensor with drafts of all official papers and statements (whether written or oral) prior to their submission in such claim, suit or proceeding, in sufficient time to allow Licensor to review, consider and substantively comment thereon; (ii) reasonably consider taking action to incorporate Licensor comments on all such official papers and statements; (iii) allow Licensor the opportunity to participate in the preparation of witnesses and other participants in such claim, suit or proceeding; and (iv) not settle any such claim, suit, or proceeding except in a manner that it believes in good faith is in the best interests of the Licensed Products (without taking into consideration products in Licensee’s portfolio that are not Licensed Products). If Licensee does not take commercially reasonable steps to prosecute a Licensee Prosecuted Infringement (i) within [***] days following the first notice provided above with respect to the Licensee Prosecuted Infringement, or (ii) provided such date occurs after the first such notice of the Licensee Prosecuted Infringement is provided, [***] Business Days before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, whichever comes first, then, Licensor may prosecute the Licensee Prosecuted Infringement. As between the Parties, Licensor shall have the sole right, but not the obligation, to: (a) prosecute any Licensor Patent Infringement (including a Product Infringement) in the Licensor Territory at its own expense in its sole discretion, and (b) prosecute any Licensor Patent Infringement in the Licensee Territory that is not a Licensee Prosecuted Infringement.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

7.3.2 Licensee Patents. Each Party shall promptly notify the other Party in writing of any alleged or threatened infringement of the Licensee Patents by a Third Party in the Territory of which such Party becomes aware (including infringement based on the development, commercialization, or an application to market a product containing a Licensed Compound in the Territory). Licensee shall have the first right, but not the obligation, to prosecute any such infringement at its own expense in the Territory and Licensee shall retain control of the prosecution of such suit. Licensor shall have the right to join as a party to such suit in the Licensor Territory and participate with its own counsel; provided that Licensee shall retain control of the prosecution of such suit. If Licensee does not take commercially reasonable steps to prosecute the alleged or threatened infringement in the Licensor Territory (i) within [***] days following the first notice provided above with respect to such alleged infringement, or (ii) provided such date occurs after the first such notice of infringement is provided, [***] Business Days before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, whichever comes first, then Licensor may prosecute the alleged or threatened infringement in the Licensor Territory at its own expense.

7.3.3 Joint Patents. Each Party shall promptly notify the other Party in writing of any alleged or threatened infringement of the Joint Patents by a Third Party in the Territory of which such Party becomes aware (including infringement based on the development, commercialization, or an application to market a product containing a Licensed Compound in the Territory). Licensee shall have the first right, but not the obligation, to prosecute any such infringement at its own expense in the Licensee Territory, and Licensor shall have the first right, but not the obligation, to prosecute any such infringement at its own expense in the Licensor Territory. The Party that does not initiate the suit shall have the right to join as a party to such suit and participate with its own counsel; provided that the Party that brought the suit shall retain control of the prosecution of such suit. If Licensee does not take commercially reasonable steps to prosecute the alleged or threatened infringement in the Licensee Territory (i) within [***] days following the first notice provided above with respect to such alleged infringement, or (ii) provided such date occurs after the first such notice of infringement is provided, [***] Business Days before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, whichever comes first, then Licensor may prosecute the alleged or threatened infringement in the Licensee Territory at its own expense. If Licensor does not take commercially reasonable steps to prosecute the alleged or threatened infringement in the Licensor Territory (i) within [***] days following the first notice provided above with respect to such alleged infringement, or (ii) provided such date occurs after the first such notice of infringement is provided, [***] Business Days before the time limit, in any, set forth in appropriate laws and regulations for filing of such actions, whichever comes first, then Licensee may prosecute the alleged or threatened infringement in the Licensor Territory at its own expense.

7.3.4 Cooperation. The Parties agree to cooperate fully in any infringement action pursuant to this Section 7.3. Where a Party brings such an action, the other Party shall, where necessary, furnish a power of attorney solely for such purpose or shall join in, or

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

be named as a necessary party to, such action. Unless otherwise set forth herein, the Party entitled to bring any patent infringement litigation in accordance with this Section 7.3 shall have the right to settle such claim; provided that neither Party shall have the right to settle any patent infringement litigation under this Section 7.3 in a manner that diminishes or has a material adverse effect on the rights or interest of the other Party, or in a manner that imposes any costs or liability on, or involves any admission by, the other Party, without the express written consent of such other Party. The Party commencing the litigation shall provide the other Party with copies of all pleadings and other documents filed with the court and shall consider reasonable input from the other Party during the course of the proceedings.

7.3.5 Recovery. Subject to the relevant provisions of the Dartmouth Agreement and the UT Agreement, and except as otherwise agreed by the Parties in connection with a cost sharing arrangement, any recovery realized as a result of such litigation described in Section 7.3.1, 7.3.2, or 7.3.3 (whether by way of settlement or otherwise) will be (i) first, allocated to reimbursement of unreimbursed legal fees and expenses incurred by the Parties, (ii) second, allocated to reimbursement of any monies due to Dartmouth and/or UT, if any, according to the relevant provisions of the Dartmouth Agreement or the UT Agreement, and (iii) third, the remainder will be divided between the Parties as follows: (A) settlements, damages, or other monetary awards recovered pursuant to a suit, action, or proceeding brought by Licensor with respect to a Licensor Patent or Licensee Patents will be retained by Licensor; (B) settlements, damages, or other monetary awards recovered pursuant to a suit, action, or proceeding brought by Licensee in the Licensee Territory with respect to a Licensee Patent will be retained by Licensee, (C)settlements, damages, or other monetary award recovered pursuant to a suit, action, or proceeding brought by Licensee in the Licensor Territory with respect to a Licensee Patent will be retained by Licensee; (D) settlements, damages or other monetary awards recovered pursuant to a suit, action, or proceeding brought by Licensee in the Licensee Territory with respect to a Licensor Patent will be retained by Licensee, except that such awards will be included in Net Sales and subject to the royalty payment obligations set forth in Section 6.2.1, and (E) settlements, damages, or other monetary awards recovered pursuant to a suit, action, or proceeding brought by either Party with respect to a Joint Patent will be shared equally by the Parties.

7.4 Infringement Claims by Third Parties

7.4.1 Initiation and Recovery . If the manufacture, sale, or use of a Licensed Product in the Licensee Territory pursuant to this Agreement results in, or may result in, any claim, suit, or proceeding by a Third Party alleging patent infringement by Licensee (or its Affiliates or Sublicensees), Licensee shall promptly notify Licensor thereof in writing. Subject to the provisions of Section 7.4.2, Licensee shall have the first right, but not the obligation to defend and control the defense of any such claim, suit or proceeding at its own expense (but subject to deduction as provided below), using counsel of its own choice. Licensor may participate in any such claim, suit or proceeding with counsel of its choice at its own expense. If Licensee elects (in a written communication submitted to Licensor within a reasonable amount of time after notice of the alleged patent infringement) not to defend or control the defense of, or otherwise fails to initiate and maintain the defense of, any such claim, suit, or proceeding, within such time periods so that Licensor is not prejudiced by any delays, Licensor may conduct and control the defense of any such claim, suit, or proceeding at its own expense. Each Party shall keep the other Party

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

reasonably informed of all material developments in connection with any such claim, suit, or proceeding. Each Party agrees to provide the other Party with copies of all pleadings filed in such action and to allow the other Party reasonable opportunity to participate in the defense of the claims. Licensee shall be entitled to deduct fifty percent (50%) of the reasonable out-of-pocket costs of defending such claim, suit, or proceeding from royalties due to Licensor pursuant to Section 6.2.1 of this Agreement. Any recoveries by Licensee of any sanctions awarded to Licensee and against a party asserting a claim being defended under this Section 7.4 shall be applied as follows: such recovery shall be applied first to (i) reimburse Licensee for its reasonable out-of-pocket costs of defending such claim, suit, or proceedings to the extent not deducted from royalties pursuant to the previous sentence, and (ii) reimburse Licensor for royalties deducted pursuant to the previous sentence, and to the extent the amount of recovery is not sufficient to reimburse the Parties for the total amount described under subsections (i) and (ii) above, the recovery shall be shared by the Parties equally. The balance of any such recoveries shall be included in net Sales for the relevant Licensed Product.

7.4.2 Related Litigation. In addition to the Licensee obligations set forth in Section 7.4.1, regardless of whether Licensor elects to participate as a Party in the claim, suit, or proceeding, Licensee further agrees that, in the event the claim, suit, or preceding under Section 7.4.1 is brought by a Third Party that is pursuing or has threatened in writing to the Knowledge of Licensee to pursue similar claims in the Licensor Territory against Licensor, its Affiliates, agents, or marketing or development partners and such claim is related to any Licensed Compound, Licensee shall: (i) provide to Licensor drafts of all official papers or other statements (whether written or oral) prior to their submission in the claim, suit, or preceding, in sufficient time to allow Licensor to review, consider and substantively comment thereon; (ii) reasonably consider taking action to incorporate Licensor comments on all such official papers and statements, (iii) allow Licensor the opportunity to participate in preparation of witnesses or other participants in the claim, suit, or proceeding; and (iv) subject to Section 7.6.1, not settle any such claim, suit, or proceeding without Licensor’s prior consent, which consent shall not be unreasonably withheld or delayed. In the event a claim, suit or proceeding is brought by a Third Party against Licensor, its Affiliates, licensees (including Kyowa) or Sublicensees alleging patent infringement of such Third Party’s intellectual property rights by the manufacture, use or sale of a Licensed Product in the Licensor Territory, Licensor shall promptly notify Licensee thereof in writing. Licensor agrees that in the event any claim, suit, or proceeding described in the preceding sentence brought by a Third Party that is pursuing or has threatened in writing to the Knowledge of Licensor to pursue similar claims in the Licensee Territory against Licensee, its Affiliates, or Sublicensees related to any Licensed Compound, Licensor shall: (A) provide to Licensee drafts of all official papers or other statements (whether written or oral) prior to their submission in the claim, suit, or proceeding, in sufficient time to allow Licensee to review, consider and substantively comment thereon; (B) reasonably consider taking action to incorporate Licensee comments on all such official papers and statements, (C) allow Licensee the opportunity to participate in preparation of witnesses or other participants in the claim, suit, or proceeding; and (D) not settle any such claim, suit, or proceeding without Licensee’s prior consent, which consent shall not be unreasonably withheld or delayed.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

7.5 Invalidity or Unenforceability Defenses or Actions.

7.5.1 Notice. Each Party shall promptly notify the other Party in writing of any alleged or threatened assertion of invalidity or unenforceability of any of the Licensor patents, Licensee Patents, or Joint Patents by a Third Party, in each case in the Territory and of which such Party becomes aware.

7.5.2 Licensor Patents. Subject to any right retained by Dartmouth and/or UT under the Dartmouth Agreement and/or the UT Agreement, Licensee shall have the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the Licensor Patents at its own expense in the Licensee Territory. Licensor may participate in any such claim, suit, or proceeding in the Licensee Territory with counsel of its choice at its own expense; provided that Licensee shall retain control of the defense in such claim, suit, or proceeding. If Licensee elects not to defend or control the defense of the Licensor Patents in a suit brought in the Licensee Territory, or otherwise fails to initiate and maintain the defense of any such claim, suit, or proceeding, then Licensor may conduct and control the defense of any such claim, suit or proceeding at its own expense. Licensor shall have the right, but not the obligation, to defend and control the defense of the validity and enforceability of the Licensor Patents, at its own expense, in the Licensor Territory.

7.5.3 Licensee Patents. Licensee shall have the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the Licensee Patents at its own expense in the Territory. Licensor may participate in any such claim, suit, or proceeding in the Licensor Territory with counsel of its choice at its own expense; provided that Licensee shall retain control of the defense in such claim, suit, or proceeding. If Licensee elects not to defend or control the defense of the Licensee Patents in a suit brought in the Licensor Territory, or otherwise fails to initiate and maintain the defense of any such claim, suit, or proceeding, then Licensor may conduct and control the defense of any such claim, suit, or proceeding at its own expense.

7.5.4 Joint Patents. Licensee shall have the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the Joint Patents at its own expense in the Licensee Territory, and Licensor shall have the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the Joint Patents at its own expense in the Licensor Territory. Each Party will keep the other Party reasonably informed of all material developments in connection with any such suit, claim, or proceeding. Each Party agrees to provide the other Party with copies of all pleadings filed in such action and to allow the other Party reasonable opportunity to participate in the defense of the claims.

7.5.5 Cooperation. Each Party shall assist and cooperate with the other Party as such other Party may reasonably request from time to time in connection with its activities set forth in this Section 7.5, including by being joined as a party plaintiff in such action or proceeding, providing access to relevant documents and other evidences, and making its employees available at reasonable business hours. In connection with any such defense or claim or counterclaim, the controlling Party shall consider in good faith any comments from the other Party and shall keep the other Party reasonably informed of any steps taken, and shall provide copies of all documents filed, in connection with such defense, claim, or counterclaim. In connection with the activities set forth in this Section 7.5, each Party shall consult with the other as to the strategy for the defense of the Licensor Patents, Licensee Patents, and Joint Patents.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

7.6 Third Party Licenses.

7.6.1 Negotiation of Third Party Licenses. If in the reasonable opinion of Licensee, the Development, Manufacture or Commercialization of any Licensed Compound or Licensed Product by Licensee, any of its Affiliates, or any of its or their Sublicensees infringes or misappropriates any Patent, trade secret, or other intellectual property right of a Third Party in any country in the Licensee Territory (or in the United States in the case of Development or Manufacture in accordance with the licenses granted in Section 5.1.2 or 5.1.3), such that Licensee, any of its Affiliates or any of its or their Sublicensees cannot Develop, Manufacture, or Commercialize such Licensed Compound or Licensed Product in such country without infringing such Patent, trade secret, or other intellectual property right of such Third Party, then, Licensee shall have the first right, but not the obligation, to negotiate and obtain a license from such Third Party as necessary for Licensee and its Affiliates, and its and their Sublicensees to Develop, Manufacture, and Commercialize Licensed Compounds and Licensed Products in such country.

7.6.2 Dartmouth Agreement and UT Agreement . Licensor acknowledges and agrees that it shall pay all amounts and other consideration payable or issuable to Third Parties pursuant to the Dartmouth Agreement, the UT Agreement, or any other agreement between Licensor or any of its Affiliates with a Third Party in respect of Third Party intellectual property rights for which a license is reasonably necessary or useful for the Exploitation of any Licensed Product in any part of the Licensee Territory, and which agreement is in existence as of the Effective Date.

7.7 Product Trademarks in the Licensee Territory.

7.7.1 Ownership and Prosecution of Product Trademarks. Licensee shall own all right, title, and interest to the Product Trademarks in the Licensee Territory, and shall be responsible for the registration, prosecution, and maintenance thereof; provided that Licensor shall have the right to provide input on the overall strategy for such registration, prosecution, and maintenance, and Licensee shall consider such input in good faith. All costs and expenses of registering, prosecuting, and maintaining the Product Trademarks shall be borne solely by Licensee. Licensor shall provide all assistance and documents reasonably requested by Licensee in support of its prosecution, registration, and maintenance of the Product Trademarks.

7.7.2 Enforcement of Product Trademarks. Licensee shall have the sole right and responsibility for taking such action as Licensee, after consultation with Licensor, deems necessary against a Third Party based on any alleged, threatened, or actual infringement, dilution, misappropriation, or other violation of, or unfair trade practices or any other like offense relating to, the Product Trademarks by a Third Party in the Licensee Territory. Licensee shall bear the costs and expenses relating to any enforcement action commenced pursuant to this Section 7.7.2 and any settlements and judgments with respect thereto, and shall retain any damages or other amounts collected in connection therewith. Subject to the foregoing, Licensor may elect at its expense to participate in the enforcement of the Product Trademarks in the Licensee Territory. In the event that Licensee fails to assume responsibility for such enforcement, Licensor shall have the sole right and responsibility for such action, in which case Licensor shall bear all costs and expenses and shall retain any damages or other amounts collected in connection therewith.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

7.7.3 Third Party Claims. Licensee shall have the sole right and responsibility for defending against any alleged, threatened, or actual claim by a Third Party that the use or registration of the Product Trademarks in the Licensee Territory infringes, dilutes, misappropriates, or otherwise violates any Trademark or other right of that Third Party or constitutes unfair trade practices or any other like offense, or any other claims as may be brought by a Third Party against a Party in connection with the use of the Product Trademarks with respect to a Licensed Product in the Licensee Territory. Licensee shall bear the costs and expenses relating to any defense commenced pursuant to this Section 7.7.3 and any settlements and judgments with respect thereto, and shall retain any damages or other amounts collected in connection therewith. Notwithstanding the foregoing, if Licensor is obligated to defend and indemnify Licensee with respect to such claim pursuant to Section 11.2(iii) and Licensor accepts such obligation without reservation in writing, then Licensor shall have such sole right and responsibility for defending against such claim, in which case Licensor shall bear all costs and expenses and shall retain any damages or other amounts collected in connection therewith. Subject to the foregoing, either Party may elect at its expense to participate in the defense of such Third-Party claims in the Licensee Territory.

7.7.4 Notice and Cooperation. Each Party shall provide to the other Party prompt written notice of any actual or threatened infringement of the Product Trademarks in the Licensee Territory and of any actual or threatened claim that the use of the Product Trademarks in the Licensee Territory violates the rights of any Third Party. Each Party agrees to cooperate fully with the other Party with respect to any enforcement action or defense commenced pursuant to this Section 7.7.

ARTICLE 8

PHARMACOVIGILANCE

8.1 Pharmacovigilance. Within [***] days after the Effective Date, the Parties shall enter into an agreement to initiate a process for the exchange of safety data (including postmarketing spontaneous reports received by each Party and its Affiliates) in a mutually agreed format in order to monitor the safety of the Licensed Products and to meet reporting requirements with any applicable Regulatory Authority.

8.2 Global Safety Database. Licensor shall set up, hold, and maintain (at Licensor’s sole cost and expense) the global safety database for Licensed Products. Licensor shall enter into such database all pharmacovigilance and other drug safety data for Licensed Products (including adverse events) in the Licensor Territory and the Licensee Territory as required by Applicable Laws (including any such data collected by licensees, Sublicensees, and other collaboration partners). Licensor shall provide Licensee with ready access to such database (with Licensee bearing any Third Party payment obligations, such as license fees, associated with such access), including to the adverse event information contained therein and Licensor expressly acknowledges that Licensee can and will provide information received by Licensee to Sublicensees engaged in Commercialization activities in the Licensee Territory.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

ARTICLE 9

CONFIDENTIALITY AND NON-DISCLOSURE

9.1 Confidentiality Obligations. At all times during the Term and for a period of [***] years following termination or expiration hereof, each Party shall, and shall cause its officers, directors, employees and agents to, keep confidential and not publish or otherwise disclose to a Third Party, and not use, directly or indirectly, for any purpose, any Confidential Information furnished or otherwise made known to it, directly or indirectly, by the other Party, except to the extent such disclosure or use is expressly permitted by the terms of this Agreement or is reasonably necessary or useful for the performance of, or the exercise of such Party’s rights under, this Agreement. “ Confidential Information ” shall mean any technical, business or information provided by or on behalf of one Party to the other Party, including information relating to the terms of this Agreement, any Licensed Compound, or any Licensed Product (including the Regulatory Documentation and any Regulatory Data), any Development or Commercialization of any Licensed Compound or any Licensed Product, any Know-How developed by or on behalf of the disclosing Party or its Affiliates (including Licensee Know-How and Licensor Know-How, as applicable), or the scientific, regulatory or business affairs or other activities of either Party. Notwithstanding the foregoing, the Parties acknowledge the practical difficulty of policing the use of information in the unaided memory of the receiving Party or its officers, directors, employees, and agents, and as such each Party agrees that the receiving Party shall not be liable for the use by any of its officers, directors, employees, or agents of specific Confidential Information of the disclosing Party that is retained in the unaided memory of such officer, director, employee or agent; provided that (a) such officer, director, employee, or agent is not aware that such Confidential Information is the confidential information of disclosing Party at the time of such use; (b) the foregoing is not intended to grant, and shall not be deemed to grant, the receiving Party, its Affiliates, or its officers, directors, employees, and agents (i) a right to disclose the disclosing Party’s Confidential Information, or (ii) a license under any Patents or other intellectual property right of the disclosing Party; and (c) such officer, director, employee, or agent has not intentionally memorized such Confidential Information for use outside this Agreement. Notwithstanding the foregoing, the confidentiality and non-use obligations under this Section 9.1 with respect to any Confidential Information shall not include any portion of such Confidential Information that:

9.1.1 is or hereafter becomes part of the public domain by public use, publication, general knowledge or the like through no wrongful act, fault or negligence on the part of the receiving Party;

9.1.2 can be demonstrated by documentation or other competent proof to have been in the receiving Party’s possession prior to disclosure by the disclosing Party without any obligation of confidentiality with respect to such information;

9.1.3 is subsequently received by the receiving Party from a Third Party who is not bound by any obligation of confidentiality with respect to such information;

9.1.4 has been published by a Third Party or otherwise enters the public domain through no fault of the receiving Party in breach of this Agreement; or

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

9.1.5 can be demonstrated by documentation or other competent evidence to have been independently developed by or for the receiving Party without reference to the disclosing Party’s Confidential Information.

Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the receiving Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of the receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the receiving Party unless the combination and its principles are in the public domain or in the possession of the receiving Party.

9.2 Permitted Disclosures. Each Party may disclose Confidential Information to the extent that such disclosure is:

9.2.1 made in response to a valid order of a court of competent jurisdiction or other supra-national, federal, national, regional, state, provincial and local governmental or regulatory body of competent jurisdiction or, if in the reasonable opinion of the receiving Party’s legal counsel, such disclosure is otherwise required by law, including by reason of filing with securities regulators; provided , however , that the receiving Party shall first have given notice to the disclosing Party and given the disclosing Party a reasonable opportunity to quash such order or to obtain a protective order or confidential treatment requiring that the Confidential Information and documents that are the subject of such order be held in confidence by such court or agency or, if disclosed, be used only for the purposes for which the order was issued; and provided further that the Confidential Information disclosed in response to such court or governmental order shall be limited to that information which is legally required to be disclosed in response to such court or governmental order;

9.2.2 made by or on behalf of the receiving Party to the Regulatory Authorities as required in connection with any filing, application or request for Regulatory Approval; provided , however , that reasonable measures shall be taken to assure confidential treatment of such information;

9.2.3 made by or on behalf of the receiving Party to a patent authority as may be reasonably necessary or useful for purposes of obtaining or enforcing a Patent; provided, however , that reasonable measures shall be taken to assure confidential treatment of such information, to the extent such protection is available; or

9.2.4 made by the receiving Party or its Affiliates or Sublicensees to its or their attorneys, auditors, advisors, consultants, contractors, existing or prospective collaboration partners, licensees, or other Third Parties as may be necessary or useful in connection with the Manufacture or Exploitation of the Licensed Compounds, the Licensed Products, or otherwise in connection with the performance of its obligations or exercise of its rights as contemplated by this Agreement, or to potential or actual investors or acquirors as may be necessary or useful in connection with their evaluation of such potential or actual investment or acquisition, or, in the case of Licensor’s disclosure to its licensee(s) in the Licensor Territory, to the extent necessary to fulfill Licensor’s contractual obligation under such agreement(s) with such licensee(s); provided ,

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

however , that such persons shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and non-use of the receiving Party pursuant to this Article 9 (with a duration of confidentiality and non-use obligations as appropriate that is no less than [***] years from the date of disclosure).

9.3 Use of Name. Except as expressly provided herein, neither Party shall mention or otherwise use the name, logo, or Trademark of the other Party or any of its Affiliates (or any abbreviation or adaptation thereof) in any publication, press release, marketing and promotional material, or other form of publicity without the prior written approval of such other Party in each instance. The restrictions imposed by this Section 9.3 shall not prohibit either Party from making any disclosure identifying the other Party that is required by Applicable Law.

9.4 Public Announcements. The Parties have agreed upon the content of a joint press release which shall be issued substantially in the form attached hereto as Schedule 9.4 , the release of which the Parties shall coordinate in order to accomplish such release promptly upon execution of this Agreement. Except pursuant to the procedures set forth below, neither Party shall issue any other public announcement, press release, or other public disclosure regarding this Agreement or its subject matter without the other Party’s prior written consent, except for (i) any such disclosure that is, based on the advice of the disclosing Party’s counsel, required by Applicable Law or the rules of a stock exchange on which the securities of the disclosing Party are listed (or to which an application for listing has been submitted), or (ii) any such disclosure that does not mention the other Party or that portion of the Territory that is allocated to the other Party. In the event that a Party is, based on the advice of the disclosing Party’s counsel, required by Applicable Law or the rules of a stock exchange on which its securities are listed (or to which an application for listing has been submitted) to make such a public disclosure, or such disclosure does not mention the other Party or that portion of the Territory that is allocated to the other party, such Party shall submit the proposed disclosure in writing to the other Party as far in advance as reasonably practicable (and in no event less than [***] Business Days prior to the anticipated date of disclosure) so as to provide a reasonable opportunity to comment thereon. Neither Party shall be required to seek the permission of the other Party to repeat any information regarding the terms of this Agreement or any amendment thereto that has already been publicly disclosed by such Party, or by the other Party, in accordance with this Section 9.4, provided such information remains accurate as of such time and provided the frequency and forms of such disclosure are reasonable.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

9.5 Publications. Each Party recognizes that the publication of papers regarding results of, and other information regarding, activities under this Agreement, including oral presentations and abstracts, may be beneficial to both Parties, provided such publications are subject to reasonable controls to protect Confidential Information. In particular, it is the intent of the Parties to maintain the confidentiality of any Confidential Information included in any invention disclosures or draft Patent application until such Patent application has been filed. Accordingly, each Party shall have the right to review and approve any paper proposed for publication by the other Party, including any oral presentation or abstract, that contains Clinical Data or pertains to results of Clinical Studies, or other studies with respect to the Licensed Products or that includes Confidential Information of the other Party. Before any such paper is submitted for publication or an oral presentation is made, the publishing or presenting Party shalldeliver a then-current copy of the paper or materials for oral presentation to the other Party at least [***] days prior to submitting the paper to a publisher or making the presentation. The other Party shall review any such paper and give its comments to the publishing Party within [***] days of the delivery of such paper to the other Party. With respect to oral presentation materials and abstracts, the other Party shall make reasonable efforts to expedite review of such materials and abstracts, and shall return such items as soon as practicable to the publishing or presenting Party with appropriate comments, if any, but in no event later than [***] days from the date of delivery to the other Party. Failure to respond within such [***] days shall be deemed approval to publish or present. If approval is not given or deemed given, either Party may refer the matter to the JDC for resolution together with the reasons for withholding approval. Notwithstanding the foregoing, the publishing or presenting Party shall comply with the other Party’s request to delete references to such other Party’s Confidential Information in any such paper and will withhold publication of any such paper or any presentation of same for an additional [***] days in order to permit the Parties to obtain Patent protection if either Party deems it necessary. Any publication shall include recognition of the contributions of the other Party according to standard practice for assigning scientific credit, either through authorship or acknowledgement, as may be appropriate. Each Party shall use commercially reasonable efforts to cause investigators and institutions participating in Clinical Studies with which it contracts, to agree to terms substantially similar to those set forth in this Section 9.5, which efforts shall satisfy such Party’s obligations under this Section 9.5 with respect to such investigators and institutions.

9.6 Return of Confidential Information. Upon the effective date of the termination of this Agreement for any reason, either Party may request in writing, and the other Party shall either, with respect to Confidential Information (in the event of termination of this Agreement with respect to one or more Terminated Territories but not in its entirety, solely to the extent relating to such Terminated Territories) to which such first Party does not retain rights under the surviving provisions of this Agreement: (i) promptly destroy all copies of such Confidential Information in the possession of the other Party and confirm such destruction in writing to the requesting Party; or (ii) promptly deliver to the requesting Party, at the other Party’s expense, all copies of such Confidential Information in the possession of the other Party; provided, however , the other Party shall be permitted to retain one (1) copy of such Confidential Information for the sole purpose of performing any continuing obligations hereunder, exercising its rights hereunder that survive such termination ( e.g ., in the case of Licensor, the exercise of its rights under the license grant back) or for archival purposes. Notwithstanding the foregoing, such other Party also shall be permitted to retain such additional copies of or any computer records or files containing such Confidential Information that have been created solely by such Party’s automatic archiving and back-up procedures, to the extent created and retained in a manner consistent with such other Party’s standard archiving and back-up procedures, but not for any other use or purpose. All Confidential Information shall continue to be subject to the terms of this Agreement for the period set forth in Section 9.1.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

ARTICLE 10

REPRESENTATIONS AND WARRANTIES

10.1 Mutual Representations and Warranties . Except as set forth in the Schedule of Exceptions, Licensor and Licensee each represents and warrants to the other, as of the Execution Date, and covenants, as follows:

10.1.1 Organization . It is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization, and has all requisite power and authority, corporate or otherwise, to execute, deliver, and perform this Agreement.

10.1.2 Authorization . The execution and delivery of this Agreement and the performance by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and do not violate (i) such Party’s charter documents, bylaws, or other organizational documents, (ii) in any material respect, any agreement, instrument, or contractual obligation to which such Party is bound, (iii) any requirement of any Applicable Law, or (d) any order, writ, judgment, injunction, decree, determination, or award of any court or governmental agency presently in effect applicable to such Party.

10.1.3 Binding Agreement . This Agreement is a legal, valid, and binding obligation of such Party enforceable against it in accordance with its terms and conditions, subject to the effects of bankruptcy, insolvency, or other laws of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance, and general principles of equity (whether enforceability is considered a proceeding at law or equity).

10.1.4 No Inconsistent Obligation . It is not under any obligation, contractual or otherwise, to any Person that conflicts with or is inconsistent in any material respect with the terms of this Agreement, or that would impede the material fulfillment of its obligations hereunder.

10.1.5 No Debarment . It shall not use in any capacity, in connection with the performance of the activities contemplated by this Agreement, any Person who has been debarred pursuant to Section 306 of the FFDCA, or who is the subject of a conviction described in such section. It agrees to inform the other Party in writing immediately if it or any Person who is performing services hereunder on its behalf is debarred or is the subject of a conviction described in Section 306, or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or, to its Knowledge, is threatened, relating to the debarment or conviction of it or any Person performing services hereunder.

10.1.6 Taxation . It is a resident, as such term is defined for tax purposes pursuant to Applicable Laws, of the jurisdiction in which it is organized.

10.2 Additional Representations of Licensor . Except as set forth in the Schedule of Exceptions, Licensor further represents and warrants to Licensee, as of the Execution Date, and covenants, as follows:

10.2.1 All Licensor Patents existing as of the Execution Date in the Licensee Territory are listed on Schedule 10.2.1 (such Patents listed on Schedule 10.2.1, the “ Existing Patents ”). To Licensor’s Knowledge, no issued patents included in the Licensor Patents existing as of the Execution Date are invalid or unenforceable.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

10.2.2 There are no claims, judgments, or settlements against, or amounts with respect thereto, owed by Licensor or any of its Affiliates relating to the Existing Regulatory Documentation, the Licensor Patents existing as of the Execution Date, or the Licensor Know-How existing as of the Execution Date. No claim or litigation has been brought or threatened by any Person alleging, and Licensor has no Knowledge of any claim, whether or not asserted, that (i) any issued patents included in the Licensor Patents existing as of the Execution Date are invalid or unenforceable, or (ii) the Existing Regulatory Documentation, the Existing Patents, or the Licensor Know-How, or the disclosing, copying, making, assigning, or licensing of the Existing Regulatory Documentation, the Existing Patents, or the Licensor Know-How, or the Development or Commercialization of the Licensed Products containing the Initial Licensed Compound as contemplated herein as of the Execution Date, violates or infringes, or would violate or infringe any intellectual property or proprietary right of any Person existing as of the Execution Date.

10.2.3 Licensor is (i) the sole and exclusive owner of the Existing Patents listed on Schedule 10.2.1 , Part A (the “ Owned Patents ”) and the Licensor Know-How and (ii) except for rights of the U.S. government and rights reserved by Dartmouth and UT, the sole and exclusive licensee of the Existing Patents listed on Schedule 10.2.1 , Part B (the “ In-Licensed Patents ”), in each case ((i) and (ii)) free of any lien or claim of ownership by any Third Party and of any material encumbrance other than, in the case of the Licensor Know-How, the rights granted to Kyowa under the Kyowa Agreement. Licensor is entitled to grant the licenses specified herein. The Owned Patents and In-Licensed Patents constitute all of the Existing Patents.

10.2.4 To Licensor’s Knowledge, Licensor has the right to use all Licensor Know-How and Licensor Patents existing as of the Execution Date that are necessary to conduct the Initial Development Activities, and the Development or Commercialization of the Initial Licensed Compound or the Licensed Products containing the Initial Licensed Compound as contemplated herein is not subject as of the Execution Date to any other license or agreement to which Licensor or any of its Affiliates is a party other than the Dartmouth Agreement and the UT Agreement.

10.2.5 During the Term, Licensor shall not encumber or violate the rights granted to Licensee hereunder with respect to the Licensor Patents, including by not (i) committing any acts or permitting the occurrence of any omissions that would cause the intentional breach or termination of the Dartmouth Agreement or the UT Agreement, or (ii) amending or otherwise modifying or permitting to be amended or modified in a manner that would encumber or adversely affect the rights granted to Licensee hereunder, the Dartmouth Agreement or the UT Agreement, without prior written consent of Licensee, such consent not to be unreasonably withheld. For any proposed amendment to the UT Agreement or Dartmouth Agreement that would not encumber or adversely affect the rights granted to Licensee hereunder, Licensor shall provide Licensee with reasonable advance notice and shall reasonably consider Licensee’s comments to such proposed amendment, but no approval from Licensee shall be required. Licensor shall promptly provide Licensee with notice of any alleged, threatened, or actual breach of the Dartmouth Agreement or

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

the UT Agreement. The foregoing shall not be construed as restricting Licensor’s right to cease the filing, prosecution or maintenance of any Licensor Patent during the Term pursuant to Article 7 above. If the Dartmouth Agreement or the UT Agreement is terminated for any reason, Licensor shall promptly notify Licensee thereof and shall assist Licensee in becoming a successor to Licensor under such agreement (in accordance with the terms and conditions thereof) if Licensee so requests, provided that Licensee consents in writing to be bound by all the terms and conditions of such agreement in the event of such termination.

10.2.6 To Licensor’s Knowledge, the Existing Patents are being diligently prosecuted in the respective patent offices in accordance with Applicable Laws. The Existing Patents have been filed and maintained properly and correctly and all applicable fees have been paid on or before the due date for payment prior to the Execution Date.

10.2.7 Licensor has not previously assigned, transferred, licensed, conveyed, or otherwise encumbered its right, title, or interest under the Existing Patents, Licensor Know-How and Regulatory Documentation in connection with the Development., Manufacture or Commercialization the Initial Licensed Compound (including by granting any covenant not to sue with respect thereto) (or any Patent rights or Information that would be Existing Patents or Licensor Know-How but for such assignment, transfer, license, conveyance, or encumbrance) in the Licensee Territory in the Licensed Indications, except where such assignment, transfer, license, conveyance, or encumbrance is terminated and no longer in force or effect, and it will not enter into any such agreements or grant any such right, title, or interest to any Person that is inconsistent with the rights and licenses granted to Licensee under this Agreement.

10.2.8 To Licensor’s Knowledge, no Person is infringing or threatening to infringe the Licensor Patents existing as of the Execution Date, or misappropriating or threatening to misappropriate the Licensor Know-How existing as of the Execution Date.

10.2.9 True, complete (except with respect to the Kyowa Agreement), and correct copies (as of the Execution Date) of: (i) the file wrapper and other documents and materials relating to the prosecution, defense, maintenance, validity, and enforceability of the Owned Patents and, to the extent in Licensor’s or an Affiliate’s possession and Control, the In-Licensed Patents; (ii) the Dartmouth Agreement and the UT Agreement, (iii) the Kyowa Agreement (in redacted form); and (iv) all Existing Regulatory Documentation, in each case ((i) through (iv)) have been provided or made available to Licensee prior to the Execution Date. As of the Execution Date, Licensor has disclosed all material adverse information with respect to the safety and efficacy of the Initial Licensed Compound as to which Licensor has Knowledge.

10.2.10 To Licensor’s Knowledge, Licensor has prepared, maintained, and retained all Regulatory Documentation that is required to be maintained or retained pursuant to and in accordance with Applicable Laws in connection with Licensor’s development of the Initial Licensed Compound for the Renal Indication prior to the Execution Date.

10.2.11 None of Licensor, its Affiliates or, to Licensor’s Knowledge, any Third Party, is in breach of the Dartmouth Agreement or the UT Agreement in any material respect, and, to the Knowledge of Licensor, each of the Dartmouth Agreement and the UT Agreement is in full force and effect.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

10.2.12 To Licensor’s Knowledge, the conduct of the Initial Development Activities, Manufacturing of the Licensed Product containing the Initial Licensed Compound (in the same formulation as it exists as of the Execution Date and using the same process as that used as of the Execution Date), and Licensee’s Commercialization of the Licensed Products containing the Initial Licensed Compound as contemplated herein will not infringe any Patents or other intellectual property or propriety right of any Person.

10.2.13 To Licensor’s Knowledge, the conception, development, and reduction to practice of the Regulatory Documentation, the Existing Patents, and Licensor Know-How existing as of the Execution Date have not constituted or involved the misappropriation of trade secrets or other rights or property of any Person.

10.2.14 To Licensor’s Knowledge, in respect of the pending patent application included in the Existing Patents, Licensor has presented or will timely present all material references, documents, or information of which it and the inventors are aware to the relevant patent office, to the extent required by Applicable Law.

10.2.15 The Existing Patents represent all Patents within Licensor’s or its Affiliates’ Control relating to the Initial Licensed Compound and the Licensed Products containing the Initial Licensed Compound within the Licensee Territory as of the Execution Date.

10.2.16 To Licensor’s Knowledge, each of the Existing Patents properly identifies each and every inventor of the claims thereof as determined in accordance with the laws of the jurisdiction in which such Existing Patent is issued or such application is pending.

10.2.17 To Licensor’s Knowledge, each Person who has or has had any rights in or to any Owned Patents, has assigned and has executed an agreement assigning its entire right, title, and interest in and to such Owned Patents to Licensor.

10.2.18 No rights or licenses are required from Licensor under the Existing Patents or Licensor Know-How for the conduct of the Initial Development Activities or for Licensee to Develop and Commercialize the Initial Licensed Compound and the Licensed Products containing the Initial Licensed Compound as contemplated herein as of the Execution Date other than those granted under Section 5.1.

10.2.19 All rights in all inventions and discoveries, made, developed, or conceived by an y employee or independent contractor of Licensor during the course of their employment (or other retention) by Licensor, and relating to or included in Licensor Know-How or that are the subject of one or more Existing Patents have been or will be assigned in writing to Licensor.

10.2.20 To Licensor’s Knowledge, Licensor has obtained the right (including under any Patents and other intellectual property rights) to use all Information and all other materials (including any formulations and manufacturing processes and procedures) developed or delivered by any Third Party under any agreements between Licensor and any such Third Party with respect to the Initial Licensed Compound, and Licensor has the rights under each such agreement to transfer such Information or other materials to Licensee and its designees and to grant Licensee the right to use such Know-How or other materials in the Development or Commercialization of the Initial Licensed Compound or the Licensed Products containing the Initial Licensed Compound as set forth in this Agreement.

\

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

10.2.21 All information, documentation, and other materials furnished or made available by Licensor upon the request of Licensee during Licensee’s period of diligence prior to the Execution Date or otherwise related to the transaction contemplated hereby are true, complete, and correct copies of what they purport to be in all material respects.

10.2.22 To Licensor’s Knowledge, neither Licensor nor any of its Affiliates, nor any of its or their respective officers, employees, or agents has made an untrue statement of material fact or fraudulent statement to the FDA or any other Regulatory Authority with respect to the Development of the Initial Licensed Compound or the Licensed Products containing the Initial Licensed Compound, failed to disclose a material fact required to be disclosed to the FDA or any other Regulatory Authority with respect to the Development of the Initial Licensed Compound or the Licensed Products containing the Initial Licensed Compound, or committed an act, made a statement, or failed to make a statement with respect to the Development of the Initial Licensed Compound or the Licensed Products containing the Initial Licensed Compound that provides a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities”, set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any amendments thereto or any analogous laws or policies in the Licensee Territory.

10.2.23 To Licensor’s Knowledge, Licensor and its Affiliates have conducted, and their respective contractors and consultants have conducted, prior to the Execution Date, all Development of the Initial Licensed Compound or the Licensed Products containing the Initial Licensed Compound in accordance with Applicable Laws.

10.2.24 Except as provided in the Dartmouth Agreement and the UT Agreement, as of the Execution Date there are no amounts that will be required to be paid to a Third Party as a result of the use of such Third Party’s Patents or other intellectual property rights for the Development or Commercialization of the Licensed Products containing the Initial Licensed Compound that arise out of any agreement to which Licensor is a party or, to Licensor’s Knowledge, at all.

10.2.25 With respect to the Existing Patents that Licensor has licensed from Dartmouth and UT pursuant to the Dartmouth Agreement and the UT Agreement, to Licensor’s Knowledge, Dartmouth has taken all actions necessary under the Bayh-Dole Act to secure ownership of such Patent Rights for Dartmouth, and UT is not required to take such actions. Licensor shall, or shall use commercially reasonable efforts to cause Dartmouth to, take all actions in the future necessary under the Bayh-Dole Act to secure ownership of such Patent rights for Dartmouth, including complying with all reporting requirements as set forth in 37 C.F.R. 401.14 and in the funding agreement between the U.S. Government (or the National Institutes of Health) and Dartmouth.

10.2.26 To Licensor’s Knowledge, the information, documents and materials furnished to Licensee in connection with its period of diligence prior to the Excution Date, do not, taken as a whole, (i) contain any untrue statement of a material fact or (ii) omit to state any material fact necessary to make the statements or facts contained therein, in light of the circumstances under which they were made, not misleading.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

10.3 DISCLAIMER OF WARRANTIES. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH HEREIN, NEITHER PARTY MAKES ANY REPRESENTATIONS OR GRANTS ANY WARRANTY, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

ARTICLE 11

INDEMNITY

11.1 Indemnification of Licensor. Licensee shall indemnify Licensor, its Affiliates and their respective directors, officers, employees, and agents, and defend and save each of them harmless, from and against any and all losses, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees and expenses) (collectively, “ Losses ”) in connection with any and all suits, investigations, claims, or demands of Third Parties (including Kyowa, Dartmouth or UT) (collectively, “ Third Party Claims ”) arising from or occurring as a result of: (i) the breach by Licensee of this Agreement, (ii) the negligence or willful misconduct on the part of Licensee or its Affiliates or their respective directors, officers, employees, and agents in performing their obligations under this Agreement; or (iii) (A) the Commercialization of the Licensed Products in the Licensee Territory, (B) the Development of the Licensed Products anywhere in the world for the purpose of obtaining or maintaining Regulatory Approval for Licensed Products in the Licensee Territory, or (C) the Manufacture of the Licensed Products anywhere in the world in support of such Development or such Commercialization, in each case ((A) – (C)), by Licensee, its Affiliates, Sublicensees; except, in each case ((i) – (iii)), for those Losses for which Licensor has an obligation to indemnify Licensee pursuant to Section 11.2 hereof, as to which Losses each Party shall indemnify the other to the extent of their respective liability.

11.2 Indemnification of Licensee. Licensor shall indemnify Licensee, its Affiliates and their respective directors, officers, employees, and agents, and defend and save each of them harmless, from and against any and all Losses in connection with any and all Third Party Claims arising from or occurring as a result of:

(i) the breach by Licensor of this Agreement,

(ii) the negligence or willful misconduct on the part of Licensor or its Affiliates or their respective directors, officers, employees, and agents in performing its obligations under this Agreement,

(iii) the use by Licensee or its Affiliates or Sublicensees of any Product Trademark selected by the Senior Officer of Licensor pursuant to the dispute resolution procedures set forth in Section 13.6.2(xiv), where such Product Trademark was not the Trademark proposed for such purpose by the representatives of Licensee;

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(iv) any actual or alleged infringement or misappropriation of any trademark or trade name right of any Third Party in connection with the use of Licensor’s Corporate Name in the Commercialization of the Licensed Products in the Licensee Territory as permitted or required under this Agreement,

(v) the Development, Commercialization, or Manufacture of the Licensed Products or the Licensed Compounds anywhere in the world prior to the Effective Date by or on behalf of Licensor or its Affiliates (or its or their contractors, licensees , or collaboration partners, including Kyowa,

(vi) (A) the Commercialization of the Licensed Products in the Licensor Territory, (B) the Development of the Licensed Products anywhere in the world for the purpose of obtaining or maintaining Regulatory Approval for Licensed Products in the Licensor Territory, or (C) the Manufacture of the Licensed Products anywhere in the world in support of such Development or such Commercialization, in each case ((A) – (C)), by Licensor, its Affiliates, licensees (including Kyowa), or Sublicensees during the Term, and

(vii) the Development, Commercialization, or Manufacture of the Licensed Products or the Licensed Compounds anywhere in the world after the Term, except for such Development, Commercialization, or Manufacture conducted by, on behalf of, or for Licensee or its Affiliates or Sublicensees are permitted hereunder,

except, in the case of clauses (i)-(iv) for those Losses for which Licensee has an obligation to indemnify Licensor pursuant to Section 11.1 hereof, as to which Losses each Party shall indemnify the other to the extent of their respective liability for the Losses.

11.3 Certain Losses.

11.3.1 Any Losses, other than those Losses for which indemnification is provided in Section 11.1 (but excluding clause (iii)(B) and, to the extent it relates to Manufacture of Licensed Products in support of Development, (C) thereof) or Section 11.2 (but excluding clause (vi)(B) and, to the extent it relates to the Manufacture of Licensed Products in support of Development, (C) thereof), in connection with any Third Party Claim brought against either Party resulting directly or indirectly from the performance of Initial Development Activities or Joint Development Activities by either Party (or its Affiliates, employees, or agents) in accordance with a Development Plan and Budget shall be included as a Collaboration Cost. The Parties shall confer through the JDC how to respond to such Third Party Claim and how to handle such Third Party Claim in an efficient manner. In the absence of such an agreement, each Party shall have the right to take such action as it deems appropriate.

11.3.2 Any Losses, including those Losses for which indemnification is provided in Section 11.1 (but excluding clause (iii)(B) and, to the extent it relates to Manufacture of Licensed Products in support of Development, (C) thereof) or Section 11.2 (but excluding clause (vi)(B) and, to the extent it relates to the Manufacture of Licensed Products in support of Development, (C) thereof), in connection with any Third Party Claim brought against either Party resulting directly or indirectly from the performance of Unilateral Activities by such Party (or its

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Affiliates, employees or agents) in accordance with a Development Plan and Budget and with respect to which Unilateral Activities the Opting-Out Party subsequently Opts-In pursuant to Section 3.7.4, including Losses from claims of infringement of Third Party intellectual property rights in connection with such Unilateral Activities, shall be included as costs reimbursable by the Opting-Out Party pursuant to Section 3.7.4 upon exercise of its right to Opt-In.

11.3.3 Any Losses, other than those Losses for which indemnification is provided in Section 11.2, in connection with any Third Party Claim brought against Licensor resulting directly or indirectly from the performance of Development activities for a Collaboration Candidate under Phase I Study Materials or a Collaboration Candidate Development Plan and Budget by Licensor (or its Affiliates, employees or agents) in accordance with such Phase I Study Materials or Collaboration Candidate Development Plan and Budget (in each case prior to Licensee’s exercise of its Collaboration Candidate Option) and with respect to which Collaboration Candidate Licensee subsequently exercises its Collaboration Candidate Option, including Losses form claims of infringement of Third Party intellectual property rights in connection with such Development activities, shall be included as costs reimbursable by Licensee pursuant to Section 3.7.5.

11.4 Notice of Claim. All indemnification claims in respect of a Party, its Affiliates, or their respective directors, officers, employees and agents shall be made solely by such Party to this Agreement (the “ Indemnified Party ”). The Indemnified Party shall give the indemnifying Party prompt written notice (an “ Indemnification Claim Notice ”) of any Losses or discovery of fact upon which such indemnified Party intends to base a request for indemnification under this Article 11, but in no event shall the indemnifying Party be liable for any Losses that result from any delay in providing such notice. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss is known at such time). The Indemnified Party shall furnish promptly to the indemnifying Party copies of all papers and official documents received in respect of any Losses and Third Party Claims.

11.5 Control of Defense . At its option, the indemnifying Party may assume the defense of any Third Party Claim by giving written notice to the Indemnified Party within [***] days after the indemnifying Party’s receipt of an Indemnification Claim Notice. The assumption of the defense of a Third Party Claim by the indemnifying Party shall not be construed as an acknowledgment that the indemnifying Party is liable to indemnify the Indemnified Party in respect of the Third Party Claim, nor shall it constitute a waiver by the indemnifying Party of any defenses it may assert against the Indemnified Party’s claim for indemnification. Upon assuming the defense of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the indemnifying Party. In the event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall immediately deliver to the indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party in connection with the Third Party Claim. Should the indemnifying Party assume the defense of a Third Party Claim, except as provided in Section 11.5.1, the indemnifying Party shall not be liable to the Indemnified Party for any legal expenses subsequently incurred by such Indemnified Party in connection with the analysis, defense or settlement of the Third Party Claim unless specifically requested in writing by the Indemnifying

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Party. In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified Party shall reimburse the indemnifying Party for any and all costs and expenses (including attorneys’ fees and costs of suit) and any Losses incurred by the indemnifying Party in its defense of the Third Party Claim.

11.5.1 Right to Participate in Defense. Without limiting Section 11.5 above, any Indemnified Party shall be entitled to participate in, but not control, the defense of such Third Party Claim and to employ counsel of its choice for such purpose; provided , however , that such employment shall be at the Indemnified Party’s own expense unless (i) the employment thereof has been specifically authorized by the indemnifying Party in writing, (ii) the indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 11.5 (in which case the Indemnified Party shall control the defense), or (iii) the interests of the indemnitee and the indemnifying Party with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by the same counsel of both parties under Applicable Law, ethical rules or equitable principles.

11.5.2 Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that shall not result in the Indemnified Party’s becoming subject to injunctive or other relief or otherwise adversely affecting the business of the Indemnified Party in any manner, and as to which the indemnifying Party shall have acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, the indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the indemnifying Party, in its sole discretion, shall deem appropriate. With respect to all other Losses in connection with Third Party Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 11.5, the indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss; provided it obtains the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed). If the indemnifying Party does not assume and conduct the defense of a Third Party Claim as provided above, the Indemnified Party may defend against such Third Party Claim; provided , that the Indemnified Party shall not settle any Third Party Claim without the prior written consent of the indemnifying Party, not to be unreasonably withheld or delayed

11.5.3 Cooperation. Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each indemnitee to, cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation shall include access during normal business hours afforded to indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making indemnified Parties and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket expenses in connection therewith.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

11.5.4 Expenses. Except as provided above, the costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any claim shall be reimbursed on a Calendar Quarter basis by the Indemnifying Party, without prejudice to the indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

11.6 Special, Indirect, and Other Losses. EXCEPT IN THE EVENT OF A PARTY’S BREACH OF ITS OBLIGATIONS UNDER ARTICLE 9 OR SECTION 5.7 OR 5.8, NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL OR PUNITIVE DAMAGES OR FOR LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT TO THE EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER THIS ARTICLE 11.

11.7 Insurance. Each Party shall have and maintain such type and amounts of insurance covering its Exploitation of the Licensed Products as is (i) normal and customary in the pharmaceutical industry generally for parties similarly situated and (ii) otherwise required by Applicable Law.

ARTICLE 12

TERM AND TERMINATION

12.1 Term. This Agreement shall commence on the Effective Date and, unless earlier terminated in accordance herewith, shall continue in force and effect until the date of expiration of the last Royalty Term for the last Licensed Product (such period, the “ Term ”).

12.1.1 Effect of Expiration of the Term . Following the expiration of the Term, the grants in Section 5.1 shall become non-exclusive, fully-paid, royalty-free and irrevocable.

12.2 Termination for Cause.

12.2.1 Material Breach . If either Party (the “ Non-Breaching Party ”) believes that the other Party (the “ Breaching Party ”) has materially breached one or more of its material obligations under this Agreement, then the Non-Breaching Party may deliver notice of such material breach to the Breaching Party (a “ Default Notice ”). The Parties agree that termination pursuant to this Section 12.2 is a remedy to be invoked only if the breach cannot be adequately remedied through a combination of specific performance and the payment of money damages. In that regard, if the money damages payable under this Agreement by reason of a breach were materially limited by reason of Section 11.6 (for reasons other than the exclusion for punitive damages), it shall be assumed that the payment of money damages was not an adequate remedy for the reach unless the breaching Party elects to waive the protections of Section 11.6 (other than with respect to punitive damages) and pay the resulting amounts. If the Breaching Party does not dispute that it has committed a material breach of one or more of its material obligations under this Agreement, then if the Breaching Party fails to cure such breach, or fails to

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

take steps as would be considered reasonable to effectively cure such breach, within [***] days after receipt of the Default Notice, the Non-Breaching Party may terminate this Agreement upon written notice to the Breaching Party. If the Breaching Party disputes that it has materially breached one of its material obligations under this Agreement, the dispute shall be resolved pursuant to Section 13.6. If, as a result of the application of such dispute resolution procedures, the Breaching Party is determined to be in material breach of one or more of its material obligations under this Agreement (an “ Adverse Ruling ”), then if the Breaching Party fails to complete the actions specified by the Adverse Ruling to cure such material breach within [***] days after such ruling, or if such compliance cannot be fully achieved within such [***]- ([***]) day period and the Breaching Party has failed to commence compliance or has failed to use diligent efforts to achieve full compliance as soon thereafter as is reasonably possible, then the Non-Breaching Party may terminate this Agreement upon written notice to the Breaching Party.

12.2.2 Material Breach Related to Diligence in a Major Market . Notwithstanding Section 12.2.1, if the material breach and failure to cure contemplated by Section 12.2.1 is with respect to Licensee’s Commercialization diligence obligations under Section 4.2 or Licensee’s Development or Regulatory diligence obligations under Section 3.1.3 or Section 3.2.3 (as applicable) with respect to any Major Market but not all Major Markets, Licensor shall not have the right to terminate this Agreement in its entirety, but shall have the right to terminate this Agreement solely with respect to such Major Market. If the material breach is as to all Major Markets, then such material breach shall be deemed a material breach as to the Agreement taken as a whole.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

12.3 Termination by Licensee.

12.3.1 For Cause. Licensee may terminate this Agreement in its entirety effective immediately upon written notice to Licensor in the event that (i) a Compound Failure occurs and Licensee does not require the JDC to select a Backup Candidate as a Licensed Compound, (ii) the aggregate Collaboration Costs incurred in connection with the Initial Development Activities exceed Two Hundred Ninety-Eight Million Dollars ($298,000,000), or (iii) Licensee in good faith believes that it is not advisable for Licensee to continue to Develop or Commercialize the Licensed Products as a result of a perceived serious safety issue regarding the use of any Licensed Product.

12.3.2 At Will. Licensee may terminate this Agreement in its entirety, or on a Region-by-Region basis solely with respect to a Region in the Licensee Territory, for any or no reason, upon [***] days’ prior written notice to Licensor.

12.4 Termination for Insolvency. In the event that either Party files for protection under bankruptcy or insolvency laws, makes an assignment for the benefit of creditors, appoints or suffers appointment of a receiver or trustee over substantially all of its property that is not discharged within [***] days after such filing, proposes a written agreement of composition or extension of its debts, proposes or is a party to any dissolution or liquidation, files a petition under any bankruptcy or insolvency act or has any such petition filed against that is not discharged within [***] days of the filing thereof, then the other Party may terminate this Agreement in its entirety effective immediately upon written notice to such Party.

12.5 Rights in Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by Licensee or Licensor are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, licenses of right to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code. The Parties agree that the Parties, as licensees of such rights under this Agreement, shall retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against either Party under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, the Party hereto that is not a Party to such proceeding shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, which, if not already in the non-subject Party’s possession, shall be promptly delivered to it (i) upon any such commencement of a bankruptcy proceeding upon the non-subject Party’s written request therefor, unless the Party subject to such proceeding elects to continue to perform all of its obligations under this Agreement, or (ii) if not delivered under clause (i) above, following the rejection of this Agreement by or on behalf of the Party subject to such proceeding upon written request therefor by the non-subject Party.

12.6 Termination in Entirety . In the event of a termination of this Agreement in its entirety by Licensee pursuant to Section 12.3 or by Licensor pursuant to Section 12.2.1 or 12.4:

12.6.1 all rights and licenses granted by Licensor hereunder shall immediately terminate;

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

12.6.2 all rights and licenses granted by Licensee hereunder shall immediately terminate;

12.6.3 Licensee shall, and hereby does effective as of the date of termination, grant Licensor and its Affiliates an exclusive, royalty-bearing license, with the right to grant multiple tiers of sublicenses, under the Licensee Patents, Licensee Know-How, and Licensee’s rights under the Joint Patents, to Commercialize the Licensed Products anywhere in the world, to Develop the Licensed Products anywhere in the world in support of such Commercialization and to Manufacture the Licensed Products anywhere in the world in support of such Development or such Commercialization; provided that: (i) the foregoing license shall exclude any license or other rights with respect to any therapeutically active pharmaceutical ingredient that is not a Licensed Compound and which is covered by Patents Controlled by Licensee or any of its Affiliates; (ii) Licensee shall provide Licensor with copies of any and all Third Party agreements with respect to the Licensee Patents and Licensee Know-How that is the subject of the license granted by Licensee to Licensor pursuant to this Section 12.6.3 and Licensor may at any time thereafter exclude all of the Licensee Patents and Licensee Know-How that is the subject of any such Third Party agreement from the grant set forth in this Section 12.6.3 by written notice to Licensee, in which event clause (iii) below shall not apply thereafter to such Third Party agreement and Licensor shall have no obligations with respect to any amounts that may become payable under such Third Party agreement; (iii) Licensor shall be responsible for (A) making any payments (including royalties, milestones and other amounts) payable by Licensee to Third Parties under any such Third Party agreements that are applicable to the grant to Licensor of such license or to the exercise of such license by Licensor or any of its Affiliates or sublicensees, by making such payments directly to Licensee and, in each instance, Licensor shall make the requisite payments to Licensee and provide the necessary reporting information to Licensee in sufficient time to enable Licensee to comply with its obligations under such Third Party agreements, and (B) complying with any other obligations included in any such Third Party agreements that are applicable to the grant to Licensor of such license or to the exercise of such license by Licensor or any of its Affiliates or sublicensees; and (iv) Licensee shall be responsible for paying or providing to any such Third Party any payments or reports made or provided by Licensor under this Section 12.6.3;

12.6.4 to the extent requested in writing by Licensor, Licensee shall promptly:

(i) where permitted by Applicable Law, transfer to Licensor all of its right, title, and interest in all Regulatory Documentation then in its name applicable to the Licensed Products in the Licensee Territory;

(ii) notify the applicable Regulatory Authorities and take any other action reasonably necessary to effect the transfer set forth in clause (i) above;

(iii) unless expressly prohibited by any Regulatory Authority, transfer control to Licensor of all Clinical Studies being Conducted by Licensee as of the effective date of termination and continue to conduct such Clinical Studies, at Licensor’s cost, for up to six (6) months to enable such transfer to be completed without interruption of any such Clinical Study; provided that (A) Licensor shall not have any obligation to continue any Clinical Study unless

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required by Applicable Laws, and (B) with respect to each Clinical Study for which such transfer is expressly prohibited by the applicable Regulatory Authority, if any, Licensee shall continue to conduct such Clinical Study to completion, at Licensor’s cost;

(iv) assign (or cause its Affiliates to assign) to Licensor all agreements with any Third Party with respect to the conduct of preclinical development activities or Clinical Studies for the Licensed Products, including agreements with contract research organizations, clinical sites, and investigators, unless, with respect to any such agreement, such agreement (A) expressly prohibits such assignment, in which case Licensee shall cooperate with Licensor in all reasonable respects to secure the consent of the applicable Third Party to such assignment, or (B) covers Clinical Studies for Combination Products in which any active pharmaceutical ingredient that is not a Licensed Compound is covered by Patents Controlled by Licensee or any of its Affiliates or covers products covered by Patents Controlled by Licensee or any of its Affiliates in addition to the Licensed Products, in which case Licensee shall, at Licensor’s sole cost and expense, cooperate with Licensor in all reasonable respects to facilitate the execution of a new agreement between Licensor and the applicable Third Party; and

(v) assign to Licensor all right, title, and interest of Licensee in each Product Trademark.

12.7 Termination of Terminated Territory. In the event of a termination of this Agreement with respect to a Terminated Territory by Licensor pursuant to Section 12.2.2 or with respect to a Region by Licensee pursuant to Section 12.3.2:

12.7.1 all rights and licenses granted by Licensor hereunder (i) shall automatically be deemed to be amended to exclude, if applicable, the right to market, promote, detail, distribute, import, sell, offer for sale, file any Drug Approval Application for, or seek any Regulatory Approval for Licensed Products in such Terminated Territory and (ii) shall otherwise survive and continue in effect in such Terminated Territory solely for the purpose of furthering any Commercialization of the Licensed Products in the Licensee Territory or any Development in support thereof;

12.7.2 Licensee shall, and hereby does effective as of the date of termination, grant Licensor and its Affiliates an exclusive, royalty-bearing license, with the right to grant multiple tiers of sublicenses, under the Licensee Patents, Licensee Know-How, and Licensee’s rights under the Joint Patents, to Commercialize the Licensed Products solely in such Terminated Territory, to Develop the Licensed Products anywhere in the world in support of such Commercialization in such Terminated Territory, and to Manufacture the Licensed Products anywhere in the world in support of such Development or such Commercialization in such Terminated Territory; provided that: (i) the foregoing license shall exclude any license or other rights with respect to any therapeutically active pharmaceutical ingredient that is not a Licensed Compound and which is covered by Patents Controlled by Licensee or any of its Affiliates; (ii) Licensee shall provide Licensor with copies of any and all Third Party agreements with respect to the Licensee Patents and Licensee Know-How that is the subject of the license granted by Licensee to Licensor pursuant to this Section 12.7.2 and Licensor may at any time thereafter exclude all of the Licensee Patents and Licensee Know-How that is the subject of any such Third Party agreement from the grant set forth in this Section 12.7.2 by written notice to Licensee, in which

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event clause (iii) below shall not apply thereafter to such Third Party agreement and Licensor shall have no obligations with respect to any amounts that may become payable under such Third Party agreement; (iii) Licensor shall be responsible for (A) making any payments (including royalties, milestones, and other amounts) payable by Licensee to Third Parties under any such Third Party agreements that are applicable to the grant to Licensor of such license or to the exercise of such license by Licensor or any of its Affiliates or sublicensees, by making such payments directly to Licensee and, in each instance, Licensor shall make the requisite payments to Licensee and provide the necessary reporting information to Licensee in sufficient time to enable Licensee to comply with its obligations under such Third Party agreements, and (B) complying with any other obligations included in any such Third Party agreements that are applicable to the grant to Licensor of such license or to the exercise of such license by Licensor or any of its Affiliates or sublicensees; and (iv) Licensee shall be responsible for paying or providing to any such Third Party any payments or reports made or provided by Licensor under this Section 12.7.2;

12.7.3 to the extent requested in writing by Licensor, Licensee shall promptly:

(i) where permitted by Applicable Law, transfer to Licensor all of its right, title, and interest in all Regulatory Documentation then in its name solely applicable to the Licensed Products that is in clinical development or is being Commercialized, as such Regulatory Documentation exists as of the effective date of such termination of this Agreement with respect to such Terminated Territory; provided that Licensee retains a right of reference under any Regulatory Documentation transferred pursuant to this clause (i) as necessary or reasonably useful for Licensee to Commercialize Licensed Products in the Licensee Territory, Develop Licensed Products in support of such Commercialization, or Manufacture Licensed Products in support of such Development or Commercialization;

(ii) notify the applicable Regulatory Authorities and take any other action reasonably necessary to effect the transfer set forth in clause (i) above;

(iii) grant Licensor a right of reference to all Regulatory Documentation then in Licensee’s name that are not transferred to Licensor pursuant to clause (i) above that are necessary or reasonably useful for Licensor, any of its Affiliates or sublicensees to Develop or Commercialize any Licensed Product that is in clinical development or is being Commercialized, as such Regulatory Documentation exists as of the effective date of such termination of this Agreement with respect to such Terminated Territory; and

(iv) assign to Licensor all right, title, and interest of Licensee in each Product Trademark in such Terminated Territory.

12.8 Reverse Royalty . If this Agreement is terminated in its entirety by Licensee pursuant to Section 12.2.1, 12.3.1, or 12.4, or by Licensor pursuant to Section 12.4, in consideration of the licenses granted and other consideration provided to Licensor pursuant to Section 12.6 or 12.7, as the case may be, Licensor shall pay Licensee a royalty on Net Sales of each Licensed Product in each country in the Terminated Territory during the Reverse Royalty Term for such Licensed Product in such country at the following percentage rates: (i) if the effective date of termination occurs prior to the completion of the first Phase III Clinical Study for such Licensed Product (for the Licensed Product containing the Initial Licensed Compound, such first Phase III Clinical Study shall be the Diabetic CKD Study), no revers royalty shall be due; (ii) if the effective date of termination occurs after the completion of such Phase III

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Clinical Study but prior to filing of the first MAA for a Licensed Product in the European Union, three percent (3%) of Net Sales of such Licensed Product; and (iii) if the effective date of termination occurs on or after such filing of the first MAA for a Licensed Product in the European Union but prior to the First Commercial Sale of a Licensed Product in any country in the European Union, five percent (5%) of Net Sales of such Licensed Product; and (iv) if the effective date of termination occurs on or after the First Commercial Sale of a Licensed Product in any country in the European Union, eight percent (8%) of Net Sales of such Licensed Product. For purposes of this Section 12.8, the definition of “Net Sales,” and Sections 6.3 through 6.9 shall apply mutatis mutandis to the calculation, payment, recording, and auditing of Licensor’s obligations to pay royalties under this Section 12.8 as they apply to Licensee and, solely for such purpose, each reference in each such Section (and any related definitions) to (A) Licensee shall be deemed to be a reference to Licensor, and (B) a Sublicensee shall be deemed to be a reference to a licensee or sublicensee of Licensor or its Affiliates.

12.9 Remedies. Except as otherwise expressly provided herein, termination of this Agreement in accordance with the provisions hereof shall not limit remedies that may otherwise be available in law or equity.

12.10 Accrued Rights; Surviving Obligations. Termination or expiration of this Agreement (either in its entirety or with respect to one or more Region(s)) for any reason shall be without prejudice to any rights that shall have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration shall not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement. Without limiting the foregoing, Sections 3.4.5 (solely to the extent any payment obligation thereunder accrued prior to such termination or expiration), 3.4.6, 3.9, 6.1 (solely to the extent any payment obligation thereunder accrued prior to such termination or expiration), 6.2 (solely to the extent any payment obligation thereunder accrued prior to such termination or expiration), 6.3 through 6.10, 7.1.1 through 7.1.4, 7.1.7, 9.1 through 9.4, 9.6, 10.3, 12.1.1, 12.5 through 12.9, and this Section 12.10, and Articles 1, 11 and 13 of this Agreement shall survive the termination or expiration of this Agreement for any reason.

ARTICLE 13

MISCELLANEOUS

13.1 Force Majeure. Neither Party shall be held liable or responsible to the other Party or be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement (other than an obligation to make payments) when such failure or delay is caused by or results from events beyond the reasonable control of the non-performing Party, including fires, floods, earthquakes, hurricanes, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not), terrorist acts, insurrections, riots, civil commotion, strikes, lockouts or other labor disturbances (whether involving the workforce of the non-performing Party or of any other Person), acts of God or acts, omissions, or delays in acting by any governmental authority (except to the extent such delay results from the breach by the non-performing Party or any of its Affiliates of any term or

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condition of this Agreement). The non-performing Party shall notify the other Party of such force majeure within [***] days after such occurrence by giving written notice to the other Party stating the nature of the event, its anticipated duration, and any action being taken to avoid or minimize its effect. The suspension of performance shall be of no greater scope and no longer duration than is necessary and the non-performing Party shall use commercially reasonable efforts to remedy its inability to perform.

13.2 Export Control. This Agreement is made subject to any restrictions concerning the export of products or technical information from the United States or other countries that may be imposed on the Parties from time to time. Each Party agrees that it will not export, directly or indirectly, any technical information acquired from the other Party under this Agreement or any products using such technical information to a location or in a manner that at the time of export requires an export license or other governmental approval, without first obtaining the written consent to do so from the appropriate agency or other governmental entity in accordance with Applicable Law.

13.3 Assignment. Without the prior written consent of the other Party, such consent not to be unreasonably withheld, conditioned, or delayed, neither Party shall sell, transfer, assign, delegate, pledge, or otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights or duties hereunder; provided, however , that either Party may make such an assignment without the other Party’s consent to its Affiliate or to a successor, whether in a merger, sale of stock, sale of assets or any other transaction, of the business to which this Agreement relates. With respect to an assignment to an Affiliate, the assigning Party shall remain responsible for the performance by such Affiliate of the rights and obligations hereunder. Any attempted assignment or delegation in violation of this Section 13.3 shall be void and of no effect. All validly assigned and delegated rights and obligations of the Parties hereunder shall be binding upon and inure to the benefit of and be enforceable by and against the successors and permitted assigns of Licensor or Licensee, as the case may be. In the event either Party seeks and obtains the other Party’s consent to assign or delegate its rights or obligations to another Party, the assignee or transferee shall assume all obligations of its assignor or transferor under this Agreement. The rights to Information, materials and intellectual property: (a) controlled by a Third Party permitted assignee of a Party, which Information, materials and intellectual property were controlled by such assignee immediately prior to such assignment; or (b) controlled by an Affiliate of a Party who becomes an Affiliate through any change of control or acquisition of such Party, which Information, materials and intellectual property were controlled by such Affiliate immediately prior to such change of control or acquisition, in each case ((a) and (b)), shall be automatically excluded from the rights licensed or granted to the other Party under this Agreement.

13.4 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of either Party under this Agreement will not be materially and adversely affected thereby, (i) such provision shall be fully severable, (ii) this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof, (iii) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom, and (iv) in lieu of such

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illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid, and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and reasonably acceptable to the Parties. To the fullest extent permitted by Applicable Law, each Party hereby waives any provision of law that would render any provision hereof illegal, invalid, or unenforceable in any respect.

13.5 Governing Law, Jurisdiction, Service.

13.5.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. The Parties agree to exclude the application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods.

13.5.2 Service. Each Party further agrees that service of any process, summons, notice or document by registered mail to its address set forth in Section 13.7.2 shall be effective service of process for any action, suit, or proceeding brought against it under this Agreement in any such court.

13.6 Dispute Resolution. Except as provided in Section 6.9 or 13.11, if a dispute arises between the Parties in connection with or relating to this Agreement or any document or instrument delivered in connection herewith or arises within the JDC or the JMC with respect to any decision under the jurisdiction of such Joint Committee (a “ Dispute ”), it shall be resolved pursuant to this Section 13.6.

13.6.1 General. Any Dispute shall be referred to the Senior Officers of the Parties, who shall confer in good faith on the resolution of the issue. Any final decision mutually agreed to by the Senior Officers shall be conclusive and binding on the Parties. If the Senior Officers are not able to agree on the resolution of any such issue within [***] days after such issue was first referred to them, then, except as otherwise set forth in Section 13.6.2, 13.6.3, or 13.6.5, either Party may, by written notice to the other Party, elect to initiate an alternative dispute resolution (“ ADR ”) proceeding pursuant to the procedures set forth in Section 13.6.4 for purposes of having the matter settled.

13.6.2 JDC and JMC Disputes. In the event that a Dispute arises with respect to an issue within the jurisdiction of the JDC or the JMC that is not resolved by the Senior Officers in accordance with Section 13.6.1, such Dispute shall be resolved as follows:

(i) if the Dispute relates to any proposed amendment to the Initial Development Plan other than a Material Amendment or an amendment described in Section 13.6.2(ii) or 13.6.2(v), the Dispute shall be resolved by the Senior Officer of Licensor;

(ii) if the Dispute relates to any amendment required pursuant to Section 3.1.1, the Dispute shall be resolved pursuant to Section 13.6.5(ii);

(iii) if the Dispute relates to whether an amendment proposed to the Initial Development Plan in the circumstances set forth in Section 3.1.2 is a Material Amendment, the Dispute shall be resolved pursuant to Section 13.6.5(ii) (and until such resolution, Licensor shall continue to carry out the Initial Development Plan then in effect, but shall not be required to commence any new Clinical Study);

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(iv) if the Dispute relates to any Material Amendment to the Initial Development Plan proposed in connection with the replacement of a Licensed Compound with a Backup Compound pursuant toSection 5.10.2 following a Compound Failure, the Dispute shall be resolved by the Senior Officer of Licensee;

(v) if the Dispute relates to any amendment (including a Material Amendment) to the Initial Development Plan after Licensor has elected to discontinue co-funding Initial Development Activities for a Backup Compound pursuant to Section 5.10.3, the Dispute shall be resolved by the Senior Officer of Licensee;

(vi) if the Dispute relates to any proposed Material Amendment to the Initial Development Plan other than as described in Section 13.6.2(ii), 13.6.2(iv) or 13.6.2(v), neither Party shall have the right to resolve the Dispute unilaterally, and the proposed Material Amendment shall be deemed rejected;

(vii) if the Dispute relates to any proposed Development Plan and Budget for a Joint Development Activity (or amendment thereto), neither Party shall have the right to resolve the Dispute unilaterally, and the proposed Development Plan and Budget (or amendment thereto) shall be deemed rejected;

(viii) if the Dispute relates to whether any Proposed Unilateral Activities, proposed regulatory actions or proposed Phase IV Studies could reasonably be expected to have a Material Adverse Effect on a Party, the Dispute shall be resolved pursuant to Section 13.6.5(ii);

(ix) if the Dispute relates to the adoption of any proposed Development Plan and Budget for a Proposed Unilateral Activity or any amendment thereto, the Dispute shall be resolved by the Senior Officer of the Developing Party;

(x) if the Dispute relates to the adoption of any proposed Collaboration Candidate Development Plan and Budget or any amendment thereto, the Dispute shall be resolved by the Senior Officer of Licensor;

(xi) if the Dispute relates to whether a Party’s Development activities comply with the applicable Development Plan and Budget, the Dispute shall be resolved pursuant to Section 13.6.5(ii);

(xii) if the Dispute relates to whether a Compound Failure has occurred, then the Dispute shall be resolved pursuant to Section 13.6.5(ii);

(xiii) if the Dispute relates to which Backup Candidate is to be selected to become a Licensed Compound pursuant to Section 5.10.2, then the Dispute shall be resolved by the Senior Officer of Licensee;

(xiv) if the Dispute relates to the Global Brand Elements to be used in connection with the Commercialization of the Licensed Products in the Licensee Territory (including the Product Trademarks), the Dispute shall be resolved by the Senior Officer of Licensor; and

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(xv) with respect to any Dispute relating to the Commercialization of the Licensed Products, if the Dispute relates to the Licensor Territory, the Dispute shall be resolved by the Senior Officer of Licensor, and if the Dispute relates to the Licensee Territory, the Dispute shall be resolved by Senior Officer of Licensee.

13.6.3 Intellectual Property Disputes. In the event that a Dispute arises with respect the validity, scope, enforceability, inventorship or ownership of any Patent, Trademark or other intellectual property rights, and such Dispute cannot be resolved in accordance with Section 13.6.1, unless otherwise agreed by the Parties in writing, such Dispute shall not be submitted to an ADR proceeding in accordance with Section 13.6.4 and instead, either Party may initiate litigation in a court of competent jurisdiction, notwithstanding Section 13.5, in any country in which such rights apply. In the event that Licensee brings an action before any court, agency or tribunal seeking to invalidate or otherwise challenge the enforceability of or Licensor’s ownership of any patent included in the Licensor Patents, then Licensor may immediately terminate this Agreement upon written notice to Licensee. Licensee understands and agrees that, in the event Licensee successfully challenges the validity or enforceability of any patent included in the Licensor Patents, all payments or other consideration made or otherwise provided by Licensee to Licensor prior to a final, non-appealable adjudication of invalidity or unenforceability shall be non-refundable.

13.6.4 ADR. Any ADR proceeding under this Agreement shall take place pursuant to the procedures set forth in Schedule 13.6.4 .

13.6.5 Expert Panel Arbitration.

(i) In the event that a Dispute arises under Section 1.34, 4.11.3(ii), 5.7.2, 5.9.1, Section 6.1.2(i) or Section 6.1.2(iii) that is not resolved by the Senior Officers in accordance with Section 13.6.1, such Dispute shall be resolved pursuant to Section 13.6.5(ii).

(ii) Any dispute to be resolved pursuant to this Section 13.6.5(ii) shall take place pursuant to the following procedures: Promptly following receipt of any notice requiring dispute resolution pursuant to this Section 13.6.5(ii), the Parties shall meet and discuss in good faith and agree on an expert panel to resolve the issue, which expert panel shall be neutral and independent of both Parties and all of their respective Affiliates, shall have significant experience and expertise in the substantive area in question, and shall have some experience in mediating or arbitrating issues relating to such agreements. If the Parties cannot agree on such expert panel within [***] days of request by a Party for arbitration, then each Party shall select one (1) expert for such panel and the two (2) experts selected by the Parties shall select a third expert for the panel, provided that all such three (3) experts much meet the foregoing criteria. Within [***] days after an arbitrator is selected (or appointed, as the case may be), each Party will deliver to both the expert panel and the other Party a detailed written proposal setting forth its proposed terms for the resolution for the matter at issue (the “ Proposed Terms ” of the Party) and a memorandum (the “ Support Memorandum ”) in support thereof, not exceeding ten (10) pages in length. The Parties will also provide the expert panel a copy of this Agreement, as may be amended at such time.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Within [***] days after receipt of the other Party’s Proposed Terms and Support Memorandum, each Party may submit to the expert panel (with a copy to the other Party) a response to the other Party’s Support Memorandum, such response not exceeding five (5) pages in length. Neither Party may have any other communications (either written or oral) with the expert panel other than for the sole purpose of engaging the expert panel or as expressly permitted in this Section 13.6.5(ii); provided that the expert panel may convene a hearing if the expert panel so chooses to ask question of the Parties and hear oral argument and discussion regarding each Party’s Proposed Terms. Within [***] days after the expert panel’s appointment, the expert panel will select one of the two Proposed Terms (without modification) provided by the Parties that the expert panel believes is most consistent with the intention underlying and agreed principles set forth in this Agreement. The decision of the expert panel shall be final, binding, and unappealable. The expert panel must select as the only method to resolve the matter at issue one of the two sets of Proposed Terms, and may not combine elements of both Proposed Terms or award any other relief or take any other action.

13.6.6 Adverse Ruling . Any determination pursuant to this Section 13.6 that a Party is in material breach of its material obligations hereunder shall specify a (nonexclusive) set of actions to be taken to cure such material breach, if feasible.

13.6.7 Interim Relief and Tolling. Notwithstanding anything herein to the contrary, nothing in this Section 13.6 shall preclude either Party from seeking interim or provisional relief, including a temporary restraining order, preliminary injunction or other interim equitable relief concerning a Dispute, if necessary to protect the interests of such Party. This Section shall be specifically enforceable.

13.7 Notices.

13.7.1 Notice Requirements. Any notice, request, demand, waiver, consent, approval, or other communication permitted or required under this Agreement shall be in writing, shall refer specifically to this Agreement and shall be deemed given only if delivered by hand or sent by facsimile transmission (with transmission confirmed) or by internationally recognized overnight delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in Section 13.7.2 or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 13.7.1. Such Notice shall be deemed to have been given as of the date delivered by hand or transmitted by facsimile (with transmission confirmed) or on the second business day (at the place of delivery) after deposit with an internationally recognized overnight delivery service. Any notice delivered by facsimile shall be confirmed by a hard copy delivered as soon as practicable thereafter. This Section 13.7.1 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.

13.7.2 Address for Notice.

If to Licensee, to:

Abbott Laboratories

Pharmaceutical Products Group

100 Abbott Park Road

Abbott Park, IL 60064-3500

Attention: Executive Vice President

Facsimile: 847-935-3260

- 101 -

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

with a copy to (which shall not constitute notice):

Abbott Laboratories

Building AP6D, D-364

100 Abbott Park Road

Abbott Park, IL 60064-3500

Attention: Executive Vice President, General Counsel and Secretary

Facsimile: 847-937-3966

If to Licensor, to:

Reata Pharmaceuticals, Inc.

2801 Gateway Drive, Suite 150

Irving, Texas 75063

Attention: Casi DeYoung

Facsimile: (214) 614-4717

with a copy to (which shall not constitute notice):

Cooley LLP

3175 Hanover Street

Palo Alto, CA 94304

Attention: Barbara A. Kosacz

Facsimile: (650) 849-7400

13.8 Antitrust Filing. .

13.8.1 Licensor and Licensee have agreed to prepare, make appropriate filings, and seek clearance under the Hart-Scott Rodino (HSR) Act and other antitrust requirements relating to the Securities Purchase Agreement and the transactions contemplated thereby as soon as reasonably practicable after the Execution Date, as provided in the Securities Purchase Agreement.

13.8.2 This Agreement will become effective automatically upon the First Closing under the Securities Purchase Agreement (as such term is defined in the Securities Purchase Agreement) (the “ Effective Date ”), without the need for further action by the Parties. Other than the provisions of Sections 9.54, 13.5, and this Section 13.8, the rights and obligations of the Parties under this Agreement shall not become effective until the Effective Date.

13.8.3 If the Effective date has not occurred within ninety (90) days after the Execution Date, or such other date as the Parties may mutually agree, this Agreement may be terminated by either Party on written notice to the other.

- 102 -

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

13.9 Entire Agreement. This Agreement, together with the Schedules attached hereto, sets forth and constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and all prior agreements, understandings, promises, and representations, whether written or oral, with respect thereto are superseded hereby (including that certain Confidential Disclosure and Limited Use Agreement between the Parties or their respective Affiliates, dated May 28, 2009, as amended). Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically set forth in this Agreement. No amendment, modification, release, or discharge shall be binding upon the Parties unless in writing and duly executed by authorized representatives of both Parties.

13.10 English Language. This Agreement shall be written and executed in, and all other communications under or in connection with this Agreement shall be in, the English language. Any translation into any other language shall not be an official version thereof, and in the event of any conflict in interpretation between the English version and such translation, the English version shall control.

13.11 Equitable Relief. Each Party acknowledges and agrees that the restrictions set forth in Sections 5.7 and 5.8, and Articles 7 and 9 are reasonable and necessary to protect the legitimate interests of the other Party and that such other Party would not have entered into this Agreement in the absence of such restrictions, and that any breach or threatened breach of any provision of such Sections or Articles may result in irreparable injury to such other Party for which there will be no adequate remedy at law. In the event of a breach or threatened breach of any provision of such Sections or Articles, the non-breaching Party shall be authorized and entitled to obtain from any court of competent jurisdiction injunctive relief, whether preliminary or permanent, specific performance, and an equitable accounting of all earnings, profits, and other benefits arising from such breach, which rights shall be cumulative and in addition to any other rights or remedies to which such non-breaching Party may be entitled in law or equity. Both Parties agree to waive any requirement that the other (i) post a bond or other security as a condition for obtaining any such relief, and (ii) show irreparable harm, balancing of harms, consideration of the public interest, or inadequacy of monetary damages as a remedy. Nothing in this Section 13.11 is intended, or should be construed, to limit either Party’s right to equitable relief or any other remedy for a breach of any other provision of this Agreement.

13.12 Waiver and Non-Exclusion of Remedies. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. The waiver by either Party hereto of any right hereunder or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise. The rights and remedies provided herein are cumulative and do not exclude any other right or remedy provided by Applicable Law or otherwise available except as expressly set forth herein.

13.13 No Benefit to Third Parties. The covenants and agreements set forth in this Agreement are for the sole benefit of the Parties hereto and their successors and permitted assigns, and they shall not be construed as conferring any rights on any other Persons.

- 103 -

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

13.14 Further Assurance. Each Party shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents, and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof, or to better assure and confirm unto such other Party its rights and remedies under this Agreement.

13.15 Relationship of the Parties. It is expressly agreed that Licensor, on the one hand, and Licensee, on the other hand, shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture, or agency. Neither Licensor, on the one hand, nor Licensee, on the other hand, shall have the authority to make any statements, representations, or commitments of any kind, or to take any action, which shall be binding on the other, without the prior written consent of the other Party to do so. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.

13.16 Counterparts; Facsimile Execution. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed by facsimile or electronically transmitted signatures and such signatures shall be deemed to bind each Party hereto as if they were original signatures.

13.17 References. Unless otherwise specified, (i) references in this Agreement to any Article, Section or Schedule shall mean references to such Article, Section or Schedule of this Agreement, (ii) references in any Section to any clause are references to such clause of such Section, and (iii) references to any agreement, instrument, or other document in this Agreement refer to such agreement, instrument, or other document as originally executed or, if subsequently amended, replaced, or supplemented from time to time, as so amended, replaced, or supplemented and in effect at the relevant time of reference thereto.

13.18 Construction. Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense (and/or). The captions of this Agreement are for convenience of reference only and in no way define, describe, extend, or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term “including” as used herein shall mean including, without limiting the generality of any description preceding such term. The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party hereto.

[ SIGNATURE PAGE FOLLOWS. ]

- 104 -

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

THIS AGREEMENT IS EXECUTED by the authorized representatives of the Parties as of the date first written above.

REATA PHARMACEUTICALS, INC.		ABBOTT PHARMACEUTICALS PR LTD.
By:	/s/ J. Warren Huff	By:	/s/ Thomas C. Freyman
Name:	J. Warren Huff	Name:	Thomas C. Freyman
Title:	CEO	Title:	Director

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Schedule 1.38

Corporate Names

Reata Pharmaceuticals, Inc.

Reata

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Schedule 1.74

Initial Development Plan

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Bardoxolone Methyl – Initial Development Plan

[***]

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15-Sep-10 402 Development Plan v5.0 – FINAL Page 1

Bardoxolone Methyl – Initial Development Plan

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

[***]

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15-Sep-10 402 Development Plan v5.0 – FINAL Page 2

Bardoxolone Methyl – Initial Development Plan

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

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15-Sep-10 402 Development Plan v5.0 – FINAL Page 3

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Bardoxolone Methyl – Initial Development Plan

[***]

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15-Sep-10 402 Development Plan v5.0 – FINAL Page 4

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Bardoxolone Methyl – Initial Development Plan

[***]

[***]	[***]
[***]
[***]	[***]
[***]	[***]

15-Sep-10 402 Development Plan v5.0 – FINAL Page 5

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

REATA PHARMACEUTICALS, INC
STUDY PROTOCOL: 402-C-0903	Page 1 of 7

[***]

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

REATA PHARMACEUTICALS, INC
STUDY PROTOCOL: 402-C-1008 [BEACON-HT]	PAGE 1 of 7

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

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Bardoxolone Methyl Development Budget

9/15/2010

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Schedule 1.148

Regions

[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Schedule 1.165

Target CKD Profile

[***]

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Schedule 1.165-2

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Schedule 2.1.1

Initial Members of the JDC

Licensor: [***]

Licensee: [***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Schedule 2.2.1

Initial Members of the JMC

Licensor: [***]

Licensee: [***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Schedule 6.1.2(iv)

Licensor EMA Deliverable Obligations

[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Schedule 9.4

Press Release

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

FOR IMMEDIATE RELEASE

News

Abbot and Reata Pharmaceuticals Announce Agreement to Develop and Commercialize Bardoxolone Methyl for Chronic Kidney Disease

ABBOTT PARK, Ill. and IRVING, Texas, September 23, 2010 – Abbott and Reata Pharmaceuticals today announced that they have entered into a collaboration agreement to develop and commercialize bardoxolone methyl (bardoxolone), which is currently in late Phase 2 trials for the treatment of chronic kidney disease (CKD).

Under the terms of the agreement, Reata will grant to Abbott exclusive rights to develop and commercialize bardoxolone outside the U.S., excluding certain Asian markets. Reata will receive upfront and near term cash payments of $450 million for the licensing rights to bardoxolone and a minority equity investment in the company. Upon completion of certain development and approval objectives for bardoxolone and other molecules in the licensed territories, Reata will receive additional milestone payments. Reata also will receive royalties on any future product sales in the Abbott territories. Additionally, Abbott obtains rights to develop and commercialize certain other Reata compounds for chronic kidney disease, and for cardiovascular and metabolic indications, in these territories.

“Early clinical studies suggest that bardoxolone could be a significant improvement to the current standard of care for CKD and possibly prevent patients from progressing to the later stages of the disease and dialysis,” said John Leonard, M.D., senior vice president, pharmaceuticals, research and development, Abbott. “This agreement builds on Abbott’s existing experience in renal care, while adding a promising compound to our later-stage pipeline.”

Bardoxolone is an oral, first-in-class antioxidant inflammation modulator that works by increasing the estimated glomerular filtration rate (eGFR) of the kidneys. In two Phase 2 clinical trials, bardoxolone significantly improved kidney function in patients with advanced CKD and Type 2 diabetes. CKD currently affects more than 50 million adults worldwide, and the number of patients is rapidly increasing throughout the world.

-more-

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Page 2

“Reata is very pleased to have Abbott as our partner and believe that its existing renal capabilities will be a great asset to the global program,” said Warren Huff, chief executive officer of Reata. “This partnership allows us to meet our strategic goal of establishing our own commercial presence in the U.S. and building a sustainable, fully integrated pharmaceutical company.”

This transaction does not impact Abbott’s previously issued ongoing earnings-per-share guidance for 2010. Abbott expects to incur one-time specified items in the fourth quarter of 2010, primarily related to in-process research and development.

About Bardoxolone Methyl

Bardoxolone methyl is an antioxidant inflammation modulator (AIM) that activates Nrf2, thereby inducing the transcription of more than 250 genes that decrease the level of oxidative stress and suppress several inflammatory mediators. In two Phase 2a studies, bardoxolone methyl was shown to produce a statistically significant increase in estimated glomerular filtration rate as well as improvements in other key markers of renal function in Stage 3b and 4 CKD patients with type 2 diabetes.

About Chronic Kidney Disease and Diabetic Kidney Disease (Nephropathy)

CKD is a highly prevalent condition, affecting more than 50 million adults around the world. Half of CKD patients also have diabetes, a percentage that is expected to grow as rates of diabetes increase. Diabetes is the leading cause of CKD, with as many as 30 to 40 percent of Type 2 diabetics developing the disease. Available therapies modestly slow the progression of CKD, and patients ultimately progress to dialysis.

About Reata Pharmaceuticals

Reata Pharmaceuticals is the leader in discovering and developing novel, oral anti-inflammatory drugs that activate Nrf2, the primary regulator of cellular antioxidant and detoxification enzymes. Activation of this important biological target protects against a broad range of diseases associated with inflammation and oxidative stress. Reata is developing bardoxolone methyl, its lead product candidate, as the first disease-modifying treatment for chronic kidney disease. In January 2010, Reata and Kyowa Hakko Kirin announced a licensing agreement providing KHK with the exclusive rights to develop and commercialize bardoxolone in Japan and other selected Asian markets.

-more-

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Page 3

For more information please visit the company’s Web site at www.reatapharma.com .

About Abbott Laboratories

Abbott is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs nearly 90,000 people and markets its products in more than 130 countries.

Abbott’s news releases and other information are available on the company’s Web site at www.abbott.com

###

Abbott Forward Looking Statement

Some statements in this news release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott’s operations are discussed in Item 1A, “Risk Factors,” to our Annual Report on Securities and Exchange Commission Form 10-K for the year ended Dec. 31, 2009, and in Item 1A, “Risk Factors,” to our Quarterly Report on Securities and Exchange Commission Form 10-Q for the period ended March 31, 2010, and are incorporated by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments.

Abbott Contacts:

Media:

Tracy Sorrentino

(847) 937-8712

Financial:

Larry Peepo

(847)0935-6722

Reata Contacts:

Media

Heidi Chokeir

(619) 528-2217

Investors:

Alan Roemer

(646) 378-2945

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Schedule 10.2.1

Existing Patents

[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

        Schedule 13.6.4

ADR Procedures

Any Dispute referred to ADR under this Agreement shall be resolved as follows:

1. To begin an ADR proceeding, a Party shall provide written notice to the other Party of the Dispute to be resolved by ADR. Within [***] days after its receipt of such notice, the other Party may, by written notice to the Party initiating the arbitration, add additional issues to be resolved within the same ADR. Thereafter, no new issues can be added absent consent of the tribunal, which consent shall be granted for good cause. In assessing whether good cause exists for permitting the addition of new issues, the tribunal shall consider all relevant factors, including whether justice is served by allowing the addition of new issues, whether a Party unduly delayed in seeking to add a new issue, and whether the other Party would be unfairly prejudiced by the addition of the new issues. The ADR shall be administered by JAMS pursuant to the then-current JAMS Comprehensive Rules and Procedures, except as modified under this Schedule 13.6.4.

2. Within [***] days following the initiation of the ADR proceeding, the Parties shall select a mutually acceptable independent, impartial and conflicts-free neutral from the JAMS list of neutrals to preside in the resolution of all issues in this ADR proceeding. If the Parties are unable to agree on a mutually acceptable neutral within such period, each Party will select one independent, impartial and conflicts-free neutral (who does not need to be from the JAMS list) and, within [***] days thereafter, those two neutrals will select a third independent, impartial and conflicts-free neutral from the JAMS list of neutrals to preside as the chair of the panel of such three neutrals (such neutral(s), the “ Neutral ”). None of the neutrals selected may be current or former employees, officers or directors of either Party or its Affiliates. Furthermore, the following provisions shall supplement (but not replace) the provisions of the JAMS Comprehensive Rules and Procedures regarding neutrality:

(a) A person shall be deemed to have a conflict, and shall not be appointed as a Neutral absent the consent of both parties, if such person (i) has presided over an evidentiary hearing relating to, or issued a ruling on, the merits of a dispute, involving either Party; (ii) has conducted a mediation involving either Party, or (iii) has been retained to perform and has performed professional services for either Party within the last 10 years. The “merits of a dispute” are matters substantially related to the substance of the underlying claim, and do not include procedural or discovery-related matters;

(b) A person shall be deemed to have a conflict, and shall not be appointed as a Neutral absent consent of both parties, if such person previously served as a party-appointed arbitrator appointed by either Party, or by any party represented in a previous arbitration by one of the law firms representing either Party in any Dispute referred to ADR under this Agreement, if the governing rules of such arbitration did not require such arbitrator to be impartial and independent; and

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(c) Neither Party nor any person acting on behalf of a Party may have any ex parte communications with any Neutral at any time before or during the proceedings. Notwithstanding JAMS Comprehensive Rules and Procedures, prohibited ex parte communications shall include, without limitation, advising the candidate of the general nature of the controversy and of the anticipated proceedings and to discuss the candidate’s qualifications, availability or independence in relation to the Parties.

3. No earlier than [***] days or later than [***] days after selection, the Neutral shall hold a hearing to resolve each of the issues identified by the Parties.

4. At least [***] days prior to the hearing, each Party shall submit the following to the other Party and the Neutral:

(a) a copy of all exhibits on which such Party intends to rely in any oral or written presentation to the Neutral;

(b) a list of any witnesses such Party intends to call at the hearing, and a short summary of the anticipated testimony of each witness;

(c) a proposed ruling on each issue to be resolved, together with a request for a specific damage award or other remedy for each issue. The proposed ruling shall not contain any recitation of the facts or any legal arguments, and the proposed remedy shall not include any punitive damages. The proposed ruling and the proposed remedy collectively shall not exceed [***] page per issue.

(d) a brief in support of such Party’s proposed rulings and remedies, provided that the brief shall not exceed [***] pages. This page limitation shall apply regardless of the number of issues raised in the ADR proceeding.

Each Party shall be entitled to [***] document requests and one deposition. The Neutral can permit additional discovery, subject to the limits specified below, where such discovery is reasonably calculated to lead to admissible evidence regarding liability or damages, and with respect to a request for an additional deposition, the necessity of an additional deposition shall be determined by the Neutral based upon the reasonable need for the requested information, the availability of other discovery options and the burdensomeness of the request on the opposing Parties and the witness. For such additional discovery, in no event shall a Party be permitted more than [***] interrogatories, [***] additional document requests (resulting in [***] total document requests) or more than [***] additional deposition of the opposing Party (with all depositions limited to one day, up to [***] hours). No corporate representative deposition shall be permitted. Within [***] days of the service of document requests, the Parties shall agree to defined search terms in order to search for responsive electronic documents as efficiently and economically as possible. If the Parties cannot agree to such search terms, the Neutral shall meet with the Parties within [***] days thereafter and, at that meeting, determine the applicable search terms. No other discovery shall be permitted in any form. All discovery must be completed [***] days before the arbitration hearing.

Schedule 13.6.4-2

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

5. The hearing shall be conducted on no more than [***] consecutive days and shall be governed by the following rules:

(a) Each party shall be entitled to [***] hours of hearing time to present its case. The Neutral shall determine whether each Party has had the [***] hours to which it is entitled.

(b) Each Party shall be entitled, but not required, to make an opening statement, to present regular and rebuttal testimony, documents, or other evidence, to cross-examine witnesses, and to make a closing argument. Cross-examination of witnesses shall occur immediately after their direct testimony, and cross-examination time shall be charged against the Party conducting the cross-examination.

(c) The Party initiating the ADR shall begin the hearing and, if it chooses to make an opening statement, shall address therein not only issues it raised but also any issues raised by the responding party. The responding party, if it chooses to make an opening statement, also shall address all issues raised in the ADR. Thereafter, the presentation of regular and rebuttal testimony and documents, other evidence, and closing arguments shall proceed in the same sequence.

(d) Except when testifying, witnesses shall be excluded from the hearing until closing arguments.

(e) Settlement negotiations, including any statements made therein, shall not be admissible under any circumstances.

(f) Affidavits prepared for purposes of the ADR hearing shall not be admissible.

(g) As to all other matters, the Neutral shall have sole discretion regarding the admissibility of any evidence.

6. Prior to the completion of the hearing, a Party may seek leave from the Neutral to modify its proposed rulings on one or more issues to be resolved. If the Neutral finds good cause for such modification, within [***] days following completion of the hearing, the Parties shall file a substitute proposed ruling on each issue for which the Neutral allows a modification, together with a request for a specific damage award or other remedy for each such issue. The proposed ruling shall not contain any recitation of the facts or any legal arguments, and the proposed remedy shall not include any punitive damages. The proposed ruling and the proposed remedy collectively shall not exceed [***] page per issue.

7. Within [***] days following completion of the hearing, each Party may submit to the other Party and the Neutral a post-hearing brief in support of its proposed rulings and remedies, provided that such brief shall not contain or discuss any new evidence and shall not exceed [***] pages. This page limitation shall apply regardless of the number of issues raised in the ADR proceeding.

8. The Neutral shall rule on each disputed issue within [***] days following completion of the post-hearing briefing. Such ruling shall adopt in its entirety the proposed ruling and remedy of one of the Parties on each disputed issue but may adopt one party’s proposed rulings and remedies on some issues and the other Party’s proposed rulings and remedies on other issues. The Neutral shall not issue any written opinion or otherwise explain the basis of the ruling.

Schedule 13.6.4-3

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

9. The Neutral shall be paid a reasonable fee plus expenses. These fees and expenses, along with the reasonable legal fees and expenses of the prevailing Party (including all expert witness fees and expenses), the fees and expenses of a court reporter, and any expenses for a hearing room, shall be paid as follows:

(a) If the Neutral rules in favor of one Party on all disputed issues in the ADR, the losing Party shall pay 100% of such fees and expenses.

(b) If the Neutral rules in favor of one Party on some issues and the other Party on other issues, the Neutral shall issue with the rulings a written determination as to how such fees and expenses shall be allocated between the Parties. The Neutral shall allocate fees and expenses in a way that bears a reasonable relationship to the outcome of the ADR, with the Party prevailing on more issues, or on issues of greater value or gravity, recovering a relatively larger share of its legal fees and expenses.

10. The rulings of the Neutral and the allocation of fees and expenses shall be binding, non-reviewable, and non-appealable, and may be entered as a final judgment in any court having jurisdiction.

11. Except as provided in paragraph 9 or as required by law, the existence of the Dispute, any settlement negotiations, the ADR proceeding, any submissions (including exhibits, testimony, proposed rulings, and briefs), and the rulings shall be deemed to be Confidential Information of both Parties. The Neutral shall have the authority to impose sanctions for unauthorized disclosure of Confidential Information.

12. All ADR proceedings shall be conducted in the English language and shall be conducted in New York, New York.

13. Each Party shall have the right to be represented by counsel in all aspects of any ADR proceeding.

Schedule 13.6.4-4

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Schedule of Exceptions

Section 10.2.1 – Licensor makes no representation under this Section 10.2.1 with respect to:

[***]

Section 10.2.2 – On January 8, 2010, an opposition was filed in [***] by the [***] to patent application [***].

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EX-10.29

Exhibit 10.29

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EXECUTION COPY

COLLABORATION AGREEMENT

between

REATA PHARMACEUTICALS, INC.

and

ABBOTT PHARMACEUTICALS PR LTD.

Dated as of December 9, 2011

TABLE OF CONTENTS

		Page
ARTICLE 1	DEFINITIONS		11
ARTICLE 2	COLLABORATION OVERVIEW; GOVERNANCE		46
2.1	Overview of Collaboration		46
2.2	General Principles Governing the Collaboration		47
2.3	Joint Executive Committee		48
2.4	Joint Research and Development Incubator		48
2.5	Joint Development Committees		49
2.6	Joint Supply Committee		50
2.7	Joint Marketing Committee		51
2.8	Joint Patent Committee		52
2.9	General Provisions Applicable to Committees		53
2.10	Good Faith		54
2.11	Appointment of Alliance Managers		54
2.12	Discontinuation of Participation on a Committee		55
2.13	Possession Arrow Decision Making		55
ARTICLE 3	RESEARCH PROGRAM		55
3.1	Research Collaboration; Discovery Research Plan		55
3.2	Unilateral Discovery		56
3.3	Initial Information-Sharing		56
3.4	New Information Sharing and Designation of Lead Compound		56
3.5	Compliance		57
3.6	Records		57
ARTICLE 4	EXPLORATORY DEVELOPMENT PROGRAM		57
4.1	General Scope		57
4.2	Elements of Exploratory Development Program		57
4.3	Joint Exploratory Development		61
4.4	Unilateral Exploratory Development		65
4.5	Exploratory Development Records and Reports		67
4.6	Relationship with Existing Agreement		67

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

ARTICLE 5	PRODUCT DEVELOPMENT	69
5.1	General	69
5.2	Formation of JDC and JMC	69
5.3	Elements of Product Development Program	69
5.4	Opt-Out After Designation of Product Candidate and Selection of Indication for Development	69
5.5	Joint Product Development	70
5.6	Unilateral Product Development	78
5.7	Development of a Product Candidate in Additional Indication(s)	88
5.8	Unilateral Development of Any Additional Product Candidate for an Active Indication	91
5.9	Development Records and Reports	91
5.10	Unilateral Acquired AIMs	92
ARTICLE 6	REGULATORY MATTERS	92
6.1	Regulatory Filings and Approvals	92
6.2	Regulatory Costs	94
6.3	Data Sharing	95
6.4	Product Withdrawals and Recalls	95
6.5	Pharmacovigilance	96
6.6	Standards of Conduct	96
ARTICLE 7	COMMERCIALIZATION OF JOINT PRODUCTS	96
7.1	Commercialization of Joint Products in a Commercialization Territory	96
7.2	Commercial Summit Meeting	96
7.3	Determination of LCP and SCP	97
7.4	Commercialization Plan	99
7.5	Commercial Readiness	101
7.6	Role of the Lead Commercialization Party	102
7.7	Co-Promotion by the SCP	103
7.8	PDE Shortfalls	105
7.9	Trademarks and Markings	106
7.10	Commercialization Reports	106
7.11	Commercialization Standards of Conduct	106

vi

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

ARTICLE 8	COMMERCIALIZATION OF UNILATERAL PRODUCTS	107
8.1	Rights of Unilateral Party	107
8.2	Commercialization Plans	107
8.3	Where Unilateral Product is also a Joint Product	107
8.4	Sales and Distribution	108
8.5	Compliance with Applicable Law	108
ARTICLE 9	MANUFACTURE AND SUPPLY	108
9.1	Supply for the Research Collaboration and Development Programs	108
9.2	Manufacturing Plan for Joint Products	109
9.3	Supply of Unilateral Products	109
9.4	Technology Transfer	110
9.5	Launch Product Volume; Product Supply Volume; Supply	112
9.6	Manufacturing Standards of Conduct	112
9.7	Subcontracting	112
9.8	Manufacturing Records and Reports	112
ARTICLE 10	LICENSES AND EXCLUSIVITY	113
10.1	License Grants	113
10.2	Sublicenses and Subcontracting	115
10.3	Negative Covenant	116
10.4	No Implied Licenses	117
10.5	Access to Regulatory Documentation and Cooperation	117
10.6	Exclusivity	117
ARTICLE 11	FINANCIALS	118
11.1	Upfront Amount	118
11.2	Development Costs	118
11.3	Profit Sharing for Joint Products in the Profit Share Region	119
11.4	Royalties	121
11.5	Mode of Payment	123
11.6	Taxes	123
11.7	Interest on Late Payments	125

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

11.8	Financial Records	125
11.9	Audit	125
11.10	Audit Dispute	125
11.11	Confidentiality	126
11.12	Diagnostic or Veterinary Products	126
ARTICLE 12	INTELLECTUAL PROPERTY	126
12.1	Ownership of Inventions	126
12.2	Maintenance and Prosecution of Patents	128
12.3	Enforcement of Patents	132
12.4	Infringement Claims by Third Parties	134
12.5	Defense of Collaboration Patents	136
12.6	Third Party Licenses	136
12.7	Patent Marking	137
12.8	Personnel Obligations	138
12.9	Trademarks, Corporate Logos and other Intellectual Property Rights	138
ARTICLE 13	REPRESENTATIONS AND WARRANTIES; COVENANTS	140
13.1	Mutual Representations and Warranties	140
13.2	Additional Representations of Reata	141
13.3	DISCLAIMER OF WARRANTIES	145
ARTICLE 14	INDEMNIFICATION	145
14.1	Indemnification by Reata	145
14.2	Indemnification by Abbott	146
14.3	Certain Losses	146
14.4	Notice of Claim	147
14.5	Control of Defense	147
14.6	Special, Indirect, Consequential and Other Losses	148
14.7	Insurance	149
ARTICLE 15	CONFIDENTIALITY	149
15.1	Confidentiality Obligations	149
15.2	Permitted Disclosures	150
15.3	Use of Name	151
15.4	Public Announcements	151
15.5	Publications	152

viii

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

ARTICLE 16	TERM AND BREACH	153
16.1	Term	153
16.2	Termination by Mutual Agreement	153
16.3	Rights in Bankruptcy	153
16.4	Material Breach	153
16.5	Remedies Other Than Termination	154
ARTICLE 17	MISCELLANEOUS	154
17.1	Force Majeure	154
17.2	Export Control	155
17.3	Assignment	155
17.4	Severability	156
17.5	Governing Law; Service	157
17.6	Dispute Resolution	157
17.7	Notices	159
17.8	Change of Control	160
17.9	Entire Agreement	164
17.10	English Language	164
17.11	Equitable Relief	164
17.12	Waiver and Non-Exclusion of Remedies	165
17.13	No Benefit to Third Parties	165
17.14	Further Assurance	165
17.15	Relationship of the Parties	165
17.16	Counterparts; Facsimile Execution	165
17.17	References	166
17.18	Construction	166

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

COLLABORATION AGREEMENT

T HIS C OLLABORATION A GREEMENT (this “ Agreement ”) is entered into as of December 9, 2011 (the “ Effective Date ”) by and between R EATA P HARMACEUTICALS , I NC . , a Delaware corporation having its principal place of business at 2801 Gateway Drive, Suite 150, Irving, Texas 75063 (“ Reata ”), and A BBOTT P HARMACEUTICALS PR LTD . , a Bermuda corporation having its principal place of business at 2 KM 58.2, Cruce Davila, Barceloneta 00617, Puerto Rico (“ Abbott ”). Reata and Abbott are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties ”.

B ACKGROUND

Abbott, together with its Affiliates (as defined herein), is a global pharmaceutical company with expertise in the development, manufacture and commercialization of human therapeutic products.

Reata is a biotechnology company with expertise and experience in the identification and development of product candidates containing Targeted AIMs (as defined herein) for use in multiple indications, and that controls intellectual property rights with respect to such Targeted AIMs.

Reata and Abbott are parties to a License Agreement, dated as of September 21, 2010 (the “ Bardoxolone License Agreement ”), under which Abbott obtained the right to develop and commercialize one of such Targeted AIMs, bardoxolone methyl, and certain back-up and follow-on compounds thereof, for use in the Previously Licensed Field (as defined herein) in certain countries and territories outside the U.S.

Abbott and Reata now desire to collaborate to establish a broad, worldwide, strategic collaboration for the joint research, development and, if successful, regulatory approval and commercialization of Targeted AIMs in fields of use other than in the Previously Licensed Field, under terms and conditions set forth herein.

Abbott and Reata intend that their collaboration hereunder will utilize Abbott’s position as a large, multi-national pharmaceutical company and Reata’s experience and expertise in discovery and development of Targeted AIMs while taking into account the Parties’ respective current and future aspirations, including Reata’s strategic goal to further develop its global clinical development and commercial capabilities.

N OW T HEREFORE , in consideration of the foregoing premises and the mutual promises and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

10

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

ARTICLE 1

DEFINITIONS

1.1 “ Abbott Excluded AIM ” means any Targeted AIM (a) that is acquired (or rights to which are acquired) by Abbott or any of its Affiliates from a Third Party after the Effective Date and that has not been clinically developed or commercialized in the New Collaboration Field as of the time of such acquisition or (b) that is owned by an Acquiring Affiliate or Acquired Affiliate of Abbott, or to which an Acquiring Affiliate or Acquired Affiliate of Abbott otherwise has rights, as of the time such Affiliate became an Affiliate of Abbott and that has not been clinically developed or commercialized in the New Collaboration Field as of the time such Affiliate became an Affiliate of Abbott.

1.2 “ Abbott Know-How ” means all Information (including Regulatory Data) Controlled by Abbott or any of its Affiliates as of the Effective Date or at any time during the Term that is not generally known and is reasonably necessary or useful for the Development, Manufacture, or Commercialization of a Product in the New Collaboration Field, but excluding any Information to the extent covered or claimed by or comprising published Abbott Patents or Joint Patents, or any Joint Know-How.

1.3 “ Abbott Patents ” means all of the Patents Controlled by Abbott or any of its Affiliates as of the Effective Date or at any time during the Term that are reasonably necessary or useful (or, with respect to patent applications, would be reasonably necessary or useful if such patent applications were to issue as patents) for the Development, Manufacture or Commercialization of a Product in the New Collaboration Field, but excluding any Joint Patents.

1.4 “ Acquired Affiliate ” means, with respect to a Party, a Person (a) with respect to which such Party acquires control (as defined in Section 1.8) after the Effective Date and (b) that was a Third Party at the time of such acquisition.

1.5 “ Acquired AIM ” means any Targeted AIM that comes into the Control of (or is otherwise Controlled by) a Party or any of its Affiliates after the Effective Date and during the Exclusivity Period as a result of: (a) the in-license or acquisition of rights to such Targeted AIM from a Third Party by such Party or any of its Affiliates after the Effective Date and during the Exclusivity Period, including any Abbott Excluded AIM; or (b) any Person that owns or otherwise has rights to such Targeted AIM becoming an Affiliate of such Party after the Effective Date and during the Exclusivity Period for any reason, including pursuant to a Change of Control, including any Abbott Excluded AIM, but excluding (i) any Exempt AIM, and (ii) any Divested AIM.

1.6 “ Acquiring Affiliate ” means, with respect to a Party, a Person that (a) acquires control (as defined in Section 1.8) of such Party after the Effective Date and (b) was a Third Party at the time of such acquisition.

11

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.7 “ Active Indication ” means an Indication in the New Collaboration Field, with respect to which, at the time of determination, either Party or both Parties are conducting Development or Commercialization activities under this Agreement (including Unilateral Development or unilateral Commercialization of a Royalty Product).

1.8 “ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such first Person. For purposes of this definition, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” shall mean: (a) the possession, directly or indirectly, of the power to direct the management or policies of a business entity, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, or otherwise; or (b) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a business entity (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity). Neither of the Parties to this Agreement shall be deemed to be an “Affiliate” of the other solely as a result of their entering into this Agreement. ‘Affiliates’ of a Party include Persons that are Affiliates of such Party as of the Effective Date and Persons that become Affiliates of such Party after the Effective Date, including pursuant to a Change of Control.

1.9 “ Applicable Law ” means applicable laws, rules, and regulations, including any rules, regulations, guidelines, or other requirements of the Regulatory Authorities, that may be in effect from time to time.

1.10 “ Bayh-Dole Act ” shall mean the Patent and Trademark Law Amendments Act of 1980, as amended, codified at 35 U.S.C. §§ 200-212, as amended, as well as any regulations promulgated pursuant thereto, including in 37 C.F.R. Part 401.

1.11 “ Business Day ” means a day other than a Saturday or Sunday on which banking institutions in New York, New York are open for business.

1.12 “ Calendar Quarter ” means for each Calendar Year, each of the three (3) month periods ending March 31, June 30, September 30 and December 31; provided, however, that the first Calendar Quarter for the first Calendar Year shall extend from the Effective Date to the first of March 31, June 30, September 30 and December 31 to occur thereafter.

1.13 “ Calendar Year ” means (a) the period commencing on the Effective Date and ending on December 31 of the calendar year during which the Effective Date occurs, and (b) each successive period beginning on January 1 and ending twelve (12) consecutive calendar months later on December 31.

1.14 “ Cardiovascular Indication ” means the prevention, treatment, or amelioration of any cardiovascular disease or condition, including atherosclerosis, heart failure, myocardial infarction, acute coronary syndrome, myocarditis, angina, restenosis, aneurysms, vasculitis, complications of vascular surgery and heart surgery, thrombosis, phlebitis, peripheral vascular disease, and hypertension.

12

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.15 “ Clinical Data ” means all data with respect to Products or New Collaboration Compounds made, collected, or otherwise generated under or in connection with Clinical Studies or Phase IV Studies, including any data, reports, and results with respect thereto.

1.16 “ Clinical Studies ” means Phase I, Phase II, Phase III, and such other tests and studies in human subjects that are required by Applicable Law, or otherwise recommended by the Regulatory Authorities, to obtain or maintain Regulatory Approval for a Product or New Collaboration Compound for an Indication.

1.17 “ CMC Development ” means those Manufacturing activities and regulatory activities designed to support preparation of the Chemistry, Manufacturing and Controls sections of any Drug Approval Application, including manufacturing process development and scale-up, bulk production and fill/finish work associated with the supply of New Collaboration Compounds or Products for Non-Clinical Studies and Clinical Studies, and related quality assurance technical support activities, as well as validation and qualification of commercial manufacturing processes.

1.18 “ Combination Product ” shall mean a Product that is comprised of or contains any New Collaboration Compound as an active pharmaceutical ingredient together with one or more other active pharmaceutical ingredients and is sold either as a fixed dose or as separate doses in a single package.

1.19 “ Commercialization ” means any and all activities directed to the preparation for sale of, offering for sale of, or sale of a Product, including activities related to marketing, promoting, distributing, and importing such Product, conducting Medical Affairs Activities, conducting Phase IV Studies, and interacting with Regulatory Authorities regarding the foregoing. When used as a verb, “ to Commercialize ” and “ Commercializing ” shall mean to engage in Commercialization, and “ Commercialized ” has a corresponding meaning.

1.20 “ Commercialization Costs ” means, with respect to a Joint Product for a Profit Share Region for any period, (i) the direct out-of-pocket costs paid to Third Parties recorded as an expense in accordance with GAAP and (ii) internal costs for field-based medical liaisons, in each case ((i) and (ii)) that are incurred by or on behalf of a Party or any of its Affiliates after the Effective Date and during the Term and that are specifically identifiable or reasonably allocable to the Commercialization of such Joint Product hereunder in the applicable Profit Share Region for such period. Except in the case of Commercialization Costs incurred in accordance with clauses (a), (e), (n), (o), and (p) below, Commercialization Costs shall be limited to Commercialization activities that are consistent with the applicable Commercialization Plan; provided, however, that such costs shall be included in “Commercialization Costs” only to the extent less than or equal to the amounts set forth in the applicable Commercialization Plan for the applicable activity. Subject to the foregoing, Commercialization Costs shall include:

13

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(a) Manufacturing Costs attributable to the Manufacture of Product (including inventory and safety stock) for commercial sale or distribution (including Samples) in the Profit Share Region for such Joint Product and incurred in accordance with the applicable Manufacturing Plan (including inventories of Joint Product Manufactured in anticipation of launch but for which Regulatory Approval is not obtained);

(b) Sales and Marketing Costs;

(c) costs associated with Medical Affairs Activities;

(d) Distribution Costs;

(e) Third Party Payments, subject to Section 12.6;

(f) Trademark Costs;

(g) costs of patient assistance and indigent/expanded access programs;

(h) import duties and similar charges for such Joint Product sold in the Profit Share Region, to the extent not recovered as a Manufacturing Cost;

(i) costs of conducting advisory board meetings or other consultant programs, the purpose of which is to obtain advice and feedback related to Commercialization of such Product in the Profit Share Region;

(j) Regulatory Costs;

(k) costs of Phase IV Studies;

(l) Patent Costs;

(m) Technology Transfer costs incurred in accordance with Section 9.4;

(n) Losses incurred in connection with Third Party Claims described in Section 14.3 to the extent such Losses are to be included in Commercialization Costs in accordance with such Section;

(o) costs of recalls, market suspensions and market withdrawals of such Joint Product incurred as Commercialization Costs incurred in accordance with Section 6.4;

(p) Exit Costs; and

(q) any other cost designated as a Commercialization Cost in this Agreement.

14

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Commercialization Costs shall include the foregoing costs which are incurred after the Effective Date and prior to the First Commercial Sale of such Joint Product in the Profit Share Region (pre-launch costs). To the extent that any of the foregoing costs apply to both the Profit Share Region for a Joint Product and the Royalty Region for a Unilateral Product, such costs shall be reasonably allocated between the Profit Share Region and the Royalty Region by the applicable JMC based on the market size in the respective regions. Notwithstanding the foregoing, Commercialization Costs shall exclude: (i) costs directly relating to Sales Representatives and their direct managers and trainers, including salary, benefits, incentive compensation, and automobile allowances, and otherwise to the direct conduct of Details, in each case except to the extent included in PDE Costs; (ii) costs incurred solely with respect to Commercialization of a Unilateral Product in a Royalty Region; (iii) Development Costs; (iv) income tax liabilities of either Party; (v) corporate overhead costs of either Party, except and only to the extent reasonably and directly allocable to the applicable Joint Product in the applicable Profit Share Region, in accordance with GAAP; and (vi) Commercialization costs and regulatory costs incurred prior to the Effective Date.

1.21 “ Commercialization Territory ” means (a) as to the U.S./Europe/Japan Region, each of (i) the U.S.; (ii) Europe; and (iii) Japan; and (b) as to the ROW Region, each of (i) China, Korea, Taiwan, Philippines, Indonesia, Singapore, Malaysia, Thailand, and Vietnam collectively (the “ Asia Territory ”); (ii) South America, Central America (including Mexico), and the Caribbean islands (including Puerto Rico and the U.S. Virgin Islands) collectively (“ Latin America ”); and (iii) all other countries within the ROW Region collectively (the “ ROW Territory ”).

1.22 “ Commercially Reasonable Efforts ” means, with respect to the performance of Development, Commercialization, or Manufacturing activities with respect to a New Collaboration Compound or a Product by a Party, the carrying out of such activities using efforts and resources comparable to the efforts and resources that such Party would typically devote to products of similar market potential at a similar stage in development or product life, taking into account all scientific, commercial, and other factors that the Party would take into account, including issues of safety and efficacy, expected and actual cost and time to develop, expected and actual profitability (including royalties and other payments required hereunder), expected and actual competitiveness of alternative Third Party products (including generic products) in the marketplace, the nature and extent of expected and actual market exclusivity (including patent coverage and Regulatory Exclusivity), the expected likelihood of regulatory approval, the expected and actual reimbursability and pricing, and the expected and actual amounts of marketing and promotional expenditures required. “Commercially Reasonable Efforts” shall be determined on a country-by-country (or region-by-region, where applicable) and indication-by-indication basis, except that the Party may consider the impact of its efforts and resources expended with respect to any country (or region) on any other country (or region).

1.23 “ Committee ” means, individually and collectively, the Joint Executive Committee, the Joint Research and Development Incubator, the Joint Development Committee(s), the Joint Supply Committee, the Joint Marketing Committee(s), the Joint Patent Committee, or any other subcommittee established under Article 2, as applicable. The Existing JDC and the Existing JMC shall not be Committees hereunder.

15

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.24 “ Completion Notice ” means, with respect to any Development activities under a Unilateral Plan, a report (which is not required to be the final study report) delivered after the datalock for the applicable Clinical Study set forth in such Unilateral Plan that summarizes the Clinical Data and other Information resulting from or with respect to such Development activities as currently as practicable as of the date of delivery of such report.

1.25 “ Control ” means, with respect to any item of Information, Regulatory Documentation, material, Patent, or other intellectual property right, possession of the right, whether directly or indirectly, and whether by ownership, license or otherwise (other than by operation of the license and other grants in Section 10.1), to grant a license, sublicense or other right (including the right to reference Regulatory Documentation) to or under such Information, Regulatory Documentation, material, Patent, or other intellectual property right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party. “ Controls ” and “ Controlled ” have corresponding meanings.

1.26 “ Co-Promotion ” or “ Co-Promote ” means those Detailing activities undertaken with respect to a Co-Promotion Product conducted by or on behalf of either Party or its Affiliates in accordance with the applicable Co-Promotion Agreement and Commercialization Plan to encourage appropriate prescribing of such Co-Promotion Product.

1.27 “ Dartmouth ” shall mean Trustees of Dartmouth College.

1.28 “ Detail ” means that part of an in-person, face-to-face sales call during which a Sales Representative, who is trained and knowledgeable with respect to a pharmaceutical product, including its product label and insert and the use of the applicable Promotional Materials, makes a presentation of such product to a physician or other medical professional with prescribing authority such that the relevant characteristics of such product are described by the Sales Representative in accordance with Applicable Law and in a fair and balanced manner that is customary in the industry for the purpose of promoting the prescription pharmaceutical product. The following shall not constitute a “Detail” except as otherwise set forth herein: (a) any activities performed by medical information scientists, market development specialists, managed care account directors and other personnel who are not conducting face-to-face sales calls; (b) E-details; (c) presentations made at conventions or to any group of more than five (5) physicians or other medical professionals with prescribing authority; or (d) a mere delivery of Samples without discussion with a medical professional about the product. When used as a verb, “ Detail ” means to perform a Detail. Details shall be measured by each Party’s internal recording of such activity; provided that such measurement shall be on the same basis as the recording Party’s measurement for its Sales Representatives’ Detailing of such recording Party’s other products, consistently applied. If a Party has no other marketed products, it will establish a reasonable basis of internal recording of Details consistent with industry standards in the global pharmaceutical industry.

16

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.29 “ Development ” means all activities related to research, preclinical testing and other Non-Clinical Studies, test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, qualification and validation, quality assurance/quality control, other CMC Development, Clinical Studies, including Manufacturing in support thereof, development and identification of biomarkers, diagnostics and companion tools, statistical analysis and report writing, the preparation and submission of Drug Approval Applications, regulatory affairs with respect to the foregoing and all other activities reasonably necessary or useful or otherwise requested or required by a Regulatory Authority as a condition or in support of obtaining or maintaining a Regulatory Approval. When used as a verb, “ Develop ” shall mean to engage in Development. Development shall exclude Phase IV Studies.

1.30 “ Development Candidate ” means any Lead Compound selected for IND- enabling Non-Clinical Studies and potentially for Clinical Studies in one or more Indications or as otherwise designated by the JRDI, but which has not yet been designated as a Product Candidate. The Development Candidates selected as of the Effective Date are set forth in Schedule 1.30 .

1.31 “ Development Costs ” means, for any period, (i) the direct out-of-pocket costs paid to Third Parties recorded as an expense in accordance with GAAP; and (ii) with respect to a Development Plan, any internal costs expressly agreed by the Parties and set forth in such Development Plan to be included as a Development Cost, in each case ((i) and (ii)) incurred by or on behalf of a Party or any of its Affiliates after the Effective Date and during the Term and that are specifically identifiable or reasonably allocable to Development activities for such period. Except in the case of Development Costs incurred in accordance with clauses (g) and (h) below, Development Costs shall be limited to Development activities that are consistent with the applicable Development Plan; provided, however, that such costs shall be included in “Development Costs” only to the extent less than or equal to the amounts set forth in the applicable Development Plan for the applicable activity (subject to permitted overruns pursuant to Section 11.2(b)). Subject to the foregoing, Development Costs shall include such costs in connection with the following activities, as applicable:

(a) pre-clinical activities and Non-Clinical Studies such as toxicology and formulation development, test method development, stability testing, quality assurance, quality control development and statistical analysis;

(b) Clinical Studies for a Product, including (i) the preparation for and conduct of such Clinical Studies; (ii) data collection and analysis and report writing; and (iii) clinical laboratory work;

(c) Manufacturing Costs for (i) a Product for use in Clinical Studies or other Development activities for such Product; (ii) the manufacture, purchase or packaging of comparators or placebo for use in Clinical Studies for a Product (with the manufacturing costs for comparators or placebo to be determined in the same manner as Manufacturing Costs are determined for such Product) and (iii) costs and expenses of disposal of drugs and other supplies used in such Clinical Studies or other Development activities;

17

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(d) Technology Transfer costs incurred in accordance with Section 9.4;

(e) Patent Costs;

(f) Study Trademark Costs;

(g) Third Party Payments, subject to Section 12.6;

(h) Losses incurred in connection with Third Party Claims described in Section 14.3 to the extent such Losses are to be included in Development Costs in accordance with such Section;

(i) Regulatory Costs;

(j) Costs for CMC Development, the development of the Manufacturing process for a Product, scale-up, Manufacturing process validation, Manufacture of registration batches, Manufacturing improvements, and qualification and validation of Third Party contract manufacturers; and

(k) any other cost designated as a Development Cost in this Agreement.

Notwithstanding the foregoing, Development Costs shall exclude: (i) any Manufacturing Costs for commercial supply of any Product; (ii) income tax liabilities of either Party; and (iii) corporate overhead costs of either Party, except and only to the extent reasonably and directly allocable to the applicable Joint Product in the applicable Profit Share Region, or applicable Development Candidate under the Joint Exploratory Development Plan, in accordance with GAAP.

1.32 “ Development Plan ” means, individually and collectively, the Joint Exploratory Development Plan, any Unilateral Exploratory Development Plan or any Product Development Plan.

1.33 “ Development Region ” means each of: (a) the U.S., Europe and Japan collectively (the “ U.S./Europe/Japan Region ”) and (b) all other countries in the Territory collectively (the “ ROW Region ”).

1.34 “ Distribution Costs ” means those costs and expenses incurred by or on behalf of a Party or any of its Affiliates, after the Effective Date and during the Term and pursuant to this Agreement and that are directly and reasonably allocable to the distribution of a Product and consistent with industry standards for a company of the size of such Party, including: (a) handling and transportation to fulfill orders with respect to a Product; (b) customer services, including order entry, billing and adjustments, inquiry and credit and collection with respect

18

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

to a Product; (c) reasonable and customary fees and other amounts payable to distributors (to the extent not taken into account in determining Net Sales); and (d) costs of storage and distribution of Products, but in each case excluding such costs to the extent they are treated as a deduction in the definition of Net Sales. For clarity, Distribution Costs shall exclude (i) corporate overhead costs of either Party, except and only to the extent reasonably and directly allocable to the applicable Joint Product in the applicable Profit Share Region, in accordance with GAAP, or (ii) costs incurred by a Party in connection with the build-out of such Party’s facilities or equipment, unless and to the extent such facility or equipment is dedicated to the distribution of a Product or Products, but excluding any excess capacity of such facility.

1.35 “ Divested AIM ” means any Targeted AIM that (a) is owned by an Acquiring Affiliate or Acquired Affiliate of a Party, or to which an Acquiring Affiliate or Acquired Affiliate of a Party otherwise has rights, as of the time such Affiliate became an Affiliate of such Party, (b) any Governmental Authority requires or recommends be divested by such Affiliate as a condition to the consummation of the transaction pursuant to which such Affiliate became an Affiliate of such Party, and (c) is actually divested by such Affiliate in accordance with such requirement or recommendation of such Governmental Authority.

1.36 “ Dollars ” or “ $ ” shall mean United States Dollars.

1.37 “ Drug Approval Application ” means a New Drug Application (an “ NDA ”) as defined in the FFDCA and the regulations promulgated thereunder (including all additions, supplements, extensions, and modifications thereto), or any corresponding foreign application in the Territory, including, with respect to the European Union, a Marketing Authorization Application (a “ MAA ”) filed with the EMA pursuant to the centralized approval procedure or with the applicable Regulatory Authority of a country in Europe with respect to the mutual recognition or any other national approval procedure.

1.38 “ EMA ” means the European Medicines Agency and any successor agency thereto.

1.39 “ Europe ” means Albania, Andorra, Austria, Armenia, Azerbaijan, Belarus, Belgium, Bosnia & Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, U.K., Vatican City and Canada.

1.40 “ European Major Market Countries ” means, collectively, Germany, France, Italy, Spain and the United Kingdom.

1.41 “ Excusable Delay ” means, with respect to a Party’s assigned activities under a Development Plan, the delay of such activities as a result of: (a) the material non-performance or delay of the other Party of activities assigned to it under the same Development Plan or the Discovery Research Plan or any other Development Plan, which activities are reasonably

19

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

necessary to be performed by the other Party for the first Party to conduct such activities under such Development Plan; (b) the need to obtain or analyze data from any other Clinical Study with respect to the applicable Indication or New Collaboration Compound, which data is reasonably necessary for such Party to plan or conduct such activities under such Development Plan; or (c) matters outside of the reasonable control of the first Party ( e.g. , regulatory delay, or other delay caused by any Third Party outside of the reasonable control of the first Party).

1.42 “ Exempt AIM ” means, with respect to a Party, any Targeted AIM (a) that is owned by an Acquiring Affiliate of such Party, or to which an Acquiring Affiliate of such Party otherwise has rights, in each case as of the time such Acquiring Affiliate becomes an Acquiring Affiliate of such Party and (b) for which a Phase IIb or later Clinical Study has been commenced in the New Collaboration Field as of the time such Acquiring Affiliate becomes an Acquiring Affiliate of such Party.

1.43 “ Existing JDC ” means the JDC established under the Bardoxolone License Agreement.

1.44 “ Existing JMC ” means the JMC established under the Bardoxolone License Agreement.

1.45 “ Existing Lead Compounds ” means the Lead Compounds existing as of the Effective Date, as set forth in Schedule 1.45 .

1.46 “ Exit Costs ” means, with respect to a Joint Product, the reasonable and direct costs incurred by a Party and its Affiliates in connection with the significant reduction of Commercialization resources or Manufacturing resources of such Party and its Affiliates as a result of the cessation of, or a significant reduction in, Commercialization or Manufacturing activities with respect to such Joint Product for a Profit Share Region in accordance with the terms of this Agreement, including termination costs with respect to Sales Representatives; provided that (a) such Commercialization resources and Manufacturing resources were acquired or established by such Party or its Affiliates consistently with the applicable Commercialization Plan and Manufacturing Plan, respectively, and (b) such Party uses commercially reasonable efforts to minimize such costs.

1.47 “ Exploit ” means to make, have made, import, use, sell, or offer for sale, including to research, develop, commercialize, register, manufacture, have manufactured, hold, or keep (whether for disposal or otherwise), have used, export, transport, distribute, promote, market, or have sold or otherwise dispose of. “ Exploitation ” shall mean the act of Exploiting a product or process.

1.48 “ FDA ” means the United States Food and Drug Administration and any successor agency thereto.

1.49 “ FFDCA ” means the United States Federal Food, Drug, and Cosmetic Act, as amended from time to time.

20

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.50 “ First Commercial Sale ” means, with respect to a pharmaceutical product and a country, the first sale for monetary value for use or consumption by the end user of such product in such country after Regulatory Approval for such product has been obtained in such country. Sales prior to receipt of Regulatory Approval for such product, such as so-called “treatment IND sales,” “named patient sales,” and “compassionate use sales,” shall not be construed as a First Commercial Sale.

1.51 “ FirstGen Targeted AIM ” means any Targeted AIM: (a) that is Controlled by Reata or any of its Affiliates as of the Effective Date and that is derived from oleanolic acid or generated using oleanolic acid (or a metabolite of oleanolic acid) as a starting material, but excluding bardoxolone methyl; (b) that is Controlled by Abbott or any of its Affiliates as of the Effective Date and that is derived from oleanolic acid or generated using oleanolic acid (or a metabolite of oleanolic acid) as a starting material; (c) that is invented solely by or on behalf of either Party, or jointly by or on behalf of the Parties, during the Exclusivity Period but prior to the [***]th anniversary of the Effective Date and is derived from oleanolic acid or generated using oleanolic acid (or a metabolite of oleanolic acid) as a starting material; or (d) that is invented solely by or on behalf of either Party, or jointly by or on behalf of the Parties, during the Exclusivity Period but after the [***]th anniversary of the Effective Date, is derived from oleanolic acid or generated using oleanolic acid (or a metabolite of oleanolic acid) as a starting material, and the composition of matter of which is claimed by any claim included in any Reata Patent existing as of the [***]th anniversary of the Effective Date. If Abbott or its Affiliates invents (either solely or jointly with Reata or its Affiliates) any Targeted AIM that would otherwise constitute a FirstGen Targeted AIM under clause (c) or (d) above and Abbott believes in good faith that such newly invented Targeted AIM constitutes a significant improvement in physical or chemical properties or other characteristics as compared to then-existing FirstGen Targeted AIMs, then Abbott may request that Reata designate such newly-invented Targeted AIM as a NextGen Targeted AIM. Reata shall consider such request reasonably and in good faith and may designate such newly-invented Targeted AIM as a NextGen Targeted AIM in Reata’s reasonable discretion.

1.52 “ GAAP ” means United States generally accepted accounting principles consistently applied.

1.53 “ Generic Product ” means, with respect to a Product, any pharmaceutical product that: (a) is sold by a Third Party under a Drug Approval Application granted by a Regulatory Authority to such Third Party, which Third Party is not a licensee or sublicensee of one of the Parties or their Affiliates, or any of their licensees or sublicensees, and has not obtained such Product from a chain of distribution including one of the Parties, its Affiliates or any of their licensees or sublicensees, (b) contains the applicable New Collaboration Compound as an active pharmaceutical ingredient (or the same active moiety); and (c) is approved in reliance, in whole or in part, on the prior approval of such Product as determined by the applicable Regulatory Authority (pursuant to 21 U.S.C. 355(b)(2), an ANDA, a separate NDA, compendia listing, other drug approval application or otherwise, including foreign equivalents of the foregoing). A Product licensed or produced by one of the Parties ( i.e. , an authorized generic product) will not constitute a Generic Product.

21

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.54 “ GMPs ” means the then-current good manufacturing practices required by the FDA, as defined in 21 C.F.R. Parts 210 and 211 and the regulations promulgated thereunder, for the manufacture and testing of pharmaceutical materials, and comparable laws or regulations applicable to the manufacture and testing of pharmaceutical materials in jurisdictions outside the U.S., as they may be updated from time to time. GMPs shall include applicable quality guidelines promulgated under the International Conference on Harmonization.

1.55 “ Governmental Authority ” means any multi-national, federal, state, local, municipal or other government authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, court or other tribunal).

1.56 “ Humira-Related Product ” means any Product containing a Product Candidate that is designated to be Developed pursuant to Section 4.2(e)(ii) for an Indication for which Humira has received regulatory approval in any country within the U.S./EU/Japan Region at the time of such designation as a Product Candidate.

1.57 “ IND ” means an investigational new drug application filed with the FDA for authorization to commence Clinical Studies in the U.S. and an equivalent application filed with the applicable Regulatory Authority in other countries or regulatory jurisdictions.

1.58 “ Indication ” means any disease or condition that can be treated, prevented or cured or the progression of which can be delayed and for which a Product is specifically Developed in order to obtain Regulatory Approval for use of such Product pursuant to an approved label claim.

1.59 “ Information ” means all technical, scientific, and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and other material, including: biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre-clinical, clinical, safety, manufacturing and quality control data and information, including study designs and protocols; assays and biological methodology; (whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now known or hereafter developed.

1.60 “Indication Survey Study ” or “ISS” means a Clinical Study of a Development Candidate which is in general relatively short in duration and small in size conducted for a particular Indication and which is reasonably designed to provide initial evidence of efficacy. An Indication Survey Study is intended only to demonstrate the suitability of treating a particular Indication using Targeted AIMs in general or to provide initial evidence of the efficacy of treating a particular Indication with a specific Development Candidate, and is not required to be (but is not prohibited from being) a pivotal trial or dose-ranging study or to

22

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

otherwise provide data sufficient to support any Regulatory Filing or Regulatory Approvals for a Development Candidate or Product Candidate. In general, the Parties intend for a typical Indication Survey Study to be a Phase IIa Study involving no more than two hundred (200) patients with a treatment period of no more than twelve (12) months. The Parties acknowledge that an actual ISS may be designed to be a more robust Clinical Study than as described in this Section 1.60.

1.61 “ Initial Studies Period ” means the period commencing on the Effective Date and ending on the earlier of: (a) [***]; and (b) the date on which [***].

1.62 “ Joint Plan ” means, individually and collectively, each Joint Pre-Phase IIb Plan, each Joint Phase IIb Plan, and each Joint Phase III Plan.

1.63 “ Knowledge ” means the actual knowledge of the chief executive officer, the president, the executive vice-president, any vice president, including the vice president for research, the vice president for product development, the vice president for clinical development, and the vice president for intellectual property, the head of regulatory affairs, the senior patent counsel, the general counsel, or the chief medical officer of a Party, or any personnel holding positions equivalent to such job titles (but only to the extent such positions exist at such Party).

1.64 “ Lead Compound ” means any New Collaboration Compound that: (a) is identified on Schedule 1.45 ; or (b) is designated as a Lead Compound by the JRDI after the Effective Date, in each case that has not yet been designated as a Development Candidate.

1.65 “ Lead Development Party ” or “ LDP ” means, with respect to each particular stage of Development of a Development Candidate or Product Candidate in the applicable Development Region or Commercialization Territory, as the case may be, the Party designated as the lead Development Party therefor pursuant to Section 4.3(e), 4.4(d), 5.5(a)(vii), 5.5(b)(iii), 5.5(d)(iv), 5.6(a)(iv), 5.6(b)(ii), or 5.6(d)(iv).

1.66 “ Lead Regulatory Party ” or “ LRP ” means, with respect to each particular stage of Development of a Development Candidate or Product Candidate in the applicable Development Region or Commercialization Territory, as the case may be, the Party designated as the lead Regulatory Party therefor pursuant to Section 4.3(e), 4.4(d), 5.5(a)(vii), 5.5(b)(iii), 5.5(d)(iv), 5.6(a)(iv), 5.6(b)(ii), or 5.6(d)(iv).

1.67 “ LIBOR ” shall mean the London Interbank Offered Rate for deposits in United States Dollars having a maturity of one month published by the British Bankers’ Association, as adjusted from time to time on the first London business day of each month.

1.68 “ Manufacture ” and “ Manufacturing ” shall mean all activities related to the production, manufacture, processing, filling, finishing, packaging, labeling, shipping, and holding of New Collaboration Compounds (including Lead Compounds, Development Candidates and Product Candidates) and Products, or any intermediate thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial manufacture and analytic development, product characterization, stability testing, quality assurance, and quality control.

23

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.69 “ Manufacturing Costs ” means costs and expenses of Manufacturing a New Collaboration Compound or a Product which is either: (a) supplied to a Party by a Third Party; or (b) Manufactured directly by a Party or its Affiliate, in each case to the extent such costs are directly and reasonably allocable to the Development or Commercialization of such New Collaboration Compound or Product in the Territory, as further described below and in accordance with GAAP. Manufacturing Costs shall be (i) included in Commercialization Costs as (A) Product is sold, (B) Product is distributed as Samples or (C) incurred or accrued by the Manufacturing Party in connection with write-offs of inventory, or (ii) Development Costs as such costs are incurred, as the case may be. In the event that a Party performs any of its Manufacturing and supply obligations through one or more Affiliates, any inter-company amounts or fees paid for any such services or Product or any intermediate used therein by such Party shall not be included in calculating Manufacturing Costs and only those costs directly incurred by such Affiliate shall be so included. To the extent that any Manufacturing Costs apply to both the Profit Share Region for a Joint Product and the Royalty Region for a Unilateral Product, such costs shall be reasonably allocated between the Profit Share Region and the Royalty Region by the JSC based on the market size in the respective regions.

For costs in subsection (a), Manufacturing Costs means: (i) the amount paid to such a Third Party (excluding any Third Party Payments); plus (ii) the relevant Manufacturing Party’s reasonable out-of-pocket costs to Third Parties, incurred or accrued (including any prepayments) by the Manufacturing Party in connection therewith, including costs associated with inventory write-offs, variances, Manufacturing process improvements, storage, freight, Manufacturing scale-up, Manufacturing site qualification, materials, quality assurance and quality control (including testing), supply chain management, capital equipment depreciation charges, similar activities comprising the Manufacturing Party’s oversight of the Manufacturing process of the Third Party, and any unrecoverable value-added tax or similar tax due for amounts paid to such Third Party.

For costs in subsection (b), Manufacturing Costs shall be calculated in accordance with Schedule 1.69 .

Manufacturing Costs shall include costs of such activities that are undertaken at any time during the Term of this Agreement (including Manufacturing activities relating to the Commercialization of a Product that are undertaken prior to the initial Regulatory Approval of such Product).

1.70 “ MAA ” has the meaning set forth in the definition of “Drug Approval Application.”

24

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.71 “ Material Adverse Effect ” means a material adverse effect on (a) the development, manufacturing or commercialization of bardoxolone methyl under the Bardoxolone License Agreement or (b) the Development, Manufacturing or Commercialization of a then-existing Joint Product or Unilateral Product under this Agreement; provided that loss of sales, loss of profit, loss of market share, reduced pricing or any other competitive effect on an existing Joint Product or Unilateral Product as a result of such activity shall not in and of itself constitute a material adverse effect on the Development, Manufacturing or Commercialization of such existing Joint Product or Unilateral Product.

1.72 “ Material Amendment ” means any amendment to a Joint Plan or any work plan or protocol under the Joint Exploratory Development Plan that (a) adds, deletes, discontinues (except for discontinuance for a reason set forth below in clause (f)) or materially changes a Clinical Study under such Joint Plan or the Joint Exploratory Development Plan or any other material Development activity under such Joint Plan or the Joint Exploratory Development Plan; (b) materially alters the nature or scope of a Party’s obligations under such Joint Plan or the Joint Exploratory Development Plan; (c) changes the budget in such Joint Plan or the Joint Exploratory Development Plan by more than [***] percent ([***]%) as compared to the budget last agreed on by the Parties mutually; (d) materially changes any timeline for performing any Clinical Study under such Joint Plan or the Joint Exploratory Development Plan or any other material Development activity under such Joint Plan or the Joint Exploratory Development Plan as compared to the timeline last agreed on by the Parties mutually; (e) could reasonably be expected to have a Material Adverse Effect; or (f) could reasonably be expected to present a Safety Risk.

1.73 “ Medical Affairs Activities ” means the coordination of medical information requests and field-based medical liaisons with respect to Products that have been commercially launched in the applicable country.

1.74 “ Metabolic Indication ” means the prevention, treatment, or amelioration of any of the following metabolic diseases or conditions: type II diabetes, insulin resistance, complications of diabetes (including retinopathy, neuropathy, and ulcers), obesity, metabolic syndrome, hypercholesterolemia, and hyperlipidemia.

1.75 “ Net Sales ” means, with respect to a Product for any period in any country in the Territory, the total amount billed or invoiced on sales of such Product during such period by a Party or its Affiliates, or sublicensees (but in the case of sublicensees, only with respect to sales of Unilateral Products in a country in the applicable Royalty Region(s)) in such country in the Territory to Third Parties (including wholesalers or distributors) in bona fide arm’s length transactions, less the following deductions, in each case to the extent such deductions relate specifically to such Product in such country and are actually allowed and taken by such Third Parties and are not otherwise recovered by or reimbursed to the selling Party, its Affiliates, or sublicensees:

(a) trade, cash and quantity discounts;

25

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(b) price reductions or rebates, retroactive or otherwise, imposed by, negotiated with or otherwise paid to Governmental Authorities;

(c) taxes on sales (such as sales, value added, or use taxes) to the extent added to the sale price and set forth separately as such in the total amount invoiced;

(d) freight, insurance, and other transportation charges to the extent added to the sale price and set forth separately as such in the total amount invoiced, as well as any fees for services provided by wholesalers and warehousing chains related to the distribution of such Product;

(e) amounts repaid or credited by reason of rejections, defects, one percent (1%) return goods allowance, recalls or returns, or because of retroactive price reductions, including rebates or wholesaler charge backs;

(f) that portion of the annual fee on prescription drug manufacturers imposed by the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 (as amended) and reasonably allocable to sales of the Product;

(g) the portion of administrative fees (which fees shall be consistent with the requirements set forth in 42 C.F.R. 1001.952(j) or any successor regulation) paid during the relevant time period to group purchasing organizations, pharmaceutical benefit managers relating specifically to such Product;

(h) any consideration actually paid or payable for any Delivery System related to a billed or invoiced sale of such Product, where for purposes of this Net Sales definition, a “Delivery System” shall mean any delivery system comprising equipment, instrumentation, one or more devices, or other components designed to assist in the administration of such Product. To the extent that the Delivery System and Product are sold as one product, the deduction from Net Sales shall be calculated using the methodology spelled out for a Combination Product involving either a Joint Product or a Unilateral Product as described below;

(i) any invoiced amounts from a prior period that are written off or reserved as not collectable by the Party, its Affiliates or its sublicensees, including bad debts; and

(j) any other similar and customary deductions that are consistent with GAAP.

Net Sales shall include the amount or fair market value of all other consideration received by the selling Party, its Affiliates, or sublicensees in respect of such Product, whether such consideration is in cash, payment in kind, exchange, or other form. Net Sales shall not include transfers or dispositions for charitable, promotional, pre-clinical, clinical, regulatory, or governmental purposes so long as such transfer or disposition is made at or below cost. Net Sales shall not include sales between or among the selling Party, its Affiliates, or sublicensees so long as such Affiliates or sublicensees are not end-users of such Product. Subject to the above, Net Sales shall be calculated in accordance with the standard internal policies and procedures of the selling Party, its Affiliates, or sublicensees, which must be in accordance with GAAP.

26

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Net Sales for a Joint Product in a Profit Share Region for a period shall include all Sublicense Revenues received by the Parties for such Joint Product in such Profit Share Region for such period.

In the event a Combination Product is a Joint Product sold in the Profit Share Region, unless otherwise agreed in writing by the Parties, Net Sales for such Combination Product shall be calculated in the same manner as all other Products (i.e., Net Sales shall include the entire invoiced amount of the Combination Product), and the incremental costs associated with such other active ingredient or delivery device shall be included as an element of Manufacturing Costs.

In the event a Combination Product is a Unilateral Product sold in the Royalty Region, the Net Sales for such Combination Product will be calculated as follows:

(i) If the selling Party, its Affiliate, or sublicensee separately sells in such country, (x) a Product containing as its sole active ingredient a New Collaboration Compound contained in such Combination Product (the “ Mono Product ”) and (y) products containing as their sole active ingredients the other active ingredients in such Combination Product, the Net Sales attributable to such Combination Product shall be calculated by multiplying actual Net Sales of such Combination Product by the fraction A/(A+B) where: A is the selling Party’s (or its Affiliate’s or sublicensee’s, as applicable) average Net Sales price during the period to which the Net Sales calculation applies for the Mono Product in such country and B is the selling Party’s (or its Affiliate’s or sublicensee’s, as applicable) average Net Sales price during the period to which the Net Sales calculation applies in such country, for products that contain as their sole active ingredients the other active ingredients in such Combination Product.

(ii) If the selling Party, its Affiliate, or sublicensee separately sells in such country the Mono Product but does not separately sell in such country products containing as their sole active ingredients the other active ingredients in such Combination Product, the Net Sales attributable to such Combination Product shall be calculated by multiplying the Net Sales of such Combination Product by the fraction A/C where: A is the selling Party’s (or its Affiliate’s or sublicensee’s, as applicable) average Net Sales price during the period to which the Net Sales calculation applies for the Mono Product in such country, and C is the selling Party’s (or its Affiliate’s or sublicensee’s, as applicable) average Net Sales price in such country during the period to which the Net Sales calculation applies for such Combination Product.

27

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(iii ) If the selling Party, its Affiliates, and sublicensees do not separately sell in such country the Mono Product but do separately sell products containing as their sole active ingredients the other active ingredients contained in such Combination Product, the Net Sales attributable to such Combination Product shall be calculated by multiplying the Net Sales of such Combination Product by the fraction (D-E)/D where: D is the average Net Sales price during the period to which the Net Sales calculation applies for such Combination Product in such country and E is the average Net Sales price during the period to which the Net Sales calculation applies for products that contain as their sole active ingredients the other active ingredients in such Combination Product.

(iv ) If the selling Party, its Affiliates, and sublicensees do not separately sell in such country both the Mono Product and the other active ingredient or ingredients in such Combination Product, the Net Sales attributable to such Combination Product shall be determined by the Parties in good faith based on the relative fair market value of such Mono Product and such other active ingredient or ingredients. If the Parties cannot agree on such relative value, the dispute shall be resolved pursuant to Section 17.6(d).

1.76 “ New Collaboration Compound ” means any Targeted AIM that:

(a ) is (i) a FirstGen Targeted AIM; (ii) Controlled by Reata or any of its Affiliates as of the Effective Date other than a FirstGen Targeted AIM and bardoxolone methyl, (iii) Controlled by Abbott or any of its Affiliates as of the Effective Date other than a FirstGen Targeted AIM; or (iv) Controlled by either Party or any of its Affiliates (or jointly by the Parties or any of their respective Affiliates) during the Exclusivity Period (including (A) any Acquired AIM and (B) any Targeted AIM discovered by or on behalf of either Party or any of its Affiliates or jointly by or on behalf of the Parties or any of their respective Affiliates during the Exclusivity Period), other than an Exempt AIM and a Divested AIM; and

(b) has not been removed from the pool of Targeted AIMs available for Development under this Agreement pursuant to Section 4.6. For clarity, none of bardoxolone methyl, any Exempt AIM and any Divested AIM shall constitute a New Collaboration Compound.

1.77 “ New Collaboration Compound Pool ” means all New Collaboration Compounds.

1.78 “ New Collaboration Field ” means all human and non-human diagnostic, prophylactic and therapeutic uses of the Products in all Indications other than an Indication included in the Previously Licensed Field.

1.79 “ NextGen Targeted AIM ” means any New Collaboration Compound that is not a FirstGen Targeted AIM.

1.80 “ Non-Clinical Studies ” means all non-human tests and studies of New Collaboration Compounds (including Lead Compounds, Development Candidates and Product Candidates) and Products.

28

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.81 “ Non-Participating Party ” means (a) with respect to any Unilateral Plan, the Party that does not conduct Development activities under such Unilateral Plan or (b) with respect to a Unilateral Product in the applicable Royalty Region, the Party that is not Developing or Commercializing such Unilateral Product in such Royalty Region.

1.82 “ Operating Profit (or Loss) ” means, with respect to a Joint Product for a given period of time, Net Sales of such Joint Product in the applicable Profit Share Region during such period, less the Commercialization Costs incurred in connection with the Commercialization of such Joint Product in or for such Profit Share Region during such period. Operating Profit (or Loss) shall be determined prior to application of any income taxes, and if such terms are used individually, “ Operating Profit ” shall mean a positive Operating Profit (or Loss), and “ Operating Loss ” shall mean a negative Operating Profit (or Loss).

1.83 “ Orange Book ” means the publication Approved Drug Products with Therapeutic Equivalence Evaluations that identifies drug products approved on the basis of safety and effectiveness by the FDA under the FFDCA.

1.84 “ Participating Party ” means (a) with respect to any Unilateral Plan, the Party conducting Development activities under such Unilateral Plan or (b) with respect to a Unilateral Product in the applicable Royalty Region, the Party that is Developing or Commercializing such Unilateral Product in such Royalty Region.

1.85 “ Patent Costs ” means the direct out of pocket costs (including the reasonable fees and expenses paid to outside counsel and other Third Parties, and filing and maintenance fees paid to Governmental Authorities) recorded as an expense by a Party or any of its Affiliates in accordance with GAAP after the Effective Date, during the Term of and pursuant to this Agreement, (i) in connection with the prosecution and maintenance of rights, including costs of patent interference, opposition, reissue, or re-examination proceedings and filing and registration fees with respect to the Reata Patents, Abbott Patents, or Joint Patents, and (ii) the costs of litigation (enforcement or defense) or other proceedings, under the Reata Patents, Abbott Patents and Joint Patents, in each case only to the extent related to a Joint Product in the applicable Profit Share Territory and not reimbursed by a Third Party.

1.86 “ Patents ” mean (i) all national, regional and international patents and patent applications, including provisional patent applications, (ii) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in- part, provisionals, converted provisionals and continued prosecution applications, (iii) any and all patents that have issued or in the future issue from the foregoing patent applications ((i) and (ii)), including utility models, petty patents and design patents and certificates of invention, (iv) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((i), (ii), and (iii)) and (v) any similar rights, including so-called pipeline protection or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any of such foregoing patent applications and patents.

29

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.87 “ PDE ” means, with respect to a Product, (i) a primary Detail equivalent where (A) a Detail during a sales call in which the Product receives greater emphasis than that given any other product during the sales call has a value of 1.0 primary Detail equivalents, and (B) a Detail during a sales call in which the Product receives emphasis that is less than the emphasis received by one (but no more than one) other product has a value of 0.5 primary Detail equivalents (it being agreed by the Parties that any Detail during a sales call in which the Product receives emphasis that is less than the emphasis received by more than one other product, and any Detail during a sales call in which more than two (2) other products are presented with the Product, has a value of 0.0 primary Detail equivalents) or (ii) for a country in which the tracking of Details in the manner set forth in the foregoing clause (i) is impractical, such method of tracking as the Parties may agree and consistent with the customary practice in such country.

1.88 “ PDE Costs ” means, with respect to a Party for any period for any Joint Product in a country in the applicable Profit Share Region, (a) the lesser of (i) the number of PDEs actually performed by such Party during such period for such Joint Product in such country and (ii) the number of PDEs required to be performed by such Party during such period for such Joint Product in such country in accordance with the applicable Commercialization Plan; multiplied by (b) the applicable PDE Rate for such country during such period.

1.89 “ PDE Rate ” means, with respect any country or region, the amount determined by the Parties at the first Commercial Summit that addresses Detailing in such country or region, increased or decreased on January 1 of each Calendar Year thereafter to correspond with the total percentage change in the inflation index for such country or region determined by the Parties at such Commercial Summit.

1.90 “ Person ” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government.

1.91 “ Phase I ” means a human clinical trial of a Product or a New Collaboration Compound, the principal purpose of which is a preliminary determination of safety in healthy individuals or patients or similar clinical study prescribed by the Regulatory Authorities, including the trials referred to in 21 C.F.R. §312.21(a), as amended.

1.92 “ Phase II ” means a human clinical trial of a Product or a New Collaboration Compound, the principal purpose of which is a determination of safety and efficacy in the target patient population or a similar clinical study prescribed by the Regulatory Authorities, from time to time, pursuant to Applicable Law or otherwise, including the trials referred to in 21 C.F.R. §312.21(b), as amended.

30

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.93 “ Phase IIa ” means a Phase II that utilizes the pharmacokinetic and pharmacodynamic information obtained from one or more previously conducted Phase I or other Phase IIa in order to confirm the optimal manner of use of the applicable Product or New Collaboration Compound (dose and dose regimes) and to better determine safety and efficacy.

1.94 “ Phase IIb ” means a Phase II designed to support and immediately precede the initiation of a Phase III without any further Phase II, on a sufficient number of patients that is designed to provide a preliminary determination of safety and efficacy of the applicable Product or New Collaboration Compound in the target patient population over a range of dose and dose regimes.

1.95 “ Phase III ” means a human clinical trial of a Product or New Collaboration Compound on a sufficient number of subjects that is designed to establish that a pharmaceutical product is safe and efficacious for its intended use and to determine warnings, precautions, and adverse reactions that are associated with such pharmaceutical product in the dosage range to be prescribed, which trial is intended to support marketing approval of such Product or New Collaboration Compound, including all tests and studies that are required by the FDA from time to time, pursuant to Applicable Law or otherwise.

1.96 “ Phase IV Study ” means a post-marketing human clinical study for a Product with respect to any Indication with respect to which Regulatory Approval has been received or for a use that is the subject of an investigator-initiated study program.

1.97 “ Possession Arrow Decision ” means a decision specified in Section 4.2(e)(ii)(3) or Section 5.5(a)(ii)(2)(B) which is to be resolved in accordance with Section 2.13.

1.98 “ Previously Licensed Compound ” means bardoxolone methyl or any Targeted AIM that is a Collaboration Compound or a Backup Compound under the Bardoxolone License Agreement. Any Targeted AIM that is returned to the New Collaboration Compound Pool pursuant to Section 4.6 shall thereafter no longer be a Previously Licensed Compound. As of the Effective Date, the only Previously Licensed Compound under the Bardoxolone License Agreement is bardoxolone methyl.

1.99 “ Previously Licensed Field ” means each of the Renal Indication, the Cardiovascular Indication, and the Metabolic Indication. The Previously Licensed Field does not include any Indication not included in the Renal Indication, the Cardiovascular Indication, or the Metabolic Indication, including the prevention, treatment, or amelioration of: (i) any forms of cancer; (ii) any forms of organ failure (other than renal failure or heart failure); (iii) respiratory disorders; (iv) allergies and autoimmune diseases (other than lupus nephritis); (v) neurological, psychiatric, or neuropsychiatric disorders (other than diabetic neuropathy); (vi) infectious diseases; (vii) skin diseases (other than diabetic ulcers); (viii) gastrointestinal disorders; (ix) bone or cartilage disorders; (x) musculoskeletal disorders; (xi) eye diseases (other than diabetic retinopathy); (xii) human immunodeficiency virus-associated complications; and (xiii) sepsis.

31

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.100 “ Product ” means any product containing a New Collaboration Compound, in oral forms and all other forms, formulations and delivery modes, including Combination Products, but excluding any combination of a New Collaboration Compound and a Previously Licensed Compound or any compound, composition or product owned or controlled by a Party or any of its Affiliates that is not a New Collaboration Compound.

1.101 “ Product Candidate ” means any Development Candidate selected for further Development in an Indication with the goal of supporting Regulatory Approval for such Development Candidate in such Indication.

1.102 “Product Development Plan” means, with respect to a given Product Candidate, any Pre-Phase IIb Plan, Phase IIb Plan, Phase III Plan, or Additional Indication Plan (whether unilateral or joint).

1.103 “ Product Labeling ” means, with respect to a Product in a country in the Territory, (i) the Regulatory Authority-approved full prescribing information for such Product for such country, including any required patient information and (ii) all labels and other written, printed or graphic matter upon a container, wrapper or any package insert utilized with or for such Product in such country.

1.104 “ Product Trademarks ” means the Trademark(s) to be used in connection with the Commercialization of Products in the Territory and any registrations thereof or any pending applications relating thereto (excluding, in any event, any trademarks, service marks, names or logos that include any corporate name or logo of the Parties or their Affiliates).

1.105 “ Promotional Materials ” means all Sales Representative training materials and all written, printed, graphic, electronic, audio or video matter, including journal advertisements, sales visual aids, leave behind items, formulary binders, reprints, direct mail, direct-to-consumer advertising, internet postings, internet sites, broadcast advertisements and sales reminder aides (for example, note pads, pens and other such items) intended for use or used by either Party or its Affiliates or sublicensees in connection with any promotion of a Product.

1.106 “ Protected Period ” means the period commencing upon the Effective Date and ending on [***].

1.107 “ Reata Know-How ” means all Information (including Regulatory Data) Controlled by Reata or any of its Affiliates as of the Effective Date or at any time during the Term that is not generally known and is reasonably necessary or useful for the Development, Manufacture, or Commercialization of a Product in the New Collaboration Field, but excluding any Information to the extent covered or claimed by or comprising published Reata Patents or Joint Patents or any Joint Know-How.

32

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.108 “ Reata Patents ” means all of the Patents Controlled by Reata or any of its Affiliates as of the Effective Date or at any time during the Term that are reasonably necessary or useful (or, with respect to patent applications, would be reasonably necessary or useful if such patent applications were to issue as patents) for the Development, Manufacture or Commercialization of a Product in the New Collaboration Field, but excluding: (a) any Joint Patents; (b) subject to Section 12.6(b), the Patents licensed by UT and Dartmouth to Reata under the UT 2006 Agreement; and (c) subject to Section 12.6(b), the Patents licensed by UT and Dartmouth to Reata under the UT 2004 Agreement.

1.109 “ Regulatory Approval ” means, with respect to a Product in a country in the Territory, any and all approvals (including Drug Approval Applications), licenses, registrations, or authorizations of any Regulatory Authority necessary to commercially distribute, sell, or market such Product in such country, including, where applicable, (i) pricing or reimbursement approval in such country, (ii) pre- and post-approval marketing authorizations (including any prerequisite Manufacturing approval or authorization related thereto), and (iii) labeling approval.

1.110 “ Regulatory Authority ” means any applicable supra-national, federal, national, regional, state, provincial, or local regulatory agencies, departments, bureaus, commissions, councils, or other government entities regulating or otherwise exercising authority with respect to the Exploitation of New Collaboration Compounds or Products in the Territory.

1.111 “ Regulatory Costs ” means the direct out-of-pocket costs paid to Third Parties recorded as an expense in accordance with GAAP, in each case incurred by or on behalf of a Party or any of its Affiliates after the Effective Date and during the Term in accordance with the applicable Development Plan, or Commercialization Plan, as applicable, that are specifically identifiable or reasonably allocable to costs and expenses incurred to prepare Regulatory Documentation to obtain or maintain Regulatory Approval and to comply with post-Regulatory Approval requirements of a Regulatory Authority, including FDA user and other fees, reporting and regulatory affairs activities.

1.112 “ Regulatory Data ” means non-clinical data, Clinical Data, results and analyses with respect to any Development activities conducted by or on behalf of a Party or any of its Affiliates that are Controlled by such Party or any of its Affiliates, including any such data, results and analyses Controlled by such Party or any of its Affiliates and resulting from or relating to Unilateral Discovery or Unilateral Development.

1.113 “ Regulatory Documentation ” means all: (a) applications (including all INDs and Drug Approval Applications), registrations, licenses, authorizations, and approvals (including Regulatory Approvals); and (b) correspondence and reports submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents with respect thereto, including all regulatory drug lists, advertising and promotion documents, adverse event files, and complaint files, in each case ((a) and (b)) relating to a New Collaboration Compound or Product.

33

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.114 “ Regulatory Exclusivity ” means, with respect to any country of the Territory, an additional market protection, other than Patent protection, granted by a Regulatory Authority in such country which confers an exclusive Commercialization period during which a Party or its Affiliates or sublicensees have the exclusive right to market, price, and sell a Product in such country through a regulatory exclusivity right, such as new chemical entity exclusivity, new use or indication exclusivity, new formulation exclusivity, orphan drug exclusivity, pediatric exclusivity, or any applicable data exclusivity.

1.115 “ Related Indications ” means, (a) with respect to each Initial Indication as of the Effective Date, those Indications identified as Related Indications with respect thereto in the Joint Exploratory Development Plan, as the same may be amended from time to time by the JEC, and (b) with respect to any other Indication, those other Indications that are determined to be related to such Indication by the JEC pursuant to Section 4.2(e)(ii).

1.116 “ Renal Indication ” means the prevention, treatment, or amelioration of any renal disease or condition, including renal insufficiency, chronic kidney disease, acute kidney failure, ischemia-reperfusion injury of the kidney, glomerulonephritis, and all other forms of nephritis (whether acute or chronic).

1.117 “ Research Term ” means the period of time that commences upon the Effective Date and ends on [***], as may be extended by mutual agreement of the Parties pursuant to Section 3.2.

1.118 “ Royalty Term ” means, with respect to each Unilateral Product and each country in the applicable Royalty Region, the period beginning on the date of the First Commercial Sale of such Unilateral Product in such country, and ending on the latest to occur of (i) the expiration of the last-to-expire Abbott Patent, Reata Patent or Joint Patent that includes a Valid Claim that covers such Unilateral Product in such country; (ii) the expiration of Regulatory Exclusivity in such country for such Unilateral Product; and (iii) the fifteenth (15 th ) anniversary of the First Commercial Sale of such Unilateral Product in such country, provided that, in the event a Generic Product is sold in such country, the Royalty Term shall end on the later of: (A) the last day of the first Calendar Quarter in which unit sales of all Generic Products in such country exceed fifty percent (50%) of the sum of unit sales of such Unilateral Product and all Generic Products in such country during such Calendar Quarter; and (B) the fifteenth (15 th ) anniversary of the First Commercial Sale of such Unilateral Product in such country.

1.119 “ Safety Risk ” means, with respect to a Clinical Study of a Product, Product Candidate or Development Candidate anywhere in the Territory, a substantial and unwarranted safety risk (in light of the perceived benefit to be conferred by such Product, Product Candidate or Development Candidate) associated with the design of or possible results of such Clinical Study, based on the administration of such Product, Product Candidate or Development Candidate in a new dosage, dosage form or in a patient population not previously studied in a Clinical Study performed with respect to such Product, Product Candidate or Development Candidate by a Party under a Development Plan.

34

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.120 “ Sales and Marketing Costs ” means, with respect to a Joint Product in the applicable Profit Share Territory for any period, the direct out-of-pocket costs paid to Third Parties recorded as an expense in accordance with GAAP that are incurred by or on behalf of a Party or any of its Affiliates after the Effective Date and during the Term and that are specifically identifiable or reasonably allocable to the marketing and promotion of such Joint Product in the applicable Profit Share Territory for such period. Subject to the foregoing, Sales and Marketing Costs shall include costs incurred in connection with the following activities (but in each case only to the extent specifically identifiable or reasonably allocable to the marketing and promotion of such Joint Product in the applicable Profit Share Territory):

(a) activities directed to the advertising and marketing of such Joint Product, in the applicable countries in the Territory;

(b) launch meetings;

(c) advertising and public relations agencies, including development and distribution of Promotional Materials, field literature, direct-to-consumer advertising campaigns, media/journal advertising, exhibiting at seminars and conventions, convention costs, and promotional premiums;

(d) peer-to-peer activities such as lunch and dinner meetings;

(e) speakers programs, including training of such speakers;

(f) developing, obtaining, and providing training packages for such Joint Product;

(g) PDE Costs;

(h) developing and performing market research;

(i) developing reimbursement programs;

(j) developing information and data specifically intended for national accounts, managed care organizations, governmental agencies (e.g., federal, state and local), and other group purchasing organizations, including pull-through activities;

(k) establishing and conducting one or more training facilities for potential users of such Joint Product, including trainer costs, facility costs, supplies and user costs; and

35

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(l) call center set-up, maintenance and operation for personnel used in connection therewith.

Sales and Marketing Costs shall exclude costs directly relating to Sales Representatives and their direct managers and trainers, including salary, benefits, incentive compensation, and automobile allowances, and otherwise to the direct conduct of Details, in each case except to the extent included in PDE Costs.

1.121 “ Sales Representative ” means a pharmaceutical sales representative employed or contracted (as permitted by the terms of this Agreement) by either Party to conduct Details with respect to the Products in accordance with the terms of this Agreement.

1.122 “ Samples ” means Product packaged and distributed as a complimentary trial for use by patients and free goods provided for this purpose through coupons or other mechanisms.

1.123 “ Senior Officer ” means, with respect to Reata, its Chief Executive Officer, and with respect to Abbott, its Executive Vice President, Pharmaceutical Products Group.

1.124 “ Study Trademark” means the Trademark(s), if any, to be used to name any Clinical Study for a New Collaboration Candidate or Product and any registrations thereof or any pending applications relating thereto (excluding, in any event, any trademarks, service marks, names or logos that include any corporate name or logo of the Parties or their Affiliates).

1.125 “ Study Trademark Costs ” means the direct out-of-pocket costs (including the reasonable fees and expenses paid to outside counsel and other Third Parties, and filing and maintenance fees paid to Governmental Authorities) recorded as an expense by a Party or any of its Affiliates in accordance with GAAP after the Effective Date, during the Term of and pursuant to this Agreement that are specifically identifiable or reasonably allocable to the Study Trademarks, including (a) expenses incurred in clearance, filing, registration and maintenance; and (b) expenses incurred in connection with any proceedings related to a Study Trademark, including actions to enforce or defend against challenges or objections to the use or registration of such Study Trademark.

1.126 “ Targeted AIM ” means any small molecule that activates the Nrf1 or the Nrf2/Keap 1 pathways as its primary mechanism of action.

1.127 “ Territory ” means all countries and territories of the world.

1.128 “ Third Party ” means any entity other than Reata or Abbott or an Affiliate of either of them.

36

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.129 “ Third Party License ” means (a) a license agreement entered into, or to be entered into, by and between a Party or its Affiliate or sublicensee, on the one hand, and a Third Party on the other hand, after the Effective Date to license intellectual property of the Third Party that is reasonably necessary or useful for the Development, Manufacture or Commercialization of any New Collaboration Compound or Product or (b) a license agreement between an Affiliate of a Party that becomes an Affiliate of such Party after the Effective Date, on the one hand, and a Third Party on the other hand, entered into prior to the date that such Affiliate becomes an Affiliate of such Party, to license intellectual property of the Third Party that is reasonably necessary or useful for the Development, Manufacture or Commercialization of any New Collaboration Compound or Product, except in each case ((a) and (b)) for Other Third Party License Agreements.

1.130 “ Third Party Payment ” means any payment (including upfront payments, milestones and royalties) to any Third Party in respect of any Third Party License that is reasonably allocable to the Development, Manufacture or Commercialization of any New Collaboration Compound or Product.

1.131 “ Trademark ” shall include any word, name, symbol, color, designation or device or any combination thereof that functions as a source identifier, including any trademark, trade dress, service mark, trade name, logo, design mark or domain name, whether or not registered.

1.132 “ Trademark Costs ” means the direct out-of-pocket costs (including the reasonable fees and expenses paid to outside counsel and other Third Parties, and filing and maintenance fees paid to Governmental Authorities) recorded as an expense by a Party or any of its Affiliates in accordance with GAAP after the Effective Date, during the Term of and pursuant to this Agreement that are specifically identifiable or reasonably allocable to the Product Trademarks, including (a) expenses incurred in clearance, filing, registration and maintenance; and (b) expenses incurred in connection with any proceedings related to a Product Trademark, including actions to enforce or defend against challenges or objections to the use or registration of such Product Trademark.

1.133 “ Unilateral Acquired AIM ” means, with respect to a Party, (a) any Acquired AIM Controlled by such Party or any of its Affiliates for which a Phase IIb or later Clinical Study had been commenced in the New Collaboration Field as of the time such Acquired AIM came into the Control of such Party or its Affiliate and (b) any Acquired AIM Controlled by an Acquired Affiliate of such Party as of the time such Acquired Affiliate became an Acquired Affiliate of such Party for which a Phase IIb or later Clinical Study had been commenced in the New Collaboration Field as of the time such Acquired Affiliate became an Acquired Affiliate of such Party.

1.134 “ Unilateral Development ” means Development activities conducted by or on behalf of a Party or any of its Affiliates under a Unilateral Plan.

1.135 “ Unilateral Material Amendment ” means, with respect to a Unilateral Plan, an amendment to such plan proposed by the applicable Participating Party that proposes to conduct any Development activity that: (a) materially alters the Indication to which the plan is then targeted; (b) could reasonably be expected to have a Material Adverse Effect; and (c) could reasonably be expected to present a Safety Risk.

37

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

1.136 “ Unilateral Plan ” means, individually and collectively, each Unilateral Exploratory Development Plan, each Unilateral Pre-Phase IIb Plan, each Unilateral Phase IIb Plan, each Unilateral Phase III Plan and each Additional Indication Plan.

1.137 “ U.S. ” means the United States of America, including all possessions and territories thereof except Puerto Rico and the U.S. Virgin Islands.

1.138 “ UT ” shall mean the Board of Regents of The University of Texas System and The University of Texas M.D. Anderson Cancer Center.

1.139 “ UT 2004 Agreement ” shall mean that certain Exclusive Patent License Agreement among UT, Dartmouth, and Reata Discovery, Inc. dated July 15, 2004, a redacted copy of which has been provided to Abbott, as may be amended, supplemented, or restated from time to time.

1.140 “ UT 2006 Agreement ” shall mean that certain Patent and Technology License Agreement among UT, Dartmouth and Reata, dated February 7, 2006.

1.141 “ Valid Claim ” means a claim of any issued and unexpired patent whose validity, enforceability, or patentability has not been affected by any of the following: (i) irretrievable lapse, abandonment, revocation, dedication to the public, or disclaimer, or (ii) a holding, finding, or decision of invalidity, unenforceability, or non-patentability by a court, governmental agency, national or regional patent office, or other appropriate body that has competent jurisdiction, such holding, finding, or decision being final and unappealable or unappealed within the time allowed for appeal.

1.142 Terms Defined in the Agreement.

Term	Section Defined
Abbott	Preamble
Abbott CoC	17.8(b)
Abbott Parent	17.8(d)
Academic Research Agreements	13.2(g)
Additional Amount	11.6(b)
Additional Indication(s)	5.7

38

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Additional Indication Activities	5.7
Additional Indication Plan	5.7(a)(iii)(1)
Adjusted Required PDEs	7.7(c)(iii)
ADR	17.6(a)
Adverse Ruling	16.4(b)
Aggregate Payments	11.6(b)
Agreement	Preamble
AIM Acquiring Party	5.10
Alliance Manager	2.11
Alternative Indication	4.2(e)(ii)(1)
Anticipated Launch Date	7.4(b)
Arbitrator	11.10
Asia Territory	1.21
Bardoxolone License Agreement	Preamble
Breaching Party	16.4(a)
Change of Control	17.8(d)
Collaboration Patents	12.3(a)
Commercial Summit	7.2
Commercialization Plan	7.4(a)
Committed Sales Force	7.5(a)
Confidential Information	15.1
Contracting Third Party	10.2(c)
Co-Promotion Agreement	7.7(c)(i)

39

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Co-Promotion Product	7.7(a)
CREATE Act	12.1(e)
Current Products	5.10
Default Notice	16.4(a)
Discovery Research Activities	3.1(a)
Discovery Research Plan	3.1(a)
Dispute	17.6
Effective Date	Preamble
Effective Date AIMs	13.2(b)
Election Notice	5.10(a)
Entity	17.8(d)
EOP2 Meeting	5.5(c)(i)
EOP3 Election Notice	5.6(e)(i)
EOP3 Notification	5.6(e)(i)
EOP3 Opt-In	5.6(e)(i)
Exclusivity Period	10.6(a)
Existing Patents	13.2(a)
Existing Reata License	12.6(b)
Exploratory Development Activities	4.2
Exploratory Development Program	2.1(b)
Exploratory Non-Performing Party	4.3(d)
Exploratory Step-In Party	4.3(d)
FCPA	7.11

40

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Field Infringement	12.3(d)
Final Launch Readiness Meeting	7.5(c)
First Indication	4.2(e)(ii)(1)
Fixed Indications	4.3(b)
Flexible Indications	4.3(b)
Follow-On Product Candidate	5.8(a)
Humira-Related Indications	11.3(a)
Indemnification Claim Notice	14.4
Indemnified Party	14.4
Initial Indications	4.3(b)
Initial Launch Readiness Meeting	7.5(b)
Initial Product Candidate	5.8(a)
Initial Shortfall Party	7.5(b)
JDC	2.5(a)
JRDI	2.4(a)
JEC	2.3(a)
JEDP Budget Cap	4.3(f)(i)
JMC	2.7(a)
Joint Exploratory Development	4.3(a)
Joint Exploratory Development Indications	4.3(b)
Joint Exploratory Development Plan	4.3(a)
Joint Intellectual Property Rights	12.1(b)
Joint Know-How	12.1(b)

41

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Joint Patents	12.1(b)
Joint Phase IIb Development	5.5(b)(ii)
Joint Phase IIb Plan	5.5(b)(ii)
Joint Phase III Plan	5.5(d)(iii)
Joint Pre-Phase IIb Development	5.5(a)(iii)
Joint Pre-Phase IIb Plan	5.5(a)(iii)
Joint Product	5.5(d)(iii)
Joint Product Infringement	12.3(b)
JPC	2.8(a)
JSC	2.6(a)
Latin America	1.21
Launch Period	7.8(a)
Lead Commercialization Party or LCP	7.2
Lead Manufacturing Party or LMP	9.2(d)
Losses	14.1
MAA	1.37
Manufacturing Plan	9.2(a)
Manufacturing Process	9.4
Mono Product	1.75(i)
MSL Agreement	7.7(d)
NDA	1.37
New Company	17.8(d)
Non-Breaching Party                                                                                 42	16.4(a)

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Non-Participating Exploratory Party	4.4(c)
Non-Participating Phase IIb Party	5.6(b)(i)
Non-Participating Phase III Party	5.6(d)(i)
Non-Participating Pre-Phase IIb Party	5.6(a)(i)
Non-Performing Party	5.5(e)
Non-Proposing Party	5.7(a)(iii)
Opt-Out Notice	5.4(b)
Other Abbott Business	17.8(d)
Other Third Party License Agreements	12.6(c)
Overage Amount	5.5(g)
Overage Recoupment Amount	5.5(g)
Owned Patents	13.2(c)
Participating Exploratory Party	4.4(b)
Participating Phase IIb Party	5.6(b)(i)
Participating Phase III Party	5.6(d)(i)
Participating Pre-Phase IIb Party	5.6(a)(i)
Party or Parties	Preamble
Party Readiness Plan	7.5(a)
Payer Party	11.6(a)
Payer Party Withholding Tax Action	11.6(b)
Payment	11.6(a)
Phase IIb Development	5.5(b)(i)(1)
Phase IIb Plan	5.5(b)(i)(1)

43

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Phase III Opt-Out	5.5(d)(ii)
Phase III Plan	5.5(d)(i)
Post-Approval Cap	5.5(g)
Post-Approval Commitments	5.5(g)
Pre-Phase IIb Development	5.5(a)(ii)(1)
Pre-Phase IIb Election Notice	5.6(a)(vi)
Pre-Phase IIb Notification	5.6(a)(vi)
Pre-Phase IIb Opt-In	5.6(a)(vi)
Pre-Phase IIb Opt-In Payment	5.6(a)(vi)
Pre-Phase IIb Plan	5.5(a)(ii)(1)
Pre-Phase III Election Notice	5.6(c)(iv)
Pre-Phase III Notification	5.6(c)(iv)
Pre-Phase III Opt-In	5.6(c)(iv)
Pre-Phase III Opt-In Payment	5.6(c)(iv)
Principles	2.2(b)
Product Development Program	2.1(c)
Profit Share Region	5.5(d)(iii)
Projected Product Supply Volume	9.5
Proprietary Pharmaceutical Business	17.8(d)
Proposed Terms	17.6(d)(ii)
Proposing Party	5.7(a)(iii)
Prosecuting Party	12.3(d)
Purchase Price	5.10(d)

44

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Reata	Preamble
Reata CoC	17.8(a)
Reata Cost Cap	4.3(f)(ii)
Receiving Party	11.6(a)
Recoupment Amount	5.7(a)(iii)(3)
Replaced PDEs	7.5(b)
Required PDEs	7.8
Research Collaboration	3.1(a)
Research Results	3.4
ROW Territory	1.21
Royalty Region	5.6(d)(i)
Sales Force Shortfall	7.5(b)
Selecting Party	7.3(c)(i)
Shortfall Party	7.8
Shortfall Period	7.5(b)
Spin Off Transaction	17.8(d)
Statement Cut-Off Date	5.6(e)(i)
Step-In Party	5.5(e)
Sublicense Revenue	7.3(e)
Supplementing Party	7.5(b)
Support Memorandum	17.6(d)(ii)
Supporting Commercialization Party or SCP	7.2
Technology Transfer	9.4

45

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Term	16.1
Third Party Agreement	10.2(c)
Third Party Claims	14.1
Threshold Amount	11.6(c)
Unilateral Discovery	3.2
Unilateral Discovery Plan	3.2
Unilateral Exploratory Development	4.4(a)
Unilateral Exploratory Development Plan	4.4(b)
Unilateral Phase IIb Development	5.6(b)(i)
Unilateral Phase IIb Plan	5.6(b)(iii)
Unilateral Phase III Development	5.6(d)(i)
Unilateral Phase III Plan	5.6(d)(ii)
Unilateral Pre-Phase IIb Development	5.6(a)(i)
Unilateral Pre-Phase IIb Plan	5.6(a)(ii)
Unilateral Product	5.6(d)(i)
Unilateral Product Infringement	12.3(c)

ARTICLE 2

C OLLABORATION O VERVIEW ; G OVERNANCE

2.1 Overview of Collaboration. The Parties shall undertake a collaboration under this Agreement consisting, in general, of the following major components:

(a) a research collaboration, for the purpose, inter alia, of characterizing New Collaboration Compounds and designating Lead Compounds, under the direction of the Joint Research and Development Incubator, and in accordance with a research plan agreed upon by the Parties, as further set forth in Article 3;

46

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(b) an exploratory Development program (the “Exploratory Development Program” ) encompassing the following activities: (i) the characterization of Lead Compounds and designation of Lead Compounds as Development Candidates; (ii) the conduct of Phase I Clinical Studies with respect to such Development Candidates; (iii) the conduct of Indication Survey Studies in various Indications, including the Initial Indications (as described in Section 4.3(c)) with respect to such Development Candidates; and (iv) the evaluation of the results of Indication Survey Studies and such Development Candidates in order to determine which Development Candidates should be designated as Product Candidates for further Development in a selected Indication and, where successful, seeking and obtaining Regulatory Approval, as further set forth in Article 4;

(c) on a Product Candidate-by-Product Candidate basis, at the time of designation of a Development Candidate as a Product Candidate for its selected Indication, a later stage development program for each such Product Candidate (each, a “Product Development Program” ) which includes all Clinical Studies and Non-Clinical Studies for such Product Candidate with the goal of obtaining Regulatory Approval for Products containing such Product Candidate, in each case under the oversight of the applicable JDC and in accordance with Article 5 and the other terms of this Agreement; and

(d) for jointly-funded Products, shared Commercialization and profit sharing of such Products within a Profit Share Region under the oversight of the applicable JMC and the JEC, and pursuant to a Commercialization Plan, in accordance with Articles 7 and 11 and the other terms of this Agreement; and for unilaterally-funded Products, unilateral Commercialization of such Products in the Royalty Regions, with a royalty paid to the non- funding party, as set forth in Articles 8 and 11 and the other terms of this Agreement.

2.2 General Principles Governing the Collaboration.

(a) General Guidelines. The Parties intend for the following guidelines to apply generally to the Parties’ activities hereunder (but in the event of any conflict between a provision of this Agreement (including the Principles) and these guidelines, the specific provisions of this Agreement (including the Principles) shall control): (i) the Parties intend in the allocation of tasks and activities hereunder, to utilize the then-prevailing infrastructure, expertise and experience of each Party with respect to specific Development, Commercialization, Manufacturing and regulatory activities hereunder; (ii) the Parties intend that each Party be allowed through this Agreement and its activities assigned or undertaken hereunder, to build its infrastructure for Development and Commercialization activities if it reasonably elects; provided that the other Party is not required to share in the build-out costs of any such infrastructure; (iii) the Parties intend to avoid unnecessary duplication of resources while being mindful of the general guideline set forth in clause (ii); and (iv) the Parties intend to maximize the flow of information between the Parties relating to their activities hereunder.

(b) Decision-Making Principles. All decision-making hereunder shall be conducted in accordance with the following principles (collectively, the “ Principles ”): [***].

47

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

2.3 Joint Executive Committee.

(a) Formation; Composition. The Parties shall establish a Joint Executive Committee (the “ JEC ”). Each Party shall initially appoint up to three (3) representatives to the JEC, each of whom will have sufficient seniority within the applicable Party to make decisions arising within the scope of the JEC’s responsibilities. The Parties’ initial representatives to the JEC are set forth on Schedule 2.3 . The JEC may change its size from time to time by mutual consent of its members. The JEC may invite non-members (including consultants and advisors of a Party who are under an obligation of confidentiality consistent with this Agreement) to participate in the discussions and meetings of the JEC, provided that such participants shall have no voting authority at the JEC. The JEC shall have a chairperson, who shall serve for a term of one year, and who shall be selected alternately, on an annual basis, by Reata or Abbott. The initial chairperson shall be selected by Abbott. The role of the chairperson shall be to convene and preside at meetings of the JEC, to prepare and circulate agendas and to ensure the preparation of minutes, but the chairperson shall have no additional powers or rights beyond those held by the other JEC representatives. The JEC shall have a vice chairperson, who shall serve for a term of one year (and who then shall serve as chairperson), and who shall be selected alternately, on an annual basis, by Abbott or Reata. The initial vice chairperson shall be selected by Reata. The role of the vice chairperson shall be to consult with and assist the chairperson in the carrying out of the chairperson’s duties.

(b) Specific Responsibilities of the JEC. The JEC shall provide strategic guidance to and oversee both Parties’ activities under this Agreement and under the Bardoxolone License Agreement, facilitate communications between the Parties with respect to the Development, Manufacture, and Commercialization of Products in the New Collaboration Field in the Territory under this Agreement and in the Previously Licensed Field under the Bardoxolone License Agreement, and provide a forum for addressing disputes in each of the JRDI, JDCs, JSC, JPC and JMCs under this Agreement, as well as the Existing JDC and Existing JMC under the Bardoxolone License Agreement. In particular, the JEC shall:

[***].

2.4 Joint Research and Development Incubator .

(a) Formation; Composition. The Parties shall establish a Joint Research and Development Incubator (the “ JRDI ”). The initial representatives of the JRDI are set forth on Schedule 2.4 . Each Party initially shall have four (4) representatives to the JRDI, with each representative having knowledge and sufficient expertise in research and early stage development of products similar to the Products and having sufficient seniority within the applicable Party to make decisions arising with the scope of the JRDI’s responsibilities, including one (1) research and discovery leader, one (1) pre-clinical leader, one (1) clinical leader and one (1) regulatory leader from each Party who have multi-therapeutic responsibilities within such Party. The JRDI may change its size from time to time by mutual consent of its members, provided that the JRDI shall consist at all times of an equal number of representatives of each of Reata and Abbott. The JRDI may invite non-members (including consultants and advisors of a Party who are under an obligation of confidentiality consistent

48

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

with this Agreement) to participate in the discussions and meetings of the JRDI, provided that such participants are involved in activities related to the Research Collaboration and shall have no voting authority at the JRDI. The JRDI shall have a chairperson, who shall serve for a term of one year, and who shall be selected alternately, on an annual basis, by Reata or Abbott. The initial chairperson shall be selected by Reata. The role of the chairperson shall be to convene and preside at meetings of the JRDI, to prepare and circulate agendas and to ensure the preparation of minutes, but the chairperson shall have no additional powers or rights beyond those held by the other JRDI representatives. The JRDI shall have a vice chairperson, who shall serve for a term of one year (and who then shall serve as chairperson), and who shall be selected alternately, on an annual basis, by Abbott or Reata. The initial vice chairperson shall be selected by Abbott. The role of the vice chairperson shall be to consult with and assist the chairperson in the carrying out of the chairperson’s duties.

(b) Specific Responsibilities of the JRDI. The JRDI shall oversee the Research Collaboration and all Unilateral Discovery during the Exclusivity Period; oversee the Development of Lead Compounds under the Exploratory Development Program; designate Lead Compounds as Development Candidates; oversee further Development of Development Candidates until designation as Product Candidates (or abandonment) under the Exploratory Development Program; and coordinate the Development activities of the Parties under the Joint Exploratory Development Plan and Unilateral Exploratory Development Plan. In particular, the JRDI shall:

[***].

2.5 Joint Development Committees .

(a) Formation; Composition. Promptly following the designation of a Product Candidate for a particular Indication, the Parties shall establish a separate Joint Development Committee for such Product Candidate (each, a “ JDC ”). The Parties contemplate that there will be a separate JDC for each Product Candidate. Each Party shall initially appoint three (3) representatives to each JDC, with each representative having knowledge and expertise in the development of products similar to the applicable Product Candidate and having sufficient seniority within the applicable Party to make decisions arising with the scope of each JDC’s responsibilities, and at least one (1) of whom shall have expertise in regulatory affairs. Each JDC may change its size from time to time by mutual consent of its members, provided that each JDC shall consist at all times of an equal number of representatives of each of Reata and Abbott. Each JDC may invite non-members (including consultants and advisors of a Party who are under an obligation of confidentiality consistent with this Agreement) to participate in the discussions and meetings of such JDC, provided that such participants are involved in activities related to Product Candidates or Products and shall have no voting authority on such JDC. The Parties intend for one (1) representative of the applicable JMC from each Party to attend the regular JDC meetings. Each JDC shall have a chairperson, who shall serve for a term of one year, and who shall be selected alternately, on an annual basis, by Reata or Abbott. The initial chairperson for the JDC for the first Product Candidate shall be selected by Reata, and the initial chairperson for the JDC for the second

49

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Product Candidate shall be selected by Abbott, with the initial chairperson for each later Product Candidate to be selected by alternating Parties. The role of the chairperson shall be to convene and preside at meetings of the applicable JDC, to prepare and circulate agendas and to ensure the preparation of minutes, but the chairperson shall have no additional powers or rights beyond those held by the other JDC representatives. Each JDC shall have a vice chairperson, who shall serve for a term of one year (and who then shall serve as chairperson), and who shall be selected alternately, on an annual basis, by Abbott or Reata. The initial vice chairperson for the JDC for the first Product Candidate shall be selected by Abbott, and the initial chairperson for the JDC for the second Product Candidate shall be selected by Reata, with the initial chairperson for each later Product Candidate to be selected by alternating Parties. The role of the vice chairperson shall be to consult with and assist the chairperson in the carrying out of the chairperson’s duties.

(b) Specific Responsibilities of the JDC . Each JDC shall oversee Development of the applicable Product Candidate under the Product Development Program. In particular, such JDC shall:

[***].

2.6 Joint Supply Committee.

(a) Formation; Composition. Promptly following the first EOP2 Meeting for a Product Candidate, the Parties shall establish a Joint Supply Committee (the “ JSC ”). Each Party shall initially appoint three (3) representatives to the JSC, with each representative having knowledge and expertise in the manufacturing of products similar to the Products and having sufficient seniority within the applicable Party to make decisions arising with the scope of the JSC’s responsibilities. The JSC may change its size from time to time by mutual consent of its members, provided that the JSC shall consist at all times of an equal number of representatives of each of Reata and Abbott. The JSC may invite non-members (including consultants and advisors of a Party who are under an obligation of confidentiality consistent

.

50

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

with this Agreement) to participate in the discussions and meetings of the JSC, provided that such participants are involved in activities related to Product Candidates or Products and shall have no voting authority on the JSC. The JSC shall have a chairperson, who shall serve for a term of one year, and who shall be selected alternately, on an annual basis, by Reata or Abbott. The initial chairperson for the Joint Supply Committee shall be selected by Abbott. The role of the chairperson shall be to convene and preside at meetings of the JSC, to prepare and circulate agendas and to ensure the preparation of minutes, but the chairperson shall have no additional powers or rights beyond those held by the other JSC representatives. The JSC shall have a vice chairperson, who shall serve for a term of one year (and who then shall serve as chairperson), and who shall be selected alternately, on an annual basis, by Abbott or Reata. The initial vice chairperson for the Joint Supply Committee shall be selected by Reata. The role of the vice chairperson shall be to consult with and assist the chairperson in the carrying out of the chairperson’s duties.

(b) Specific Responsibilities of the Joint Supply Committee. The JSC shall oversee any late-stage CMC Development activities and the Manufacture of late-stage clinical and commercial supply of Product Candidates and Joint Products. In particular, the Joint Supply Committee shall:

[***].

2.7 Joint Marketing Committee .

(a) Formation; Composition. Promptly following the designation of a Product Candidate, the Parties shall establish a Joint Marketing Committee for such Product Candidate and Products containing such Product Candidate (each, a “ JMC ”). The Parties contemplate that there will be a separate JMC for each Product Candidate. Each Party shall initially appoint three (3) representatives to each JMC, with each representative having knowledge and expertise in the commercialization of products similar to the Products and having sufficient seniority within the applicable Party to make decisions arising with the scope of such JMC’s responsibilities. Each JMC may change its size from time to time by mutual consent of its members, provided that such JMC shall consist at all times of an equal number of representatives of each of Reata and Abbott. Each JMC may invite non-members (including consultants and advisors of a Party who are under an obligation of confidentiality consistent with this Agreement) to participate in the discussions and meetings of such JMC, provided that such participants are involved in activities related to Product Candidates or Products and shall have no voting authority on such JMC. Each JMC shall have a chairperson, who shall serve for a term of one year, and who shall be selected alternately, on an annual basis, by Reata or Abbott. The initial chairperson for the JMC for the first Product Candidate shall be selected by Abbott, and the initial chairperson for the JMC for the second Product Candidate shall be selected by Reata, with the initial chairperson for JMC for each later Product Candidate to be selected by alternating Parties. The role of the chairperson shall be to convene and preside at meetings of the applicable JMC, to prepare and circulate agendas and to ensure the preparation of minutes, but the chairperson shall have no additional powers or rights beyond those held by the other JMC representatives. Each JMC shall have a vice chairperson, who shall serve for a

51

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

term of one year (and who then shall serve as chairperson), and who shall be selected alternately, on an annual basis, by Abbott or Reata. The initial vice chairperson for the JMC for the first Product Candidate shall be selected by Reata, and the initial chairperson for the JMC for the second Product Candidate shall be selected by Abbott, with the initial chairperson for JMC for each later Product Candidate to be selected by alternating Parties. The role of the vice chairperson shall be to consult with and assist the chairperson in the carrying out of the chairperson’s duties.

(b) Specific Responsibilities of the Joint Marketing Committee. Each JMC shall oversee the Commercialization of Products containing the applicable Product Candidate in the Territory. In particular, the JMC shall:

[***].

2.8 Joint Patent Committee .

(a) Formation; Composition. The Parties shall establish a Joint Patent Committee (the “ JPC ”). Each Party shall initially appoint three (3) representatives to the JPC, with each representative having knowledge and expertise in intellectual property protection and strategy and having sufficient seniority within the applicable Party to make decisions arising within the scope of the JPC’s responsibilities. The JPC may change its size from time to time by mutual consent of its members, provided that the JPC shall consist at all times of an equal number of representatives of each of Reata and Abbott. The JPC may invite non-members (including consultants and advisors of a Party who are under an obligation of confidentiality consistent with this Agreement) to participate in the discussions and meetings of the JPC, provided that such participants are involved in activities related to Product Candidates or Products and shall have no voting authority at the JPC. The JPC shall have a chairperson, who shall serve for a term of one year, and who shall be selected alternately, on an annual basis, by Reata or Abbott. The initial chairperson shall be selected by Reata. The role of the chairperson shall be to convene and preside at meetings of the JPC, to prepare and circulate agendas and to ensure the preparation of minutes, but the chairperson shall have no additional powers or rights beyond those held by the other JPC representatives. The JPC shall have a vice chairperson, who shall serve for a term of one year (and who then shall serve as chairperson), and who shall be selected alternately, on an annual basis, by Abbott or Reata. The initial vice chairperson shall be selected by Abbott. The role of the vice chairperson shall be to consult with and assist the chairperson in the carrying out of the chairperson’s duties.

(b) Specific Responsibilities of the Joint Patent Committee. The JPC shall oversee and coordinate all Patent-related matters under this Agreement and the Bardoxolone License Agreement. In particular, the Joint Patent Committee shall:

[***].

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

2.9 General Provisions Applicable to Committees.

(a) Replacement of Representatives. Each Party shall provide the other Party with [***]-day written notification prior to the replacement of any of its representatives on any Committee set forth in this Article 2 or otherwise established pursuant to this Agreement, and shall consider in good faith any reasonable comments from the other Party with respect to such replacement. In the event the proposed incoming representative is of a lower seniority than or possesses different operational expertise from the outgoing representative and the Party not proposing such replacement objects to such replacement, then such replacement shall not become effective until the Parties’ representatives on the JEC (or, in the event such proposed representative is a representative of the JEC, the Parties’ Senior Officers) have had a chance to discuss such proposed replacement and attempt to resolve such matter in good faith for a period of not less than [***] days.

(b) Meetings and Minutes. Each Committee shall meet [***], or as otherwise agreed to by the Parties, with the location of such meetings alternating between locations designated by Reata and locations designated by Abbott (with the location of the initial meeting determined by Party whose representative is the initial chairperson). The chairperson of the Committee shall be responsible for calling meetings on no less than [***] Business Days’ notice. Each Party shall make all proposals for agenda items and shall provide all appropriate information with respect to such proposed items at least [***] Business Days in advance of the applicable meeting; provided that under exigent circumstances requiring input by the Committee, a Party may provide its agenda items to the other Party within a shorter period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as the other Party consents to such later addition of such agenda items or the absence of a specific agenda for such meeting, such consent not to be unreasonably withheld or delayed. The chairperson of the Committee shall prepare and circulate for review and approval of the Parties minutes of each meeting within [***] days after the meeting. The Parties shall agree on the minutes of each meeting promptly, but in no event later than the next meeting of the Committee.

(c) Procedural Rules. Each Committee shall have the right to adopt such standing rules as shall be necessary for its work, to the extent that such rules are not inconsistent with this Agreement. A quorum of the Committee shall exist whenever there is present at a meeting at least one (1) representative appointed by each Party. Members of a Committee may attend a meeting either in person or by telephone, video conference or similar means in which each participant can hear what is said by, and be heard by, the other participants; provided that at least one meeting of the JEC shall be held in person each year. Each Committee shall take action by consensus of the members present at a meeting at which a quorum exists, with each Party having a single vote irrespective of the number of representatives of such Party in attendance, or by a written resolution signed by at least one (1) representative appointed by each Party.

(d) Dispute Resolution. If a Committee other than the JEC cannot, or does not, reach consensus on an issue within a period of [***] Business Days or such other period as may be set forth in this Agreement with respect to particular disputes in such Committee or as the Parties may agree, then the dispute shall be referred to the JEC for resolution. If the JEC

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

cannot, or does not, reach consensus on an issue within a period of [***] Business Days or such other period as the Parties may agree, then, with respect to any provision of this Agreement that specifically provides for the resolution of certain disputes in the JEC in a particular manner, the procedures in such provision shall apply, and with respect to any other dispute in the JEC, the dispute resolution provisions set forth in Section 17.6 shall apply. Any provision in the Agreement that refers to the approval, authorization, determination, decision, selection, designation, allocation or similar action by a Committee with respect to a matter shall be deemed to mean the approval, authorization, determination, decision selection, designation, allocation or similar action by such Committee with respect to such matter subject to the dispute resolution procedures of this Section 2.9(d), whether or not explicitly stated.

(e) Limitations on Authority. Each Party shall retain the rights, powers, and discretion (including final decision-making authority with respect to certain disputes) granted to it under this Agreement and no such rights, powers, or discretion shall be delegated to or vested in a Committee unless the Parties expressly so agree in writing. No Committee shall have the power to amend, modify, or waive compliance with this Agreement, which may only be amended or modified as provided in Section 17.9 or compliance with which may only be waived as provided in Section 17.12.

2.10 Good Faith. In conducting themselves on Committees, and in exercising their rights under this Article 2, all representatives of both Parties shall consider diligently, reasonably and in good faith all input received from the other Party, and shall use reasonable efforts to reach consensus on all matters before them. Notwithstanding anything to the contrary in this Agreement, neither Party nor any of its Affiliates shall be required to take, or shall be penalized for not taking, any action that such Party reasonably believes is not in compliance with Applicable Law.

2.11 Appointment of Alliance Managers. Each Party shall appoint an appropriately qualified individual to serve as alliance manager (each, an “ Alliance Manager ”) under both this Agreement and the Bardoxolone License Agreement. Such persons shall endeavor to assure clear and responsive communication between the Parties and the effective exchange of Information, and may serve as a single point of contact for any matters arising under this Agreement. Alliance Managers may attend all meetings between the Parties, including Committee meetings, and shall also work together to resolve any deadlock between the Parties in accordance with the procedures set forth in this Agreement; provided, however, that the Alliance Managers shall not be members of any Committee established pursuant to this Agreement and shall not have final decision-making authority with respect to any matter. Each Party may change its designated Alliance Manager from time to time upon written notice to the other Party. From time to time, the Committees under this Agreement and the Existing JDC and Existing JMC under the Bardoxolone License Agreement shall, through the Alliance Managers and the JEC, raise any strategic issues affecting the Development, Manufacture or Commercialization of Products under this Agreement and Licensed Products under the Bardoxolone License Agreement.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

2.12 Discontinuation of Participation on a Committee. Each Committee shall continue to exist until the first to occur of (a) the Parties mutually agreeing to disband the Committee, and (b) [***], such affected Committee shall have no further force and effect or obligations under this Agreement but all decisions formerly made within or by such Committee shall become a decision as between the Parties, with any final decision authority previously vested in a Party’s members on such Committee to be vested in the same Party, and thereafter any requirement of a Party to provide Information or other materials to such Committee shall be deemed a requirement to provide such Information or other materials to the other Party.

2.13 Possession Arrow Decision Making .

(a) The Parties shall alternate in making all Possession Arrow Decisions hereunder, with such alternation being made solely by the order of occurrence of such Possession Arrow Decision, regardless of the nature of such Possession Arrow Decision. The Party making a Possession Arrow Decision shall exercise reasonable good faith judgment consistent with the Principles. [***] shall have the right to make the first Possession Arrow Decision.

(b) The Parties’ Alliance Managers shall, collectively, be responsible for the record keeping as to the Parties’ exercise of their respective Possession Arrow Decision making authorities. At any time a Party exercises such Possession Arrow Decision making authority, such Party shall provide written notification to the other Party and the Parties’ Alliance Managers of such decision, the date such decision was made through such Possession Arrow Decision making authority, and the identity of the Party exercising such Possession Arrow Decision making authority. The Alliance Managers shall record such information and shall provide a copy of such information to the JEC for its record and information. At each regular meeting of the JEC, the JEC shall review the list of Possession Arrow Decisions made by the Parties since its last meeting to ensure its accuracy.

ARTICLE 3

R ESEARCH P ROGRAM

3.1 Research Collaboration; Discovery Research Plan.

(a) The Parties shall conduct a research collaboration (the “ Research Collaboration ”) to: (i) characterize the New Collaboration Compounds with the goal of identifying and designating Lead Compounds in addition to the Existing Lead Compounds for pursuit as potential Development Candidates under the Exploratory Development Program; and (ii) conduct research to discover NextGen Targeted AIMs (the activities under clauses (i) and (ii) collectively, “ Discovery Research Activities ”); all in accordance with a research plan agreed upon by the Parties and attached hereto as Schedule 3.1 (as the same may be amended from time to time in accordance with the terms hereof, the “ Discovery Research Plan ”).

(b) Each Party shall perform the Discovery Research Activities assigned to it in the Discovery Research Plan, and shall do so in accordance with the Discovery Research Plan by allocating sufficient time, effort, equipment, and skilled personnel to complete such Discovery Research Activities successfully and promptly. The Parties understand and acknowledge that neither Party can guarantee the outcome or results of any Discovery Research Activities under the Discovery Research Plan.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(c) Each Party shall be responsible for all costs in connection with the performance of the activities assigned to it under the Discovery Research Plan, and such costs shall not count towards the Cap, in each case unless otherwise agreed by the Parties.

(d) Either Party may propose an amendment to its activities under the Discovery Research Plan by submitting such proposed amendment to the JRDI for its review and comment. The proposing Party shall consider the JRDI’s comments in good faith, [***]. For clarity, any amendment proposed by a Party that would delete, change the nature of, reduce or add to the activities then-assigned to the other Party under the Discovery Research Plan [***].

3.2 Unilateral Discovery. Prior to the expiration of the Research Term, the Parties shall discuss in good faith as to whether the Parties will extend the Research Term. In the event both Parties wish to continue the Research Collaboration, the Parties shall amend the Discovery Research Plan to extend the Research Term and to include additional Discovery Research Activities to be conducted by the Parties under the Research Collaboration. In the event one Party does not wish to continue the Research Collaboration, but the other Party desires to conduct additional Discovery Research Activities, the Research Term [***]. All Targeted AIMs discovered, characterized or optimized in the course of any Unilateral Discovery during the Exclusivity Period shall become part of the New Collaboration Compound Pool and subject to the same terms and conditions as all other New Collaboration Compounds under this Agreement. A Party shall not be required to submit to the JRDI for its review and comment a plan for unilaterally conducting additional Discovery Research Activities after the Exclusivity Period.

3.3 Initial Information Sharing. The Parties shall cooperate to effect a substantially complete transfer of Information relating to all Targeted AIMs Controlled by each Party and its Affiliates as of the Effective Date (including the FirstGen Targeted AIMs) within [***] days following the Effective Date to the extent such Information has not been provided previously, which transfer shall include discussions between the appropriate personnel of each Party. In addition, during the Term, each Party promptly shall provide to the other Party such Information relating to New Collaboration Compounds Controlled by such providing Party or its Affiliates as needed or as may be reasonably requested by the other Party from time to time.

3.4 New Information Sharing and Designation of Lead Compound. Each Party promptly shall share with the other Party, through the JRDI, all Information generated and results achieved in conducting or as a result of conducting activities under the Discovery Research Plan or any Unilateral Discovery Plan (the “ Research Results ”), and the JRDI shall use such Research Results to determine whether a New Collaboration Compound should be designated a Lead Compound and whether additional research activities should be conducted on a New Collaboration Compound in order to help make such determination. If, within a [***]-day period, the JRDI cannot come to agreement on whether a New Collaboration

56

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Compound should be designated as a Lead Compound, such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Senior Officers of the Parties for resolution. If such Senior Officers cannot resolve such matter within a [***]-day period, then: (a) [***] or (b) [***]; provided that in each case each Party’s rights to conduct Development with respect to any such Lead Compound shall be only as set forth under the Exploratory Development Program and Product Development Program under Articles 4 and 5.

3.5 Compliance. Each Party shall perform or cause to be performed, any and all of its activities under the Discovery Research Plan or any Unilateral Discovery Plan in a good scientific manner and in compliance with Applicable Law.

3.6 Records . Each Party shall maintain, or cause to be maintained, records of its activities under the Discovery Research Plan and its Unilateral Discovery Plans in accordance with Applicable Law and in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall be complete and accurate and shall properly reflect all work done and results achieved in the performance of such activities, and which shall be retained by such Party for at least [***] years after the termination of this Agreement, or for such longer period as may be required by Applicable Law. Each Party shall have the right, during normal business hours and upon reasonable notice, to inspect and copy any such records, except to the extent that a Party reasonably determines that such records contain Confidential Information that is not licensed to the other Party.

ARTICLE 4

E XPLORATORY D EVELOPMENT P ROGRAM

4.1 General Scope. The Parties shall undertake any and all Exploratory Development Activities with respect to any New Collaboration Compound, either unilaterally or jointly, only as a Lead Compound or Development Candidate under the Exploratory Development Program in accordance with this Article 4.

4.2 Elements of Exploratory Development Program. The Exploratory Development Program consists of the elements set forth in this Section 4.2 (collectively, the “Exploratory Development Activities” ), to be conducted as either Joint Exploratory Development under Section 4.3 or as Unilateral Exploratory Development under Section 4.4.

(a) Characterization and Evaluation of Lead Compounds . Under the Exploratory Development Program, the Parties (either jointly or unilaterally) will conduct Non-Clinical Studies (such as in vivo pharmacodynamics studies, pharmacological studies and ADMET studies) to characterize Lead Compounds, to determine whether any such Lead Compounds should be designated as Development Candidates for IND-enabling Non-Clinical Studies and potentially for Clinical Studies. The plan for the initial undertaking to characterize the Existing Lead Compounds is set forth in the Joint Exploratory Development Plan. The Parties anticipate that the characterization of other Lead Compounds (beyond those identified in Schedule 1.45 ), as they become designated as such, will also be conducted, either jointly as part of an amended Joint Exploratory Development Plan in accordance with Section 4.3(a), or unilaterally as part of a Unilateral Exploratory Development Plan in accordance with Section 4.4.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(b) Designation of Lead Compounds as Development Candidates . The JRDI shall evaluate the results generated from the Non-Clinical Studies conducted as described in Section 4.2(a) (whether jointly or unilaterally) pertaining to each Lead Compound to determine whether to designate such Lead Compound as a Development Candidate. If the JRDI cannot agree on whether a Lead Compound shall be designated as a Development Candidate within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***])-day period [***].

(c) IND-Enabling Studies for Development Candidate. For each Development Candidate, the Parties (jointly or unilaterally) may conduct IND-enabling Non- Clinical Studies (such as pharmacokinetics studies, metabolism studies, toxicology studies and genotoxicity studies) to characterize such Development Candidate and to determine whether to further pursue Development of such Development Candidate in Phase I Clinical Studies. The plan for the initial undertaking to characterize the Development Candidates existing as of the Effective Date is set forth in the Joint Exploratory Development Plan. The Parties anticipate that the characterization of other Development Candidates, as they become designated as such during the course of this Agreement, will also be conducted, either jointly as part of an amended Joint Exploratory Development Plan in accordance with Section 4.3(a), or unilaterally as part of a Unilateral Exploratory Development Plan in accordance with Section 4.4.

(d) Filing of IND for Development Candidates. For each Development Candidate, the JRDI shall evaluate the results generated from the IND-enabling Non-Clinical Studies conducted as described in Section 4.2(c) (whether jointly or unilaterally) pertaining to such Development Candidate to determine whether to file an IND for such Development Candidate in order to further Develop such Development Candidate in Phase I Clinical Studies. If the JRDI cannot agree on whether an IND should be filed for a Development Candidate within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***])-day period [***].

(e) Phase I and Phase II Clinical Studies .

(i) Phase I and Phase II Clinical Studies for Each Development Candidate. The Parties (jointly or unilaterally) may Develop each Development Candidate in Phase I Clinical Studies for which an IND has been filed. The JRDI shall evaluate the results obtained from such Phase I Clinical Studies and determine whether to further Develop such Development Candidate in Indication Survey Studies as described in Section 4.2(e)(ii) below or other Phase II Clinical Studies to further characterize such Development Candidate prior to it being designated, if at all, as a Product Candidate.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(ii) Designation of Product Candidates and Selection of Indication. Subject to Section 5.5(a), which sets forth the decision making process as to the commencement of a particular jointly conducted Phase IIb Clinical Study, the Parties shall not commence any Phase IIb Clinical Study for a Development Candidate unless and until such Development Candidate is first designated as a Product Candidate pursuant to this Section 4.2(e)(ii) for a particular Indication. At any time after [***], the JRDI may recommend to the JEC to designate such Development Candidate as a Product Candidate, together with the potential Indication(s) in which it proposes to further Develop such Development Candidate as a Product Candidate for the purpose of obtaining Regulatory Approval for such Product Candidate in such Indication(s), and a list of proposed Related Indications to such Indication(s), together with Clinical Data and other results supporting such recommendation. [***]. If the JRDI cannot agree on whether or for which Indication(s) it will recommend a particular Development Candidate to the JEC, or if the JRDI cannot agree on the list of Related Indications for any such Indication, then either Party’s representatives on the JRDI may proceed to make such recommendation and each Party’s representatives on the JRDI may recommend to the JEC the Indication(s) for which it wishes to further Develop such Development Candidate and the list of Related Indications, or recommend to the JRDI that such Development Candidate not be further Developed in any such Indications. The JEC shall review such recommendations and determine: (A) whether to designate such Development Candidate as a Product Candidate; (B) if so, in which Indication(s) to further Develop such Development Candidate as a Product Candidate for the purpose of obtaining Regulatory Approval and (C) the list of Related Indications for such Indication(s) (other than the Related Indications for the Initial Indications as of the Effective Date, which are set forth in the Joint Exploratory Development Plan). If the JEC cannot agree on whether a Development Candidate shall be designated as a Product Candidate, or for which Indication(s) such Development Candidate shall be further Developed, or the list of Related Indications, within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***]-day period, then [***]:

(1) if such Development Candidate is a FirstGen Targeted AIM that has been Developed under a Joint Exploratory Development Plan directly preceding such determination (or Developed by Reata in an Alternative Indication pursuant to this Section 4.2(e)(ii)(1)), Reata shall have the final decision-making authority on whether such Development Candidate shall be designated as a Product Candidate, and if so, the Indication for which it will be Developed and up to two (2) Indications as Related Indications thereof (except that the Related Indications for the Initial Indications as of the Effective Date shall be as set forth in the most current Joint Exploratory Development Plan, and may only be changed with the mutual agreement of both Parties), exercising reasonable good faith judgment consistent with the Principles. Notwithstanding the foregoing, if Abbott proposed that such Development Candidate should be designated as a Product Candidate for a particular Indication (the “ First Indication ”), and Reata in the exercise of its final decision-making authority

59

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

determines not to confer Product Candidate status on such Development Candidate for such First Indication or any other then-eligible Indication, then at the time Reata exercises such final decision-making authority [***] must inform [***] in writing whether [***]. For the purpose of this Section 4.2(e)(ii)(1), Section 4.2(e)(ii)(2) and Section 4.2(e)(ii)(3), an “ Alternative Indication ” means, as to a given Development Candidate, either (A) any Initial Indication or any of its Related Indications, or (B) an Indication that is expected by the Parties, in good faith, on the basis of market data from a recognized provider such as IMS Health, to have anticipated aggregate annual Net Sales for the Product containing such Development Candidate in the Territory in any [***] ([***]) of the [***] full Calendar Years immediate following the launch date of such Product of at least [***] Dollars ($[***]) for such Calendar Year;

(2) if such Development Candidate is a NextGen Targeted AIM that has been Developed under a Joint Exploratory Development Plan directly preceding such determination (or Developed by Reata in an Alternative Indication pursuant to this Section 4.2(e)(ii)(2)), then [***]. Notwithstanding the foregoing, if [***] proposed that such Development Candidate should be designated as a Product Candidate for a First Indication, and [***] in the exercise of its final decision-making authority determines not to confer Product Candidate status on such Development Candidate for such First Indication or any other then-eligible Indication, then at the time [***] exercises such final decision-making authority [***] must inform [***] in writing [***];

(3) if such Development Candidate is a NextGen Targeted AIM that has been Developed under a Joint Exploratory Development Plan directly preceding such determination (or Developed by the decision-making Party in an Alternative Indication pursuant to this Section 4.2(e)(ii)(3)), then, after the Initial Studies Period, [***] shall have the final determination as to whether such Development Candidate shall be designated as a Product Candidate, and if so, the Indication for which it will be Developed [***]), exercising reasonable good faith judgment consistent with the Principles. Notwithstanding the foregoing, if at the time of such decision-making the other Party proposed that such Development Candidate should be designated as a Product Candidate for a First Indication, and the Party [***] in the exercise of its final decision-making authority determines not to confer Product Candidate status on such Development Candidate for such First Indication or any other then-eligible Indication, then at the time the decision-making Party exercises such final decision-making authority the decision-making Party must inform the other Party in writing [***];

(4) if such Development Candidate is a FirstGen Targeted AIM or NextGen Targeted AIM developed under a Party’s Unilateral Exploratory Development Plan, then the Participating Exploratory Party shall have the final decision- making authority on whether such Development Candidate shall be designated as a Product Candidate, and if so, the Indication(s) for which it will be Developed and [***];

provided that, in each case of (1), (2), (3) and (4) above, neither Party may exercise its final decision-making authority to determine to Develop a particular Product Candidate in more than [***] Indication without the other Party’s written consent, except as otherwise provided in Section 5.7. Once a Development Candidate is designated a Product Candidate, its further Development shall be governed by the applicable Joint Development Committee and in accordance with Article 5.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

4.3 Joint Exploratory Development .

(a) Joint Exploratory Development Plan; Amendment. The Parties have agreed on a joint exploratory development plan, attached to this Agreement as Schedule 4.3(a) , that sets forth (i) the plans for characterization of Lead Compounds and Development Candidates existing as of the Effective Date; (ii) the Initial Indications in which the Parties intend to conduct Indication Survey Studies; (iii) the general parameters of such Indication Survey Studies, including number of participants and duration of treatment; (iv) the Related Indications for the Initial Indications as determined by the Parties as of the Effective Date; and (v) overall budget for such activities (such plan, the “ Joint Exploratory Development Plan ”, and such Development activities, the “ Joint Exploratory Development ”). From time to time, the Parties may amend the Joint Exploratory Development Plan to include other similar activities within the scope of Exploratory Development Activities that the Parties agree to jointly conduct and fund. To that end, either Party may propose any amendment to the Joint Exploratory Development Plan to the JRDI (including adding newly designated Lead Compounds for characterization in Non-Clinical Studies, adding newly designated Development Candidates for characterization in IND-enabling Non-Clinical Studies or adding or changing Indications for Indication Survey Studies), and any such amendment shall be effective upon the approval of the JRDI. If the JRDI cannot agree on any such proposed amendment within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***]-day period, then: (A) [***]; and (B) [***].

(b) Joint Exploratory Development Indications; Initial Indications. The Parties agree to jointly fund and conduct, in accordance with Sections 4.3(d) and 4.3(f), Indication Survey Studies for certain Indications as set forth in the Joint Exploratory Development Plan (the “ Joint Exploratory Development Indications ”). As of the Effective Date, the Parties have agreed on [***] Joint Exploratory Development Indications, as set forth in the Joint Exploratory Development Plan attached to this Agreement as of the Effective Date (the “ Initial Indications ”). The Initial Indications consist of [***] Indications identified as such in the Joint Exploratory Development Plan attached to this Agreement as of the Effective Date which are fixed as of the Effective Date (the “ Fixed Indications ”), and [***] Indications identified as such in the Joint Exploratory Development Plan attached to this Agreement as of the Effective Date which the Parties understand and acknowledge may be substituted for other Indications as the Joint Exploratory Development Plan progresses (the “ Flexible Indications ”). As of the Effective Date, the Parties have also agreed on the Related Indications for the Initial Indications, as set forth in the Joint Exploratory Development Plan attached to this Agreement as of the Effective Date. From time to time, either Party may propose to the JRDI any amendment to the Joint Exploratory Development Plan proposing any addition, deletion or substitution of a Joint Exploratory Development Indication, and any such amendment shall be effective upon the approval of the JRDI. If the JRDI cannot agree on any

61

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

such proposed amendment within a ([***])-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***]-day period, then the following shall apply:

[***].

(c) Indication Survey Studies. For each Initial Indication, the Parties shall, in accordance with Section 4.3(d), conduct one or more Indication Survey Studies to assess the merit of treating such particular Indication with the Targeted AIM approach using Development Candidates for which an IND has been filed and a Phase I Clinical Study has been completed. The general approach for the joint conduct of Indication Survey Studies in the Initial Indications is set forth in the Joint Exploratory Development Plan. The JRDI shall determine the use of a particular Development Candidate for the conduct of Indication Survey Studies for a particular Indication under the Joint Exploratory Development Plan. In making such determination, the JRDI may use the same Development Candidate in multiple Indication Survey Studies conducted for more than one (1) Indication, with the understanding that the use of a particular Development Candidate in the Indication Survey Study for an Indication may not result in the Development of such Development Candidate as a Product Candidate in such Indication, and that such Development Candidate may not ultimately be Developed as a Product Candidate in any of such Indications. If the JRDI cannot agree on which Development Candidate should be used to conduct an Indication Survey Study under the Joint Exploratory Development Plan for a particular Indication within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***]-day period, then, subject to Section 4.3(d): (i) [***].

(d) Development Activities under Joint Exploratory Development. The JRDI shall allocate the Joint Exploratory Development activities between the Parties (to the extent not already allocated in the Joint Exploratory Development Plan attached as Schedule 4.3(a) ) and shall establish a reasonable timeline for the performance of such Joint Exploratory Development activities and include any such allocation and timelines in the then-current Joint Exploratory Development Plan. From time to time, the JRDI shall: (i) extend such timelines for the length of any Excusable Delay; and (ii) otherwise adjust such timelines to reflect actual Development progress made by the Parties. Each Party shall use Commercially Reasonable Efforts to perform the Joint Exploratory Development activities allocated to it under the Joint Exploratory Development Plan in accordance with such timeline. Each Party shall conduct the Development activities under the Joint Exploratory Development Plan in accordance with the terms and conditions of this Agreement and in compliance with all Applicable Laws. If a Party (the “ Exploratory Non-Performing Party ”) fails to commence or perform any Joint Exploratory Development activities allocated to it by the JRDI in accordance with such timeline, the other Party (the “ Exploratory Step-In Party ”) may notify the Exploratory Non- Performing Party of such failure. If the Exploratory Non-Performing Party does not commence

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

performing such Joint Exploratory Development activities within [***] days after receipt of such notice (and thereafter continue to perform such Joint Exploratory Development activities), the Exploratory Step-In Party shall have the right, at the Exploratory Step-In Party’s sole election, to assume and complete some or all of such Joint Exploratory Development activities (which shall include the right to designate a Development Candidate for use in an ISS for an Indication if a Development Candidate has not already been designated for use in such ISS to the extent the timeline for such designation has not been met), and all Development Costs incurred by the Exploratory Step-In Party and its Affiliates in performing such assumed Joint Exploratory Development activities shall be shared by the Parties in accordance with Section 4.3(f). If the Exploratory Step-In Party so elects to assume and complete any of the Joint Exploratory Development activities, to the extent requested by the Exploratory Step-In Party in writing and reasonably necessary for the conduct of such activities, the Exploratory Non-Performing Party shall assign (or cause its Affiliates to assign) to the Exploratory Step-In Party all agreements with any Third Party with respect to the conduct of such Exploratory Development Activities, including agreements with contract research organizations, clinical sites, and investigators, unless, with respect to any such agreement, such agreement (A) expressly prohibits such assignment, in which case the Exploratory Non-Performing Party shall cooperate with the Exploratory Step-In Party in all reasonable respects to secure the consent of the applicable Third Party to such assignment, or (B) covers products in addition to the New Collaboration Compound that is the subject of such Exploratory Development Activities, in which case the Exploratory Non-Performing Party shall cooperate with the Exploratory Step-In Party in all reasonable respects to facilitate the execution of a new agreement between the Exploratory Step-In Party and the applicable Third Party. In such event, with respect to all such Joint Exploratory Development activities that involve Clinical Studies, at the Exploratory Step-In Party’s option, the Exploratory Non- Performing Party shall transfer control to the Exploratory Step-In Party or its designee of such Clinical Studies and cooperate with the Exploratory Step-In Party to ensure a smooth and orderly transition thereof that will not involve any disruption of such Clinical Studies.

(e) Lead Development Party; Lead Regulatory Party . Reata shall have the option to be the Lead Development Party and Lead Regulatory Party for Joint Exploratory Development involving a Development Candidate that (i) is a FirstGen Targeted AIM or (ii) is a NextGen Targeted AIM for which Joint Exploratory Development commences during the Initial Studies Period. For Joint Exploratory Development involving a Development Candidate that is a NextGen Targeted AIM that commences after the Initial Studies Period, the JRDI shall appoint the Party that will be the Lead Development Party and Lead Regulatory Party. If the JRDI cannot agree on the Party that will be the Lead Development Party and Lead Regulatory Party, [***] shall have the option to be the Lead Development Party and Lead Regulatory Party for the first Development Candidate that is a NextGen Targeted AIM to be Developed after the Initial Studies Period, and the Parties thereafter shall alternate as to which Party shall have the option to be the Lead Development Party and Lead Regulatory Party for each Development Candidate that is a NextGen Targeted AIM to be Developed after the Initial Studies Period. For any Joint Exploratory Development, the LDP shall have the primary responsibility for developing a work plan including the details of or protocols for any of the Non-Clinical Studies or Clinical Studies listed in the then-current Joint Exploratory

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Development Plan; provided that such work plans (including protocols) shall be subject to approval by the JRDI. In the event the JRDI cannot agree on the work plan for a particular Non-Clinical Study or Clinical Study (or the protocol thereof) within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***])-day period [***]. In the event the JRDI cannot agree on any amendment of a particular work plan or protocol within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***]-day period, then, [***].

(f) Costs for Joint Exploratory Development.

(i) Budget. The Parties have determined that the overall Development Costs they anticipate are required to conduct the Joint Exploratory Development Plan attached hereto as Exhibit 4.3(a) equal One Hundred Twenty Million Dollars ($120,000,000) in aggregate (the “ JEDP Budget Cap ”). In the event the actual Development Costs to be incurred in connection with one or more of the Initial Survey Studies or other activities are such that the then-applicable JEDP Budget Cap would be exceeded, the Parties shall discuss whether the design or details of other of the Initial Survey Studies should be amended so as to keep the overall costs of completion of the activities under the Joint Exploratory Development Plan within the JEDP Budget Cap or to increase the JEDP Budget Cap; provided that no such amendment shall be made without the mutual agreement of the Parties.

(ii) Cost-Sharing; Reata Cost Cap. The Parties shall share the Development Costs incurred by each Party in connection with the conduct of the Joint Exploratory Development Plan as follows: (i) Reata shall be solely responsible for and shall bear the first Fifty Million Dollars ($50,000,000) (the “ Reata Cost Cap ”); and (ii) the Parties shall share equally (50/50) the portion of such Development Costs that exceeds the Reata Cost Cap, subject to the immediately following sentence. Neither Party shall have the obligation to fund activities under the Joint Exploratory Development Plan once the JEDP Budget Cap has been reached without such Party’s consent; provided that neither Party shall have the right to cease funding any Clinical Study under the Joint Exploratory Development Plan once it has been commenced due to the actual Development Costs of such Clinical Study causing the overall Development Costs of the Joint Exploratory Development Plan to exceed the JEDP Budget Cap. While the Parties agree to share Development Costs incurred by each Party in accordance with this Section 4.3(f), each Party [***].

(iii) Budget Overruns. If, notwithstanding the Parties’ discussions regarding amendment of Joint Exploratory Development to “balance” the JEDP Budget Cap or increase the JEDP Budget Cap as outlined in Section 4.3(f)(i), the activities set forth in the Joint Exploratory Development Plan cannot be undertaken without incurring Development Costs in excess of the then-applicable JEDP Budget Cap, and either Party decides not to co-fund activities in excess of the JEDP Budget Cap in accordance with Section 4.3(f)(ii), then the

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other Party shall have the right to conduct the remainder of such Exploratory Development Activities set forth under such Joint Exploratory Development Plan as Unilateral Exploratory Development in accordance with Section 4.4 (in which event the Joint Exploratory Development Plan thereafter shall be deemed a Unilateral Exploratory Development Plan) and solely fund such activities (and the non-funding Party would have the right to participate in the joint funding and Development of any Product Candidates arising therefrom in accordance with Article 5).

(g) Discontinuation of Clinical Studies. Neither Party may discontinue any Clinical Study for a Development Candidate (including any Indication Survey Study) conducted pursuant to the Joint Exploratory Development Plan without the consent of the other Party; provided that the Party holding the IND for such Development Candidate shall have the right to discontinue any Clinical Study for such Development Candidate in the event such Party reasonably determines in good faith that such Clinical Study presents a Safety Risk. In the event that the Party that does not hold the IND for a Development Candidate reasonably determines in good faith that a Clinical Study for such Development Candidate conducted pursuant to the Joint Exploratory Development Plan presents a Safety Risk and therefore should be discontinued, such Party shall notify the Party that holds such IND. If the Party that holds such IND does not discontinue such Clinical Study within [***] days after receipt of such notice, the Party that does not hold such IND shall have the right to withdraw from participation in Joint Exploratory Development activities with respect to such Development Candidate immediately upon written notice to the IND holder, in which event the withdrawing Party shall have no further obligation to perform or fund Exploratory Development Activities for such Development Candidate, and the IND holder shall have the right to continue, unilaterally, Exploratory Development Activities for such Development Candidate under a Unilateral Exploratory Development Plan in accordance with Section 4.4; provided that, in the event such Development Candidate is designated as a Product Candidate, the withdrawing Party shall nonetheless have the right to participate in the joint funding and Development of such Product Candidate as provided in Article 5.

4.4 Unilateral Exploratory Development.

(a) Rights to Conduct Unilateral Exploratory Development. Each Party shall have the right to unilaterally conduct Exploratory Development Activities outside the scope of, and independent of, the Joint Exploratory Development Plan in accordance with this Section 4.4 (the “ Unilateral Exploratory Development ”), subject to the following:

(i) Neither Party shall have the right to conduct Exploratory Development Activities for a particular New Collaboration Compound or for a particular Indication under Unilateral Exploratory Development without first having proposed such Exploratory Development Activity as a joint activity by means of an amendment to the Joint Exploratory Development Plan under Section 4.3(a), and only after the other, non-proposing Party declines to include such Exploratory Development Activity as part of the Joint Exploratory Development Plan.

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(ii) Except as otherwise provided in Section 5.7, neither Party shall have the right to conduct Unilateral Exploratory Development using a Development Candidate that has been designated a Product Candidate without the other Party’s prior written approval.

(iii) Subject to the restrictions set forth in Sections 4.4(a)(i) and (ii) above, after the Protected Period [***].

(iv) In the event that Reata decides not to co-fund activities under the Joint Exploratory Development Plan in excess of the JEDP Budget Cap in accordance with Section 4.3(f)(ii), [***].

(v) Subject to the restrictions set forth in Sections 4.4(a)(i) and (ii) above, [***] shall at all times during the Term have the right to (A) conduct Unilateral Exploratory Development with respect to any New Collaboration Compound or (B) use any New Collaboration Compound to conduct unilaterally any Clinical Studies under this Article 4 for any Indication other than a Joint Exploratory Development Indication.

(b) Unilateral Exploratory Development Plan; Amendment. If a Party desires to conduct Unilateral Exploratory Development in accordance with Section 4.4(a) above, such Party shall provide the JRDI with a written plan that sets forth: (i) any Lead Compounds or Development Candidates that will be Developed under such Unilateral Exploratory Development; (ii) any Indications as to which Development will be pursued under such Unilateral Exploratory Development; and (iii) a summary of the Non-Clinical Studies and Clinical Studies (including Indication Survey Studies) proposed to be conducted under such Unilateral Exploratory Development (such plan, the “ Unilateral Exploratory Development Plan ”). Such Unilateral Exploratory Development Plan shall be subject to the JRDI’s [***], and shall nonetheless be subject to the restrictions set forth in Section 4.4(a). From time to time, the Party conducting Unilateral Exploratory Development (the “ Participating Exploratory Party ”) may amend the Unilateral Exploratory Development Plan to include other similar activities within the scope of Exploratory Development Activities (including adding Lead Compounds for characterization in Non-Clinical Studies, adding Development Candidates for characterization in Non-Clinical Studies and potential Development in Phase I or II Clinical Studies or adding or changing Indications for Indication Survey Studies) by providing any such proposed amendment to the JRDI for its [***], provided that such amendment is consistent with Section 4.4(a) above.

(c) Development Activities under Unilateral Exploratory Development. The Participating Exploratory Party shall conduct the Development activities under any Unilateral Exploratory Development Plan in accordance with the terms and conditions of this Agreement and in compliance with all Applicable Laws. The Participating Exploratory Party shall have the right (but not the obligation) to request the other Party (the “ Non-Participating Exploratory Party ”) to conduct certain such Development activities, which request may be accepted or declined at the Non-Participating Exploratory Party’s sole discretion.

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(d) Regulatory Matters for Unilateral Exploratory Development . The Participating Exploratory Party shall be the Lead Development Party and Lead Regulatory Party for its Unilateral Exploratory Development.

(e) Costs for Unilateral Exploratory Development. The Participating Exploratory Party shall be solely responsible for the Development Costs incurred by it (and by the Non-Participating Exploratory Party if such Non-Participating Exploratory Party conducts certain activities under such Unilateral Exploratory Development under Section 4.4(c)).

(f) Opt-In Rights of the Non-Participating Exploratory Party . Any Development Candidate that is Developed under a Unilateral Exploratory Program shall be subject to the JEC’s review and approval as a Product Candidate under Section 4.2(e)(ii) before commencement of any Phase IIb Clinical Study with respect thereto. If so designated by the JEC as a Product Candidate, the Non-Participating Exploratory Party shall nonetheless have the right to participate in the joint funding and Development of such Product Candidate as provided in Article 5.

4.5 Exploratory Development Records and Reports. Each Party shall maintain, or cause to be maintained, records of its Exploratory Development Activities (including any Development activities undertaken pursuant to the Joint Exploratory Development Plan or any Unilateral Exploratory Development Plan) in accordance with Applicable Law and in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall be complete and accurate and shall properly reflect all work done and results achieved in the performance of such Exploratory Development Activities, and which shall be retained by such Party for at least [***] years after the termination of this Agreement, or for such longer period as may be required by Applicable Law. Each Party shall have the right, during normal business hours and upon reasonable notice, to inspect and copy any such records, except to the extent that a Party reasonably determines that such records contain Confidential Information that is not licensed to the other Party. Each Party shall provide the JRDI and the other Party with such reports summarizing in reasonable detail its Exploratory Development Activities under this Article 4 and the results of such activities as the JRDI or the other Party reasonably requests.

4.6 Relationship with Existing Agreement. The Bardoxolone License Agreement shall remain in effect on its original terms with respect to bardoxolone methyl and any Collaboration Candidates, Collaboration Compounds, Backup Candidates and Backup Compounds (as defined in the Bardoxolone License Agreement), for the Renal Indication, the Cardiovascular Indication and the Metabolic Indication except as set forth herein under Article 4 and subject to the following:

(a) The Targeted AIMs in the New Collaboration Compound Pool will be the source of both: (i) New Collaboration Compounds under this Agreement for Development and Commercialization in the New Collaboration Field in accordance with the terms of this Agreement on the one hand; and (ii) Collaboration Candidates, Collaboration Compounds, Backup Candidates and Backup Compounds under the Bardoxolone License Agreement for development and commercialization in the Previously Licensed Field on the other hand; provided that Reata shall not have the right to select a Unilateral Acquired AIM of Abbott as a Collaboration Candidate or Backup Candidate under the Bardoxolone License Agreement without the prior written consent of Abbott.

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(b) Unless otherwise mutually agreed by the Parties, the selection of a Targeted AIM from the New Collaboration Compound Pool as a Collaboration Candidate, Collaboration Compound, Backup Candidate or Backup Compound under the Bardoxolone License Agreement will serve to remove such Targeted AIM from the New Collaboration Compound Pool and such Targeted AIM shall thereafter be governed solely by the Bardoxolone License Agreement and will not be eligible to be selected as a Development Candidate or Product Candidate under this Agreement, unless and until the Parties permanently discontinue development and commercialization of such Targeted AIM under the Bardoxolone License Agreement, in which event such Targeted AIM shall be returned to the New Collaboration Compound Pool and shall again be eligible to be selected as a Development Candidate or Product Candidate under this Agreement in accordance with the terms hereof.

(c) Unless otherwise mutually agreed by the Parties, the selection of a Targeted AIM in the New Collaboration Compound Pool as a Product Candidate for an Indication under this Agreement will make such Targeted AIM ineligible to be selected as a Collaboration Candidate, Collaboration Compound, Backup Candidate or Backup Compound under the Bardoxolone License Agreement and such Targeted AIM shall thereafter be governed solely by this Agreement and will not be eligible to be selected as a Collaboration Candidate, Collaboration Compound, Backup Candidate or Backup Compound under the Bardoxolone License Agreement, unless and until the Parties permanently discontinue Development and Commercialization of such Targeted AIM under this Agreement, in which event such Targeted AIM shall be returned to the New Collaboration Compound Pool and shall again be eligible to be selected as a Collaboration Candidate, Collaboration Compound, Backup Candidate or Backup Compound under the Bardoxolone License Agreement.

(d) As part of the Exploratory Development, the Parties may perform certain Exploratory Development Activities under the Exploratory Development Program with respect to a Targeted AIM prior to the time that such Targeted AIM is selected as a Product Candidate for an Indication under this Agreement. If such Targeted AIM is selected as a Collaboration Candidate, Collaboration Compound, Backup Candidate or Backup Compound under the Bardoxolone License Agreement prior to such Targeted AIM being selected as a Product Candidate under this Agreement, then: (i) any Development Costs incurred by the Parties for such Exploratory Development Activities for such Targeted AIM shall no longer be counted towards the Cap (and any previous inclusion of such amount will be reversed); and (ii) Reata shall reimburse Abbott for Abbott’s share of any Development Costs incurred by the Parties for such Exploratory Development Activities (including Unilateral Exploratory Development Activities) that has been borne by Abbott in accordance with the terms hereof.

(e) Reata acknowledges and agrees that Abbott has the right to select any Abbott Excluded AIM(s) from the New Collaboration Compound Pool and develop, manufacture and commercialize such Abbott Excluded AIM(s) for the Renal Indication, Cardiovascular Indication or Metabolic Indication subject to the terms of the Bardoxolone

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License Agreement. Unless otherwise mutually agreed by the Parties, the selection by Abbott of an Abbott Excluded AIM from the New Collaboration Compound Pool for development, manufacture and commercialization in the Previously Licensed Field will serve to remove such Targeted AIM from the New Collaboration Compound Pool and such Targeted AIM shall thereafter be subject to the Bardoxolone License Agreement and not this Agreement, and will not be eligible to be selected as a Development Candidate or Product Candidate under this Agreement, unless and until Abbott permanently discontinues development and commercialization of such Targeted AIM in the Previously Licensed Field, in which event such Targeted AIM shall be returned to the New Collaboration Compound Pool and shall again be eligible to be selected as a Development Candidate or Product Candidate under this Agreement in accordance with the terms hereof.

ARTICLE 5

P RODUCT DEVELOPMENT

5.1 General . All Development of New Collaboration Compounds that have been designated as Product Candidates shall be undertaken, either unilaterally or jointly, under a Product Development Program under the oversight of the applicable JDC and in accordance with this Article 5.

5.2 Formation of JDC and JMC. Following the designation by the JEC of a Development Candidate as a Product Candidate and the Indication for which such Product Candidate is to be further Developed under this Article 5 (either by consensus or through a Party’s exercise of its final decision-making authority under Section 4.2(e)(ii)), the Parties shall form a JDC to oversee the further Development of Product(s) containing such Product Candidate for Regulatory Approval in such Indication, and a JMC to oversee the potential Commercialization of such Products, all in accordance with Article 2.

5.3 Elements of Product Development Program. Each Product Development Program for a given Product Candidate shall consist of the following activities, to be conducted either jointly under Section 5.5 or unilaterally under Section 5.6: (a) Pre-Phase IIb Development; (b) Phase IIb Development; (c) additional studies, if any, required following Phase IIb Clinical Studies and prior to the EOP2 Meeting; (d) conduct of the EOP2 Meeting and preparation of a briefing package therefor; and (e) Phase III Development; as well as Additional Indication Activities under Section 5.7. Product Candidates that either Party wishes to Develop for an Indication that is already an Active Indication in another Product Development Program are addressed under Section 5.8.

5.4 Opt-Out after Designation of Product Candidate and Selection of Indication for Development.

(a) Evaluation. Promptly after its formation, the JDC for a particular Product Candidate shall review and discuss the Clinical Data and other data and results generated under the Exploratory Development Program for such Product Candidate and the likely timeline and path for Development of such Product Candidate through Phase III Clinical Studies.

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(b) Opt-Out Notice; Unilateral Development. Within [***] days of completion of such review by the JDC, either Party shall have the right to deliver to the other Party a written notice that it does not desire to pursue Development of such Product Candidate for the Indication selected for Development at such time (the “ Opt-Out Notice ”), in which event the other Party shall have the right to pursue, unilaterally, the further Development of such Product Candidate under a Unilateral Development Program as provided under and in accordance with Section 5.6, unless and until the opt-out Party later opts back in to such Unilateral Development Program in accordance with Section 5.6.

(c) Neither Party Opts-Out; Joint Development. If neither Party delivers such Opt-Out Notice within such [***]-day period, the Parties shall proceed to jointly Develop such Product Candidate under a Joint Development Program as provided under and in accordance with Section 5.5 (unless and until either Party elects to deliver an Opt-Out Notice at a later point in time as provided in Section 5.5).

5.5 Joint Product Development.

(a) Readiness for Phase IIb Development. With respect to any Product that is subject to Joint Development pursuant to Section 5.4(c) above, the JDC for such Product Candidate shall discuss and determine whether the Product Candidate is ready for Phase IIb Clinical Studies, and if not, what additional Development activities are required prior to the conduct of a Phase IIb Clinical Study.

(i) Proceed to Phase IIb. If the JDC agrees that such Product Candidate is so ready for Phase IIb Clinical Studies, the Parties shall proceed under Section 5.5(b).

(ii) Pre-Phase IIb Development and Plan.

(1) If either Party’s representatives on the JDC are of the view that such Product Candidate is not ready for Phase IIb Clinical Studies, then the Parties shall not commence Phase IIb Clinical Studies for such Product Candidate at such time; and instead the JDC shall prepare a written plan setting forth: (A) the Development activities (including any additional Phase IIa Clinical Study or other Phase II Clinical Study) it believes should be conducted prior to a Phase IIb Clinical Study, or any Non-Clinical Studies to be conducted by the Parties for such Product Candidate with the goal of determining whether such Product Candidate should be further Developed in Phase IIb Clinical Studies, and related Manufacture and supply matters (such activities collectively, the “ Pre-Phase IIb Development ”), including the protocols for any such Clinical Studies or other such studies; (B) the allocation of the conduct of the activities under such Pre-Phase IIb Development between the Parties; (C) the timeline associated with such Pre-Phase IIb Development; and (D) the budget for such Pre-Phase IIb Development (the “ Pre-Phase IIb Plan ”). Any such Pre- Phase IIb Plan shall be effective upon approval of the JDC, either by the agreement of the JDC or, in the case of disagreement, as set forth in Section 5.5(a)(ii)(2) below.

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(2) Disagreement on Pre-Phase IIb Development Plan. If the JDC cannot agree on the Pre-Phase IIb Plan within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***]-day period, then: (A) if such Product Candidate at issue is a FirstGen Targeted AIM, [***]; (B) if such Product Candidate at issue is a NextGen Targeted AIM and has been designated as a Product Candidate by the JEC by consensus, then [***]; or (C) if such Product Candidate at issue is a NextGen Targeted AIM and has been designated as a Product Candidate by the JEC through a Party’s use of its final decision- making authority pursuant to Section 4.2(e)(ii), then [***].

(iii) Opting-Out of Pre-Phase IIb Development . Either Party shall have the right, during a period of [***] days after the determination of the Pre-Phase IIb Plan, to deliver to the other Party an Opt-Out Notice. If neither Party delivers such Opt-Out Notice within such period, such Pre-Phase IIb Development shall be deemed “ Joint Pre-Phase IIb Development ” and such Pre-Phase IIb Plan shall be deemed a “ Joint Pre-Phase IIb Plan ”. If either Party delivers such Opt-Out Notice, the other Party may conduct such Pre- Phase IIb Development unilaterally as provided under and in accordance with Section 5.6(a), and the Unilateral Pre-Phase IIb Plan may be amended in accordance with Section 5.6(a)(iii).

(iv) Amendment of Joint Pre-Phase IIb Plan. Either Party may propose an amendment to any Joint Pre-Phase IIb Plan to the applicable JDC from time to time. If such JDC cannot agree on any such proposed amendment within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***]-day period [***].

(v) Funding of Joint Pre-Phase IIb Development. The Parties shall share the Development Costs incurred by each Party in connection with Joint Pre-Phase IIb Development equally (50/50).

(vi) Decision to Commence Phase IIb Development . At the conclusion of Joint Pre-Phase IIb Development activities, the JDC shall again assess the readiness for such Product Candidate for further Development in Phase IIb Clinical Studies in accordance with this Section 5.5(a).

(vii) Regulatory Matters for Joint Pre-Phase IIb Development. The Party that was the LDP and LRP for Exploratory Development Activities for a Product Candidate shall be the LDP and LRP for Joint Pre-Phase IIb Development activities for such Product Candidate unless otherwise agreed by the Parties.

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(b) Phase IIb Development.

(i) Phase IIb Plan .

(1) For any Product Candidate that is being jointly Developed and that has been determined by the applicable JDC to be ready for Development in Phase IIb Clinical Studies pursuant to Section 5.5(a)(i) or Section 5.5(a)(vi), the JDC shall prepare a written plan setting forth: (A) the Development activities (including the Phase IIb Clinical Study, any Non-Clinical Studies and potentially other Clinical Study(ies)) to be conducted by the Parties for such Product Candidate with the goal of determining whether such Product Candidate should be further Developed in Phase III Clinical Studies, and if so, obtaining the Clinical Data and other results necessary to meet the requirements of the Regulatory Authorities in order to commence Phase III Clinical Studies for such Product Candidate and related Manufacture and supply matters (such activities collectively, the “ Phase IIb Development ”), including the protocol for the proposed Phase IIb Clinical Study or other related such studies; (B) the allocation of the conduct of the activities under such Phase IIb Development between the Parties; (C) the timeline associated with such Phase IIb Development; and (D) the budget for such Phase IIb Development (the “ Phase IIb Plan ”). Any such Phase IIb Plan shall be effective upon approval of the JDC, either by the agreement of the JDC or, in the case of disagreement, as set forth in Section 5.5(b)(i)(2) below.

(2) If the JDC cannot agree on the Phase IIb Plan within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***]-day period, then the Phase IIb Clinical Study for such Product Candidate [***].

(ii) Opting-Out of Phase IIb Development . Either Party shall have the right, during a period of [***] days after the determination of the Phase IIb Plan, to deliver to the other Party an Opt-Out Notice. If neither Party delivers such Opt-Out Notice within such period, then such Phase IIb Development shall be deemed “ Joint Phase IIb Development ” and such Phase IIb Plan shall be deemed a “ Joint Phase IIb Plan ”. If either Party delivers such Opt-Out Notice, the other Party may conduct such Phase IIb Development unilaterally as provided under and in accordance with Section 5.6(b), and the Unilateral Phase IIb Plan may be amended in accordance with Section 5.6(b)(iii).

(iii) Lead Development Party; Lead Regulatory Party. If Pre-Phase IIb Development activities were conducted for a Product Candidate (either jointly or unilaterally), the Party that was the LDP and LRP for such Pre-Phase IIb Development activities shall be the LDP and LRP for Joint Phase IIb Development activities for such Product Candidate unless otherwise agreed by the Parties. If no Pre-Phase IIb Development activities were conducted for a Product Candidate, the Party that was the LDP and LRP for Exploratory Development Activities for such Product Candidate shall be the LDP and LRP for Joint Phase IIb Development activities for such Product Candidate unless otherwise agreed by the Parties.

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(iv) Amendment of Joint Phase IIb Plans. Either Party may propose an amendment to any Joint Phase IIb Plan to the applicable JDC from time to time. If such JDC cannot agree on any such proposed amendment within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***])-day period [***].

(v) Funding of Joint Phase IIb Development. The Parties shall share the Development Costs incurred by each Party in connection with Joint Phase IIb Development equally (50/50).

(vi) Evaluation of Joint Phase IIb Results . For each Product Candidate, promptly after completion of all Development activities under the applicable Joint Phase IIb Plan, the applicable JDC shall evaluate all results pertaining to such Product Candidate and determine whether such Product Candidate is ready to be Developed in a Phase III Clinical Study or whether one or more additional Clinical Studies or Non-Clinical Studies should be conducted prior to Development in a Phase III Clinical Study.

(vii) Discontinuation of Development . If after completion of all Development activities under the applicable Joint Phase IIb Plan, both Parties’ representatives on the applicable JDC agree that the Development of the applicable Product Candidate in such Indication shall be discontinued, then such Product Candidate shall be discontinued as a Product Candidate for such Indication and returned to the JEC for a determination as to whether it should be: (A) re-designated as a Development Candidate for additional Exploratory Development Activities pursuant to Article 4, or (B) retained as a Product Candidate, but for another Indication to be selected by the JEC and then referred again to the JDC under this Article 5.

(viii) Additional Studies Required Before Commencement of Phase III Clinical Study. If after completion of all Development activities under the applicable Joint Phase IIb Plan, either (or both) Party’s representatives on the applicable JDC are of the view that further Clinical Studies or Non-Clinical Studies are required prior to advancing the applicable Product Candidate under a Joint Phase IIb Plan to Phase III Clinical Studies, then [***]. At the conclusion of such additional Development activities, the Parties shall again assess the readiness for such Product Candidate for further Development in Phase III Clinical Studies in accordance with Sections 5.5(b)(vi), 5.5(b)(vii), and 5.5(b)(viii).

(c) EOP2 Meeting; Briefing Package.

(i) EOP2 Meeting [***] (collectively, the “ EOP2 Meeting ”). Both Parties shall have the right to attend any EOP2 Meeting for a Product Candidate for an Indication under this Section 5.5(c)(i).

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(ii) Briefing Package. Prior to any EOP2 Meeting for a Product Candidate under a Joint Phase IIb Plan, the JDC shall prepare a briefing package for submission to the applicable Regulatory Authority for such EOP2 Meeting. If the JDC cannot agree on the content of such briefing package within a [***]-day period, then either Party’s JDC representatives may refer such matter to the JEC for resolution. If the JEC cannot agree on such content within a [***]-day period, then the matter shall be referred to the Senior Officers of the Parties for resolution. If such Senior Officers cannot agree on such content, [***].

(iii) Further Development Prior to Phase III Development. After reviewing the minutes of the EOP2 Meeting, if both Parties’ JDC representatives agree that such Product Candidate is ready for Phase III Clinical Studies in the applicable Indication, the Parties shall proceed under Section 5.5(d). If either Party’s representatives on the JDC are of the view that such Product Candidate is not ready for Phase III Clinical Studies, [***]. At the conclusion of such additional Development activities, the Parties shall again assess the readiness of such Product Candidate for further Development in a Phase III Clinical Study in accordance with this Section 5.5(c)(iii).

(d) Phase III Development .

(i) Phase III Plan.

(1) If both Parties’ JDC representatives agree that a Product Candidate under a Joint Phase IIb Plan is ready for Phase III Clinical Studies in an Indication, then the JDC shall prepare a written Development plan and budget for the Phase III Development of such Product Candidate for such Indication with the goal of obtaining Regulatory Approval for the U.S./Europe/Japan Region and the ROW Region, which shall include a clinical plan and a protocol for such Phase III Clinical Study(ies) based on the EOP2 Meeting briefing package, incorporating any feedback received from each Regulatory Authority, as well as all other Development activities, including Non-Clinical Studies and CMC Development, that are required to support Regulatory Approval of the Product containing such Product Candidate in such Indication for the U.S./Europe/Japan Region and the ROW Region, and which Development plan shall assign responsibility for such Development activities between the Parties, and shall include the timeline and budget for such Development activities (the “ Phase III Plan ”).

(2) If the JDC cannot agree on such Phase III Plan within [***] days after both Parties’ JDC representatives agree that such Product Candidate is ready for Phase III Clinical Studies in an Indication, the matter shall be referred to the JEC for resolution. If the JEC cannot agree on such Phase III Plan within a [***]-day period, then such matter shall be referred to the Senior Officers of the Parties for resolution. If such Senior Officers cannot agree on such Phase III Plan within a [***]-day period, then [***].

(ii) Opting-Out of Phase III Development. Within [***] days after the determination of the Phase III Plan in accordance with Section 5.5(d)(i), each Party shall have the right to deliver to the other Party an Opt-Out Notice in which it notifies the other Party whether it desires to opt-out of the Development of the applicable Product Candidate under such Phase III Plan, which opt-out may be for the entire Territory or for the ROW Region only (the “ Phase III Opt-Out ”).

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(iii) Joint Products; Joint Phase III Plan . Any Development Region for which neither Party exercises its Phase III Opt-Out for a Product Candidate in an Indication is referred to as a “ Profit Share Region ” for such Product Candidate, and any Product containing such Product Candidate is referred to as a “ Joint Product ” with respect to such Development Region. For each Joint Product in each applicable Profit Share Region, the Parties shall conduct the Phase III Clinical Studies, as well as other Development activities required for Regulatory Approval, all in accordance with the applicable Phase III Plan (such Phase III Plan, the “ Joint Phase III Plan ”).

(iv) Lead Development Party; Lead Regulatory Party. With respect to a Joint Phase III Plan for a Joint Product in an Indication for a Profit Share Region, (A) the Party that was the Lead Development Party for Phase IIb Development for such Joint Product in such Indication shall remain the Lead Development Party for such Joint Product in such Indication in such Profit Share Region; and (B) the Party that was the Lead Regulatory Party for Phase IIb Development for such Joint Product in such Indication in such Region shall remain the Lead Regulatory Party with respect to the Development activities for such Joint Product in such Indication in such Profit Share Region up to and including the preparation, filing and approval of all Drug Approval Applications for such Joint Product in each Commercialization Territory, and thereafter the Lead Commercialization Party for such Joint Product in each Commercialization Territory (as determined in accordance with Section 5.6(e)(vi) or Section 7.3) shall be Lead Regulatory Party with respect to all other regulatory Development, Manufacturing and Commercialization activities with respect to such Joint Product in such Commercialization Territory thereafter.

(v) Amendment to Joint Phase III Plan. Either Party may propose to the applicable JDC an amendment to the Joint Phase III Plan from time to time, including adding Development activities required to obtain Regulatory Approval in the applicable Indication in the Profit Share Region. If such JDC cannot agree on any such proposed amendment within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***]-day period, the Lead Development Party shall have the final decision-making authority, exercising reasonable good faith judgment consistent with the Principles; provided that such Lead Development Party shall not have the right, without the other Party’s written consent, to make any Material Amendment to the Joint Phase III Plan.

(vi) Funding of Joint Phase III Plan. The Parties shall share equally (50/50) all Development Costs incurred by each Party in connection with the conduct of Development activities under such Joint Phase III Plan.

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(vii) Additional Phase III Studies. Notwithstanding anything in this Agreement (including Section 5.6(d)(v)) to the contrary, if, after the completion of all Phase III Clinical Studies and other Development activities set forth in a then-current Joint Phase III Plan, any Regulatory Authority recommends or requires that an additional Phase III Clinical Study(ies) (or other additional Development activity(ies)) be conducted in order to obtain and prior to obtaining, Regulatory Approval for a Joint Product in an Indication in the applicable Profit Share Region, either Party may propose to the applicable JDC an amendment to such Joint Phase III Plan to add such additional Phase III Clinical Study(ies) (or other additional Development activity(ies)). If such JDC cannot agree on any such proposed amendment within a [***]-day period, then such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then such matter shall be referred to the Parties’ Senior Officers for resolution. If such Senior Officers cannot resolve such matter within a [***]-day period [***]. Any Product containing such Product Candidate shall thereafter be deemed a Unilateral Product (with the Party continuing with such Development as the Participating Party) and the other Party shall be entitled to receive royalties on such Unilateral Product pursuant to Section 11.4(a)(i).

(e) Development Activities under Joint Plans. For each Joint Plan, the applicable Lead Development Party shall prepare a reasonable timeline for the commencement of Development activities thereunder (if such timeline is not already included therein) and such timeline shall be included in the applicable Joint Plan upon approval by the applicable JDC, and from time to time, such JDC shall: (i) extend such timelines for the length of any Excusable Delay; and (ii) otherwise adjust such timelines to reflect actual Development progress made by the Parties. Each Party shall use Commercially Reasonable Efforts to perform the Development activities allocated to it in such Joint Plan in accordance with the timeline set forth therein. Each Party shall conduct the Development activities under each Joint Plan in accordance with the terms and conditions of this Agreement and in compliance with all Applicable Laws. If a Party (the “ Non-Performing Party ”) fails to commence or perform any Development activities allocated to it in a Joint Plan in accordance with the timeline set forth therein, the other Party (the “ Step-In Party ”) may notify the Non-Performing Party of such failure. If the Non-Performing Party does not commence performing such Development activities within [***] days after receipt of such notice (and thereafter continue to perform such Development activities), the Step-In Party shall have the right, at the Step-In Party’s sole election, to assume and complete some or all of such Development activities, and all Development Costs incurred by the Step-In Party and its Affiliates in performing such assumed Development activities shall be shared by the Parties in accordance with Section 5.5(a)(v), 5.5(b)(v), or 5.5(d)(vi), as applicable. If the Step-In Party so elects to assume and complete any of such Development activities, to the extent requested by the Step-In Party in writing and reasonably necessary for the conduct of such activities, the Non-Performing Party shall assign (or cause its Affiliates to assign) to the Step-In Party all agreements with any Third Party with respect to the conduct of such Development activities, including agreements with contract research organizations, clinical sites, and investigators, unless, with respect to any such agreement, such agreement (A) expressly prohibits such assignment, in which case the Non- Performing Party shall cooperate with the Step-In Party in all reasonable respects to secure the consent of the applicable Third Party to such assignment, or (B) covers products in addition to the New Collaboration Compound that is the subject of such Development activities, in which case the Non-Performing Party shall cooperate with the Step-In Party in all reasonable respects

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

to facilitate the execution of a new agreement between the Step-In Party and the applicable Third Party. In such event, with respect to all such Development activities that involve Clinical Studies, at the Step-In Party’s option, the Non-Performing Party shall transfer control to the Step-In Party or its designee of such Clinical Studies and cooperate with the Step-In Party to ensure a smooth and orderly transition thereof that will not involve any disruption of such Clinical Studies.

(f) Discontinuation of Clinical Studies. Neither Party may discontinue any Clinical Study for a Product Candidate conducted pursuant to a Joint Plan without the consent of the other Party; provided that the Party holding the IND for such Product Candidate shall have the right to discontinue any Clinical Study in the event such Party reasonably determines in good faith that such Clinical Study presents a Safety Risk. In the event that the Party that does not hold the IND for a Product Candidate reasonably determines in good faith that a Clinical Study for such Product Candidate conducted pursuant to a Joint Plan presents a Safety Risk and therefore should be discontinued, such Party shall notify the Party that holds such IND. If the Party that holds such IND does not discontinue such Clinical Study within [***] days after receipt of such notice, the Party that does not hold such IND shall have the right to withdraw from participation in Development activities with respect to such Product Candidate immediately upon written notice to the IND holder, in which event the withdrawing Party shall have no further obligation to perform or fund Development activities for such Product Candidate, and the IND holder shall have the right to continue, unilaterally, Development activities for such Product Candidate under a Unilateral Plan in accordance with Section 5.6; provided that the withdrawing Party shall retain and may exercise in accordance with the terms hereof its Pre-Phase IIb Opt-In, Pre-Phase III Opt-In and EOP3 Opt-In, as applicable, with respect to such Product Candidate.

(g) Funding of Required Post-Regulatory Approval Development. If any Regulatory Authority requires, as a condition to obtaining or maintaining Regulatory Approval for a Joint Product in an Indication in the applicable Profit Share Region, that one or more Clinical Studies or other Development activities with respect to such Joint Product be conducted following initial Regulatory Approval of such Joint Product (“ Post-Approval Commitments ”), the Parties shall be required to share equally (50/50) all Development Costs incurred by each Party in connection with the conduct of such Post-Approval Commitments up to an aggregate amount of $50,000,000 for all Joint Products containing the same Product Candidate (the “Post-Approval Cap ”). Neither Party shall have the obligation, however, to fund Post-Approval Commitments for Joint Products containing the same Product Candidate once the Post-Approval Cap has been reached without such Party’s consent; provided that neither Party shall have the right to cease funding any Clinical Study that is a Post-Approval Commitment once it has been commenced due to the actual Development Costs of such Clinical Study causing the overall Development Costs of the Post-Approval Commitments to exceed the Post-Approval Cap. If either Party decides not to co-fund Post-Approval Commitments in excess of the Post-Approval Cap and the other Party decides to perform and fund all of the Development Costs for such Post-Approval Commitments in excess of the Post- Approval Cap at its own expense (the “Overage Amount” ), then the funding Party shall have the right, in addition to all of its rights (and obligations) to receive (and bear) its share of

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Operating Profit (or Loss) for such Product in the applicable Profit Share Region as otherwise set forth in Section 11.3 of this Agreement, to recoup one hundred percent (100%) (%) of the Overage Amount, plus a premium, by receiving (or retaining) a royalty equal to fifteen percent (15%) of the quarterly Net Sales of such Product in the applicable Profit Share Region (the “ Overage Recoupment Amount ”), until the aggregate amount of royalties received (or retained) by such Participating Party under this Section 5.5(g) equals two (2) times the total Overage Amount. The Overage Recoupment Amount shall be deducted from Net Sales of such Product in the Profit Share Region prior to determining Operating Profit (or Loss) of such Product in the Profit Share Region and shall not otherwise be taken into account in determining Operating Profit (or Loss). The funding Party shall provide to the other Party a written statement of all Overage Amounts incurred by it on a quarterly basis, and all such costs specified in such cost statements shall be subject to audit pursuant to Section 11.9.

(h) Funding of Humira-Related Products . Notwithstanding anything to the contrary in this Agreement, the Parties agree that, with respect to any joint Development of any Product Candidate contained in a Humira-Related Product under this Agreement, the Development Costs incurred by the Parties with respect to such Product Candidate from and after the designation as such under Section 4.2(e)(ii) shall be shared between the Parties in the following ratio: seventy percent (70%) Abbott; thirty percent (30%) Reata.

(i) Internal Costs. While the Parties agree to share Development Costs incurred by each Party for joint Development in accordance with this Section 5.5, each Party shall bear its own internal costs incurred in connection with the conduct of joint Development activities unless otherwise agreed upon by the Parties in writing, it being the intention of the Parties that over time and over the course of the conduct of the Joint Plan(s), each Party shall have contributed approximately equal internal resources to the conduct of such Development activities as it does in relation to the amount of Development Costs it has been allocated to fund (i.e., 50% or 30% or 70%, as the case may be). In the event a Party is of the opinion that there is a material discrepancy between the allocation of internal costs between the Parties with respect to their joint Development activities and their Development Cost allocation, the Parties shall discuss in good faith a mechanism to rebalance the allocation of such internal costs between the Parties to achieve approximately an appropriate ratio; it being understood, however, that the Parties shall not be required to track internal costs or time in connection with their Development activities unless the Parties otherwise agree.

5.6 Unilateral Product Development.

(a) Pre-Phase IIb Development.

(i) Participating Party. If only one Party desires to fund Pre-Phase IIb Development of a Product Candidate for an Indication and the other Party delivers an Opt- Out Notice in accordance with Section 5.4(b) or 5.5(a)(iii), then such Pre-Phase IIb Development shall be deemed “ Unilateral Pre-Phase IIb Development. ” The Party that desires to fund such Unilateral Pre-Phase IIb Development shall be the “Participating Pre- Phase IIb Party,” and the other Party shall be the “Non-Participating Pre-Phase IIb Party,” in each case with respect to such Product Candidate for such Pre-Phase IIb Development.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(ii) Unilateral Pre-Phase IIb Plan. Unless already approved by the JDC under Section 5.5(a)(ii), the Participating Pre-Phase IIb Party shall prepare for review and comment by the JDC a plan for such Pre-Phase IIb Development, exercising reasonable good faith judgment consistent with the Principles, which shall be referred to as the “Unilateral Pre-Phase IIb Plan” .

(iii) Amendment to Unilateral Pre-Phase IIb Plan. The Participating Pre-Phase IIb Party under a Unilateral Phase IIb Plan shall have the right to amend such Unilateral Pre-Phase IIb Plan, exercising reasonable good faith judgment consistent with the Principles, subject to the applicable JDC’s review and comment; provided that the Participating Pre-Phase IIb Party shall not have the right to make any Unilateral Material Amendment without the other Party’s consent. If the JDC cannot agree on whether such an amendment is a Unilateral Material Amendment within [***] days, such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within such [***]-day period, then such matter shall be referred to the Senior Officers of the Parties for resolution. If such Senior Officers cannot agree on such matter within [***].

(iv) Lead Development Party; Lead Regulatory Party. The Participating Pre-Phase IIb Party shall be the Lead Development Party and the Lead Regulatory Party for such Unilateral Pre-Phase IIb Development.

(v) Funding. The Participating Pre-Phase IIb Party for any Unilateral Pre-Phase IIb Development shall pay for one hundred percent (100%) of all Development Costs incurred in connection with such Unilateral Pre-Phase IIb Development.

(vi) Right to Opt Back In Prior to Phase IIb Development. The Non-Participating Pre-Phase IIb Party for a Product Candidate under a Unilateral Pre-Phase IIb Plan shall have the right to opt back in to the Development of such Product Candidate (the “ Pre-Phase IIb Opt-In ”) by providing the Participating Pre-Phase IIb Party with written notice of its exercise of such Pre-Phase IIb Opt-In (the “ Pre-Phase IIb Election Notice ”) within [***] days after receiving from the Participating Pre-Phase IIb Party: (A) a Completion Notice with respect to such Unilateral Pre-Phase IIb Development, (B) reasonable access to (with the ability to analyze and manipulate but not change) the electronic database that contains the Regulatory Data with respect to such Unilateral Pre-Phase IIb Development, and (C) a written statement of the costs that would need to be paid under clauses (1) and (2) below by the Non-Participating Pre-Phase IIb Party if it elects to exercise its Pre-Phase IIb Opt-In ((A), (B) and (C) collectively, the “ Pre-Phase IIb Notification ”). In addition, the Participating Pre-Phase IIb Party promptly shall provide to the Non-Participating Pre-Phase IIb Party such additional Information and Regulatory Documentation with respect to the Development activities described in such Completion Notice as may be reasonably requested by the Non-Participating Pre-Phase IIb Party in order to evaluate such Development activities. The Participating Pre-Phase IIb Party shall provide the Pre-Phase IIb Notification to the Non- Participating Pre-Phase IIb Party promptly after completion of such Unilateral Pre-Phase IIb Development. Any Pre-Phase IIb Opt-In exercise shall become effective only if the Non- Participating Pre-Phase IIb Party pays the Participating Pre-Phase IIb Party an amount equal to the sum of the following (as applicable) within [***] days after its delivery of the Pre- Phase IIb Election Notice:

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(1) One hundred percent (100%) of such Participating Pre-Phase IIb Party’s Development Costs incurred in connection with such Unilateral Pre- Phase IIb Plan (even if such Non-Participating Pre-Phase IIb Party delivers its notice of election to opt back in prior to the completion of such activities); and

(2) If such Non-Participating Pre-Phase IIb Party was a Non-Participating Exploratory Party for the applicable Development Candidate, One hundred percent (100%) of such Participating Exploratory Party’s Development Costs incurred in connection with Unilateral Exploratory Development for the applicable Development Candidate;

with such aggregate payment (for (1) and (2)) (the “ Pre-Phase IIb Opt-In Payment ”) reflecting the reimbursement of such Non-Participating Pre-Phase IIb Party’s original fifty percent (50%) share of such Development Costs plus a premium of [***] percent ([***]%). All Development Costs incurred by a Participating Exploratory Party or Participating Pre-Phase IIb Party in connection with any Development activities under any Unilateral Exploratory Development Plan or Unilateral Pre-Phase IIb Plan and specified in any cost statement under this Section 5.6(a)(vi) shall be subject to audit pursuant to Section 11.9. In the event a Non-Participating Pre-Phase IIb Party does not elect to opt-in to Joint Phase IIb Development under this Section 5.6(a)(vi), it shall nonetheless have the right to exercise its Pre-Phase III Opt-In or EOP3 Opt-In with respect the applicable Product Candidate in the applicable Indication in accordance with the terms hereof.

(vii) Effect of Opting Back In. Exercise of the Pre-Phase IIb Opt-In and payment of the Pre-Phase IIb Opt-In Payment in accordance with Section 5.6(a)(vi) shall not render the applicable Product Candidate a Product Candidate that has been jointly Developed (for purposes of decision making under Section 5.5(b)(i)) prior to the determination of the Phase IIb Plan, but rather shall ensure that such previously Non-Participating Pre-Phase IIb Party has the right, and the obligation, to participate in the ongoing joint funding of the Phase IIb Development under Section 5.5(b); however, exercise of the Pre-Phase IIb Opt-In and payment of the Pre-Phase IIb Opt-In Payment in accordance with Section 5.6(a)(vi) shall render such Product Candidate a Product Candidate Developed under a Joint Pre-Phase IIb Plan for all purposes following the determination of the initial Phase IIb Plan, including the right to opt-out of Phase IIb Development under Section 5.5(b)(ii) and joint decision making as to (A) the readiness for Phase III Development under Section 5.5(b), (B) the EOP2 Meeting and briefing package under Section 5.5(c), and (C) Phase III Development under Section 5.5(d).

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(b) Phase IIb Development.

(i) Participating Party. If the Non-Participating Pre-Phase IIb Party does not opt in under Section 5.6(a)(vi), or if a Party delivers to the other Party an Opt- Out Notice pursuant to Section 5.5(b)(ii), such that only one Party desires to fund Phase IIb Development, then such Phase IIb Development shall be deemed “ Unilateral Phase IIb Development ”. The Party that desires to fund such Unilateral Phase IIb Development shall be the “Participating Phase IIb Party,” and the other Party shall be the “Non-Participating Phase IIb Party,” in each case with respect to such Product Candidate for such Phase IIb Development.

(ii) Lead Development Party; Lead Regulatory Party. The Participating Phase IIb Party for particular Unilateral Phase IIb Development shall be the Lead Development Party and the Lead Regulatory Party for such Unilateral Phase IIb Development.

(iii) Unilateral Phase IIb Plans. Unless approved by the JDC pursuant to Section 5.5(b)(i), the Participating Phase IIb Party shall prepare for review and comment by the JDC a plan for such Phase IIb Development, exercising reasonable good faith judgment consistent with the Principles. Such Phase IIb plan shall be thereafter referred to as a “ Unilateral Phase IIb Plan ”. The Participating Phase IIb Party under a Unilateral Phase IIb Plan shall have the right to amend such Unilateral Phase IIb Plan, exercising reasonable good faith judgment consistent with the Principles, subject to the applicable JDC’s review and comment; provided that the Participating Phase IIb Party shall not have the right to make any such Unilateral Material Amendment without the other Party’s consent. If the JDC cannot agree on whether such an amendment is Unilateral Material Amendment within [***] days, such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within such [***]-day period, then such matter shall be referred to the Senior Officers of the Parties for resolution. If such Senior Officers cannot agree on such matter within [***].

(iv) Funding. The Participating Phase IIb Party for any Unilateral Phase IIb Development shall pay for one hundred percent (100%) of all Development Costs incurred in connection with such Unilateral Phase IIb Development.

(v) Evaluation of Phase IIb Results . For each Product Candidate, promptly after completion of all Development activities under the applicable Unilateral Phase IIb Plan, the applicable Participating Phase IIb Party shall present to the JDC all results pertaining to such Product Candidate for review. The applicable Participating Phase IIb Party’s JDC representatives shall have the right to determine whether such Product Candidate is ready to be Developed in a Phase III Clinical Study or whether one or more additional Clinical Studies or Non-Clinical Studies should be conducted prior to Development in a Phase III Clinical Study. If the JDC representatives of the Participating Phase IIb Party under a Unilateral Phase IIb Plan determine that further Clinical Studies or Non-Clinical Studies are required prior to advancing the applicable Product Candidate to Phase III Clinical Studies, then such Participating Phase IIb Party shall have the right to amend the Unilateral Phase IIb Plan to include such additional Development activities in accordance with Section 5.6(b)(iii).

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(c) EOP2 Meeting; Briefing Package for Unilateral Products.

(i) Proceeding to EOP2 Meeting. If the Participating Phase IIb Party’s representatives on the JDC determine that a Product Candidate under a Unilateral Phase IIb Plan is ready to be Developed in Phase III Clinical Study(ies) for the applicable Indication, such Party shall have the right to proceed to the EOP2 Meeting; provided, however, that if the Non-Participating Pre-Phase IIb Party has exercised the Pre-Phase IIb Opt-In and paid the Pre- Phase IIb Opt-In Payment in accordance with Section 5.6(a)(vi), then the Parties shall proceed as provided in Section 5.5(c).

(ii) Briefing Package; Phase III Plan. Prior to any EOP2 Meeting for a Product Candidate under a Unilateral Phase IIb Plan for an Indication, the Participating Phase IIb Party shall prepare a briefing package, exercising reasonable good faith judgment consistent with the Principles, for submission to the applicable Regulatory Authority for such EOP2 Meeting. The Participating Phase IIb Party shall provide such briefing package to the JDC for review and comment, and shall consider in good faith all comments made by the Non- Participating Phase IIb Party’s representatives on the JDC. The Non-Participating Phase IIb Party shall not have the right to attend any EOP2 Meeting for a Product Candidate under a Unilateral Phase IIb Plan for an Indication under this Section 5.6(c)(ii).

(iii) Commencement of Phase III Development. After reviewing the minutes of the EOP2 Meeting, if the Participating Phase IIb Party’s JDC representatives are of the view that such Product Candidate is ready for Phase III Clinical Studies, the Participating Phase IIb Party may proceed under Section 5.6(d). If the Participating Phase IIb Party’s JDC representatives are of the view that such Product Candidate is not ready for Phase III Clinical Studies, then the Participating Phase IIb Party may amend the Unilateral Phase IIb Plan in accordance with Section 5.6(b)(iii), and the Participating Phase IIb Party shall have the right to carry out the Development activities set forth in such amended plan under the same terms and conditions as set forth in Section 5.6(b) for the original Unilateral Phase IIb Plan, as applicable, and at the conclusion of such additional Development activities, the Participating Phase IIb Party shall again assess the readiness for such Product Candidate for further Development in a Phase III Clinical Studies in accordance with this Section 5.6(c).

(iv) Right to Opt Back In Prior to Phase III. The Non- Participating Phase IIb Party for a Product Candidate under a Unilateral Phase IIb Plan shall have the right to opt back in to the Development of such Product Candidate (the “ Pre-Phase III Opt-In ”) by providing the Participating Phase IIb Party with written notice of its exercise of such Pre-Phase III Opt-In (the “ Pre-Phase III Election Notice ”) within [***] days after receiving from the Participating Phase IIb Party: (A) a Completion Notice with respect to such Unilateral Phase IIb Development, (B) reasonable access to (with the ability to analyze and manipulate but not change) the electronic database that contains the Regulatory Data with respect to such Unilateral Phase IIb Development, and (C) a written statement of the costs that would need to be paid under clauses (1), (2) and (3) below by the Non-Participating Phase IIb Party if it elects to exercise its Pre-Phase III Opt-In ((A), (B) and (C) collectively, the “ Pre- Phase III Notification ”). In addition, the Participating Phase IIb Party promptly shall provide to the Non-Participating Phase IIb Party such additional Information and Regulatory Documentation with respect to the Development activities described in such Completion

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Notice as may be reasonably requested by the Non-Participating Phase IIb Party in order to evaluate such Development activities. The Participating Phase IIb Party shall provide the Pre- Phase III Notification to the Non-Participating Phase IIb Party promptly after completion of such Unilateral Phase IIb Development. Any Pre-Phase III Opt-In exercise shall become effective only if the Non-Participating Phase IIb Party pays the Participating Phase IIb Party an amount equal to the sum of the following (as applicable) within [***] days after its delivery of the Pre-Phase III Election Notice:

(1) one hundred percent (100%) of the Participating Phase IIb Party’s Development Costs incurred in connection with such Unilateral Phase IIb Plan (even if such Non-Participating Phase IIb Party delivers its notice of election to opt back in prior to the completion of such activities); and

(2) if such Non-Participating Phase IIb Party also has been a Non-Participating Pre-Phase IIb Party during any Unilateral Pre-Phase IIb Development for the applicable Product Candidate, one hundred percent (100%) of the Participating Pre- Phase IIb Party’s Development Costs incurred in connection with such Unilateral Pre-Phase IIb Party’s Development; and

(3) if such Non-Participating Phase IIb Party also has been a Non-Participating Exploratory Party during any Unilateral Exploratory Development for the applicable Product Candidate as a Development Candidate or Lead Compound, one hundred percent (100%) of the Participating Exploratory Party’s Development Costs incurred in connection with such Unilateral Exploratory Development;

with such aggregate payment (for (1), (2) and (3)) (the “ Pre-Phase III Opt-In Payment ”) reflecting the reimbursement of such Non-Participating Phase IIb Party’s original fifty percent (50%) share of such Development Costs plus a premium of one hundred percent (100%). All Development Costs incurred by a Participating Phase IIb Party in connection with any Development activities under any Unilateral Exploratory Development Plan or Unilateral Pre-Phase IIb Plan or Unilateral Phase IIb Plan and specified in any cost statement under this Section 5.6(c)(iv) shall be subject to audit pursuant to Section 11.9. In the event a Non- Participating Phase IIb Party does not elect to opt-in to Joint Phase III Development under this Section 5.6(c)(iv), it shall nonetheless have the right to exercise its EOP3 Opt-In with respect the applicable Product Candidate in the applicable Indication in accordance with the terms hereof.

(v) Effect of Opting Back In.

(1) Where the Pre-Phase III Election Notice under Section 5.6(c)(iv) is received prior to the first data analysis (including any interim analysis as part of the statistical plan) of the Phase IIb Clinical Study, payment of the Pre-Phase III Opt-In Payment shall render such Product Candidate a Product Candidate Developed under a Joint Phase IIb Plan for all purposes, including joint decision making as to the readiness for Phase III Development and the Phase III Plan under Sections 5.5(c) and 5.5(d).

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(2) Where the Pre-Phase III Election Notice under Section 5.6(c)(iv) is not received prior to the first data analysis (including any interim analysis as part of the statistical plan) of the Phase IIb Clinical Study, payment of the Pre-Phase III Opt- In Payment shall not render such Product Candidate a Product Candidate Developed under a Joint Phase IIb Plan for purposes of determining the Phase III Plan, but rather shall ensure that such previously Non-Participating Phase IIb Party has the right, and the obligation, to participate in the ongoing joint funding of Phase III Development under Section 5.5(d); however, exercise of the Pre-Phase III Opt-In and payment of the Pre-Phase III Opt-In Payment shall render such Product Candidate a Product Candidate Developed under a Joint Phase IIb Plan for all purposes following the completion of the first Phase III Clinical Study.

(d) Phase III Clinical Development.

(i) Unilateral Products. If the Non-Participating Phase IIb Party does not opt-in under Section 5.6(c)(iv), or if a Party delivers to the Participating Party an Opt- Out Notice pursuant to Section 5.5(d)(ii) with respect to a Development Region, such that only one Party (the “ Participating Phase III Party ”) desires to fund Phase III Development in such Development Region, then such Development Region is referred to as a “ Royalty Region ” for the applicable Product Candidate, and any Product containing such Product Candidate is referred to as a “ Unilateral Product ” with respect to such Development Region, and the Party that does not fund such Phase III Development for such Development Region is referred to as the “ Non-Participating Phase III Party ”. For each Unilateral Product in each applicable Royalty Region, the Participating Phase III Party shall conduct the Phase III Clinical Study(ies), as well as other Development activities required for Regulatory Approval, all in accordance with the Unilateral Phase III Plan, and such Phase III Development shall be deemed “ Unilateral Phase III Development ”.

(ii) Unilateral Phase III Plan. Unless agreed upon by the Parties under Section 5.5(d)(i), the Participating Phase III Party shall prepare for review and approval by the JDC a plan for such Phase III Development. If the JDC cannot agree on such Phase III Plan within [***] days after submission of such plan by the Participating Phase III Party, the matter shall be referred to the JEC for resolution. If the JEC cannot agree on such Phase III Plan within a [***]-day period, then such matter shall be referred to the Senior Officers of the Parties for resolution. If such Senior Officers cannot agree on such Phase III Plan within a [***]. Such Phase III plan shall be thereafter referred to as a “ Unilateral Phase III Plan ” and shall govern the Unilateral Phase III Development.

(iii) Amendments to Unilateral Phase III Plan. The Participating Phase III Party under a Unilateral Phase III Plan shall have the right to amend such Unilateral Phase III Plan, [***]. If the JDC cannot agree [***] within [***] days, such matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within such [***]-day period, then such matter shall be referred to the Senior Officers of the Parties for resolution. If such Senior Officers cannot agree on such matter within [***].

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(iv) Lead Development Party; Lead Regulatory Party. With respect to a Unilateral Phase III Plan for a Unilateral Product in an Indication for a Royalty Region, the applicable Participating Phase III Party shall be the Lead Development Party and Lead Regulatory Party with respect to the Development activities under such Unilateral Phase III Plan (including with respect to the preparation and filing of all Drug Approval Applications for such Unilateral Product in such Indication in such Royalty Region).

(v) Funding. The Participating Phase III Party shall pay for one hundred percent (100%) of all Development Costs incurred in connection with its activities under such Unilateral Phase III Plan.

(e) Option to Convert a Unilateral Product into a Joint Product at the End of the first Phase III Clinical Study.

(i) EOP3 Opt-In and Notice. Subject to Section 5.6(e)(ii) below, for any particular Unilateral Product in a Royalty Region, a Party that has been the Non- Participating Phase III Party under the Unilateral Phase III Plan shall have the right to convert such Unilateral Product to a Joint Product in such Development Region after the completion of the first Phase III Clinical Study for such Unilateral Product (the “ EOP3 Opt-In ”) by providing the Participating Phase III Party with written notice of its exercise of such EOP3 Opt-In (the “ EOP3 Election Notice ” ) within [***] days after receiving from the Participating Phase III Party: (A) a Completion Notice with respect to such Phase III Clinical Study, (B) reasonable access to (with the ability to analyze and manipulate but not change) the electronic database that contains the Regulatory Data with respect to such Phase III Clinical Study and all other Development activities under the applicable Unilateral Phase III Plan, and (C) a written statement of the costs that would need to be paid under Section 5.6(e)(iii) below by the Non-Participating Phase III Party if it elects to exercise its EOP3 Opt-In incurred by the Participating Phase III Party through the last day of the Calendar Quarter immediately preceding the Calendar Quarter in which such statement is provided (such date, the “ Statement Cut-Off Date ”) ((A), (B) and (C) collectively, the “ EOP3 Notification ”). In addition, the Participating Phase III Party promptly shall provide to the Non-Participating Phase III Party such additional Information and Regulatory Documentation with respect to the Development activities described in such Completion Notice as may be reasonably requested by the Non-Participating Phase III Party in order to evaluate such Development activities. The Participating Phase III Party shall provide the EOP3 Notification to the Non-Participating Phase III Party promptly after completion of such first Phase III Clinical Study.

(ii) Restriction on Opting-In. A Non-Participating Phase III Party shall not have the right to exercise the EOP3 Opt-In with respect to a Product for the ROW Region unless such Product is a Joint Product with respect to U.S./Europe/Japan Region, either as a result of such Party’s exercise of its Pre-Phase III Opt-In prior to the commencement of the Phase III Clinical Study for such Product Candidate, or as a result of such Party’s exercise of the EOP3 Opt-In for the U.S./Europe/Japan Region concurrent with its exercise of the EOP3 Opt-In for the ROW Region.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(iii) Reimbursement of Prior Incurred Expenses Required for Effectiveness Of EOP3 Opt-In. Any EOP3 Opt-In exercise shall become effective only if the Non-Participating Phase III Party pays the Participating Phase III Party an amount equal to the sum of the following within [***] days after its delivery of the EOP3 Election Notice:

(A) in the event such Non-Participating Phase III Party also has been a Non-Participating Exploratory Party during any Unilateral Exploratory Development for the applicable Development Candidate (but only in the event not already paid), one hundred percent (100%) of the Participating Exploratory Party’s Development Costs incurred in connection with such Unilateral Exploratory Development Plan, with such payment reflecting the reimbursement of such Non-Participating Exploratory Party’s original fifty percent (50%) share of such Development Costs plus a premium of one hundred percent (100%);

(B) in the event such Non-Participating Phase III Party also has been a Non-Participating Pre-Phase IIb Party during any Unilateral Pre-Phase IIb Development for the applicable Product Candidate in the applicable Indication (but only in the event not already paid), one hundred percent (100%) of the Participating Pre-Phase IIb Party’s Development Costs incurred in connection with such Unilateral Pre-Phase IIb Plan, with such payment reflecting the reimbursement of such Non-Participating Pre-Phase IIb Party’s original fifty percent (50%) share of such Development Costs plus a premium of one hundred percent (100%);

(C) in the event such Non-Participating Phase III Party also has been a Non-Participating Phase IIb Party during the Phase IIb Development for the applicable Product Candidate in the applicable Indication, one hundred percent (100%) of the Participating Phase IIb Party’s Development Costs incurred in connection with such Unilateral Phase IIb Plan, with such payment reflecting the reimbursement of such Non-Participating Phase IIb Party’s original fifty percent (50%) share of such Development Costs plus a premium of one hundred percent (100%);

(D) one hundred fifty percent (150%) of the Participating Phase III Party’s total Development Costs incurred through the Statement Cut-Off Date in connection with its Unilateral Phase III Development activities under the Unilateral Phase III Plan for such Product Candidate in the Development Region for which the Non-Participating Phase III Party is exercising the EOP3 Opt-In, with such payment reflecting the reimbursement of such Party’s original fifty percent (50%) share of such Development Costs plus a premium of two hundred percent (200%); and

(E) fifty percent (50%) of the pre-launch commercialization costs (calculated in the same manner as Commercialization Costs, mutatis mutandis ) incurred by the Participating Phase III Party for such Product Candidate in such Development Region for such Indication and identified in the EOP3 Notification.

(iv) EOP3 Notice True-Up. Not later than [***] days after receiving the EOP3 Election Notice, the Participating Phase III Party shall provide to the Non- Participating Phase III Party a statement specifying the Participating Phase III Party’s total Development Costs incurred in connection with its Development activities under the Unilateral

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Phase III Plan for such Product Candidate in such Development Region during the period commencing on the day after the Statement Cut-Off Date and ending on the date of receipt of the EOP3 Election Notice, and the Non-Participating Phase III Party shall within [***] days of the receipt of such statement pay one hundred fity percent (150%) of such additional Development Costs set forth in such statement, with such payment reflecting the reimbursement of such Non-Participating Phase III Party’s original fifty percent (50%) share of such additional Development Costs plus a premium of two hundred percent (200%).

(v) Audit Rights. All Development Costs and commercialization costs incurred by a Participating Phase III Party in connection with any Development activities under any Unilateral Plan and specified in any cost statement under Sections 5.6(e)(iii) and (iv) shall be subject to audit pursuant to Section 11.9.

(vi) Conversion of Unilateral Product to Joint Product and Royalty Region to Profit Share Region. Upon the Participating Phase III Party’s receipt of the EOP3 Election Notice and the payment required pursuant to Section 5.6(e)(iii): (A) such Product shall cease to be a Unilateral Product in the applicable Development Region for which the Non-Participating Phase III Party is exercising the EOP3 Opt-In, and shall become a Joint Product in such Development Region; (B) such Development Region shall cease to be a Royalty Region and shall become a Profit Share Region; (C) the original Participating Phase III Party that has been conducting the Phase III Clinical Study for such Product Candidate shall have the right to be the Lead Commercialization Party for such Joint Product in such Profit Share Region; and (D) the Parties shall share equally (50/50) all future Development Costs for such Joint Product for such Indication for such Profit Share Region.

(vii) Failure to Exercise EOP3 Opt-In. If a Non-Participating Phase III Party does not exercise its EOP3 Opt-In with respect to a particular Product Candidate in a particular Development Region in accordance with this Section 5.6, then, unless the Participating Phase III Party otherwise agrees, Products containing such Product Candidate shall thereafter remain Unilateral Products for such Development Region and such Party shall not have any future right to convert such Products into Joint Products.

(viii) Conduct of Unilateral Development. The Participating Party shall conduct the Development activities under any Unilateral Plan in accordance with the terms and conditions of this Agreement and in compliance with all Applicable Laws.

(ix) Opt-In Across Indications. Except as set forth in Section 5.7(a)(iii)(3), in the event a Non-Participating Party exercises its Pre-Phase II Opt-In, Pre-Phase III Opt-In or EOP3 Opt-In for a particular Product Candidate for any Indication (either an original Indication or an Additional Indication), such Non-Participating Party shall be deemed to have exercised such Pre-Phase II Opt-In, Pre-Phase III Opt-In or EOP3 Opt-In with respect to all Active Indications with respect to such Product Candidate (and shall be required to make opt-in payments in respect of all Development Costs and commercialization costs with respect thereto).

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(x) Combined Studies Opt-In . Notwithstanding anything herein to the contrary, in the event that any Clinical Study conducted under a Unilateral Plan encompasses more than one stage of clinical Development (e.g., a Phase IIb/III Clinical Study), the Non-Participating Party shall have the right to opt in after the completion of such combined Clinical Study with the same effect as if such Non-Participating Party had opted in after the completion of a Clinical Study that encompassed only the earlier stage of clinical Development and without paying any increased premium that would have resulted from opting in after completion of a Clinical Study that encompassed only the later stage of clinical Development (e.g., a Non-Participating Party that opts in after completion of a Phase IIb/III Clinical Study shall be required to pay only one hundred percent (100%) of the Development Costs incurred by the Participating Party in conducting such Phase IIb/III Clinical Study and not one hundred fifty percent (150%) as otherwise set forth in Section 5.6(e)(iii)(D)).

5.7 Development of a Product Candidate in Additional Indication(s). For each Product Candidate/Product that is being Developed or Commercialized by the Parties or a Party (either jointly or unilaterally) in an Active Indication, each Party shall have the right to propose to the JEC that the Parties jointly, or such Party unilaterally, undertake Development activities for that same Product Candidate/Product for one (1) or more additional Indications in the New Collaboration Field, whether a Related Indication or outside the Related Indications (such Indications, the “ Additional Indication(s) ” and such Development activities, the “ Additional Indication Activities ”), subject to the following:

(a) Joint Product. If such Product Candidate/Product is at such time being jointly Developed or Commercialized in an Active Indication by the Parties, then the following shall apply:

(i) Proposed Additional Indication Not a Related Indication. Where any such proposed Additional Indication is not a Related Indication for the Active Indication in which such Product Candidate/Product is then being jointly Developed or Commercialized by the Parties, the JEC shall consider in good faith any such proposal for Additional Indication Activities. If one Party’s representatives on the JEC decide that such proposal should not be pursued, [***]. If the Parties mutually agree that such Additional Indication Activities may be carried out for such Product Candidate/Product in a Profit Share Region, and both Parties desire to fund such Additional Indication Activities, then the Parties shall carry out such Additional Indication Activities, and fund such Additional Indication Activities equally, all in accordance with an amendment approved by the JEC to the then-current (or most recently completed) Product Development Plan for such Product Candidate/Product for the applicable Active Indication. If the Parties mutually agree that such Additional Indication Activities may be carried out, but only one Party desires to fund such Additional Indication Activities, then such Party shall have the right (but not the obligation) to conduct and fund such Additional Indication Activities unilaterally, and in such event, the provisions in Section 5.7(a)(iii) shall apply.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(ii) Proposed Additional Indication is a Related Indication. Where any such proposed Additional Indication is a Related Indication for the Active Indication in which such Product Candidate/Product is being jointly Developed or Commercialized, the JEC shall consider in good faith any such proposal for Additional Indication Activities. If the Parties mutually agree that such Additional Indication Activities may be carried out for such Product Candidate/Product in a Profit Share Region, and both Parties desire to fund such Additional Indication Activities, then the Parties shall carry out such Additional Indication Activities, and fund such Additional Indication Activities equally, all in accordance with an amendment approved by the JEC to the then-current (or most recently completed) Product Development Plan for such Product Candidate/Product for the applicable Active Indication. If one Party’s representatives on the JEC wish to pursue such Additional Indication Activities and the other Party’s representatives on the JEC do not wish to do so [***].

(iii) Unilateral Development of an Additional Indication; Additional Indication Plan. The Party that has the right to conduct and fund any Additional Indication Activities unilaterally pursuant to Section 5.7(a)(i) or 5.7(a)(ii) shall be deemed the “ Proposing Party ” for such Additional Indication Activities, and the other Party shall be deemed the “ Non-Proposing Party ” for such Additional Indication Activities. If the Proposing Party pursues such Additional Indication Activities unilaterally:

(1) The Proposing Party shall conduct all Additional Indication Activities in accordance with a written Development plan and budget (the “ Additional Indication Plan ”) to be proposed by such Proposing Party and approved by the applicable JDC, provided that, if such JDC cannot reach agreement on such plan within a [***]-day period, the matter shall be referred to the JEC for resolution. If the JEC cannot resolve such matter within a [***]-day period, then the matter shall be referred to the Senior Officers of the Parties for resolution. If such Senior Officers cannot resolve such matter within a [***])-day period, then [***];

(2) The Non-Proposing Party shall have the right to exercise its Pre-Phase IIb Opt-In under Section 5.6(a)(vi), its Phase IIb Opt-In under Section 5.6(c)(iv), and its EOP3 Opt-In under Section 5.6(e) with respect to such Additional Indication under the Additional Indication Plan on the substantially same terms and conditions as set forth in such Sections, mutatis mutandis ; and

(3) If the Non-Proposing Party does not participate in Phase III Clinical Studies for such Additional Indication under the Additional Indication Plan, then, if the Proposing Party obtains Regulatory Approval for such Additional Indication in the applicable Profit Share Region: (A) such Product shall be Commercialized as a single Product for all Indications in the applicable Profit Share Region as provided in Article 7; and (B) the Proposing Party shall have the right, in addition to all of its rights (and obligations) to receive (and bear) its share of Operating Profit (or Loss) for such Product in the applicable Profit Share Region as otherwise set forth in Section 11.3 of this Agreement, to recoup its Development Costs incurred in the Development of such Product in such Additional Indication, plus a premium, by receiving (or retaining) a royalty equal to fifteen percent (15%) of the quarterly Net Sales of such Product in all Indications in the applicable Profit Share Region (the “ Recoupment Amount ”), until the aggregate amount of royalties received (or retained) by such Proposing Party under this Section 5.7(a)(iii)(3) equals two (2) times the total

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Development Costs incurred by such Proposing Party in connection with the Additional Indication Activities to the extent not jointly funded by such Non-Proposing Party. The Recoupment Amount shall be deducted from Net Sales of such Product in the Profit Share Region prior to determining Operating Profit (or Loss) of such Product in the Profit Share Region and shall not otherwise be taken into account in determining Operating Profit (or Loss). The Proposing Party shall provide to the other Party a written statement of all Development Costs incurred by such Proposing Party in connection with any Additional Indication Activities promptly after obtaining Regulatory Approval for the applicable Additional Indication in the applicable Profit Share Region, and all such Development Costs specified in such cost statement under this Section 5.7(a)(iii)(3) shall be subject to audit pursuant to Section 11.9.

(b) Unilateral Product . If such Product Candidate/Product is at such time being only unilaterally Developed or Commercialized in an Active Indication by a Party (and not also jointly being Developed or Commercialized), then the following shall apply:

(i) Proposed Additional Indication Not a Related Indication. Where any such proposed Additional Indication is not a Related Indication for the Active Indication in which such Product Candidate/Product is being Developed or Commercialized unilaterally by a Party, the JEC shall consider in good faith any such proposal for such Additional Indication Activities. If either Party’s representatives on the JEC decide that such proposal shall not be pursued, [***]. If the Parties mutually agree that such Additional Indication Activities may be carried out for such Product Candidate/Product, then the Participating Party with respect to such unilateral Product Candidate/Product in the applicable Royalty Region shall have the right (but not the obligation) to pursue Additional Indication Activities for such Product Candidate/Product solely for the purpose of obtaining Regulatory Approval for such Product Candidate/Product in such Additional Indication in such Royalty Region, at its sole cost and expense in accordance with an amendment approved by the JEC to the then-current (or most recently completed) unilateral Product Development Plan for such Product Candidate/Product for the applicable Active Indication. In the event the JEC cannot reach agreement on such amendment within a [***].

(ii) Proposed Additional Indication is a Related Indication. Where any such proposed Additional Indication is a Related Indication for the Active Indication in which such Product Candidate/Product is being Developed or Commercialized unilaterally by a Party, then the Participating Party (but not the other Party) shall have the right (but not the obligation) to carry out Additional Indication Activities for such Product Candidate/Product solely for the purpose of obtaining Regulatory Approval for such Product Candidate/Product in such Additional Indication in such Royalty Region, at its sole cost and expense in accordance with an amendment approved by the JEC to the then-current (or most recently completed) Development Plan for such Product Candidate/Product for the applicable Active Indication. In the event the JEC cannot reach agreement on such amendment within a thirty (30)-day period, [***].

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

5.8 Unilateral Development of Any Additional Product Candidate for an Active Indication.

(a) Requirements. For any Active Indication as to which a Product Candidate is being Developed or has obtained Regulatory Approval, either by a Party unilaterally or the Parties jointly (the “Initial Product Candidate” ), in the event either Party desires to pursue Development of a different Product Candidate for such Active Indication or any of its Related Indications (a “ Follow-On Product Candidate ”), it shall have the right, but not the obligation, to Develop unilaterally such Follow-On Product Candidate, but only if it complies with each of the following:

(i) Such Party shall first propose the Development of such Follow-On Product Candidate in such Indication to the JDC which is overseeing the then-current Development of the Initial Product Candidate (or which oversaw the Development where such Initial Product Candidate is an approved Product), and such Party may conduct such Development unilaterally [***];

(ii) Unless the Parties otherwise agree, if a Participating Party is unilaterally Developing such Initial Product Candidate for the Active Indication (and such Initial Product Candidate is not being Developed for the Active Indication jointly by the Parties in any Development Region), the other Non-Participating Party may not commence any unilateral Clinical Study Development of a Follow-On Product Candidate in such Active Indication or any of its Related Indications [***];

(iii) Unless the Parties otherwise agree, if the Parties jointly are Developing such Initial Product Candidate for the Active Indication in any Development Region, [***].

(b) Right for Non-Participating Party to Opt-In. Any Follow-On Product Candidate unilaterally Developed by a Party for an Active Indication or its Related Indications in compliance with Section 5.8(a) shall be subject to the right of the other Non- Participating Party to (i) exercise its Pre-Phase IIb Opt-In, (ii) exercise its Pre-Phase III Opt-In, and (iii) exercise its EOP3 Opt-In, provided that, in the event the Participating Party conducting such unilateral Development commences any Clinical Studies for such Follow-On Product Candidate within [***] years after the commencement of the first Phase III Clinical Study for the Initial Product Candidate in the applicable Active Indication, the payment due from the Non-Participating Party upon the exercise of such opt-in right shall equal such Non- Participating Party’s original fifty percent (50%) share of all Development Costs incurred in connection with Development activities for such Follow-On Product Candidate in such Indication, without any requirement for such other Party to pay any premium upon such opt-in.

5.9 Development Records and Reports. Each Party shall maintain, or cause to be maintained, records of its Development activities under this Article 5 (including any Development activities undertaken pursuant to any Product Development Plan) in accordance with Applicable Law and in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall be complete and accurate and shall properly reflect all work done and results achieved in the performance of such Development activities, and which shall be retained by such Party for at least [***] years after the termination of this

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Agreement, or for such longer period as may be required by Applicable Law. Each Party shall have the right, during normal business hours and upon reasonable notice, to inspect and copy any such records, except to the extent that a Party reasonably determines that such records contain Confidential Information that is not licensed to the other Party. Each Party shall provide the applicable JDC and the other Party with such reports summarizing in reasonable detail its Development activities under this Article 5 and the results of such activities as such JDC or the other Party reasonably requests.

5.10 Unilateral Acquired AIMs. Notwithstanding Section 5.8(a), each Party and its Affiliates shall not be precluded from Developing or Commercializing any Unilateral Acquired AIM Controlled by such Party (the “ AIM Acquiring Party ”) or its Affiliate in an Active Indication or its Related Indications, but subject to the following ((a) through (d)) in the event that any Joint Product(s) are being Developed or Commercialized by the Parties in or for a Profit Share Region in any such Active Indication or its Related Indications (the “ Current Products ”) at the time such Unilateral Acquired AIM becomes a Unilateral Acquired AIM:

(a) within [***] months of the date on which such Unilateral Acquired AIM becomes a Unilateral Acquired AIM, such AIM Acquiring Party shall be required to elect one (1) of the following: (A) [***];

(b) if the First Commercial Sale of a Current Product has not occurred in the Profit Share Region and the AIM Acquiring Party elects [***];

(c) if the First Commercial Sale of a Current Product has occurred anywhere in the Profit Share Region, and the AIM Acquiring Party elects [***]; and

(d) if the AIM Acquiring Party elects [***].

ARTICLE 6

R EGULATORY M ATTERS

6.1 Regulatory Filings and Approvals .

(a) Regulatory Strategy. The regulatory strategy and activities applicable to any New Collaboration Compound or Product in any stage of Development under this Agreement shall be set forth in the applicable Development Plan with respect to such stage, and approved in the same manner applicable to the other elements of such Development Plan(s). The regulatory strategy and activities applicable to any Joint Product after Regulatory Approval for such Joint Product has been obtained in a country shall be set forth in the applicable Commercialization Plan, and approved in the same manner applicable to the other elements of such Commercialization Plan(s). All regulatory activities for Joint Products shall be conducted by or on behalf of the Parties in accordance with such Commercialization Plan(s).

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(b) Regulatory Responsibilities .

(i) As between the Parties, subject to Section 9.2(c)(iii), the Party designated in accordance with the provisions of this Agreement as the LRP with respect to a particular set of Development, Manufacturing or Commercialization activities for a particular Development Candidate, Product Candidate or Product in a particular country in the Territory shall have the right and responsibility (but subject to the other Party’s rights of participation as set forth herein) for preparing, obtaining, and maintaining Drug Approval Applications, other Regulatory Approvals and other submissions, and for conducting communications with the Regulatory Authorities, with respect to the specific activities for which it is designated as LRP.

(ii) All Regulatory Documentation (including all Regulatory Approvals and Product Labeling) relating to the applicable Development Candidate, Product Candidate or Product with respect to the applicable Development, Manufacturing, or Commercialization activities in the applicable countries shall be owned by the applicable LRP or its designee. The Party that is not the LRP with respect to the applicable Development Candidate, Product Candidate or Product for the applicable Development, Manufacturing, or Commercialization activities in the applicable countries shall assign to the LRP all of its right, title, and interest in and to the applicable Regulatory Documentation (including any existing Regulatory Approvals) with respect to the applicable Product or New Collaboration Compound in the applicable countries, including Regulatory Documentation with respect to activities for which such Party was the LRP in a previous stage of Development, subject to such Party’s right of access, reference and use of Regulatory Data and Regulatory Documentation pursuant to Section 6.3, Section 10.1 and Section 10.5.

(iii) For all Joint Products, the LRP shall provide the other Party with an opportunity to review and comment on all Regulatory Documentation for Joint Products in the applicable countries in the Profit Share Territory, and all proposed actions with respect thereto, prior to submission thereof or the taking of the action. The LRP shall provide the other Party with access to interim drafts of the Regulatory Documentation for Joint Products in the applicable countries in the Profit Share Territory via the access methods (such as secure databases) established by the applicable JDC, and the other Party shall provide its comments on the then-current drafts of such Regulatory Documentation or of proposed actions within [***] days ([***] for Drug Approval Applications), or such other longer period of time mutually agreed to by the Parties. In the event that a Regulatory Authority establishes a response deadline for a regulatory filing or action shorter than such ([***])-day (or [***]-day) period, the Parties shall work cooperatively to ensure the other Party has a reasonable opportunity for review and comment within such deadlines. The LRP shall consider in good faith any such comments of the other Party.

(iv) For all Joint Products, the LRP shall provide the other Party with (A) access to or copies of all material written or electronic correspondence (other than regulatory filings) relating to the Development or Commercialization of Joint Products in the applicable countries in the Profit Share Territory received by such Party or its Affiliates from, or forwarded by such Party or its Affiliates to, the Regulatory Authorities in the applicable countries, and (B) copies of all meeting minutes and summaries of all meetings, conferences, and discussions held by such Party or its Affiliates with the Regulatory Authorities relating to

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

such Joint Products in such applicable countries, including copies of all contact reports produced by such Party or its Affiliates, in each case ((A) and (B)) within [***] Business Days of its receipt, forwarding or production of the foregoing, as applicable. If such written or electronic correspondence received from a Regulatory Authority relates to the withdrawal, suspension, or revocation of a Regulatory Approval for a Joint Product, the prohibition or suspension of the supply of a Joint Product, or the initiation of any investigation, review, or inquiry by such Regulatory Authority concerning the safety of a Joint Product, such Party shall notify the other Party and provide the other Party with copies of such written or electronic correspondence as soon as practicable, but not later than [***] Business Day after receipt of such correspondence.

(v) For all Joint Products, the LRP shall provide the other Party with prior written notice, to the extent the LRP has advance knowledge, of any meeting, conference, or discussion (including any advisory committee meeting) with a Regulatory Authority in the applicable countries relating to the applicable Development, Manufacture, or Commercialization of a Joint Product in the Profit Share Territory, within [***] Business Days after the Party or its Affiliate first receives notice of the scheduling of such meeting, conference, or discussion (or within such shorter period as may be necessary in order to give the other Party a reasonable opportunity to attend such meeting, conference, or discussion). The other Party shall have the right to attend as an observer (but not participate in) all such meetings, conferences, and discussions.

(vi) For all Joint Products, the Party that is not the LRP shall support the LRP, as may be reasonably necessary, in obtaining and maintaining Regulatory Approval for Joint Products in the applicable countries in the Profit Share Territory, including providing necessary documents or other materials required by Applicable Law to obtain and maintain Regulatory Approval, in each case in accordance with the terms and conditions of this Agreement and any applicable Development Plan.

(vii) For any Joint Product in any particular Commercialization Territory, in the event a Party becomes the new Lead Regulatory Party, the other Party shall promptly provide to such new Lead Regulatory Party copies of or access to all non-clinical data, Clinical Data and other Information, results and analyses with respect to such Joint Product to the extent not already in possession of such new Lead Regulatory Party, as may be reasonably necessary for obtaining and maintaining Regulatory Approval for such Joint Product in such Commercialization Territory, including providing necessary documents or other materials required by Applicable Law to obtain and maintain Regulatory Approval.

6.2 Regulatory Costs .

(a) Regulatory Costs incurred by the Parties in connection with Development activities for a Product (and Development-related Manufacturing activities, including CMC Development for a Product) shall be allocated in the same manner as Development Costs for such Development activities for such Product.

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(b) Regulatory Costs incurred by the Parties in connection with Commercialization activities for a Product (and Commercialization-related Manufacturing activities, including commercial supply activities for such Product): (i) shall be included as part of the Commercialization Costs in the Profit Share Region for such Product, if the Product is a Joint Product; and (ii) shall be solely borne by the Participating Party in the Royalty Region for such Product, if such Product is a Unilateral Product.

6.3 Data Sharing. Each Party shall promptly provide to the other Party copies of or access to, all Regulatory Data and Regulatory Documentation, when and as such Regulatory Data and Regulatory Documentation becomes reasonably available. Each Party shall have the right to use such Regulatory Data and Regulatory Documentation for all purposes in exercising its rights or fulfilling its obligations under this Agreement, whether or not such Party participated in or funded the activities in the course of which such data and results are generated, including expressly the right of any Party Developing a Unilateral Product to use all such Regulatory Data and Regulatory Documentation for submission to any Regulatory Authorities in the applicable Royalty Region, for no additional consideration other than the royalties owed thereon under Article 11.

6.4 Product Withdrawals and Recalls. Each Party shall make every reasonable effort to notify the other Party promptly (but in no event later than [***] hours) following its determination that any event, incident, or circumstance has occurred that may result in the need for a recall, market suspension or market withdrawal of a Product (whether a Joint Product or a Unilateral Product), and shall include in such notice the reasoning behind such determination, and any supporting facts. The Parties will discuss in good faith and attempt to agree upon whether to recall, suspend or withdraw the Product throughout the Territory; provided, however, that if the Parties fail to agree within an appropriate time period, then (i) with respect to a Joint Product in its Profit Share Region (if any), the Party that is the Lead Commercialization Party for the applicable Commercialization Territory within the Profit Share Region shall decide whether to recall, suspend or withdraw such Joint Product therein; and (ii) with respect to a Unilateral Product in its Royalty Region (if any), the Party that is the Participating Party therefor shall decide whether to recall, suspend or withdraw such Unilateral Product therein. If a recall, market suspension or market withdrawal is mandated by a Regulatory Authority in a country in the Territory, the Lead Commercialization Party shall initiate such a recall, market suspension or market withdrawal in compliance with Applicable Law. The Party that is not the Lead Commercialization Part shall reasonably cooperate in all recall, market suspension or market withdrawal efforts. Any expenses in connection with a recall, market withdrawal or market suspension with respect to Joint Products within the Profit Share Region shall be treated as Commercialization Costs except to the extent that the recall or withdrawal is attributable to (A) the negligence or willful misconduct of, or breach of this Agreement by, a Party, or (B) a Manufacturing defect in the Joint Product, in which events ((A) or (B)): (1) the Party that was negligent or committed willful misconduct or breach, or the Party responsible for Manufacture of the Joint Product, as applicable, shall bear that portion of the recall expenses attributable thereto; and (2) such costs shall not be included in Commercialization Costs. Any expenses in connection with a recall, market withdrawal or market suspension with respect to Unilateral Products within the Royalty Region shall be the

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sole responsibility of the Participating Party except to the extent that the recall or withdrawal is attributable to the negligence or willful misconduct of, or breach of this Agreement by, the Non-Participating Party, in which event the Non-Participating Party shall bear that portion of the recall expenses attributable thereto.

6.5 Pharmacovigilance. Prior to the filing of the first IND for a Development Candidate under this Agreement, the Parties shall enter into an agreement to initiate a process for the exchange of safety data (including post-marketing spontaneous reports received by each Party and its Affiliates) for the Products, and the establishment and maintenance of one or more global safety databases for the Products, in a mutually agreed format in order to monitor the safety of Products and to meet reporting requirements with any applicable Regulatory Authority.

6.6 Standards of Conduct. Each Party shall make regulatory filings, seek Regulatory Approvals and conduct all other regulatory activities under this Article 6 in compliance with Applicable Law, including any applicable anti-bribery laws and regulations.

ARTICLE 7

C OMMERCIALIZATION OF J OINT P RODUCTS

7.1 Commercialization of Joint Products in a Commercialization Territory. The Parties shall Commercialize each Joint Product in the New Collaboration Field in a given Commercialization Territory within a Profit Share Region under the oversight of the JMC and the JEC, and pursuant to the Commercialization Plan applicable to each such Joint Product in the Profit Share Region. If a Joint Product receives Regulatory Approval for more than one Indication, Commercialization of such Joint Product for all Indications will be conducted pursuant to a single Commercialization Plan and led by a single LCP. In furtherance of the foregoing, each Party shall be obligated to (a) perform the number of PDEs for each Joint Product assigned to it in each applicable Commercialization Plan and (b) expend the amount of promotional funds with respect to each Joint Product required in each applicable Commercialization Plan, and each Party otherwise shall use Commercially Reasonable Efforts to Commercialize each Joint Product in the Profit Share Region pursuant to the applicable Commercialization Plan.

7.2 Commercial Summit Meeting. For each Joint Product and corresponding Profit Share Region, within [***] days after the enrollment of the first patient in the first Phase III Clinical Study for such Joint Product, the Parties shall meet at a “ Commercial Summit .” The objective of each Commercial Summit shall be (a) to determine, for each Commercialization Territory, which Party is to act as the lead commercialization Party (the “ Lead Commercialization Party ” or “ LCP ”) for such Commercialization Territory, and which is to act as the supporting commercialization Party (the “ Supporting Commercialization Party, ” or “ SCP ”), the duties of which are discussed further below, (b) to determine the high-level Commercialization plan for such Joint Product throughout the Profit Share Region, and (c) to determine the allocation of tasks to each Party in line with their roles as Lead Commercialization Party and Supporting Commercialization Party, respectively. At

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each Commercial Summit the Parties shall discuss in good faith and attempt to agree upon a PDE Rate that will be applicable to each country in the Profit Share Region. If the Parties cannot agree upon the PDE Rate for any country in the Profit Share Region, the dispute shall be resolved pursuant to Section 17.6(d)(ii).

7.3 Determination of LCP and SCP . Unless otherwise mutually agreed upon or as determined pursuant to Section 5.6(e)(vi), the following shall apply in determining which Party is to be the LCP and which the SCP for a given Joint Product for a given Commercialization Territory:

(a) First Joint Product . For the first Joint Product under this Agreement to reach such stage of Development and which is not a Humira-Related Product:

(i) In the U.S., Reata shall have the first right to be the LCP, and if Reata elects to be the LCP, Abbott shall have the right to be the SCP, with a right to Co- Promote such Joint Product in the U.S., at its election, as further provided in Section 7.7 below;

(ii) In Europe, Abbott shall have the first right to be the LCP, and if Abbott elects to be the LCP, Reata shall have the right to be the SCP, with the right to Co- Promote such Joint Product in any or all of the European Major Market Countries, at its election, as further provided in Section 7.7 below;

(iii) In Japan, Abbott shall have the first right to be the LCP, and if Abbott elects to be the LCP, Reata shall have the right to be the SCP, but if Reata is the SCP, it shall have no right to Co-Promote such Joint Product in Japan; and

(iv) If the ROW Region is a Profit Share Region, Abbott shall have the first right to be the LCP in all countries of the ROW Region, and if Abbott elects to be the LCP, Reata shall have the right to be the SCP, but if Reata is the SCP, it shall have no right to Co-Promote such Joint Product in any such countries.

(b) Second Joint Product. For the second Joint Product under this Agreement to reach such stage of Development and which is not a Humira-Related Product:

(i) In the U.S. and Europe, Abbott shall have the first right to be the LCP in either the U.S. or Europe (or neither, but not both), and Reata shall have the right to be the SCP in whichever of such Commercialization Territories (if any) is selected by Abbott;

(ii) Reata shall have the first right to be the LCP in whichever (or both) of the U.S. or Europe for which Abbott has elected not to be the LCP pursuant to Section 7.3(b)(i) above, and Abbott shall have the right to be the SCP in such Commercialization Territory(ies) for which Reata has elected to be the LCP;

(iii) The SCP in the U.S. (whether Reata or Abbott) shall have right to Co-Promote in the U.S., at its election, as further provided in Section 7.7 below;

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(iv) If Abbott is the SCP in Europe, it shall have right to Co-Promote such Joint Product in any or all of the countries of Europe, at its election, as further provided in Section 7.7 below;

(v) If Reata is the SCP in Europe, it shall have the right to Co- Promote such Joint Product in any or all of the European Major Market Countries, at its election, as further provided in Section 7.7 below;

(vi) In Japan, Abbott shall have the first right to be the LCP, and if Abbott elects to be the LCP, Reata shall have the right to be the SCP, but if Reata is the SCP, it shall have no right to Co-Promote such Joint Product in Japan; and

(vii) If the ROW Region is a Profit Share Region, Abbott shall have the first right to be the LCP in all countries of the ROW Region, and if Abbott elects to be the LCP, Reata shall have the right to be the SCP, but if Reata is the SCP, it shall have no right to Co-Promote such Joint Product in any such countries.

(c) Third and Subsequent Joint Products . With respect to the third Joint Product and all subsequent Joint Products to reach such stage of Development and which are not Humira-Related Products:

(i) For the U.S. and Europe, beginning with Reata, the Parties shall alternate as to which has the first right to elect to be the LCP (the “ Selecting Party ”) in either (or neither) but not both of such Commercialization Territories; and the other Party shall have the right to be the SCP in such selected Commercialization Territory, if any;

(ii) The non-Selecting Party shall have the right to be the LCP in whichever (or both) of the U.S. or Europe for which the Selecting Party has elected not to be the LCP pursuant to Section 7.3(c)(i) above, and the Selecting Party shall have the right to be the SCP in such Commercialization Territory(ies) for which the non-Selecting Party has elected to be the LCP;

(iii) The SCP in the U.S. (whether Reata or Abbott) shall have right to Co-Promote such Joint Product in the U.S., at its election, as further provided in Section 7.7 below;

(iv) The SCP in Europe (whether Reata or Abbott) shall have right to Co-Promote such Joint Product in any or all of the countries of Europe, at its election, as further provided in Section 7.7 below;

(v) The non-Selecting Party shall have the first right to elect to be the LCP in up to two (2) of the following Commercialization Territories: (A) Japan, (B) the Asia Territory (if it is in the Profit Share Region), (C) Latin America (if it is in the Profit Share Region), and (D) the ROW Territory (if it is in the Profit Share Region). The Selecting Party shall have the right to be the LCP in whichever Commercialization Territories are not selected by the non-Selecting Party (and which are in Profit Share Regions). By way of example,

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assuming the ROW Region is a Profit Share Region, if Abbott is the Selecting Party under Section 7.3(c)(i) and elects to be the LCP in the U.S., then Reata shall have the right to be the LCP in Europe pursuant to Section 7.3(c)(ii), and shall further have the first right to elect to be the LCP pursuant to this Section 7.3(c)(v) in two out of the following: Japan, Asia Territory, Latin America, and the ROW Territory. Continuing such example, if Reata exercises such first right by electing to be the LCP in Japan and the Asia Territory, then Abbott shall have the right to be the LCP in Latin America and the ROW Territory. In each Commercialization Territory, the Party that is not the LCP shall have the right to be the SCP, and shall have the right to Co- Promote the Joint Product in all countries of such Commercialization Territory, at its election and as further provided in Section 7.7 below.

(d) Humira-Related Product . For each Joint Product which is a Humira- Related Product and for which Regulatory Approval is obtained, Abbott shall have the first right to be the LCP in every Commercialization Territory, and Reata shall have the right to be the SCP in all of the Commercialization Territories (if any) in which Abbott elects to be LCP for such Joint Products. Where Abbott does not elect to be the LCP for such Humira-Related Product in a Commercialization Territory, Reata shall have the right, but not the obligation, to be the LCP.

(e) No Obligation to be LCP or SCP . Notwithstanding the foregoing Sections 7.3(a) through 7.3(d), but subject to Section 7.4, a Party having the right to be the LCP shall not be required to be the LCP in any given Commercialization Territory, and if it declines such right, the other Party shall have the right to be the LCP in such Commercialization Territory; it being understood that neither Party shall have the authority to require the other Party to be the LCP. Similarly, a Party having the right to be the SCP shall not be required to be the SCP in the applicable Commercialization Territory, and if it declines such right, the LCP shall, in addition to its role as the LCP, carry out those Commercialization responsibilities that would otherwise have been allocated to the SCP. If, as to any given Commercialization Territory for a Joint Product, neither Party desires to be the LCP, then the Parties, through the JMC, shall discuss the matter and endeavor to agree as to the use of one or more Third Parties to act as the LCP or otherwise take the lead role in the Commercialization of such Joint Product in such Commercialization Territory. Any payments made under any arrangement with any such Third Party to either Party in exchange for such Commercialization Rights, whether in the form of upfront payments, milestones, Net Sales of Joint Product, profit share or royalties shall be deemed “ Sublicense Revenue ” and shared equally by the Parties as part of the Operating Profit (or Operating Loss), and all costs incurred in connection with the establishment of such Third Party arrangement shall be Commercialization Costs.

7.4 Commercialization Plan .

(a) As further described in this section 7.4, the strategy for the commercial launch of, and subsequent Commercialization of, each Joint Product in each Commercialization Territory shall be described in a comprehensive plan (each such plan, and any revisions thereto, a “ Commercialization Plan ”) for such Commercialization Territory that describes: (a) the pre-launch, launch and subsequent Commercialization activities for such Joint Product in the Commercialization Territory

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(including promotional messaging, branding (including Product Trademarks), pricing, advertising, planning, marketing, sales force training); (b) key tactics for implementing those activities; (c) the responsibilities for implementing those activities assigned to each of the Parties; (d) the Detailing plan (including the number of Sales Representatives to be provided by the Parties and the number of PDEs required to be performed by the Parties in each applicable country in the Commercialization Territory during each Calendar Quarter); (e) Phase IV Studies and Medical Affairs Activities; (f) the brand elements for such Joint Product throughout the Profit Share Region, including the applicable key distinctive colors, logos, images, and symbols, and Trademarks (including the Product Trademarks) to be used in connection therewith (consistent with Section 7.9); and (g) a comprehensive budget of the projected costs for executing such activities for such Joint Product in the Commercialization Territory (which budget shall include required amounts of promotional funds to be expended by the Parties). The Parties may agree on a single Commercialization Plan to cover multiple Joint Products. Each Commercialization Plan and all subsequent revisions thereto shall contain the information described above in this Section 7.4(a) and any other information the JMC believes is necessary or useful for the successful commercial launch and subsequent Commercialization of such Joint Product. The Parties acknowledge that certain items of the Commercialization Plan may not be amenable to determination at the time the Commercialization Plan is initially drafted. In such event, the Parties shall amend such plan pursuant to Section 7.4(b) to include such items when appropriate. In the event of any inconsistency between a Commercialization Plan and this Agreement, the terms of this Agreement shall control.

(b) The applicable JMC shall develop for approval by the JEC a proposed Commercialization Plan for each Joint Product for each Commercialization Territory at least [***] months prior to the then-current date of expected First Commercial Sale for such Joint Product in the Commercialization Territory as determined by such JMC (such date, the “ Anticipated Launch Date ” for such Joint Product). In addition, the JMC shall prepare and provide to the JEC for approval by [***]of each year an updated Commercialization Plan for the following Calendar Year. The JMC may also prepare amendments to the Commercialization Plan from time to time during the Calendar Year. If the JMC or JEC cannot agree on any amendment to any such Commercialization Plan, the matter shall be resolved [***].

(c) In the event the JMC cannot agree on a Commercialization Plan (or any amendment thereto, including each annual update) to be submitted to the JEC within [***] days after consideration thereof, then such matter shall be referred to the JEC for resolution. In the event the JEC cannot agree on a Commercialization Plan (or any amendment thereto, including each annual update) within [***] days after consideration thereof, then such matter shall be referred to the Senior Officers of the Parties for resolution. If such Senior Officers cannot reach resolution on the matter within a [***])-day period [***].

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7.5 Commercial Readiness.

(a) Party Readiness Plan. For each Joint Product and each Commercialization Territory, at least [***] months prior to the Anticipated Launch Date, each Party shall provide to the JMC for its approval a plan of activities and timelines therefor for planned launch in such Commercialization Territory, including specific criteria and timelines to be met for assuring that such Party, where it is LCP, has appropriate capabilities for distribution, managed care contracting, government pricing and reimbursement matters, and tendering (where applicable), and each Party has appropriate capabilities for performing its required PDEs (such plan of activities, criteria and timelines, collectively, the “ Party Readiness Plan ”). The number of Sales Representatives that each Party shall be required to provide in each country in such Commercialization Territory shall be set forth in the Party Readiness Plan, shall be determined in accordance with Section 7.4 and shall be deemed the “ Committed Sales Force ” for such Party.

(b) Initial Launch Readiness Meeting. The JMC shall meet at least [***] months prior to the Anticipated Launch Date (the “ Initial Launch Readiness Meeting ”), during which meeting each Party shall present to the JMC the number of Sales Representatives it has hired and that are ready for training for such launch. Unless the Parties agree to an alternative commercial ramp up strategy, in the event either Party (the “ Initial Shortfall Party ”) has not hired [***] percent ([***]%) or more of its Committed Sales Force by such Initial Launch Readiness Meeting (such difference between the Sales Representatives then hired by such Party and its Committed Sales Force, the “ Sales Force Shortfall ”), the other Party (the “ Supplementing Party ”) shall have the right (but not the obligation) to supplement for such Sales Force Shortfall by providing (x) its Sales Representatives up to the number of such Sales Force Shortfall and (y) PDEs in an amount up to (1) the number of Required PDEs assigned to the Initial Shortfall Party, multiplied by (2) the percentage of the Sales Force Shortfall (the “ Replaced PDEs ”), for the launch and the Commercialization of such Product in such Commercialization Territory. In such event, the Supplementing Party shall have the right to provide such Sales Representatives and Replaced PDEs for a period of time determined by the Supplementing Party, but which period shall not be more than [***] years after launch unless the Parties mutually otherwise agree (the “ Shortfall Period ”), and the Initial Shortfall Party’s Required PDEs shall be reduced by the number of Replaced PDEs. From and after the end of the Shortfall Period, (a) the Supplementing Party shall cease to provide the Sales Representatives and Replaced PDEs to supplement the Sales Force Shortfall and (b) the Initial Shortfall Party shall be obligated to (i) provide sufficient Sales Representatives to meet its total Committed Sales Force and Required PDEs as previously required by the Commercialization Plan and prior to downward adjustment as provided in the prior sentence, and (ii) promptly reimburse the Supplementing Party for all reasonable and direct costs incurred by the Supplementing Party and its Affiliates in connection with the reduction of its Sales Force resources provided to supplement the Sales Force Shortfall during the Shortfall Period; provided that the Supplementing Party shall use commercially reasonable efforts to minimize any such costs. Any reimbursement of costs by the Initial Shortfall Party to the Supplementing Party shall not reduce Net Sales and shall not be included as Sales and Marketing Costs or Commercialization Costs. However, (1) the PDE Costs incurred by the Supplementing Party during the Shortfall Period for the Replaced PDEs shall be included in Sales and Marketing Costs; and (2) the costs incurred by the Initial Shortfall Party in performing PDEs in excess of its Required PDEs, as reduced by the Replaced PDEs, shall not be Sales and Marketing Costs or Commercialization Costs.

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(c) Final Launch Readiness Meeting. The JMC shall meet at least [***] months prior to the Anticipated Launch Date (the “ Final Launch Readiness Meeting ”), during which meeting the JMC shall review the activities of each Party against such Party’s Party Readiness Plan (other than Sales Representative matters which are addressed in Section 7.5(b)) and determine whether such Party has met the criteria and timelines set forth in such Party Readiness Plan. In the event that either Party has not complied with the timelines and criteria set forth in such Party’s Party Readiness Plan by the Final Launch Readiness Meeting, the other Party shall have the right to perform the commercial responsibilities with respect to which the first Party has not complied until such first Party is ready to perform such commercial responsibilities, and at such time, the Parties shall cooperate to transfer such responsibilities to such first Party in an efficient manner that minimizes the disruption of the Commercialization of the Product and avoids duplication of costs.

7.6 Role of the Lead Commercialization Party. The LCP shall, under the oversight of the JMC and pursuant to the applicable Commercialization Plan, be solely responsible on behalf of the Parties for the following Commercialization activities with respect to the Joint Product in each of the countries within the applicable Commercialization Territory, unless mutually agreed otherwise:

(a) Sales and Distribution. The LCP shall be solely responsible for invoicing and booking sales, establishing all terms of sale (including pricing and discounts) and warehousing and distributing the Joint Product in the Commercialization Territory and shall perform all related services, in each case, in a manner consistent with the terms and conditions of this Agreement. The LCP shall be solely responsible for handling all returns, recalls, or withdrawals (except as set forth in Section 6.4), order processing, invoicing, collection, and inventory management with respect to the Joint Product in the Commercialization Territory. The other Party shall not accept orders for Joint Products or sell Joint Products for its own account or for the LCP’s account, and if the other Party receives any order for Joint Products in the Commercialization Territory, it shall refer such orders to the LCP for acceptance or rejection. If a Joint Product is returned to the other Party, the other Party shall promptly ship such Joint Product to the LCP. The other Party, if requested by the LCP, shall advise the customer who made the return that the Joint Product has been returned to the LCP.

(b) Medical Information. The LCP shall be responsible for responding to medical information requests from healthcare professionals and consumers in accordance with its standard practice for such activity and in accordance with procedures approved by the JMC.

(c) Customer Support. The LCP shall be responsible for providing customer support, handling medical queries, and responding to product and medical complaints relating to the Joint Product.

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(d) Reimbursement and Managed Care Activities. The LCP shall be the lead managed care/reimbursement Party and shall have the right and responsibility for negotiating and obtaining pricing or reimbursement approval for the Joint Product in the Commercialization Territory and negotiating managed care arrangements in accordance with a strategy formulated by the JMC. The LCP will make a good faith effort to involve the SCP in clinical and formulary presentations and in meetings with regional accounts.

(e) Medical Affairs Activities. The LCP shall be responsible for all Medical Affairs Activities with respect to the Joint Product in the Commercialization Territory, subject to the right of the SCP to provide, in the countries in which it Co-Promotes the Joint Product, the same level of field-based medical liaison support with respect thereto as it elects to provide with respect to Co-Promotion in such country under Section 7.7 (i.e., between [***] percent ([***]%) and [***] percent ([***]%) of the total number of field-based medical liaisons).

(f) Promotion and Detailing. The LCP shall be responsible for all promotion and Detailing activities, subject to the right of the SCP in such Commercialization Territory to Co-Promote, as provided in Section 7.7.

7.7 Co-Promotion by the SCP .

(a) Co-Promotion Option. As and to the extent provided in Section 7.3, the SCP in a given Commercialization Territory in the Profit Share Region shall have the right to Co-Promote the Joint Product on the terms and conditions set forth in this Section 7.7. A Joint Product Co-Promoted under the same Product Trademark by both Parties under this Article 7 is referred to herein as a “ Co-Promotion Product .”

(b) Notice . In order to exercise such Co-Promotion right, no later than [***] days after the filing with the applicable Regulatory Authority of the Drug Approval Application for the Joint Product in a country in the Profit Share Region for which the SCP has the right to Co-Promote, the SCP must provide the LCP with written notice of its election to exercise such Co-Promotion right in such country. Following delivery of such notice, the Parties shall negotiate the Co-Promotion Agreement and the MSL Agreement reasonably and in good faith and with such diligence as is required to execute and deliver each agreement by the date that is [***] months following such filing, or such other period as the Parties may agree in writing. If the SCP does not provide the above election notice with respect to any country within such [***]-day period, the SCP shall be deemed to have irrevocably waived its right to Co-Promote the Joint Product hereunder in such country.

(c) Terms of Co-Promotion Agreement .

(i) Terms. If the SCP exercises its Co-Promotion right for a country, the terms and conditions of such Co-Promotion arrangement shall be set forth in a co-promotion agreement (the “ Co-Promotion Agreement ”) to be entered into between the Parties as set forth in this Section 7.7(c). The Co-Promotion Agreement shall include the terms and conditions set forth herein and such other provisions as are usual and customary in the LCP’s contract sales force agreements, except that the SCP shall not be entitled to compensation for its Detailing efforts (but the PDE Cost of such efforts shall be deemed Commercialization

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Costs). Under the Co-Promotion Agreement, the LCP shall have the right to make all final decisions with respect to the Co-Promotion arrangement (consistent with the applicable Commercialization Plan), including call plans and assigned territories, the total number of PDEs required to be performed by the SCP (in accordance with Section 7.7(c)(ii)), the Promotional Materials to be used, the training and testing applicable to such Sales Representatives, and restrictions with respect to the ability of such Sales Representatives to Detail other products.

(ii) Co-Promotion Percentage. Within [***] days after the finalization of the first Commercialization Plan for a Co-Promotion Product in a country, the SCP shall notify the LCP of the percentage of the Sales Representatives and PDEs that the SCP shall contribute in such country during the period from the First Commercial Sale of the Co- Promotion Product in the country to the end of the first full Calendar Year following such First Commercial Sale, which percentage must be a multiple of [***] percent ([***]%) that is at least [***] percent ([***]%) but does not exceed [***] percent ([***]%) and which percentage shall be the same with respect to number of Sales Representatives and PDEs. The LCP shall be responsible for providing the remaining percentage of Sales Representatives and PDEs. Commencing with the second full Calendar Year following the First Commercial Sale of the Co-Promotion Product in the country, and annually thereafter, the SCP may reduce such percentage by providing the JMC with at least [***] days prior written notice thereof, provided that such percentage remains a multiple of [***] percent ([***]%) and remains within the range of [***] percent ([***]%) to [***] percent ([***]%) (unless the LCP terminates its right to Co-Promote with respect to such Joint Product in such country in accordance with the terms of the Co-Promotion Agreement). The SCP may not increase its then-current percentage at any time without the LCP’s consent.

(iii) PDE Shortfall . In addition to the remedies provided in Section 7.8, if the SCP fails to perform at least [***] percent ([***]%) of the Required PDEs (as may have been adjusted pursuant to Section 7.5 during the Shortfall Period) for a Co-Promotion Product in a country for each Calendar Quarter during any [***] consecutive Calendar Quarters, then the LCP shall have the right to reduce the SCP’s Co-Promotion percentage with respect to such Joint Product for such country by the same percentage points as such shortfall, on [***] days’ notice, which such reduced number shall thereafter during such Co-Promotion be the Required PDEs of such SCP in such country (the “Adjusted Required PDEs” ). Thereafter, if the SCP fails to perform at least [***] percent ([***]%) of the Adjusted Required PDEs for such Co-Promotion Product in such country for each Calendar Quarter during any [***] consecutive Calendar Quarters, then the LCP shall have the right to terminate the Co-Promotion Agreement with respect to such Joint Product for such country on [***] days’ written notice.

(iv) Dispute Resolution on Terms. If the Parties, despite good faith negotiations for a period of [***] days, cannot agree on the terms and conditions of any such Co-Promotion Agreement, either Party may refer such issue for resolution pursuant to Section 17.6(d)(ii) after the end of such [***]-day period. In the course of such dispute resolution, neither Party may propose terms and conditions for such Co-Promotion Agreement inconsistent with the terms and conditions set forth in this Section 7.7.

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(d) Terms of MSL Agreement. If the SCP exercises its Co-Promotion right for a Co-Promotion Product in a country, it shall have the right to provide in such country the same percentage of field-based medical liaisons for such Co-Promotion Product in such country as it does Sales Representatives. The terms and conditions of such arrangement shall be set forth in a medical science liaison agreement (the “ MSL Agreement ”) to be entered into between the Parties as set forth in this Section 7.7(d). The MSL Agreement shall include usual and customary provisions, except that the SCP shall not be entitled to compensation for its services (but the costs of such efforts shall be deemed [***], to the extent applicable). Under the MSL Agreement, the SCP shall have the right to make all final decisions with respect to the arrangement (consistent with the applicable Commercialization Plan), including the total number of medical liaisons to be used and their assignments, and the training and testing applicable to such medical science liaisons. If the Parties, despite good faith negotiations for a period of [***] ([***]) days, cannot agree on the terms and conditions of such MSL Agreement, either Party may [***].

7.8 PDE Shortfalls. In addition to the remedies provided in Section 7.5 and Section 7.7(c)(iii), if in any Calendar Quarter either Party (the “ Shortfall Party ”) fails to perform all of the required number of PDEs for a Joint Product in a country in the applicable Commercialization Territory assigned to the Shortfall Party with respect to such Calendar Quarter in accordance with the applicable Commercialization Plan (as may have been downward adjusted pursuant to Section 7.5 during the Shortfall Period) and any applicable Co-Promotion Agreement (the “ Required PDEs ”), the Shortfall Party shall pay the following amount to the other Party, as liquidated damages and not as a penalty, which payments shall be the other Party’s exclusive monetary remedy for the failure of the Shortfall Party to perform the Required PDEs for such Calendar Quarter (for clarity, such payments by the Shortfall Party shall not be deducted in calculating Net Sales and shall not be included in Commercialization Costs):

(a) if the Shortfall Party fails to perform [***] percent ([***]%) (but performs at least [***] percent ([***]%) of the Required PDEs in a country for any Calendar Quarter during the period commencing on the date of First Commercial Sale of such Joint Product in such country and ending [***] years after such date of First Commercial Sale (the “ Launch Period ”), then, not later than [***] days after the end of such Calendar Quarter, the Shortfall Party shall pay to the other Party an amount equal to (A) the difference between (i) the number of Required PDEs for such country for such Calendar Quarter, less (ii) the number of PDEs actually performed by the Shortfall Party for such country for such Calendar Quarter; multiplied by (B) the PDE Rate for such country for such Calendar Quarter, multiplied by (C) five (5);

(b) if the Shortfall Party fails to perform at least [***] percent ([***]%) of the Required PDEs in a country for [***] during the Launch Period, then, not later than [***] days after the end of [***], the Shortfall Party shall pay to the other Party an amount equal to (A) the difference between (i) the number of Required PDEs for such country for such Calendar Quarter, less (ii) the number of PDEs actually performed by the Shortfall Party for such country for such Calendar Quarter; multiplied by (B) the PDE Rate for such country for such Calendar Quarter, multiplied by (C) ten (10);

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(c) if the Shortfall Party fails to perform [***] percent ([***]%) (but performs at least [***] percent ([***]%) of the Required PDEs in a country for [***] after the Launch Period, then, not later than [***] days after the end of [***], the Shortfall Party shall pay to the other Party an amount equal to (A) the difference between (i) the number of Required PDEs for such country for such Calendar Quarter, less (ii) the number of PDEs actually performed by the Shortfall Party for such country for such Calendar Quarter; multiplied by (B) the PDE Rate for such country for such Calendar Quarter, multiplied by (C) two and one-half (2.5); and

(d) if the Shortfall Party fails to perform at least [***] percent ([***]%) of the Required PDEs in a country for [***] after the Launch Period, then, not later than [***] days after the end of [***], the Shortfall Party shall pay to the other Party an amount equal to (A) the difference between (i) the number of Required PDEs for such country for such Calendar Quarter, less (ii) the number of PDEs actually performed by the Shortfall Party for such country for such Calendar Quarter; multiplied by (B) the PDE Rate for such country for such Calendar Quarter, multiplied by (C) five (5).

7.9 Trademarks and Markings. The Parties shall Commercialize each Joint Product under a Product Trademark to be set forth in the Commercialization Plan for such Joint Product (or as generic products), in accordance with Section 12.9. Each such Product Trademark for such Joint Product shall be subject to the mutual agreement of the Parties. To the extent permitted by Applicable Law in each country in the Commercialization Territory, and subject to the prior written approval of each Party with respect to the presentation of its corporate name and logo, the Promotional Materials, packaging, and Product Labeling for each Joint Product in such country shall contain the corporate name and logo of each Party with equal prominence. If not permitted by Applicable Law, then such Promotional Materials, packaging, and Product Labeling for such Joint Product in such country shall contain the corporate name and logo of the LCP in each Commercialization Territory.

7.10 Commercialization Reports. The LCP in each Commercialization Territory shall keep the JMC fully informed regarding the progress and results of Commercialization activities for Joint Products in such Commercialization Territory, including by providing annual reports of results achieved against Commercialization Plan(s). The JMC shall specify the format and content of such reports.

7.11 Commercialization Standards of Conduct. Each Party shall, and shall cause its Affiliates to, comply with Applicable Law, the Pharmaceutical Research and Manufacturers of America (PhRMA) Code on Interactions with Healthcare Professionals, and other generally accepted industry codes with respect to the Commercialization of Joint Products in the Territory. In particular, and without limiting the foregoing, each Party shall in all respects comply with Applicable Law concerning the advertising, sales and marketing of prescription drug products in Commercializing Products in the Territory under this Agreement, including the Foreign Corrupt Practices Act of 1977, as amended (“ FCPA ”) and any applicable local

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anti-bribery laws. Each Party and its Affiliates shall have a system of internal accounting controls in place that are sufficient to provide reasonable assurances of compliance as required by the FCPA, and shall obtain certification from any permitted sublicensee or distributor it or its Affiliates may engage with respect to Joint Products to do the same, to bring any material non-compliance therewith (should it ever occur) by any of the foregoing entities to its attention, and to promptly remedy any such non-compliance. Each Party and its Affiliates shall maintain such controls throughout the Term and shall promptly notify the JMC in writing with respect to any material non-compliance regarding Commercialization of Joint Products.

ARTICLE 8

C OMMERCIALIZATION OF U NILATERAL P RODUCTS

8.1 Rights of Unilateral Party. The applicable Participating Party shall have the sole right to Commercialize Unilateral Products in the New Collaboration Field in any Royalty Region at its own cost and expense (except as otherwise expressly provided herein).

8.2 Commercialization Plans. The Participating Party shall provide to the JEC (and, if the Unilateral Product is also a Joint Product, the applicable JMC) informational updates regarding its Commercialization plans with respect to such Unilateral Product in the Royalty Region on an annual basis, and shall respond in a timely fashion to any reasonable requests of the JEC, JMC (if applicable) or the other Party with respect to such plans and its Commercialization activities in the Royalty Region. The Participating Party will consider in good faith the other Party’s input on such plans; [***].

8.3 Where Unilateral Product is also a Joint Product. Where a Unilateral Product in a Royalty Region is also a Joint Product in a Profit Share Region:

(a) Global Brand Elements . The Participating Party shall Commercialize such Unilateral Product in the Royalty Region in a manner consistent with the applicable key distinctive colors, logos, images, and symbols, and, subject to Section 8.3(b), the Product Trademarks developed by the applicable JMC for Commercialization of the Joint Product in the Profit Share Region.

(b) Trademarks and Markings. If required by the JMC (and permitted by Applicable Law), the Participating Party shall Commercialize the Unilateral Product under the Product Trademarks selected by the applicable JMC for the Joint Product in the Profit Share Region; provided that the Participating Party also may Commercialize the Unilateral Product as a generic product. To the extent required by Applicable Law in a country in the Royalty Region, the Promotional Materials, packaging, and Product Labeling for the Unilateral Product in such country shall contain the corporate name and logo of each Party; provided that the manner in which such corporate names and logos are to be presented shall be subject to the reasonable approval of the applicable Party.

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8.4 Sales and Distribution. The Participating Party shall be solely responsible for invoicing and booking sales, establishing all terms of sale (including pricing and discounts) and warehousing and distributing the Unilateral Product in the Royalty Region and shall perform all related services, in each case, in a manner consistent with the terms and conditions of this Agreement. The Participating Party shall be solely responsible for handling all returns, recalls, or withdrawals, order processing, invoicing, collection, distribution, and inventory management with respect to the Unilateral Product in the Royalty Region.

8.5 Compliance with Applicable Law. The Participating Party shall, and shall cause its Affiliates to, comply with Applicable Law, the Pharmaceutical Research and Manufacturers of America (PhRMA) Code on Interactions with Healthcare Professionals, and other generally accepted industry codes with respect to the Commercialization of the Unilateral Product in the Royalty Region. In particular, and without limiting the foregoing, the Participating Party shall in all respects comply with Applicable Law concerning the advertising, sales and marketing of prescription drug products in Commercializing the Unilateral Product in the Royalty Region under this Agreement, including the FCPA and any applicable local anti-bribery laws. The Participating Party and its Affiliates shall have a system of internal accounting controls in place that are sufficient to provide reasonable assurances of compliance as required by the FCPA, and shall obtain certification from any permitted sublicensee or distributor it or its Affiliates may engage with respect to the Unilateral Product to do the same, to bring any material non-compliance therewith (should it ever occur) by any of the foregoing entities to its attention, and to promptly remedy any such non- compliance. The Participating Party and its Affiliates shall maintain such controls throughout the Term and shall promptly notify the other Party in writing with respect to any material non- compliance regarding Commercialization of the Unilateral Product.

ARTICLE 9

M ANUFACTURE AND S UPPLY

9.1 Supply for the Research Collaboration and Development Programs. The Parties intend that the Discovery Research Plan, the Joint Exploratory Development Plan and each of the Joint Plans shall set forth the allocation of Manufacturing responsibilities between the Parties for the Manufacture of New Collaboration Compounds (including applicable Lead Compounds, Development Candidates, and Product Candidates) for use under such plan. All decisions regarding a particular matter relating to such pre-clinical and clinical Manufacturing activities shall be made in accordance with the decision-making rules set forth in Articles 3, 4 and 5 for the Development Plan that pertains to the corresponding Development activities for which such Manufacturing activity applies. Manufacturing Costs incurred by or on behalf of the Parties (either jointly or unilaterally) under any such plan shall be deemed [***] under such plan and shared between the Parties in accordance with the terms of this Agreement.

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9.2 Manufacturing Plan for Joint Products .

(a) Manufacturing Plan. The Manufacture of each Joint Product in the New Collaboration Field in the Territory to support ongoing or anticipated Commercialization of such Joint Product shall be conducted pursuant to a comprehensive manufacturing plan for such Joint Product (the “ Manufacturing Plan ”) that sets forth: (i) all significant work necessary to establish capacity for and to support ongoing or anticipated Commercialization of such Joint Product in the Territory, including the timeline therefor; (ii) the anticipated tasks and responsibilities and resource allocation of each Party both prior to and after launch; (iii) the annual projected Joint Product volume to be Manufactured both prior to and after launch; (iv) any backup plan for Manufacturing and supply in the event of a shortfall or non-performance of the primary Manufacturing arrangement; and (iv) a corresponding budget for such activities.

(b) Amendment to Manufacturing Plan. Any initial Manufacturing Plan and any amendment to a then-current Manufacturing Plan, including any re-prioritization of activities within, reallocation of resources with respect to, or additions to the then-current Manufacturing Plan, shall be subject to the approval of the JSC. If the JSC cannot reach agreement on such amendment within [***] days, such matter shall be referred to the JEC for resolution. If the JEC cannot reach agreement on such amendment within [***] days then [***].

(c) Manufacturing Responsibilities under the Manufacturing Plan. Unless the Parties agree in writing upon an alternate allocation of responsibility, the Parties agree that the Lead Manufacturing Party shall have primary operational responsibility for: (i) executing the Manufacturing Plan as in effect from time to time for the Profit Share Territory; (ii) the Manufacturing of Joint Product in accordance with the Manufacturing Plan; and (iii) the preparation of the CMC sections of the Drug Approval Applications for such Joint Product and any follow-on correspondence and discussions with the applicable Regulatory Authorities in connection therewith.

(d) Lead Manufacturing Party and Backup Supplier for Joint Product. Abbott shall serve as the lead manufacturing Party for the commercial supply for the Profit Share Region (the “ Lead Manufacturing Party ” or “ LMP ”) of the first Joint Product. Reata shall serve as the LMP for the second Joint Product; thereafter, the Parties shall alternate as LMPs for subsequent Joint Products. The Party that is not the LMP shall have the right, but not the obligation, to serve as the backup supplier for a Joint Product.

9.3 Supply of Unilateral Products. As between the Parties, the Participating Party shall be solely responsible, at its sole expense, to Manufacture (or have Manufactured) and supply the applicable Product Candidate and Unilateral Product for clinical use and commercial sale and distribution in the Royalty Region by the Participating Party and its Affiliates and sublicensees, except to the extent otherwise agreed by the Parties. In the event that the Unilateral Product is also a Joint Product in a Profit Share Region and the Non- Participating Party for the Unilateral Product in the Royalty Region is the Lead Manufacturing Party for such Product in the Profit Share Region, the Participating Party for such Product shall have the right to request such Lead Manufacturing Party to supply such Product for the Development or Commercialization of such Product in the Royalty Region. Such Lead Manufacturing Party may, at its discretion: (a) [***].

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9.4 Technology Transfer. In order to permit each Party to fulfill its duties as LMP or backup supplier and otherwise to Manufacture New Collaboration Compounds and Products as reasonably necessary or useful to exercise its rights and perform its obligations under this Agreement (including as a Participating Party to Manufacture such Product for Development or Commercialization in a Royalty Region), each Party shall have the right to require the other Party to effect from time to time in accordance with this Section 9.4 a full transfer to it or its designee (which designee may be an Affiliate or a Third Party manufacturer, subject to Section 9.7) of all Manufacturing Information relating to the then-current process (the “ Manufacturing Process ”) for the Manufacture of any Product or New Collaboration Compound contained therein, and to implement the Manufacturing Process at facilities designated by the transferee Party (such transfer and implementation, as more fully described in this Section 9.4, the “ Technology Transfer ”). The transferring Party shall provide, and shall use Commercially Reasonable Efforts to cause its Third Party manufacturers to provide (including by using Commercially Reasonable Efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following the Effective Date), all reasonable assistance requested by the transferee Party to enable the transferee Party (or its Affiliate or designated Third Party manufacturer, as applicable) to implement the Manufacturing Process at the facilities designated by the transferee Party. If requested by the transferee Party, such assistance shall include facilitating the entering into of agreements with applicable Third Party suppliers relating to the Products and New Collaboration Compounds. Without limitation to the foregoing, in connection with each Technology Transfer:

(a) At the transferee Party’s reasonable request, the transferring Party shall make available, and shall use Commercially Reasonable Efforts to cause its Third Party manufacturers to make available (including by using Commercially Reasonable Efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following the Effective Date), to the transferee Party (or its Affiliate or designated Third Party manufacturer, as applicable), all of the transferring Party’s Manufacturing Information and materials relating to the Manufacturing Process, and all documentation constituting material support, performance advice, shop practice, standard operating procedures, specifications as to materials to be used and control methods, that are reasonably necessary or useful to enable the transferee Party (or its Affiliate or designated Third Party manufacturer, as applicable) to use and practice the Manufacturing Process;

(b) At the transferee Party’s reasonable request, the transferring Party shall cause all appropriate employees and representatives of the transferring Party and its Affiliates to meet with, and shall use Commercially Reasonable Efforts to cause all appropriate employees and representatives of its Third Party manufacturers to meet with (including by using Commercially Reasonable Efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following the Effective Date), employees or representatives of the transferee Party (or its Affiliate or designated Third Party manufacturer, as applicable) at the applicable manufacturing facility at mutually convenient times to assist with the working up and use of the Manufacturing Process and with the training of the personnel of the transferee Party (or its Affiliate or designated Third Party manufacturer, as applicable) to the extent reasonably necessary or useful to enable the transferee Party (or its Affiliate or designated Third Party manufacturer, as applicable) to use and practice the Manufacturing Process;

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(c) Without limiting the generality of clause 9.4(b) above, at the transferee Party’s reasonable request, the transferring Party shall cause all appropriate analytical and quality control laboratory employees and representatives of the transferring Party and its Affiliates to meet with, and shall use Commercially Reasonable Efforts to cause all appropriate analytical and quality control laboratory employees and representatives of its Third Party manufacturers to meet with (including by using Commercially Reasonable Efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following the Effective Date), employees or representatives of the transferee Party (or its Affiliate or designated Third Party manufacturer, as applicable) at the applicable manufacturing facility and make available all necessary equipment, at mutually convenient times, to support and execute the transfer of all applicable analytical methods and the validation thereof (including, all applicable Information, methods, validation documents and other documentation, materials and sufficient supplies of all primary and other reference standards);

(d) At the transferee Party’s reasonable request, the transferring Party shall take such steps, and shall use Commercially Reasonable Efforts to cause its Third Party manufacturers to take such steps (including by using Commercially Reasonable Efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following the Effective Date), as are reasonably necessary or useful to assist in reasonable respects the transferee Party (or its Affiliate or designated Third Party manufacturer, as applicable) in obtaining any necessary licenses, permits, or approvals from Regulatory Authorities with respect to the Manufacture of the Products and New Collaboration Compounds at the applicable facilities; and

(e) At the transferee Party’s reasonable request, the transferring Party shall provide, and shall use Commercially Reasonable Efforts to cause its Third Party manufacturers to provide (including by using Commercially Reasonable Efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following the Effective Date), such other assistance as the transferee Party (or its Affiliate or designated Third Party manufacturer, as applicable) may reasonably request to enable the transferee Party (or its Affiliate or designated Third Party manufacturer, as applicable) to use and practice the Manufacturing Process and otherwise to Manufacture the Products and New Collaboration Compounds.

For each Joint Product, the reasonable out-of-pocket costs paid to Third Parties by or on behalf of the Parties in connection with each Technology Transfer, in each case incurred directly as a result of performing each Technology Transfer, shall be Development Costs or Commercialization Costs, as applicable.

For each Unilateral Product, the reasonable out-of-pocket costs paid to Third Parties by or on behalf of the Parties in connection with each Technology Transfer, in each case incurred directly as a result of performing each Technology Transfer, shall be borne by the Participating Party that requests such Technology Transfer.

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9.5 Launch Product Volume; Product Supply Volume; Supply. At least [***] months before the Anticipated Launch Date for a Joint Product, the Lead Manufacturing Party shall include in the Manufacturing Plan a projected launch volume to support the launch that is consistent with such Party’s then-current or planned standard practice of inventory building for product launches, which shall at least require such Party to have [***] months of the then annual projected demand of active ingredient and [***] months of the annual projected demand of finished Products or other good faith determination by the Lead Manufacturing Party. From time to time as appropriate, the Lead Manufacturing Party shall establish and adjust the Joint Product supply volume on a sustained basis after launch (the “ Projected Product Supply Volume ”), taking into consideration the estimated Joint Product demand in the Profit Share Territory, the distribution logistics, and the shelf life of the applicable Joint Product. The Parties acknowledge that the Projected Product Supply Volume included in a Manufacturing Plan is a good faith estimate and that actual Product volume Manufactured may differ from such Projected Product Supply Volume due to changes in demand. The Lead Manufacturing Party shall have the flexibility to adjust the actual Joint Product volume using its good faith judgment to meet the ongoing demand for Joint Product supply while minimizing the quantity of unusable Joint Product.

9.6 Manufacturing Standards of Conduct. Each Party shall use Commercially Reasonable Efforts to carry out the Manufacturing activities assigned to it under the Discovery Research Plan, the Joint Exploratory Development Plan, each Joint Plan and the Manufacturing Plan in a timely and professional manner. Each Party shall carry out the Manufacturing activities assigned to it under the Discovery Research Plan, the Joint Exploratory Development Plan, each Joint Plan and the Manufacturing Plan in compliance with Applicable Law (including GMPs, if applicable).

9.7 Subcontracting . A Party with the right or obligation to Manufacture New Collaboration Compounds or Products hereunder shall have the right to subcontract its Manufacturing obligations to a Third Party manufacturer following good faith negotiations with the other Party, provided that the terms offered by such Third Party manufacturer are superior, taken as a whole (accounting for the respective Manufacturing capacity and expertise offered by the Third Party and the other Party), than the terms upon which the other Party is willing to take on such obligations. Section 9.2(c) shall also apply to any subcontracting arrangement with a Third Party manufacturer.

9.8 Manufacturing Records and Reports. Each Party shall maintain, or cause to be maintained, records of its Manufacturing activities under this Article 9 in accordance with Applicable Law and in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall be complete and accurate and shall properly reflect all work done and results achieved in the performance of such activities, and which shall be retained by such Party for at least [***] years after the termination of this Agreement, or for such longer period as may be required by Applicable Law. Each Party shall have the right, during normal business hours and upon reasonable notice, to inspect and copy any such records, except to the extent that a Party reasonably determines that such records contain Confidential Information that is not licensed to the other Party. Each Party shall provide the JSC with such reports detailing its Manufacturing activities under this Article 9 and the results of such activities as the JSC reasonably requests.

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ARTICLE 10

L ICENSES A ND E XCLUSIVITY

10.1 License Grants .

(a) Grants to Abbott. Subject to Section 10.4 and the other terms and conditions of this Agreement, Reata (on behalf of itself and its Affiliates) hereby grants to Abbott:

(i) an exclusive (including with regard to Reata and its Affiliates) license (or sublicense), with the right to grant sublicenses in accordance with Section 10.2, under the Reata Patents, Reata Know-How and Reata’s interest in Joint Patents and Joint Know-How, to import, offer to sell and sell in the New Collaboration Field (A) those Joint Products in those countries of the Territory for which Abbott is designated as LCP under and in accordance with the terms of this Agreement and (B) those Unilateral Products in those countries of the Territory for which Abbott is the Participating Party under and in accordance with the terms of this Agreement;

(ii) an exclusive (including with regard to Reata and its Affiliates) license and right of reference, with the right to grant sublicenses and further rights of reference in connection with the grant of sublicenses in accordance with Section 10.2 under the grants in Section 10.1(a)(i), under the Regulatory Approvals and any other Regulatory Documentation that Reata or any of its Affiliates may Control with respect to New Collaboration Compounds or Products, to import, offer to sell and sell in the New Collaboration Field (A) those Joint Products in those countries of the Territory for which Abbott is designated as LCP under and in accordance with the terms of this Agreement and (B) those Unilateral Products in those countries of the Territory for which Abbott is the Participating Party under and in accordance with the terms of this Agreement;

(iii) a co-exclusive (together with Reata and its Affiliates) license (or sublicense), with the right to grant sublicenses in accordance with Section 10.2, under the Reata Patents, Reata Know-How and Reata’s interest in Joint Patents and Joint Know-How, to (A) Develop, Manufacture, have Manufactured, and obtain, maintain, and hold Regulatory Approvals for, New Collaboration Compounds and Products in the New Collaboration Field in the Territory and (B) Commercialize (other than importing, offering to sell or selling) Products in the New Collaboration Field in the Territory;

(iv) a co-exclusive (together with Reata and its Affiliates) license and right of reference, with the right to grant sublicenses and further rights of reference in connection with the grant of sublicenses in accordance with Section 10.2 under the grants in Section 10.1(a)(iii), under the Regulatory Approvals and any other Regulatory Documentation that Reata or any of its Affiliates may Control with respect to New Collaboration Compounds

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or Products, to (A) Develop, Manufacture, have Manufactured, and obtain, maintain, and hold Regulatory Approvals for, New Collaboration Compounds and Products in the New Collaboration Field in the Territory and (B) Commercialize (other than importing, offering to sell or selling) Products in the New Collaboration Field in the Territory;

(v) subject to Sections 7.9, 8.3(b) and 12.9, a non-exclusive license, without the right to grant sublicenses, except in connection with the grant of sublicenses pursuant to Section 10.2 under the grants in Section 10.1(a), to use Reata’s corporate names solely as required to comply and solely in accordance with Sections 7.9 and 8.3(b) and for no other purpose; and

(vi) a non-exclusive license (or sublicense), with the right to grant sublicenses through multiple tiers, under the Reata Know-How from and after the end of the Exclusivity Period for any and all purposes in the New Collaboration Field except as expressly prohibited under this Agreement (including under Section 10.6).

(b) Grants to Reata. Subject to Section 10.4 and the other terms and conditions of this Agreement, Abbott (on behalf of itself and its Affiliates) hereby grants to Reata:

(i) an exclusive (including with regard to Abbott and its Affiliates) license (or sublicense), with the right to grant sublicenses in accordance with Section 10.2, under the Abbott Patents, Abbott Know-How and Abbott’s interest in Joint Patents and Joint Know-How, to import, offer to sell and sell in the New Collaboration Field (A) those Joint Products in those countries of the Territory for which Reata is designated as LCP under and in accordance with the terms of this Agreement and (B) those Unilateral Products in those countries of the Territory for which Reata is the Participating Party under and in accordance with the terms of this Agreement;

(ii) an exclusive (including with regard to Abbott and its Affiliates) license and right of reference, with the right to grant sublicenses and further rights of reference in connection with the grant of sublicenses in accordance with Section 10.2 under the grants in Section 10.1(b)(i), under the Regulatory Approvals and any other Regulatory Documentation that Abbott or any of its Affiliates may Control with respect to New Collaboration Compounds or Products, to import, offer to sell and sell in the New Collaboration Field (A) those Joint Products in those countries of the Territory for which Reata is designated as LCP under and in accordance with the terms of this Agreement and (B) those Unilateral Products in those countries of the Territory for which Reata is the Participating Party under and in accordance with the terms of this Agreement;

(iii) a co-exclusive (together with Abbott and its Affiliates) license (or sublicense), with the right to grant sublicenses in accordance with Section 10.2, under the Abbott Patents, Abbott Know-How and Abbott’s interest in Joint Patents and Joint Know- How, to (A) Develop, Manufacture, have Manufactured, and obtain, maintain, and hold Regulatory Approvals for, New Collaboration Compounds and Products in the New Collaboration Field in the Territory and (B) Commercialize (other than importing, offering to sell or selling) Products in the New Collaboration Field in the Territory;

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(iv) a co-exclusive (together with Abbott and its Affiliates) license and right of reference, with the right to grant sublicenses and further rights of reference in connection with the grant of sublicenses in accordance with Section 10.2 under the grants in Section 10.1(b)(iii), under the Regulatory Approvals and any other Regulatory Documentation that Abbott or any of its Affiliates may Control with respect to New Collaboration Compounds or Products, to (A) Develop, Manufacture, have Manufactured, and obtain, maintain, and hold Regulatory Approvals for, New Collaboration Compounds and Products in the New Collaboration Field in the Territory and (B) Commercialize (other than importing, offering to sell or selling) Products in the New Collaboration Field in the Territory;

(v) subject to Sections 7.9, 8.3(b) and 12.9, a non-exclusive license, without the right to grant sublicenses, except in connection with the grant of sublicenses pursuant to Section 10.2 under the grants in Section 10.1(b), to use Abbott’s corporate names solely as required to comply and solely in accordance with Sections 7.9 and 8.3(b) and for no other purpose; and

(vi) a non-exclusive license (or sublicense), with the right to grant sublicenses through multiple tiers, under the Abbott Know-How from and after the end of the Exclusivity Period for any and all purposes in the New Collaboration Field except as expressly prohibited under this Agreement (including under Section 10.6).

As used in this Section 10.1, “co-exclusive” shall mean that the Person granting the license and the licensee shall have the right to Exploit the intellectual property rights granted under such license (by itself or together with its Affiliates), but shall not have the right to further license (in the case of the Person granting the license) or sublicense (in the case of the licensee) such rights to a Third Party except in accordance with Section 10.2 below.

10.2 Sublicenses and Subcontracting .

(a) Licenses/Sublicenses. Each Party shall have the right to grant licenses or sublicenses (or further rights of reference to licensees or sublicensees) under the rights it retains or is granted under Section 10.1: (i) to any of its Affiliates; provided that such license or sublicense shall immediately terminate if and when such Person ceases to be an Affiliate of such Party, (ii) to a Third Party through multiple tiers of licensees or sublicensees; provided that, unless otherwise agreed in writing by the other Party, (A) any such license or sublicense (1) shall apply only with respect to a Unilateral Product in the applicable Royalty Territory for an Indication which is not then an Active Indication or a Related Indication for any Active Indication in such Royalty Territory, (2) may only be granted after the EOP3 Opt-in with respect to such Unilateral Product for such Indication in such Royalty Territory has expired unexercised by the Non-Participating Party, and (3) shall require the prior written consent of the other Party if such license or sublicense granted to a Third Party includes the right to sell, promote or Detail such Unilateral Product in the U.S./Europe/Japan Region; and (B) the licensing or sublicensing Party shall first discuss with the other Party in good faith as to

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whether such other Party desires to take on the activities proposed to be licensed or sublicensed (but the Participating Party shall be under no obligation to engage such other Party as the subcontractor); or (iii) in connection with the settlement of any Joint Product Infringement, Unilateral Product Infringement or Field Infringement pursuant to Section 12.3.

(b) Subcontracting . Each Party shall have the right to engage a Third Party subcontractor to perform on such Party’s behalf any of its obligations in the normal course of business with respect to the Development and Commercialization of Products hereunder; provided that (a) any such subcontract to sell, distribute, promote or Detail a Product in the U.S./Europe/Japan Region (including the engagement of a contract sales organization to promote such Product) shall require the prior written consent of the other Party; (b) the subcontracting Party shall first discuss with the other Party in good faith as to whether such other Party desires to take on the activities proposed to be subcontracted (but the subcontracting Party shall be under no obligation to engage such other Party as the subcontractor); and (c) any such subcontractor agreement shall comply with the requirements of Section 10.2(c). The subcontracting by a Party of any Manufacturing rights and obligations hereunder shall be governed by Section 9.7.

(c) Sublicense and Subcontracting Agreements. Each time a Party grants a sublicense pursuant to Section 10.2(a)(i) or 10.2(a)(ii) or engages a subcontractor pursuant to Section 10.2(b), it shall enter into a written agreement (a “ Third Party Agreement ”) with the licensee, sublicensee or subcontractor, as the case may be (the “ Contracting Third Party ”). Each such Third Party Agreement shall be consistent with and subject to the terms and conditions of this Agreement, and the sublicensing or subcontracting Party shall remain fully liable for the performance of its obligations and for the performance of such Contracting Third Party in accordance with the terms of this Agreement, and all acts or omissions of the Contracting Third Party shall be deemed acts or omissions of such sublicensing or subcontracting Party hereunder. In addition, each such Third Party Agreement shall require that such Contracting Third Party: (i) comply with the terms and conditions of this Agreement that are applicable to its activities; and (ii) (x) subject to Section 13.1(d), in the case of a Contracting Third Party that is a subcontractor, assign to such Party, or (y) in the case of a Contracting Third Party that is a sublicensee, assign to such Party or grant to such Party the royalty-free license under and right of reference to (with rights to grant sublicenses and further rights of reference to the other Party and its Affiliates and sublicensees), in each case ((x) and (y)): (A) all Information (including all Regulatory Data) and Regulatory Documentation generated by or on behalf of such Contracting Third Party in connection with the Development of Products; and (B) all Patents owned or controlled by such Contracting Third Party with respect to the Products. A copy of each such Third Party Agreement, redacted as appropriate for competitively sensitive information or as required to comply with confidentiality obligations, shall be provided to the other Party within [***] days after its execution.

10.3 Negative Covenant. Each Party covenants that it will not Exploit any of the other Party’s intellectual property rights licensed to it under this Article 10 beyond the scope of the applicable license grant. In particular, neither Party shall Exploit any of the other Party’s intellectual property rights in connection with the development, manufacture or commercialization of Exempt AIMs.

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10.4 No Implied Licenses. Abbott and its Affiliates and sublicensees shall have no right, express or implied, with respect to the Reata Patents, the Reata Know-How, Reata’s Regulatory Documentation and Reata’s corporate names, and Reata and its Affiliates shall have no right, express or implied, with respect to the Abbott Patents, the Abbott Know-How, Abbott’s Regulatory Documentation and Abbott’s corporate names except, in each case, as expressly provided in Sections 10.1.

10.5 Access to Regulatory Documentation and Cooperation. To the extent not already provided under Articles 3 and 6, each Party promptly shall provide to the other Party, at the other Party’s cost and expense, copies of such Regulatory Data, Regulatory Approvals and other Regulatory Documentation Controlled by such Party or any of its Affiliates as shall be reasonably requested by the other Party solely for purposes of exercising its rights under the grants in Section 10.1. All such documents shall be provided in the format as submitted to the applicable Regulatory Authority, and also in Word, Excel or other source formats to permit analysis, editing, and inclusion in regulatory submissions.

10.6 Exclusivity .

(a) During the Research Term and for a period of [***] years ([***]) thereafter (the “ Exclusivity Period ”), the Parties shall not, and shall cause their respective Affiliates not to, directly or indirectly (including by licensing, authorizing, appointing, or otherwise enabling any Third Party to do so), develop, manufacture or commercialize any Targeted AIM other than an Exempt AIM, or any product containing a Targeted AIM other than an Exempt AIM, in each case in the New Collaboration Field in the Territory except pursuant to the Parties’ activities under and in accordance with this Agreement.

(b) During the Term following the end of the Exclusivity Period, the Parties shall not, and shall cause their respective Affiliates not to, directly or indirectly (including by licensing, authorizing, appointing, or otherwise enabling any Third Party to do so), develop, manufacture or commercialize: (i) any Targeted AIM other than an Exempt AIM, or any product containing a Targeted AIM other than an Exempt AIM, in each case in an Active Indication or any Related Indication for an Active Indication, or (ii) any Targeted AIM that is part of the New Collaboration Compound Pool as of the end of the Exclusivity Period, or any product containing such a Targeted AIM, in each case ((i) and (ii)) in the New Collaboration Field in the Territory except pursuant to the Parties’ activities under and in accordance with this Agreement (including Section 5.7 and Section 5.8).

(c) Following the end of the Exclusivity Period, nothing herein shall restrict either Party or its Affiliates from, directly or indirectly (including by licensing, authorizing, appointing, or otherwise enabling any Third Party to do so), developing, manufacturing or commercializing Targeted AIMs that are not in the New Collaboration Compound Pool as of the end of the Exclusivity Period for any indication except a then-Active Indication or any Related Indication for a then-Active Indication, and nothing herein shall require the Parties to share Information with or coordinate such development, manufacturing or commercialization activities with the other Party.

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(d) During the Term, each Party shall not, and shall cause its Affiliates not to, directly or indirectly (including by licensing, authorizing, appointing, providing Product or funding to, or otherwise enabling any Third Party to do so), conduct any Clinical Study with a New Collaboration Compound in which a product of the other Party or its Affiliate is used as a comparator except to the extent such a Clinical Study is required or recommended by a Regulatory Authority or as otherwise approved by the other Party.

ARTICLE 11

F INANCIALS

11.1 Upfront Amount . No later than [***] days following the Effective Date, Abbott shall pay Reata an upfront amount equal to Four Hundred Million Dollars ($400,000,000). Such payment shall be noncreditable against any other payments due hereunder.

11.2 Development Costs .

(a) Reports . Each Party shall report to the other Party, within [***] days after the end of each Calendar Quarter, Development Costs incurred by such Party during such Calendar Quarter. Such report shall specify in reasonable detail all amounts included in such Development Costs during such Calendar Quarter. Each such report shall enable the receiving Party to compare the reported costs against the applicable Development Plan, on both a quarterly basis and a cumulative basis for each activity. The Parties shall seek to resolve any questions related to such accounting statements within [***] days following receipt by each Party of the other Party’s report hereunder.

(b) Cost Overruns.

(i) Each Party shall promptly inform the other Party if such Party determines that it is likely to overspend or underspend by more than [***] percent ([***]%) its respective aggregate budgeted costs and expenses under the Joint Exploratory Development Plan or any Joint Plan for Development activities conducted thereunder and shall provide the other Party with a reasonably detailed explanation for such anticipated overspend or underspend. If the Parties agree, the budget set forth in the Joint Exploratory Development Plan or any Joint Plan for Development activities may be amended to address such overspend or underspend.

(ii) The portion of any overspend that is less than or equal to [***] percent ([***]%) of a Party’s respective aggregate budgeted costs and expenses set forth in the Joint Exploratory Development Plan or such Joint Plan, as applicable, shall be included in Development Costs and shared by the Parties in accordance with the terms hereof.

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(iii) If a Party exceeds its aggregate budgeted costs and expenses by more than [***] percent ([***]%), the Party that has so exceeded its budget shall provide to the JEC a full explanation for exceeding such aggregate budgeted costs under the Joint Exploratory Development Plan or such Joint Plan, as applicable. If and to the extent that any such overspend in excess of [***] percent ([***]%) was outside the reasonable control of the applicable Party and not caused by the negligence or willful misconduct of, or breach of this Agreement by, such Party, then provided that the applicable Party has promptly notified the other Party of such overspend and used reasonable efforts to mitigate the size of such overspend, such overspend shall be included in Development Costs and shared by the Parties in accordance with the terms hereof.

(iv) To the extent that any overspend is not included in Development Costs as provided in Section 11.2(b)(iii), the Party that has exceeded its budget shall be solely responsible for the overspend.

(c) Payments. Development Costs initially shall be borne by the Party incurring the cost or expense and thereafter shall be subject to reimbursement. Within [***] days after the end of each Calendar Quarter or, for the last Calendar Quarter of any Calendar Year, within [***] days after the end of such Calendar Year, the Party that has

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

paid less than its share of Development Costs during such Calendar Quarter shall make reconciling payments to the other Party to achieve the appropriate allocation of Development Costs provided for herein.

11.3 Profit Sharing for Joint Products in the Profit Share Region. The terms and conditions of this Section 11.3 shall govern each Party’s rights and obligations with respect to Operating Profits (or Losses) relating to each Joint Product in the Profit Share Region. For any Unilateral Product in a Royalty Region, the Non-Participating Party shall have no right to share Operating Profits, and no obligation to bear any Operating Losses, but will instead receive royalty payments pursuant to Section 11.4.

(a) Share of Operating Profits and Operating Losses. The Parties shall share (i) equally (50/50) all Operating Profits and all Operating Losses (as applicable) for each Joint Product (other than a Humira-Related Product) in the applicable Profit Share Region, (ii) seventy percent (70%) to Abbott and thirty percent (30%) to Reata the Operating Profits and the Operating Losses (as applicable) for each Joint Product that is a Humira-Related Product and which Operating Profits and Operating Losses (as applicable) are attributable (as determined pursuant to a methodology established by the applicable JMC) to the Humira-Related Indications in the applicable Profit Share Region; provided that all Operating Profits and all Operating Losses (as applicable) for a Humira-Related Product for which Regulatory Approval has been obtained only for the Humira-Related Indications shall be attributable solely to the Humira-Related Indications, and (iii) equally (50/50) the Operating Profits and the Operating Losses (as applicable) for each Joint Product that is a Humira-Related Product and which Operating Profits and Operating Losses (as applicable) are attributable (as determined pursuant to a methodology established by the applicable JMC) to Indications other than the Humira-Related Indications in the applicable Profit Share Region. As used herein “ Humira-Related Indications” means, with respect to any Humira-Related Product, those Indications for which Humira has received Regulatory Approval in any country within the U.S./EU/Japan Region at the time of designation of the Product Candidate comprising such Humira-Related Product as such pursuant to Section 4.2(e)(ii).

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(b) Calculation and Payment. Within [***] days after the end of each Calendar Quarter, each Party shall report to the applicable JMC the Net Sales for any sales it booked for each Joint Product in the applicable Profit Share Territory in such Calendar Quarter, as well as the Commercialization Costs incurred by it for such Joint Product in such Profit Share Territory in such Calendar Quarter. Each such report shall specify in reasonable detail all deductions allowed in the calculation of such Net Sales and all expenses included in Commercialization Costs. Within [***] days after receipt of such reports, such JMC shall provide a consolidated financial statement setting forth: (i) the Operating Profit or Operating Loss for each such Joint Product in the applicable Profit Share Territory and calculating each Party’s share of such Operating Profit or Operating Loss for such Joint Product for such Calendar Quarter; (ii) the Operating Profit (or Loss) for all Joint Products during such Calendar Quarter, the aggregate Net Sales received by each Party for all Joint Products during such Calendar Quarter, and the aggregate Commercialization Costs incurred by each Party for all Joint Products during such Calendar Quarter; and (iii) the amount of reconciliation payment owed by one Party to the other Party, if any, to achieve the appropriate allocation of Operating Profit (or Loss) for all Joint Products for such Calendar Quarter provided for herein. The Party owing the other Party a reconciliation payment under subsection (iii) above shall pay to the other Party such reconciliation amount within [***] days after receiving such consolidated financial statement from the JMC. An example of such financial statement is set forth on Schedule 11.3(b) . For clarity, any pre-launch Commercialization costs already reimbursed in connection with the exercise of a Party’s EOP3 Opt-In as set forth in Section 5.6(e) shall be excluded from the calculation of Operating Profit or Operating Loss.

(c) Internal Costs. Except (i) [***], each Party shall bear its own internal costs incurred in connection with the Commercialization of each Joint Product in the applicable Profit Share Region unless otherwise agreed upon by the Parties in writing, it being the intention of the Parties that over time and over the course of the conduct of the applicable Commercialization Plans, each Party shall have contributed approximately equal internal resources to the conduct of such Commercialization activities as it does in relation to the amount of Operating Profits and Operating Losses it shares with respect to such Joint Product (i.e., 50% or 30% or 70%, as the case may be). In the event a Party is of the opinion that there is a material discrepancy between the allocation of internal costs between the Parties with respect to their joint Commercialization activities and their Operating Profit and Operating Loss allocation, the Parties shall discuss in good faith a mechanism to rebalance the allocation of such internal costs between the Parties to achieve approximately an appropriate ratio; it being understood, however, that the Parties shall not be required to track internal costs or time in connection with their Commercialization activities unless the Parties otherwise agree.

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11.4 Royalties .

(a) Royalty Region. Subject to Section 11.4(c), commencing upon the date of the First Commercial Sale of each Unilateral Product (including any Unilateral Product that contains a Unilateral Acquired AIM) in each country in the applicable Royalty Region, and during the Royalty Term for such Unilateral Product in such country, the Participating Party shall pay to the other Party a royalty on Net Sales of such Unilateral Product in such country during such Royalty Term at the following applicable rate:

(i) For each Unilateral Product for which the Non-Participating Party has co-funded Phase III Development for the U.S./Europe/Japan Region only (i.e., such Product is a Joint Product in U.S./Europe/Japan Region and a Unilateral Product only in the ROW Region), the royalty rate applicable to Net Sales of such Unilateral Product shall be sixteen percent (16%).

(ii) For each Unilateral Product for which the Non-Participating Party has co-funded Phase IIb Development (or has exercised its Pre-Phase III Opt-In) but has not co-funded any further Development for such Unilateral Product, the royalty rate applicable to Net Sales of such Unilateral Product shall be thirteen percent (13%).

(iii) For each Unilateral Product for which the Non-Participating Party has co-funded Pre-Phase IIb Development (or has exercised its Pre-Phase IIb Opt-In) but has not co-funded any further Development for such Unilateral Product, the royalty rate applicable to Net Sales of such Unilateral Product shall be eight percent (8%).

(iv) For each Unilateral Product for which the Non-Participating Party has co-funded Exploratory Development but has not co-funded any further Development for such Unilateral Product, the royalty rate applicable to Net Sales of such Unilateral Product shall be six percent (6%).

(v) For each Unilateral Product for which the Non-Participating Party has not co-funded any Development activities (other than Unilateral Products containing a Unilateral Acquired AIM of the Participating Party), the royalty rate applicable to Net Sales of such Unilateral Product shall be five percent (5%).

(vi) For each Unilateral Product that contains a Unilateral Acquired AIM of the Participating Party, the royalty rate applicable to Net Sales of such Unilateral Product shall be five percent (5%).

(vii) For each Unilateral Product that becomes a Unilateral Product through an AIM Acquiring Party’s opting-out after the First Commercial Sale of such Product pursuant to Section 5.10(c), the royalty rate applicable to Net Sales of such Unilateral Product shall be twenty percent (20%).

(viii) In addition, for each Unilateral Product that is a Humira-Related Product and for which Abbott is the Participating Party, Abbott shall pay to Reata an additional royalty of three percent (3%) on Net Sales of such Unilateral Product for royalties payable under Sections 11.4(a)(i) or (ii) above, as the case may be.

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(b) Royalty Term. The Participating Party shall have no obligation to pay any royalty with respect to Net Sales of any Unilateral Product in any country after the Royalty Term for such Unilateral Product in such country has expired.

(c) Adjustments to Royalties .

(i) Generic Entry. In the event that in any country in the Royalty Region during the Royalty Term for a Unilateral Product in such country unit sales of all Generic Products in such country in a Calendar Quarter (A) exceed ten percent (10%) of the sum of unit sales of such Unilateral Product and all Generic Products in such country, Net Sales of such Unilateral Product in such country shall from the first day of such Calendar Quarter and thereafter be multiplied by seventy-five percent (75%) for purposes of calculating royalties, or (B) exceed twenty percent (20%) of the sum of unit sales of such Unilateral Product and all Generic Products in such country, Net Sales of such Unilateral Product in such country shall from the first day of such Calendar Quarter and thereafter be multiplied by fifty percent (50%) for purposes of calculating royalties;

(ii) Third Party Payments. The Participating Party shall be entitled to deduct from the royalties payable to the other Party based on Net Sales of a Unilateral Product in a country in the applicable Royalty Region, fifty percent (50%) of Third Party Payments made with respect to Third Party Licenses for intellectual property of Third Parties that is reasonably necessary or useful to Develop, Manufacture or Commercialize a Unilateral Product in or for the Royalty Region, provided that with respect to any such Third Party License that covers both a Unilateral Product hereunder and any other product under development, manufacture or commercialization by the Participating Party outside this Agreement or any other Product under Development, Manufacture or Commercialization hereunder (either unilaterally or jointly), such Participating Party shall only have the right to offset against its royalty obligations the portion of such Third Party Payment that can be reasonably allocated to the Unilateral Product;

(iii) Defense of Infringement Claims. The Participating Party shall have the right to deduct costs in accordance with Section 12.4(c); and

(iv) Compulsory Licenses. In the event that a court or a Governmental Authority of competent jurisdiction requires the Participating Party or any of its Affiliates or sublicensees to grant a compulsory license to a Third Party permitting such Third Party to make and sell a Unilateral Product in a country in the Royalty Region, then, for the purposes of calculating the royalties payable with respect to such Unilateral Product hereunder, fifty percent (50%) of the Net Sales of such Unilateral Product in such country shall be disregarded;

Provided, however, that regardless of the adjustment mechanisms of clauses (i) – (iv) above, the royalties that would otherwise be payable to the Non-Participating Party with respect to a Unilateral Product pursuant to Section 11.4(a) shall not be reduced by more than fifty percent (50%) in any given Calendar Quarter. Reductions in royalties pursuant to the adjustment mechanisms of clauses (i) – (iv) above that are not used to reduce the royalties due in a particular Calendar Quarter on account of the previous sentence shall be carried over to subsequent Calendar Quarters until fully used in accordance with clauses (i) – (iv) above.

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(d) Royalty Payments and Reports . The Participating Party shall calculate all amounts payable pursuant to Section 11.4 at the end of each Calendar Quarter, which amounts shall be converted to Dollars, in accordance with Section 11.5. The Participating Party shall pay to the other Party the royalty amounts due with respect to a given Calendar Quarter within [***] days after the end of such Calendar Quarter. Each payment of royalties due to the other Party shall be accompanied by a statement of the amount of gross sales and Net Sales (and the calculations thereof) of each Unilateral Product in each country in the Royalty Region during the applicable Calendar Quarter (including such amounts expressed in local currency and as converted to Dollars) and a calculation of the amount of royalty payment due on such Net Sales for such Calendar Quarter. Without limiting the generality of the foregoing, the Participating Party shall require each of its Affiliates and sublicensees to account for its Net Sales and to provide such reports with respect thereto as if such sales were made by the Participating Party.

11.5 Mode of Payment. All payments to either Party under this Agreement shall be made by electronic transfer of Dollars in the requisite amount to such bank account as the receiving Party may from time to time designate by notice to the paying Party. For the purpose of calculating any sums due under, or otherwise reimbursable pursuant to, this Agreement (including the calculation of Net Sales expressed in currencies other than Dollars), a Party shall convert any amount expressed in a foreign currency into Dollar equivalents using its, its Affiliate’s or sublicensee’s standard conversion methodology consistent with GAAP. Such standard conversion methodology shall be based upon the Monthly Average Exchange Rate. “Monthly Average Exchange Rate” means the simple average of prior month-end Exchange Rate and current month-end Exchange Rate based on 9:00 AM Central Time Bloomberg screen on the penultimate Business Day of the corresponding month, and “Exchange Rate” means, with respect to a Business Day, the spot bid rate for X currencies and spot ask rate for non-X currencies for the conversion of the applicable country’s currency to Dollars as reported at 9:00 AM Central Time Bloomberg screen on the penultimate Business Day.

11.6 Taxes .

(a) Deduction or Withholding of Tax. Any payments that are payable by one Party (the “ Payer Party ”) to the other Party (the “ Receiving Party ”) pursuant to this Agreement (each a “ Payment ”) shall not be reduced on account of any taxes unless required by Applicable Laws. The Payer Party shall deduct or withhold from the Payments any taxes that it is required by Applicable Laws to deduct or withhold on Receiving Party’s behalf. If any Payment is subject to a deduction or withholding of tax, the Receiving Party and Payer Party shall use commercially reasonable efforts to perform all acts (including by executing all appropriate documents) so as to enable Receiving Party to take advantage of any applicable double taxation agreement or treaty. In the event there is no applicable double taxation agreement or treaty, or if an applicable double taxation agreement or treaty reduces but does not eliminate such tax, Payer Party shall pay the applicable tax to the appropriate government

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authority, shall deduct the amount paid from the amount due Receiving Party, and shall provide to Receiving Party evidence of such payment within [***] days following such payment. If Payer Party has not received evidence, in a form satisfactory to Payer Party, at least [***] days prior to the time that a Payment is due, of Receiving Party’s entitlement under an applicable treaty to a reduced rate or elimination of the applicable tax, Payer Party may withhold with respect to such Payment as if no double taxation agreement or treaty applied.

(b) Payer Party Withholding Tax Action. Subject to Section 11.6(c), if Payer Party (or Payer Party’s Affiliates or successors) is required to make a Payment to Receiving Party subject to a deduction or withholding of tax, as described in Section 11.6(a), then if such deduction or withholding of tax obligation is increased solely as a result of the assignment or transfer of all or a portion of this Agreement by Payer Party as permitted under Section 17.3, or there is a change, whether by corporate continuance, merger or other means, in the tax residency of Payer Party from that represented in Section 13.1(h), or the Payments arise or are deemed to arise through a permanent establishment, branch or similar place of business of Payer Party in a jurisdiction other than the country in which Payer Party is organized (each a “ Payer Party Withholding Tax Action ”), then notwithstanding Section 11.6(a), the Payment by Payer Party (in respect of which such deduction and withholding of tax is required to be made) shall be increased by the amount necessary (the “ Additional Amount ”) to ensure that Receiving Party receives an amount equal to the same amount that it would have received had no Payer Party Withholding Tax Action occurred. In the case where the sum of the Payment and the aggregate of Payments made on and after the Effective Date (the “ Aggregate Payments ”) exceed the Threshold Amount (as defined in Section 11.6(c)) the Additional Amount shall be based solely on a portion of the Payment that is equal to the amount derived by subtracting the Aggregate Payments from the Threshold Amount. Furthermore, Receiving Party shall pay Payer Party an amount equal to any reduction in tax realized by Receiving Party, or any of its Affiliates or successors, that is due to a deduction or credit for, or refund of, any withholding taxes that gave rise to the payment of an Additional Amount. The aggregate of all payments made by Receiving Party to Payer Party pursuant to the preceding sentence, if any, shall not exceed the aggregate of the Additional Amounts paid by Party to Receiving Party. All payments due to Payer Party pursuant to the two preceding sentences shall be paid no later than [***] days following the filing of the tax return or other report in which such deduction, credit or refund is claimed.

(c) Payment of Additional Amount . Section 11.6(b) shall only apply if each of the following applies: (i) Receiving Party has not changed its tax residency from that represented in Section 13.1(h); (ii) Receiving Party is the beneficial owner of the Payments; and (iii) at the time a Payment is due, the aggregate of Payments (in the event not including such Payment) paid by the Payer Party since the Effective Date does not exceed $250,000,000, excluding the upfront payment of $400,000,000 provided for under the provisions of Section 11.1 (the “ Threshold Amount ”).

(d) Indirect Taxes. Except as otherwise provided in this Section 11.6, each Party shall be liable for and shall pay the taxes which are imposed on it under Applicable Law arising from, or attributable to, any Payment.

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11.7 Interest on Late Payments. If any payment due to either Party under this Agreement is not paid when due, then such paying Party shall pay interest thereon (before and after any judgment) at an annual rate (but with interest accruing on a daily basis) of [***] basis points above LIBOR, such interest to run from the date on which payment of such sum became due until payment thereof in full together with such interest.

11.8 Financial Records. Each Party shall, and shall cause its Affiliates to, keep complete and accurate books and records pertaining to Net Sales of Products, as applicable, and the Development, Manufacturing Commercialization activities pertaining to New Collaboration Compounds or Products, including Development Costs, Manufacturing Costs and Commercialization Costs incurred in connection therewith, in sufficient detail to calculate all amounts payable hereunder and to verify compliance with its obligations under this Agreement. Such books and records shall be retained by such Party and its Affiliates until the later of: (a) [***] years after the end of the period to which such books and records pertain (or, with respect to any payment made in connection with a Party’s exercise of its Pre-Phase IIb Opt-In, Pre-Phase III Opt-In or EOP3 Opt-In, [***] years after date of the submission of such payment); and (b) the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Applicable Law.

11.9 Audit. At the request of the other Party, each Party shall, and shall cause its Affiliates to, permit an independent auditor designated by the other Party and reasonably acceptable to the audited Party, at reasonable times and upon reasonable notice, to audit the books and records maintained pursuant to Section 11.8 to ensure the accuracy of all reports and payments made hereunder. Such examinations may not: (a) be conducted for any Calendar Quarter more than [***] years after the end of such quarter (or, with respect to any payment made in connection with a Party’s exercise of its Pre-Phase IIb Opt-In, Pre-Phase III Opt-In or EOP3 Opt-In, be conducted more than [***] years after the date of the submission of such payment); (b) be conducted more than [***] in any [***]-month period (unless a previous audit during such [***]-month period revealed an underpayment with respect to such period); or (c) be repeated for any Calendar Quarter. Except as provided below, the cost of this audit shall be borne by the auditing Party, unless the audit reveals a variance of more than [***] percent ([***]%) from the reported amounts, in which case the audited Party shall bear the cost of the audit. Unless disputed pursuant to Section 11.10 below, if such audit concludes that: (i) additional amounts were owed by the audited Party, the audited Party shall pay the additional amounts, with interest as provided in Section 11.7; or (ii) excess payments were made by the audited Party, the auditing Party shall reimburse such excess payments, in either case ((i) or (ii)), within [***] days after the date on which such audit is completed by the auditing Party.

11.10 Audit Dispute. In the event of a dispute with respect to any audit under Section 11.9, the Parties shall work in good faith to resolve the disagreement. If the Parties are unable to reach a mutually acceptable resolution of any such dispute within [***] days, the dispute shall be submitted for resolution to a certified public accounting firm jointly selected by each Party’s certified public accountants or to such other Person as the Parties shall mutually agree (the “ Arbitrator ”). The Parties shall enter into an engagement letter with the

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Arbitrator, which shall spell out the specific procedures that the Arbitrator shall perform in order to reach a decision. The Parties shall make available to the Arbitrator all working papers and supporting documents required by the Arbitrator to fulfill its obligations under the engagement letter. The decision of the Arbitrator shall be final and the costs of such arbitration as well as the initial audit shall be borne between the Parties in such manner as the Arbitrator shall determine. Not later than [***] days after such decision and in accordance with such decision, the audited Party shall pay the additional amounts, with interest as provided in Section 11.7, or the auditing Party shall reimburse such excess payments, as applicable.

11.11 Confidentiality. The receiving Party shall treat all information subject to review under this Article 11 in accordance with the confidentiality provisions of Article 15 and the Parties shall cause any Arbitrator to enter into a reasonably acceptable confidentiality agreement with the audited Party obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement.

11.12 Diagnostic or Veterinary Products . The royalties in Section 11.4 shall not apply to Development and Commercialization of Unilateral Products for diagnostic or veterinary use, or for uses solely for screening patients who have been diagnosed with a disease, state, or condition for eligibility to be treated for such disease, state, or condition with a Unilateral Product or for monitoring patients who are or have been treated with a Unilateral Product. In the event that a Unilateral Product is Developed for any such purposes, the Parties shall negotiate a downward adjustment to such royalties for the sale of such Unilateral Product that reflects the commercial potential of such Unilateral Product and standard commercial terms in the industry for diagnostic or veterinary products, as applicable.

ARTICLE 12

I NTELLECTUAL P ROPERTY

12.1 Ownership of Inventions .

(a) Ownership of Technology. As between the Parties, each Party shall own and retain all right, title, and interest in and to any and all: (i) Information and inventions that are conceived, discovered, developed, or otherwise made solely by or on behalf of such Party (or its Affiliates or licensees or sublicensees) under or in connection with this Agreement, whether or not patented or patentable, and any and all Patents and other intellectual property rights with respect thereto, and (ii) other Information, inventions, Patents and other intellectual property rights that are owned or otherwise Controlled (other than pursuant to the license grants set forth in Section 10.1) by such Party, its Affiliates or its licensees or sublicensees. Each Party shall promptly disclose to the other Party in writing, and shall cause its Affiliates, licensees and sublicensees to so disclose, the development, making, conception or reduction to practice of any such Information, inventions, Patents and other intellectual property rights that are conceived, discovered, developed, or otherwise made under or in connection with this Agreement pertaining to any Product or New Collaboration Compound in any Indication in the New Collaboration Field.

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(b) Ownership of Joint Patents and Joint Know-How. As between the Parties, the Parties shall each own an equal, undivided interest in any and all (i) Information and inventions that are conceived, discovered, developed or otherwise made jointly by or on behalf of Reata or its Affiliates or licensees or sublicensees, on the one hand, and Abbott or its Affiliates or licensees or sublicensees, on the other hand, in connection with the work conducted under or in connection with this Agreement, whether or not patented or patentable (the “ Joint Know-How ”) and (ii) Patents (the “ Joint Patents ”) and other intellectual property rights with respect thereto (together with Joint Know-How and Joint Patents, the “ Joint Intellectual Property Rights ”). Each Party shall promptly disclose to the other Party in writing, and shall cause its Affiliates, licensees and sublicensees to so disclose, the development, making, conception or reduction to practice of any Joint Know-How or Joint Patents. Subject to the licenses and rights of reference granted under Section 10.1 and the Parties’ respective exclusivity obligations hereunder, each Party shall have the right to exploit the Joint Intellectual Property Rights without a duty of seeking consent or accounting to the other Party.

(c) United States Law. The determination of whether Information and inventions are conceived, discovered, developed, or otherwise made by a Party for the purpose of allocating proprietary rights (including Patent, copyright or other intellectual property rights) therein, shall, for purposes of this Agreement, be made in accordance with Applicable Law in the United States as such law exists as of the Effective Date irrespective of where such conception, discovery, development or making occurs.

(d) Assignment Obligation. Each Party shall cause all Persons who perform research and development activities, Manufacturing process development activities or regulatory activities for such Party under this Agreement to be under an obligation to assign (or, if such Party is unable to cause such Person to agree to such assignment obligation despite such Party’s using Commercially Reasonable Efforts to negotiate such assignment obligation, provide an exclusive license under) their rights in any inventions resulting therefrom to such Party, except where Applicable Law requires otherwise and except in the case of governmental, not-for-profit and public institutions which have standard policies against such an assignment (in which case a suitable license, or right to obtain such a license, shall be obtained).

(e) CREATE Act . Notwithstanding anything to the contrary in this Article 12, neither Party shall have the right to make an election under the Cooperative Research and Technology Enhancement Act of 2004, 35 U.S.C. 103(c)(2)-(c)(3) (the “ CREATE Act ”) when exercising its rights under this Article 12 without the prior written consent of the other Party. With respect to any such permitted election, the Parties shall coordinate their activities with respect to any submissions, filings, or other activities in support thereof. The Parties acknowledge and agree that this Agreement is a “joint research agreement” as defined in the CREATE Act.

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(f) Patent Listings .

(i) The LCP with respect to a Joint Product shall have the sole right to make all filings for such Joint Product with Regulatory Authorities in the applicable Commercialization Territory with respect to Abbott Patents, Reata Patents, and Joint Patents as required or allowed in connection with the Orange Book in the U.S. or under the national implementations of Article 10.1(a)(iii) of Directive 2001/EC/83 or other international equivalents, provided that the LCP shall consult with the other Party and the JPC to determine the course of action with respect to such filings. The other Party shall (A) provide to the LCP all Information, including a correct and complete list of its Patents covering the applicable Joint Product or otherwise reasonably necessary or useful to enable the LCP to make such filings with Regulatory Authorities in the Commercialization Territory with respect to such Patents, and (B) cooperate with the LCP’s reasonable requests in connection therewith, including meeting any submission deadlines, in each case, to the extent required or permitted by Applicable Law.

(ii) The Participating Party with respect to a Unilateral Product shall have the sole right to make all filings for such Unilateral Product with Regulatory Authorities in the applicable Royalty Region with respect to Abbott Patents, Reata Patents, and Joint Patents as required or allowed in connection with the Orange Book in the U.S. or under the national implementations of Article 10.1(a)(iii) of Directive 2001/EC/83 or other international equivalents, provided that the Participating Party shall consult with the Non-Participating Party and the JPC to determine the course of action with respect to such filings. The Non- Participating Party shall (i) provide to the Participating Party all Information, including a correct and complete list of its Patents covering the applicable Unilateral Product or otherwise reasonably necessary or useful to enable the Participating Party to make such filings with Regulatory Authorities in the Royalty Region with respect to such Patents, and (ii) cooperate with the Participating Party’s reasonable requests in connection therewith, including meeting any submission deadlines, in each case, to the extent required or permitted by Applicable Law.

12.2 Maintenance and Prosecution of Patents .

(a) Prosecution and Maintenance of Reata Patents. Reata shall have the right, but not the obligation, through the use of internal or outside counsel reasonably acceptable to Abbott (which shall include Reata’s current outside counsel as of the Effective Date), to prepare, file, prosecute, and maintain the Reata Patents worldwide. Reata shall keep Abbott fully informed of all steps with regard to the preparation, filing, prosecution, and maintenance of Reata Patents, including by providing Abbott with a copy of material communications to and from any patent authority in the Territory regarding such Reata Patents, and by providing Abbott drafts of any material filings or responses to be made to such patent authorities in the Territory sufficiently in advance of submitting such filings or responses so as to allow for a reasonable opportunity for Abbott to review and comment thereon. Reata shall consider in good faith the requests and suggestions of Abbott with respect to such Reata drafts and with respect to strategies for filing and prosecuting the Reata Patents in the Territory. Notwithstanding the foregoing, Reata shall promptly inform Abbott of any adversarial patent office proceeding or sua sponte filing, including a request for, or filing or declaration of, any interference, opposition, or reexamination relating to a Reata Patent in the Territory. The Parties shall thereafter consult and cooperate to determine a course of action with respect to any such proceeding in the Territory and Reata shall consider in good faith all comments,

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requests and suggestions provided by Abbott. Reata shall not initiate any such adversarial patent office proceeding relating to a Reata Patent in the Territory without first consulting Abbott. In the event that Reata decides not to prepare, file, prosecute, or maintain a Reata Patent in a country in the Territory, Reata shall provide reasonable prior written notice to Abbott of such intention (which notice shall, in any event, be given no later than [***] days prior to the next deadline for any action that may be taken with respect to such Reata Patent in such country), and Abbott shall thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution, and maintenance of such Reata Patent in such country on Reata’s behalf. Upon Abbott’s written acceptance of such option, Abbott shall assume the responsibility and control for the preparation, filing, prosecution, and maintenance of such specific Reata Patent, as well as all costs that accrue in connection therewith. In such event, Reata shall reasonably cooperate with Abbott in such country as provided under Section 12.2(c).

(b) Prosecution and Maintenance of Abbott Patents and Joint Patents. Abbott shall have the right, but not the obligation, through the use of internal counsel, or outside counsel reasonably acceptable to Reata (which shall include Abbott’s current outside counsel as of the Effective Date), to prepare, file, prosecute, and maintain the Abbott Patents and the Joint Patents worldwide. Abbott shall keep Reata fully informed of all steps with regard to the preparation, filing, prosecution, and maintenance of such Patents, including by providing Reata with a copy of material communications to and from any patent authority in the Territory regarding such Patents, and by providing Reata drafts of any material filings or responses to be made to such patent authorities in the Territory sufficiently in advance of submitting such filings or responses so as to allow for a reasonable opportunity for Reata to review and comment thereon. Abbott shall consider in good faith the requests and suggestions of Reata with respect to such Abbott drafts and with respect to strategies for filing and prosecuting the Abbott Patents and Joint Patents in the Territory. Notwithstanding the foregoing, Abbott shall promptly inform Reata of any adversarial patent office proceeding or sua sponte filing, including a request for, or filing or declaration of, any interference, opposition, or reexamination relating to an Abbott Patent or a Joint Patent in the Territory. The Parties shall thereafter consult and cooperate to determine a course of action with respect to any such proceeding in the Territory and Abbott shall consider in good faith all comments, requests and suggestions provided by Reata. Abbott shall not initiate any such adversarial patent office proceeding relating to an Abbott Patent or a Joint Patent in the Territory without first consulting Reata. In the event that Abbott decides not to prepare, file, prosecute, or maintain an Abbott Patent or a Joint Patent in a country in the Territory, Abbott shall provide reasonable prior written notice to Reata of such intention (which notice shall, in any event, be given no later than [***] days prior to the next deadline for any action that may be taken with respect to such Abbott Patent in such country), and Reata shall thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution, and maintenance of such Abbott Patent or Joint Patent in such country on Abbott’s behalf. Upon Reata’s written acceptance of such option, Reata shall assume the responsibility and control for the preparation, filing, prosecution, and maintenance of such specific Abbott Patent or Joint Patent, and all costs that accrue in connection with such Abbott Patents shall be borne solely by Reata (and costs with respect to such Joint Patents shall continue to be Patent Costs). In such event, Abbott shall reasonably cooperate with Reata in such country as provided under Section 12.2(c).

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(c) Cooperation. The Parties agree to cooperate fully in the preparation, filing, prosecution, and maintenance of the Reata Patents, Abbott Patents, and Joint Patents in the Territory under this Agreement. Cooperation shall include:

(i) executing all papers and instruments, or requiring its employees or contractors to execute such papers and instruments, so as to (A) effectuate the ownership of intellectual property set forth in Sections 12.1(a) and 12.1(b), (B) enable the other Party to apply for and to prosecute Patent applications in the Territory, and (C) obtain and maintain any Patent extensions, supplementary protection certificates, and the like with respect to the Reata Patents, Abbott Patents, and Joint Patents in the Territory, each of (A), (B), and (C) to the extent provided for in this Agreement;

(ii) consistent with this Agreement, assisting in any license registration processes with applicable Governmental Authorities that may be available in the Territory for the protection of a Party’s interests in this Agreement; and

(iii) promptly informing the other Party of any matters coming to such Party’s attention that may materially affect the preparation, filing, prosecution, or maintenance of any such Reata Patents, Abbott Patents, or Joint Patents in the Territory.

In addition, each Party agrees to use reasonable efforts to promptly provide to the other Party notice and copies of (or citations to) any publications that such Party’s intellectual property personnel (and such Party’s scientific and technical personnel working with such intellectual property personnel) involved in either the intellectual property diligence review conducted by such Party in anticipation of executing this Agreement, or involved in the patent prosecution or enforcement related activities provided for in this Agreement, reasonably believe would constitute prior art required to be disclosed in any patent applications within the other Party’s Patent or Joint Patents (to the extent not already disclosed therein) to the extent such personnel become reasonably aware of such publications and their relationship to the other Party’s Patent or Joint Patents.

(d) Patent Term Extension and Supplementary Protection Certificate .

(i) Upon receiving Regulatory Approval for a Joint Product in any country in the Territory, the Parties shall coordinate the application for any patent term extension or supplementary protection certificates that may be available, and the Parties shall determine jointly, through their representatives on the JPC, for which Patent(s) the Parties shall apply for patent term extension for such Joint Product in the Profit Share Region. If the JPC cannot agree on the patents that should be the subject of the application for patent term extension in a particular country in the Profit Share Region within [***] days, subject to clause (iii) below the LCP shall have the right to determine for which Patent(s) the Parties shall apply for patent term extension or supplementary protection certificate for a particular Joint Product in the Profit Share Region. The LCP shall have the primary responsibility of applying

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for any patent term extension or supplementary protection certificate for a particular Joint Product in the Profit Share Region. The LCP shall keep the other Party fully informed of its efforts to obtain such extension or supplementary protection certificate. The other Party shall provide prompt and reasonable assistance, as requested by the LCP, including by taking such action as patent holder as is required under any Applicable Law to obtain such patent extension or supplementary protection certificate. Expenses in regard to obtaining the extension or supplementary protection certificate for a Joint Product shall be Commercialization Costs.

(ii) The Participating Party shall have the right to determine for which Patent(s) it shall apply for patent term extension or supplementary protection certificate for a particular Unilateral Product in the applicable Royalty Region. The Participating Party shall have the primary responsibility of applying for any patent term extension or supplementary protection certificate for a particular Unilateral Product in the applicable Royalty Region. The Participating Party shall keep the Non- Participating Party fully informed of its efforts to obtain such extension or supplementary protection certificate. The Non- Participating Party shall provide prompt and reasonable assistance, as requested by the Participating Party, including by taking such action as patent holder as is required under any Applicable Law to obtain such patent extension or supplementary protection certificate. Expenses in regard to obtaining the extension or supplementary protection certificate for a Unilateral Product shall be borne solely by the Participating Party and shall not be Commercialization Costs.

(iii) Notwithstanding the foregoing, in the event that a particular Patent in a particular country claims the composition of matter of, or the method of making or using, multiple Products where for one (1) or more of such Products one Party is the LCP or Participating Party and for one (1) or more of such Products the other Party is the LCP or Participating Party, the Parties shall consult with each other as to for which Product the Parties shall apply for patent term extension or a supplementary protection certificate using such Patent in such country.

(e) Patents Licensed from Third Parties. Each Party’s rights under this Section 12.2 with respect to any Patent Right licensed to a Party by a Third Party shall be subject to the rights of such Third Party to prosecute, maintain and extend such Patent Right.

(f) Costs and Expenses. All Patent Costs initially shall be borne by the Party incurring such costs. The Patent Costs incurred by each Party in connection with the prosecution and maintenance of Abbott Patents, Reata Patents, and Joint Patents in a country in the Territory shall be allocated by the JPC to Joint Products, Unilateral Products or New Collaboration Compounds being Developed unilaterally or jointly, as applicable. For a Joint Product or New Collaboration Compound being jointly Developed, such Patent Costs shall be included in Development Costs or Commercialization Costs, as applicable. For a New Collaboration Compound being Developed by a Party unilaterally, such Patent Costs shall be borne solely by the Participating Party but be included as costs reimbursable by a Non- Participating Party that exercises its Pre-Phase IIb Opt-In, Pre-Phase III Opt-In or EOP3 Opt-In with respect to such Unilateral Product or New Collaboration Compound. With respect to Commercialization of Unilateral Products in a Royalty Region, such Patent Costs shall be borne solely by the Participating Party Commercializing the Unilateral Product in such Royalty Region.

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12.3 Enforcement of Patents.

(a) Notice. If there is any infringement, threatened infringement, or alleged infringement of any Reata Patent, Abbott Patent or Joint Patent (collectively, “ Collaboration Patents ”), then the Party first learning of such alleged infringement shall notify the other Party in writing within [***] Business Days of the first learning by the Party of any such infringement of which it becomes aware, and shall provide evidence in such Party’s possession demonstrating such infringement.

(b) Joint Product Infringement. Any infringement, threatened infringement, or alleged infringement of any Collaboration Patent covering a Joint Product for which a Commercial Summit has been conducted on account of a Third Party’s manufacture, use, offer for sale, or sale of a product containing the same New Collaboration Compound (or the same active moiety) as is contained in such Joint Product ( i.e. , infringement by a generic product) in the New Collaboration Field in a Commercialization Territory in the applicable Profit Share Region shall be deemed a “ Joint Product Infringement .” The LCP for such Joint Product in such Commercialization Territory shall have the first right, but not the obligation, to prosecute such Joint Product Infringement. In the event the LCP prosecutes such Joint Product Infringement, the other Party shall have the right to join as a party to such claim, suit or proceeding and participate with its own counsel at its own expense; provided that the LCP shall retain control of the prosecution of such claim, suit or proceeding. During any such claim, suit or proceeding, the LCP shall: (i) provide the other Party with drafts of all official papers and statements (whether written or oral) prior to their submission in such claim, suit or proceeding, in sufficient time to allow the other Party to review, consider and substantively comment thereon; (ii) reasonably consider taking action to incorporate the other Party’s comments on all such official papers and statements; (iii) allow the other Party the opportunity to participate in the preparation of witnesses and other participants in such claim, suit or proceeding; and (iv) not settle any such claim, suit, or proceeding except in a manner that it believes in good faith is in the best interests of such Joint Product. If the LCP does not take commercially reasonable steps to prosecute a Joint Product Infringement (A) within [***] days following the first notice provided above with respect to the Joint Product Infringement, or (B) provided such date occurs after the first such notice of the Joint Product Infringement is provided, [***] Business Days before the time limit, if any, set forth in Applicable Laws for filing of such actions, whichever comes first, then the other Party may prosecute the Joint Product Infringement. In the event such Joint Product Infringement involves the sale of an infringing product in the applicable Profit Share Region in a manner that would result in each Party having the right to enforce such Collaboration Patent(s) against a Third Party(ies) in different countries, then the Parties shall attempt to coordinate their efforts in such enforcement efforts through the JPC to form a joint enforcement strategy and plan of execution and to appoint one Party to lead such enforcement on the worldwide basis. In the absence of such an agreement, each Party shall have the right to take such action as it deems appropriate.

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(c) Unilateral Product Infringement. As between the Parties, the Participating Party shall have the sole right, but not the obligation, to prosecute any infringement, threatened infringement, or alleged infringement of any Collaboration Patent covering a Unilateral Product on account of a Third Party’s manufacture, use, offer for sale, or sale of a product containing the same New Collaboration Compound (or the same active moiety) as such Unilateral Product ( i.e. , infringement by a Generic Product) in the New Collaboration Field in the applicable Royalty Region (a “ Unilateral Product Infringement ”) at the Participating Party’s own expense in its sole discretion.

(d) Field Infringement. Any infringement, threatened infringement, or alleged infringement of a Collaboration Patent in the New Collaboration Field that is not a Joint Product Infringement or a Unilateral Product Infringement shall be deemed a “ Field Infringement .” If the Collaboration Patent in question is a Reata Patent, Reata shall have the first right, but not the obligation, to prosecute such Field Infringement. If the Collaboration Patent in question is an Abbott Patent or a Joint Patent, Abbott shall have the first right, but not the obligation, to prosecute such Field Infringement. In the event the Party with the first right to prosecute a Field Infringement (the “ Prosecuting Party ”) prosecutes such Field Infringement, the other Party shall have the right to join as a party to such claim, suit or proceeding and participate with its own counsel at its own expense; provided that the Prosecuting Party shall retain control of the prosecution of such claim, suit or proceeding. During any such claim, suit or proceeding, the Prosecuting Party shall: (i) provide the other Party with drafts of all official papers and statements (whether written or oral) prior to their submission in such claim, suit or proceeding, in sufficient time to allow the other Party to review, consider and substantively comment thereon; (ii) reasonably consider taking action to incorporate the other Party’s comments on all such official papers and statements; (iii) allow the other Party the opportunity to participate in the preparation of witnesses and other participants in such claim, suit or proceeding; and (iv) not settle any such claim, suit, or proceeding except in a manner that it believes in good faith is in the best interests of any existing Joint Products and any New Collaboration Compounds then being jointly Developed by the Parties. If the Prosecuting Party does not take commercially reasonable steps to prosecute a Field Infringement (i) within [***] days following the first notice provided above with respect to the Field Infringement, or (ii) provided such date occurs after the first such notice of the Field Infringement is provided, [***] Business Days before the time limit, if any, set forth in Applicable Laws for filing of such actions, whichever comes first, then the other Party may prosecute the Field Infringement.

(e) Cooperation. The Parties agree to cooperate fully in any infringement action pursuant to this Section 12.3. Where a Party brings such an action, the other Party shall, where necessary, furnish a power of attorney solely for such purpose or shall join in, or be named as a necessary party to, such action. Unless otherwise set forth herein, the Party entitled to bring any patent infringement litigation in accordance with this Section 12.3 shall have the right to settle such claim; provided that neither Party shall have the right to settle any patent infringement litigation under this Section 12.3 in a manner that diminishes or has a material adverse effect on the rights or interest of the other Party, or in a manner that imposes any costs or liability on, or involves any admission by, the other Party, without the express written consent of such other Party. The Party commencing the litigation shall provide the other Party with copies of all pleadings and other documents filed with the court and shall consider reasonable input from the other Party during the course of the proceedings.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(f) Expenses and Recoveries. Any expenses incurred by a Party in connection with bringing a claim, suit or action under this Section 12.3 with respect to any Joint Product Infringement or Field Infringement of a Collaboration Patent shall be included in Development Costs or Commercialization Costs , as applicable. If such Party recovers monetary damages from such Third Party in such suit or action, such recovery shall be allocated first to the reimbursement of any expenses incurred by the Parties in such litigation (including, for this purpose, a reasonable allocation of expenses of internal counsel), in which event such reimbursed expenses shall not be included in Development Costs or Commercialization Costs, and any remaining amount shall be (i) included in Net Sales of the applicable Joint Product for the applicable Profit Share Region with respect to a Joint Product Infringement and (ii) shall be shared equally (50/50) by the Parties with respect to a Field Infringement. Any expenses incurred by a Participating Party in connection with bringing a claim, suit or action under this Section 12.3 with respect to any Unilateral Product Infringement shall be borne solely by such Participating Party. If such Participating Party recovers monetary damages from such Third Party in such suit or action, such recovery shall be allocated first to the reimbursement of any expenses incurred by such Participating Parties in such litigation (including, for this purpose, a reasonable allocation of expenses of internal counsel), and any remaining amount shall be included in Net Sales for the applicable Unilateral Product.

(g) Patents Licensed from Third Parties Each Party’s rights under this Section 12.3 with respect to any Collaboration Patent licensed to the other Party by a Third Party shall be subject to the rights of such Third Party to enforce such Collaboration Patent or defend against any claims that such Collaboration Patent is invalid or unenforceable.

12.4 Infringement Claims by Third Parties .

(a) Notice . Each Party shall bring to the attention of the other Party within [***] days of such Party’s first notice all information regarding potential infringement or any claim of infringement of Third Party intellectual property rights in connection with the Development, Manufacture or Commercialization of Products in the Territory.

(b) Joint Products. In the event such claim is brought against a Joint Product in a particular Commercialization Territory in the Profit Share Region, the LCP with respect to such Joint Product in such Commercialization Territory shall have the first right, but not the obligation, to defend and control the defense of any such claim using counsel of its own choice reasonably acceptable to the other Party. The other Party may participate in any such claim with counsel of its choice reasonably acceptable to the LCP. If the LCP elects (in a written communication submitted to the other Party within a reasonable amount of time not to exceed [***] Business Days after first notice of the alleged patent infringement) not to defend or control the defense of, or otherwise fails to initiate and maintain the defense of, any such claim within such time periods so that the other Party is not prejudiced by any delays, the other

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Party may conduct and control the defense of any such claim, suit, or proceeding. Each Party shall keep the other Party reasonably informed of all material developments in connection with any such claim, suit, or proceeding. Each Party agrees to provide the other Party with copies of all pleadings filed in such action and to allow the other Party reasonable opportunity to participate in the defense of the claims. All out-of-pocket costs (including any payment made pursuant to a judgment or settlement) incurred by the LCP and the other Party in defending such claim shall constitute Commercialization Costs with respect to such Joint Product and be included in the calculation of Operating Profit or Loss. Any recoveries by the LCP of any sanctions awarded to the LCP and against a Third Party asserting a claim being defended under this Section 12.4 shall be applied as follows: such recovery shall be applied first to (i) reimburse the LCP for its reasonable out-of-pocket costs of defending such claim, and (ii) reimburse the other Party for its reasonable out-of-pocket costs of defending such claim (and to such extent shall not constitute Commercialization Costs). The balance of any such recoveries shall be included in Net Sales for the relevant Joint Product and included in the calculation of Operating Profit or Loss. In the event the claim is brought against a Joint Product in the Territory in a manner that would result in each Party controlling the defense of such claim in different countries of the world, then the Parties shall attempt to coordinate their efforts in conducting such defense through the JPC to form a joint defense strategy and plan of execution and to appoint one Party to lead such defense on the worldwide basis. In the absence of such an agreement, each Party shall have the right to take such action as it deems appropriate.

(c) Unilateral Products . In the event such claim is brought against a Unilateral Product in a Royalty Region, the Participating Party with respect to such Unilateral Product shall have the first right, but not the obligation, to defend and control the defense of any such claim using counsel of its own choice at its sole expense. The other Party may participate in any such claim with counsel of its choice reasonably acceptable to the Participating Party at its sole expense. If the Participating Party elects (in a written communication submitted to the other Party within a reasonable amount of time after notice of the alleged patent infringement) not to defend or control the defense of, or otherwise fails to initiate and maintain the defense of, any such claim within such time periods so that the other Party is not prejudiced by any delays, the other Party may conduct and control the defense of any such claim, suit, or proceeding. Each Party shall keep the other Party reasonably informed of all material developments in connection with any such claim, suit, or proceeding. Each Party agrees to provide the other Party with copies of all pleadings filed in such action and to allow the other Party reasonable opportunity to participate in the defense of the claims. The Participating Party shall be entitled to deduct [***] percent ([***]%) of the reasonable out-of- pocket costs (including any payment made pursuant to a judgment or settlement) of defending such claim, suit, or proceeding from [***]. Any recoveries by the Participating Party of any sanctions awarded to the Participating Party and against a Third Party asserting a claim being defended under this Section 12.4 shall be applied as follows: such recovery shall be applied first to (i) reimburse the Participating Party for its reasonable out-of-pocket costs of defending such claim, suit or proceedings to the extent not deducted from royalties pursuant to the previous sentence, and (ii) reimburse the other Party for [***].

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

12.5 Defense of Collaboration Patents .

(a) Notice . Each Party shall notify the other Party in writing within [***] Business Days of the Party’s first learning of any alleged or threatened assertion of invalidity or unenforceability of any Collaboration Patent by a Third Party of which such Party becomes aware.

(b) Defense. Where such allegation is made in an opposition, reexamination, interference or other patent office proceeding, the provisions of Section 12.2 shall apply. Where such allegation is made in a counterclaim to a suit or other action brought under Section 12.3, the provisions of Section 12.3 shall apply. Where such allegation is made in a declaratory judgment or other court action, (i) the Party who prosecuted such Collaboration Patent pursuant to Section 12.2 shall have the first right to defend such action, provided that if a Party pursuant to Section 12.3 elects to bring an infringement counterclaim, the provisions of Section 12.3 shall thereafter apply.

(c) Cooperation. Each Party shall assist and cooperate with the other Party as such other Party may reasonably request from time to time in connection with its activities set forth in this Section 12.5, including by being joined as a party in such action or proceeding, providing access to relevant documents and other evidence, and making its employees available at reasonable business hours. In connection with any such defense or claim or counterclaim, the controlling Party shall consider in good faith any comments from the other Party and shall keep the other Party reasonably informed of any steps taken, and shall provide copies of all documents filed, in connection with such defense, claim, or counterclaim. In connection with the activities set forth in this Section 12.5, each Party shall consult with the other as to the strategy for the defense of the Collaboration Patents.

12.6 Third Party Licenses .

(a) Negotiation of Third Party Licenses . The Parties acknowledge that during the Term, it may be beneficial to obtain a Third Party License, including in connection with an infringement action under Section 12.4. The Parties agree that the JPC shall oversee and determine the overall strategy for obtaining any such Third Party Licenses and the implementation of such strategy, including assigning to each Party the responsibility for negotiating and executing any agreement governing such Third Party Licenses. If the JPC cannot agree whether the Parties should obtain a Third Party License within a [***]-day period (unless extended by agreement of the Parties in writing) commencing from the initial meeting of the JPC to determine the strategy, then (i) the LDP, in the case of a Third Party License with respect to a New Collaboration Compound prior to the First Commercial Sale of any Product containing such New Collaboration Compound, (ii) the LCP, in the case of a Third Party License with respect to a Joint Product after the First Commercial Sale of such Joint Product in the applicable Commercialization Territory, or (iii) the Participating Party, in the case of a Third Party License with respect to a Unilateral Product after the First Commercial Sale of such Unilateral Product in the applicable Royalty Region, in each case ((i), (ii) or (iii)) shall have the right to obtain such Third Party License [***]. The Parties agree that any Third Party Payment under such Third Party License shall be included in the Development

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Costs for a particular New Collaboration Compound covered under the applicable Patents subject to such license (or, if such Patents cover more than one (1) New Collaboration Compounds, allocated by the JPC among the Development Costs for such New Collaboration Compounds), in each case prior to the First Commercial Sale of the Product containing such New Collaboration Compound. Thereafter, such Third Party Payments shall be included in Commercialization Costs for any Joint Product, or borne solely by the Participating Party for any Unilateral Product, subject to a royalty reduction as and to the extent provided in Section 11.4(c).

(b) Existing Reata License Agreements. If at any time Abbott in good faith believes that a sublicense under any Patents (which are not otherwise included in the Reata Patents) licensed by a Third Party to Reata under any license agreement between such Third Party and Reata in existence as of the Effective Date (an “Existing Reata License” ) is reasonably necessary or useful for the Development, Manufacture or Commercialization of any Product in any part of the Territory, Abbott shall so notify Reata. Upon delivery of such notice, (i) the term “Reata Patents” automatically shall include the Patents licensed by such Third Party to Reata under the applicable Existing Reata License and (ii) the license grants by Reata in Sections 10.1(a)(i) and 10.1(a)(iii) automatically shall include grants under the Patents licensed by such Third Party to Reata under the applicable Existing Reata License. Reata acknowledges and agrees that (x) it solely shall pay all amounts and other consideration payable or issuable to Third Parties pursuant to any Existing Reata License, and no such payment shall constitute a Development Cost or Commercialization Cost hereunder and (y) it shall not grant to any Third Party any sublicense under any Existing Reata License to Exploit any product in the New Collaboration Field.

(c) Other Third Party Agreement. Each Party agrees that it solely shall pay all amounts and other considerations payable or issuable to Third Parties pursuant to any agreement between such Party or any of its Affiliates and a Third Party in respect of Third Party intellectual property rights that cover the composition of matter of, or method of use of, or Manufacture of, a New Collaboration Compound or Product for which a license is reasonably necessary or useful for the Development, Manufacture or Commercialization of any Product in any part of the Territory, and which agreement (i) is in existence as of the Effective Date or (ii) relates to intellectual property created by such Third Party prior to the Effective Date pursuant to or in connection with any arrangement or agreement between such Third Party and such Party or any of its Affiliates, and no such payment shall constitute a Development Cost or Commercialization Cost hereunder (collectively (i) and (ii) referred to as “ Other Third Party License Agreements ”).

12.7 Patent Marking. The LCP for a Joint Product for the applicable Commercialization Territory, or the Participating Party for a Unilateral Product, as the case may be, shall, and shall require its Affiliates and sublicensees to, mark Products sold by it hereunder (in a reasonable manner consistent with industry custom and practice) with appropriate patent numbers or indicia to the extent permitted by Applicable Law, in those countries in which such markings or such notices impact recoveries of damages or equitable remedies available with respect to infringements of patents.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

12.8 Personnel Obligations. Each Party shall cause its employees who perform any activities for such Party under this Agreement to be bound by non-disclosure and invention assignment obligations that are consistent with the obligations of Abbott or Reata, as appropriate, in this Agreement, including: (a) promptly reporting any invention, discovery, process or other intellectual property right; (b) assigning to Abbott or Reata, as appropriate, all of his or her right, title and interest in and to any invention, discovery, process or other intellectual property right; (c) cooperating in the preparation, filing, prosecution, maintenance and enforcement of any Patent; (d) performing all acts and signing, executing, acknowledging and delivering any and all documents required for effecting the obligations and purposes of this Agreement; and (e) abiding by the obligations of confidentiality and non-use set forth in Article 15. Such non-disclosure and invention assignment agreement need not reference or be specific to this Agreement.

12.9 Trademarks, Corporate Logos and other Intellectual Property Rights .

(a) Ownership and Prosecution of Product Trademarks.

(i) With respect to each Joint Product in a Commercialization Territory, the LCP with respect to such Joint Product in such Commercialization Territory shall own all right, title, and interest to the Product Trademarks for such Joint Product in such Commercialization Territory, and shall be responsible for the clearance, registration, prosecution, and maintenance thereof; provided that the other Party shall have the right to provide input on the overall strategy for such registration, prosecution, and maintenance, and such LCP shall consider such input in good faith. The other Party shall provide all assistance and documents reasonably requested by the LCP in support of its prosecution, registration, and maintenance of the Product Trademarks.

(ii) With respect to each Unilateral Product in a Royalty Region, the Participating Party with respect to such Unilateral Product in such Royalty Region shall own all right, title, and interest to the Product Trademarks for such Unilateral Product in such Royalty Region, and shall be responsible for the clearance, registration, prosecution, and maintenance thereof.

(b) Enforcement of Product Trademarks.

(i) With respect to each Joint Product in a Commercialization Territory, the LCP with respect to such Joint Product in such Commercialization Territory shall have the first right to take such action as the LCP, after consultation with the other Party, deems necessary against a Third Party based on any alleged, threatened, or actual infringement, dilution, misappropriation, or other violation of, or unfair trade practices or any other like offense relating to, the Product Trademarks for such Joint Product in such Commercialization Territory by a Third Party. Subject to the foregoing, the other Party may elect at its expense to participate in the enforcement of such Product Trademarks. In the event that the LCP fails to assume responsibility for such enforcement, the other Party shall have the right to do so, with the LCP’s prior written consent, not to be unreasonably withheld.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(ii) With respect to each Unilateral Product in a Royalty Region, the Participating Party with respect to such Unilateral Product in such Royalty Region shall have the sole right to take such action as the Participating Party deems necessary against a Third Party based on any alleged, threatened, or actual infringement, dilution, misappropriation, or other violation of, or unfair trade practices or any other like offense relating to, the Product Trademarks for such Unilateral Product in such Royalty Region by a Third Party.

(c) Third Party Claims .

(i) With respect to each Joint Product in a Commercialization Territory, the LCP with respect to such Joint Product in such Commercialization Territory shall have the first right to defend against any alleged, threatened, or actual claim by a Third Party that the use or registration of the Product Trademarks for such Joint Product in such Commercialization Territory infringes, dilutes, misappropriates, or otherwise violates any Trademark or other right of such Third Party or constitutes unfair trade practices or any other like offense, or any other claims as may be brought by a Third Party against a Party in connection with the use of the Product Trademarks for such Joint Product in such Commercialization Territory. Subject to the foregoing, the other Party may elect at its expense to participate in the defense of the Product Trademarks. In the event that the LCP fails to assume responsibility for such defense, the other Party shall have the right to do so.

(ii) With respect to each Unilateral Product in a Royalty Region, the Participating Party with respect to such Unilateral Product in such Royalty Region shall have the sole right to defend against any alleged, threatened, or actual claim by a Third Party that the use or registration of the Product Trademarks for such Unilateral Product in such Royalty Region infringes, dilutes, misappropriates, or otherwise violates any Trademark or other right of such Third Party or constitutes unfair trade practices or any other like offense, or any other claims as may be brought by a Third Party against such Participating Party in connection with the use of the Product Trademarks for such Unilateral Product in such Royalty Region.

(d) The Trademark Costs incurred by each Party with respect to a Joint Product in the applicable Profit Share Region shall be included in Commercialization Costs. The Trademark Costs incurred by the Participating Party with respect to a Unilateral Product in the applicable Royalty Region shall be borne solely by the Unilateral Party. Any recoveries awarded to a Party in connection with an action under Section 12.9(b) or Section 12.9(c) shall be applied as follows: such recovery shall be applied first to reimburse the Parties for their Trademark Costs relating to such enforcement or defense, and any amounts remaining shall be allocated as follows: (x) for Joint Products, such amounts shall be deemed Net Sales of such Joint Product in the applicable Profit Share Region; and (y) for Royalty Products, such amounts shall be deemed Net Sales of the applicable Unilateral Product in the applicable Royalty Region.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(e) Notice and Cooperation . Each Party shall provide to the other Party written notice within [***] Business Days of the Party’s first notice of any actual or threatened infringement of the Product Trademarks in the Territory and of any actual or threatened claim that the use of the Product Trademarks in the Territory violates the rights of any Third Party. Each Party agrees to reasonably cooperate with the other Party with respect to any enforcement action or defense commenced pursuant to this Section 12.9.

(f) Ownership of Corporate Names. As between the Parties, each Party shall retain all right, title and interest in and to its corporate names and logos, and any goodwill derived through the use of such marks shall inure solely to the benefit of its owner. Neither Party shall, without the other Party’s prior written consent, use any Trademarks of the other Party (including the other Party’s corporate name and logo), or marks confusingly similar thereto, in connection with such Party’s marketing or promotion of Products under this Agreement, except as expressly provided in, and in accordance with, this Agreement.

(g) Study Trademarks .

(i) The LDP with respect to a Clinical Study under a Development Plan shall have the right (after consultation with the other Party in the case of the Joint Exploratory Development Plan or a Joint Plan) to select the Study Trademark, if any, with respect to such Clinical Study.

(ii) The provisions of Sections 12.9(a) through (d) shall apply to the ownership, clearance, prosecution, maintenance, enforcement and defense of Study Trademarks (and related Study Trademark Costs), mutatis mutandis , in each case with the applicable LDP substituted for the applicable LCP in each such provision and with applicable Study Trademark Costs allocated to Development Costs.

ARTICLE 13

R EPRESENTATIONS A ND W ARRANTIES ; C OVENANTS

13.1 Mutual Representations and Warranties . Reata and Abbott each represents and warrants to the other, as of the Effective Date, and covenants, as follows:

(a) Organization . It is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization, and has all requisite power and authority, corporate or otherwise, to execute, deliver, and perform this Agreement.

(b) Authorization . The execution and delivery of this Agreement and the performance by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and do not violate (i) such Party’s charter documents, bylaws, or other organizational documents, (ii) in any material respect, any agreement, instrument, or contractual obligation to which such Party is bound, (iii) any requirement of any Applicable Law, or (d) any order, writ, judgment, injunction, decree, determination, or award of any court or governmental agency presently in effect applicable to such Party.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(c) Binding Agreement . This Agreement is a legal, valid, and binding obligation of such Party enforceable against it in accordance with its terms and conditions, subject to the effects of bankruptcy, insolvency, or other laws of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance, and general principles of equity (whether enforceability is considered a proceeding at law or equity).

(d) No Inconsistent Obligation . It is not under any obligation, contractual or otherwise, to any Person that conflicts with or is inconsistent in any material respect with the terms of this Agreement, or that would impede the material fulfillment of its obligations hereunder.

(e) No Debarment . It shall not use in any capacity, in connection with the performance of the activities contemplated by this Agreement, any Person who has been debarred pursuant to Section 306 of the FFDCA, or who is the subject of a conviction described in such section. It agrees to inform the other Party in writing immediately if it or any Person who is performing services hereunder on its behalf is debarred or is the subject of a conviction described in Section 306, or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or, to its Knowledge, is threatened, relating to the debarment or conviction of it or any Person performing services hereunder.

(f) No Encumbrance. During the Term, it shall not encumber or violate the rights granted by it to the other Party hereunder with respect to Reata Patents or Abbott Patents, as applicable.

(g) Disclosure to Patent Office. During the Term, it shall timely present all material references, documents, or information in respect of pending applications included in the Reata Patents or Abbott Patents, as applicable, of which it and the inventors are aware to the relevant patent office, to the extent required by Applicable Law.

(h) Taxation. It is a resident, as such term is defined for tax purposes pursuant to Applicable Laws, of the jurisdiction in which it is organized.

13.2 Additional Representations of Reata . Except as set forth in the Schedule of Exceptions, Reata further represents and warrants to Abbott, as of the Effective Date, and covenants, as follows:

(a) All Reata Patents existing as of the Effective Date in the Territory (the “ Existing Patents ”) are listed on Schedule 13.2(a) . To Reata’s Knowledge, no issued patents included in the Existing Patents are invalid or unenforceable.

(b) There are no claims, judgments, or settlements against, or amounts with respect thereto (other than amounts owed to any patent office), owed by Reata or any of its Affiliates relating to the Existing Patents, or the Reata Know-How existing as of the Effective Date. As of the Effective Date, no claim or litigation has been brought or threatened by any Person alleging, and Reata has no Knowledge of any claim, whether or not asserted, that (i) any issued patents included in the Existing Patents are invalid or unenforceable, or (ii) the disclosing, copying, making, assigning, or licensing of the inventions claimed by the Existing

141

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Patents, or the Reata Know-How, or the Development or Commercialization of Products containing any Effective Date AIMs as contemplated herein as of the Effective Date, violates or infringes, or would violate or infringe any intellectual property or proprietary right of any Person existing as of the Effective Date. “ Effective Date AIMs ” means New Collaboration Compounds Controlled by Reata or any of its Affiliates as of the Effective Date and claimed in any of the Reata Patents.

(c) Reata is the sole and exclusive owner of the Existing Patents listed on Schedule 13.2(a) (the “ Owned Patents ”) and the Reata Know-How existing as of the Effective Date free of any lien or claim of ownership by any Third Party and of any material encumbrance. Reata is entitled to grant the licenses specified herein. The Owned Patents constitute all of the Existing Patents.

(d) Reata has the right to use all Reata Know-How and the inventions claimed by Existing Patents that are necessary to conduct Joint Exploratory Development as set forth in the Joint Exploratory Development Plan existing as of the Effective Date. The Development or Commercialization of the Effective Date AIMs as contemplated herein is not subject as of the Effective Date to any other license or agreement to which Reata or any of its Affiliates is a party as of the Effective Date.

(e) During the Term, Reata shall not encumber or violate the rights granted to Abbott hereunder with respect to the Reata Patents.

(f) To Reata’s Knowledge, the Existing Patents are being diligently prosecuted in the respective patent offices in accordance with Applicable Law. The Existing Patents have been filed and maintained properly and correctly and all applicable fees have been paid on or before the due date for payment prior to the Effective Date.

(g) Reata has not previously assigned, transferred, licensed, conveyed, or otherwise encumbered its right, title, or interest under the Existing Patents or Reata Know-How in connection with the Development, Manufacture or Commercialization of the Effective Date AIMs (including by granting any covenant not to sue with respect thereto) (or any Patents or Information that would be Existing Patents or Reata Know-How but for such assignment, transfer, license, conveyance, or encumbrance) in the Territory in the New Collaboration Field, except (i) as provided in the agreements listed on Schedule 13.2(g) (the “ Academic Research Agreements ”) or (ii) where such assignment, transfer, license, conveyance, or encumbrance is terminated and no longer in force or effect, and it will not enter into any such agreements or grant any such right, title, or interest to any Person that is inconsistent with the rights and licenses granted to Abbott under this Agreement.

(h) To Reata’s Knowledge, no Person is infringing or threatening to infringe the Existing Patents, or misappropriating or threatening to misappropriate the Reata Know- How existing as of the Effective Date.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(i) True, complete and correct copies (as of the Effective Date) of: (i) the file wrapper and other documents and materials relating to the prosecution, defense, maintenance, validity, and enforceability of the Owned Patents; (ii) the UT 2004 Agreement; (iii) the UT 2006 Agreement; and (iv) each of the Academic Research Agreements, in each case ((i), (ii), (iii) and (iv)) have been provided or made available to Abbott prior to the Effective Date. As of the Effective Date, Reata has disclosed to Abbott (A) all material adverse information with respect to the safety and efficacy of the Existing Lead Compounds and the Development Candidates existing as of the Effective Date as to which Reata has Knowledge and (B) all material information and data with respect to RTA-408 and RTA-410 as to which Reata has Knowledge.

(j) To Reata’s Knowledge, the conduct of Joint Exploratory Development, Manufacturing of the Products containing the Effective Date AIMs (in the same formulation as they exist as of the Effective Date and using the same process as that used as of the Effective Date), and the Parties’ Commercialization of the Products containing the Effective Date AIMs as contemplated herein will not infringe any Patents or other intellectual property or proprietary right of any Person.

(k) To Reata’s Knowledge, the conception, development, and reduction to practice of the inventions claimed by the Existing Patents and Reata Know-How existing as of the Effective Date have not constituted or involved the misappropriation of trade secrets or other rights or property of any Person.

(l) To Reata’s Knowledge, in respect of the pending patent applications included in the Existing Patents, Reata has presented or will timely present all material references, documents, or information of which it and the inventors are aware to the relevant patent office, to the extent required by Applicable Law.

(m) The Existing Patents represent all Patents within Reata’s or its Affiliates’ Control relating to the Effective Date AIMs and the Products containing the Effective Date AIMs within the Territory as of the Effective Date.

(n) Each of the Existing Patents properly identifies each and every inventor of the claims thereof as determined in accordance with the laws of the jurisdiction in which such Existing Patent is issued or such application is pending.

(o) Each Person who has or has had any rights in or to any Owned Patents, has assigned and has executed an agreement assigning its entire right, title, and interest in and to such Owned Patents to Reata.

(p) All rights in all inventions and discoveries, made, developed, or conceived by any employee or independent contractor of Reata during the course of their employment (or other retention) by Reata, and relating to or included in Reata Know-How or that are the subject of one or more Existing Patents have been or will be assigned in writing to Reata.

143

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(q) To Reata’s Knowledge, Reata has obtained the right (including under any Patents and other intellectual property rights) to use all Information and all other materials (including any formulations and manufacturing processes and procedures) developed or delivered by any Third Party under any agreements between Reata and any such Third Party with respect to the Effective Date AIMs as of the Effective Date, and Reata has the rights under each such agreement to transfer such Information or other materials to Abbott and its designees and to grant Abbott the right to use such Know-How or other materials in the Development or Commercialization of the Effective Date AIMs or the Products containing the Effective Date AIMs as set forth in this Agreement.

(r) All information, documentation, and other materials furnished or made available by Reata upon the request of Abbott during Abbott’s period of diligence prior to the Effective Date or otherwise related to the transactions contemplated hereby are true, complete, and correct copies of what they purport to be in all material respects.

(s) Reata has made available to Abbott true, complete and correct copies of all Regulatory Documentation relating to any New Collaboration Compound that has been submitted to or received from any Regulatory Authority as of the Effective Date.

(t) To Reata’s Knowledge, Reata and its Affiliates have conducted, and their respective contractors and consultants have conducted, prior to the Effective Date, all Development of the Effective Date AIMs or the Products containing the Effective Date AIMs in accordance with Applicable Law.

(u) As of the Effective Date there are no amounts that will be required to be paid to a Third Party as a result of the use of such Third Party’s Patents or other intellectual property rights for the Development or Commercialization of the Products containing the Effective Date AIMs that arise out of any agreement to which Reata is a party or, to Reata’s Knowledge, at all.

(v) Reata has caused all Persons who have performed research and development activities, Manufacturing process development activities or regulatory activities for Reata with respect to Targeted AIMs prior to the Effective Date to be under an obligation to assign (or, if Reata was unable to cause such Person to agree to such assignment obligation despite using commercially reasonable efforts to negotiate such assignment obligation, provide an exclusive license under) their rights in any inventions resulting therefrom (other than rights in inventions with respect to bardoxolone methyl) to Reata, except where Applicable Law requires otherwise.

(w) To Reata’s Knowledge, the information, documents and materials furnished to Abbott in connection with its period of diligence prior to the Effective Date, do not, taken as a whole, (i) contain any untrue statement of a material fact or (ii) omit to state any material fact necessary to make the statements or facts contained therein, in light of the circumstances under which they were made, not misleading.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

13.3 DISCLAIMER OF WARRANTIES. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH HEREIN, NEITHER PARTY MAKES ANY REPRESENTATIONS OR GRANTS ANY WARRANTY, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

ARTICLE 14

I NDEMNIFICATION

14.1 Indemnification by Reata. Reata shall indemnify Abbott, its Affiliates and their respective directors, officers, employees, and agents, and defend and save each of them harmless, from and against any and all losses, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees and expenses) (collectively, “ Losses ”) in connection with any and all suits, investigations, claims, or demands of Third Parties (collectively, “ Third Party Claims ”) arising from or occurring as a result of:

(a) the breach by Reata of this Agreement;

(b) the negligence or willful misconduct on the part of Reata or its Affiliates or their respective directors, officers, employees, and agents in performing its obligations under this Agreement;

(c) any actual or alleged infringement or misappropriation of any trademark or trade name right of any Third Party in connection with the use of Reata’s corporate name or logo in the Development or Commercialization of the Products in the Territory as permitted or required under this Agreement;

(d) any Manufacturing defect in a Product or a New Collaboration Compound Manufactured by or on behalf of Reata;

(e) the Development, Commercialization or Manufacture of Reata’s Unilateral Products in the applicable Royalty Regions;

(f) the Unilateral Development by or on behalf of Reata of a New Collaboration Compound that has not yet been Commercialized; or

(g) the Development, Commercialization or Manufacture of the Products or the New Collaboration Compounds owned or Controlled by Reata prior to the Effective Date anywhere in the world prior to the Effective Date by or on behalf of Reata or its Affiliates (or its or their contractors, licensees, or collaboration partners).

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except, in the case of clauses (a)-(d), for those Losses for which Abbott has an obligation to indemnify Reata pursuant to Section 14.2 hereof, as to which Losses each Party shall indemnify the other to the extent of their respective liability for the Losses.

14.2 Indemnification by Abbott. Abbott shall indemnify Reata, its Affiliates and their respective directors, officers, employees, and agents, and defend and save each of them harmless, from and against any and all Losses in connection with any and all Third Party Claims arising from or occurring as a result of:

(a) the breach by Abbott of this Agreement;

(b) the negligence or willful misconduct on the part of Abbott or its Affiliates or their respective directors, officers, employees, and agents in performing its obligations under this Agreement;

(c) any actual or alleged infringement or misappropriation of any trademark or trade name right of any Third Party in connection with the use of Abbott’s corporate name or logo in the Development or Commercialization of the Products in the Territory as permitted or required under this Agreement;

(d) any Manufacturing defect in a Product or a New Collaboration Compound Manufactured by or on behalf of Abbott;

(e) the Development, Commercialization or Manufacture of Abbott’s Unilateral Products in the applicable Royalty Regions; or

(f) the Unilateral Development by or on behalf of Abbott of a New Collaboration Compound that has not yet been Commercialized.

except, in the case of clauses (a)-(d), for those Losses for which Reata has an obligation to indemnify Abbott pursuant to Section 14.1 hereof, as to which Losses each Party shall indemnify the other to the extent of their respective liability for the Losses.

14.3 Certain Losses . Any Losses, other than those Losses for which indemnification is provided in Section 14.1, Section 14.2 or Section 14.6, in connection with any Third Party Claim brought against either Party resulting directly or indirectly from the Development, Manufacture or Commercialization of Joint Products (or joint Development of New Collaboration Compounds that have not yet been Commercialized) hereunder shall be included as a Development Cost or a Commercialization Cost, as applicable. The Parties shall confer through the JEC how to respond to such Third Party Claim and how to handle such Third Party Claim in an efficient manner. In the absence of such an agreement, each Party shall have the right to take such action as it deems appropriate.

\

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14.4 Notice of Claim. All indemnification claims in respect of a Party, its Affiliates, or their respective directors, officers, employees and agents shall be made solely by such Party to this Agreement (the “ Indemnified Party ”). The Indemnified Party shall give the indemnifying Party prompt written notice (an “ Indemnification Claim Notice ”) of any Losses or discovery of fact upon which such indemnified Party intends to base a request for indemnification under this Article 14, but in no event shall the indemnifying Party be liable for any Losses that result from any delay in providing such notice. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss is known at such time). The Indemnified Party shall furnish promptly to the indemnifying Party copies of all papers and official documents received in respect of any Losses and Third Party Claims.

14.5 Control of Defense . At its option, the indemnifying Party may assume the defense of any Third Party Claim by giving written notice to the Indemnified Party within [***] days after the indemnifying Party’s receipt of an Indemnification Claim Notice. The assumption of the defense of a Third Party Claim by the indemnifying Party shall not be construed as an acknowledgment that the indemnifying Party is liable to indemnify the Indemnified Party in respect of the Third Party Claim, nor shall it constitute a waiver by the indemnifying Party of any defenses it may assert against the Indemnified Party’s claim for indemnification. Upon assuming the defense of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the indemnifying Party. In the event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall immediately deliver to the indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party in connection with the Third Party Claim. Should the indemnifying Party assume the defense of a Third Party Claim, except as provided in Section 14.5(a), the indemnifying Party shall not be liable to the Indemnified Party for any legal expenses subsequently incurred by such Indemnified Party in connection with the analysis, defense or settlement of the Third Party Claim unless specifically requested in writing by the indemnifying Party. In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified Party shall reimburse the indemnifying Party for any and all costs and expenses (including attorneys’ fees and costs of suit) and any Losses incurred by the indemnifying Party in its defense of the Third Party Claim.

(a) Right to Participate in Defense. Without limiting Section 14.5 above, any Indemnified Party shall be entitled to participate in, but not control, the defense of such Third Party Claim and to employ counsel of its choice for such purpose; provided, however, that such employment shall be at the Indemnified Party’s own expense unless (i) the employment thereof has been specifically authorized by the indemnifying Party in writing, (ii) the indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 14.5 (in which case the Indemnified Party shall control the defense), or (iii) the interests of the indemnitee and the indemnifying Party with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by the same counsel of both parties under Applicable Law, ethical rules or equitable principles.

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(b) Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that shall not result in the Indemnified Party’s becoming subject to injunctive or other relief or otherwise adversely affecting the business of the Indemnified Party in any manner, and as to which the indemnifying Party shall have acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, the indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the indemnifying Party, in its sole discretion, shall deem appropriate. With respect to all other Losses in connection with Third Party Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 14.5, the indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss; provided it obtains the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed). If the indemnifying Party does not assume and conduct the defense of a Third Party Claim as provided above, the Indemnified Party may defend against such Third Party Claim; provided, that the Indemnified Party shall not settle any Third Party Claim without the prior written consent of the indemnifying Party, not to be unreasonably withheld or delayed.

(c) Cooperation. Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each indemnitee to, cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation shall include access during normal business hours afforded to indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making indemnified Parties and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket expenses in connection therewith.

(d) Expenses. Except as provided above, the costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any claim shall be reimbursed on a Calendar Quarter basis by the indemnifying Party, without prejudice to the indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

14.6 Special, Indirect, Consequential and Other Losses. EXCEPT IN THE EVENT OF A PARTY’S BREACH OF ITS OBLIGATIONS UNDER ARTICLE 15 OR SECTION 10.6, NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL OR PUNITIVE DAMAGES OR FOR LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT TO THE EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER THIS ARTICLE 14.

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14.7 Insurance. Each Party shall have and maintain such type and amounts of insurance covering its activities hereunder as is: (a) normal and customary in the pharmaceutical industry generally for parties similarly situated; and (b) otherwise required by Applicable Law.

ARTICLE 15

C ONFIDENTIALITY

15.1 Confidentiality Obligations. At all times during the Term and for a period of [***] years following termination or expiration hereof, each Party shall, and shall cause its Affiliates and its and their respective officers, directors, employees and agents to, keep confidential and not publish or otherwise disclose to a Third Party, and not use, directly or indirectly, for any purpose, any Confidential Information furnished or otherwise made known to it, directly or indirectly, by the other Party, except to the extent such use is expressly permitted by the terms of this Agreement or is reasonably necessary or useful for the performance of, or the exercise of such Party’s rights under, this Agreement. “ Confidential Information ” shall mean any technical, business or other information provided by or on behalf of one Party to the other Party, including information relating to the terms of this Agreement, any New Collaboration Compound, or any Product (including the Regulatory Documentation, Clinical Data, and any other data and results), any Development or Commercialization of any New Collaboration Compound or Product, any Information developed by or on behalf of the disclosing Party or its Affiliates, or the scientific, regulatory or business affairs or other activities of either Party. Notwithstanding the foregoing, the Parties acknowledge the practical difficulty of policing the use of information in the unaided memory of the receiving Party or its officers, directors, employees, and agents, and as such each Party agrees that the receiving Party shall not be liable for the use by any of its officers, directors, employees, or agents of specific Confidential Information of the disclosing Party that is retained in the unaided memory of such officer, director, employee or agent; provided that (a) such officer, director, employee, or agent is not aware that such Confidential Information is the confidential information of disclosing Party at the time of such use; (b) the foregoing is not intended to grant, and shall not be deemed to grant, the receiving Party, its Affiliates, or its officers, directors, employees, and agents (i) a right to disclose the disclosing Party’s Confidential Information, or (ii) a license under any Patents or other intellectual property right of the disclosing Party; and (c) such officer, director, employee, or agent has not intentionally memorized such Confidential Information for use outside this Agreement. The receiving Party shall have the right to disclose to Third Parties Confidential Information of the disclosing Party that constitutes Reata Know-How, in the case of Reata as the disclosing Party, or Abbott Know-How, in the case of Abbott as the disclosing Party, after the Exclusivity Period for the purpose of exercising the rights granted under Section 10.1; provided, however, that such Third Parties shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and non-use of the receiving Party pursuant to this Article 15 (with a duration of confidentiality and non-use obligations as appropriate that is no less than [***] years from the date of disclosure). Notwithstanding the foregoing, the confidentiality and non-use obligations under this Section 15.1 with respect to any Confidential Information shall not include any portion of such Confidential Information that:

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(a) is or hereafter becomes part of public domain by public use, publication, general knowledge or the like through no wrongful act, fault or negligence on the part of the receiving Party;

(b) can be demonstrated by documentation or other competent proof to have been in the receiving Party’s possession prior to disclosure by the disclosing Party without any obligation of confidentiality with respect to such information;

(c) is subsequently received by the receiving Party from a Third Party who is not bound by any obligation of confidentiality with respect to such information;

(d) has been published by a Third Party or otherwise enters the public domain through no fault of the receiving Party in breach of this Agreement; or

(e) can be demonstrated by documentation or other competent evidence to have been independently developed by or for the receiving Party without reference to the disclosing Party’s Confidential Information.

Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the receiving Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of the receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the receiving Party unless the combination and its principles are in the public domain or in the possession of the receiving Party.

15.2 Permitted Disclosures. Notwithstanding Section 15.1, each Party may disclose Confidential Information to the extent that such disclosure is:

(a) made in response to a valid order of a court of competent jurisdiction or other supra-national, federal, national, regional, state, provincial and local governmental or regulatory body of competent jurisdiction or, if in the reasonable opinion of the receiving Party’s legal counsel, such disclosure is otherwise required by law, including by reason of filing with securities regulators; provided, however, that the receiving Party shall first have given notice to the disclosing Party and given the disclosing Party a reasonable opportunity to quash such order or to obtain a protective order or confidential treatment requiring that the Confidential Information and documents that are the subject of such order be held in confidence by such court or agency or, if disclosed, be used only for the purposes for which the order was issued; and provided, further, that the Confidential Information disclosed in response to such court or governmental order shall be limited to that information which is legally required to be disclosed in response to such court or governmental order;

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(b) made by or on behalf of the receiving Party to the Regulatory Authorities as required in connection with any filing, application or request for Regulatory Approval; provided, however, that reasonable measures shall be taken to assure confidential treatment of such information, to the extent such protection is available;

(c) made by or on behalf of the receiving Party to a patent authority as may be reasonably necessary or useful for purposes of obtaining or enforcing a Patent; provided, however, that reasonable measures shall be taken to assure confidential treatment of such information, to the extent such protection is available; or

(d) made by the receiving Party or its Affiliates or licensees or sublicensees to its or their attorneys, auditors, advisors, consultants or Contracting Third Party as may be necessary or useful in connection with the Development, Manufacturing or Commercialization of the New Collaboration Compounds or the Products, or otherwise in connection with the performance of its obligations or exercise of its rights as contemplated by this Agreement, or to potential or actual investors or acquirors as may be necessary or useful in connection with their evaluation of such potential or actual investment or acquisition; provided, however, that such Persons shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and non-use of the receiving Party pursuant to this Article 15 (with a duration of confidentiality and non-use obligations as appropriate that is no less than [***] years from the date of disclosure).

15.3 Use of Name. Except as expressly provided herein, neither Party shall mention or otherwise use the name, logo, or Trademark of the other Party or any of its Affiliates (or any abbreviation or adaptation thereof) in any publication, press release, marketing and Promotional Materials, or other form of publicity without the prior written approval of such other Party in each instance. The restrictions imposed by this Section 15.3 shall not prohibit either Party from making any disclosure identifying the other Party that is required by Applicable Law. Further, the restrictions imposed on each Party under this Section 15.3 are not intended, and shall not be construed, to prohibit a Party from identifying the other Party in its internal business communications, provided that any Confidential Information in such communications remains subject to this Article 15.

15.4 Public Announcements. The Parties have agreed upon the content of a joint press release which shall be issued substantially in the form attached hereto as Schedule 15.4 , the release of which the Parties shall coordinate in order to accomplish such release promptly upon execution of this Agreement. Except pursuant to the procedures set forth below, neither Party shall issue any other public announcement, press release, or other public disclosure regarding this Agreement or its subject matter without the other Party’s prior written consent, except for (i) any such disclosure that is, based on the advice of the disclosing Party’s counsel, required by Applicable Law or the rules of a stock exchange on which the securities of the disclosing Party are listed (or to which an application for listing has been submitted), or (ii) any such disclosure that does not mention the other Party. In the event that a Party is, based on the advice of the disclosing Party’s counsel, required by Applicable Law or the rules of a stock exchange on which its securities are listed (or to which an application for listing has been submitted) to make such a public disclosure, or such disclosure does not mention the other

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Party, such Party shall submit the proposed disclosure in writing to the other Party as far in advance as reasonably practicable (and in no event less than [***] Business Days prior to the anticipated date of disclosure) so as to provide a reasonable opportunity to comment thereon. Neither Party shall be required to seek the permission of the other Party to repeat any information regarding the terms of this Agreement or any amendment thereto that has already been publicly disclosed by such Party, or by the other Party, in accordance with this Section 15.4, provided such information remains accurate as of such time and provided the frequency and form of such disclosure are reasonable.

15.5 Publications. Each Party recognizes that the publication of papers regarding results of, and other information regarding, activities under this Agreement, including oral presentations and abstracts, may be beneficial to both Parties, provided such publications are subject to reasonable controls to protect Confidential Information. In particular, it is the intent of the Parties to maintain the confidentiality of any Confidential Information included in any invention disclosures or draft Patent application until such Patent application has been filed. Accordingly, each Party shall have the right to review and approve any paper proposed for publication by the other Party, including any oral presentation or abstract, that contains Clinical Data or pertains to results of Clinical Studies, or other Development activities with respect to the New Collaboration Compounds or Products or that includes Confidential Information of the other Party. Before any such paper is submitted for publication or an oral presentation is made, the publishing or presenting Party shall deliver a then-current copy of the paper or materials for oral presentation to the other Party at least [***] days prior to submitting the paper to a publisher or making the presentation; provided that the Parties may agree to a shorter period in exigent circumstances. The other Party shall review any such paper and give its comments to the publishing Party within [***] days of the delivery of such paper to the other Party. With respect to oral presentation materials and abstracts, the other Party shall make reasonable efforts to expedite review of such materials and abstracts, and shall return such items as soon as practicable to the publishing or presenting Party with appropriate comments, if any, but in no event later than [***] days from the date of delivery to the other Party. Failure to respond within such [***] days shall be deemed approval to publish or present. If approval is not given or deemed given, either Party may refer the matter to the JRDI or applicable JDC, as applicable for resolution together with the reasons for withholding approval. If the JDC or JRDI, as applicable, does not resolve such dispute within [***] days, the publishing or presenting Party shall be entitled to publish such paper or make such presentation; provided that the publishing or presenting Party shall comply with the other Party’s request to delete references to such other Party’s Confidential Information in any such paper and will withhold publication of any such paper or any presentation of same for an additional [***] days in order to permit the Parties to obtain Patent protection if either Party deems it necessary. Any publication shall include recognition of the contributions of the other Party according to standard practice for assigning scientific credit, either through authorship or acknowledgement, as may be appropriate. Each Party shall use commercially reasonable efforts to cause investigators and institutions participating in Clinical Studies with which it contracts, to agree to terms substantially similar to those set forth in this Section 15.5, which efforts shall satisfy such Party’s obligations under this Section 15.5 with respect to such investigators and institutions.

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ARTICLE 16

T ERM AND B REACH

16.1 Term. This Agreement shall become effective on the Effective Date and shall remain in full force and effect until terminated pursuant to Section 16.2 (the “ Term ”).

16.2 Termination by Mutual Agreement. In the event both Parties desire to terminate this Agreement in its entirety, the Parties shall negotiate in good faith and enter into a termination agreement setting forth the Parties’ respective rights and obligations with respect to the Collaboration Patents, New Collaboration Compounds and Products after such termination, and any such termination shall only be effective upon the Parties’ agreement on and execution of such termination agreement.

16.3 Rights in Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by Abbott or Reata are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, licenses of right to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code. The Parties agree that the Parties, as licensees of such rights under this Agreement, shall retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against either Party under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, the Party hereto that is not a Party to such proceeding shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, which, if not already in the non-subject Party’s possession, shall be promptly delivered to it (i) upon any such commencement of a bankruptcy proceeding upon the non-subject Party’s written request therefor, unless the Party subject to such proceeding elects to continue to perform all of its obligations under this Agreement, or (ii) if not delivered under clause (i) above, following the rejection of this Agreement by or on behalf of the Party subject to such proceeding upon written request therefor by the non-subject Party.

16.4 Material Breach .

(a) If either Party (the “ Non-Breaching Party ”) believes that the other Party (the “ Breaching Party ”) has materially breached one or more of its material obligations under this Agreement, then the Non-Breaching Party may deliver notice of such material breach to the Breaching Party (a “ Default Notice ”).

(b) If the Breaching Party does not dispute that it has committed a material breach of one or more of its material obligations under this Agreement, then with respect to a breach of a payment obligation (including the failure by a Party to pay its share of Development Costs or to bear its share of an Operating Loss), if the Breaching Party fails to cure such breach within [***] days after receipt of the Default Notice, then, notwithstanding anything to

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the contrary herein, upon the election of the Non-Breaching Party the New Collaboration Compound or Joint Product with respect to which such payment breach applies shall cease (unless and until the Breaching Party opts in to joint Development of such New Collaboration Compound as provided below) to be a jointly Developed New Collaboration Compound or Joint Product in the relevant Profit Share Region, as the case may be and thereafter shall be solely a New Collaboration Compound or Unilateral Product for which the Non-Breaching Party is the Participating Party with rights to continue to Develop and Commercialize unilaterally at its cost; provided, however, that the Breaching Party shall have the right to opt in to the joint Development of a New Collaboration Compound by (i) exercising its Pre-Phase II Opt-In, Pre-Phase III Opt-In or EOP3 Opt-In with respect to such Collaboration Compound, but only to the extent such opt-in rights have not expired in with respect to such New Collaboration Compound in accordance with Article 5 and (ii) paying to the Non-Breaching Party simultaneously with the applicable opt-in payment an amount equal to [***] percent ([***]%) of the original breached payment. The Breaching Party shall not have the right to opt-in to joint Development of any New Collaboration Compound after the Pre-Phase II Opt-In, Pre-Phase III Opt-In and EOP3 Opt-In for such New Collaboration Compound have expired.

(c) If the Breaching Party disputes that it has materially breached one of its material obligations under this Agreement, the dispute shall be resolved pursuant to Section 17.6. If, as a result of the application of such dispute resolution procedures, the Breaching Party is determined to be in material breach of one or more of its material obligations under this Agreement (an “ Adverse Ruling ”), then if the Breaching Party fails to complete the actions specified by the Adverse Ruling to cure such material breach within [***] days after such ruling with respect to a breach of a payment obligation, then the Non-Breaching Party shall have the remedy set forth in Section 16.4(b) (which shall not be an exclusive remedy), upon written notice to the Breaching Party. Subject to Section 16.5, exercise of the rights set forth in this Section 16.4 shall not limit remedies that may otherwise be available to the Non-Breaching Party in law or equity.

16.5 Remedies Other Than Termination. Except pursuant to Section 16.2, neither Party shall have the right to terminate this Agreement, in part or in its entirety, for any reason. It is the Parties’ intent to provide relief or compensation to either Party hereunder in the event of the other Party’s material breach of any material provision of this Agreement, not through the termination of this Agreement but through remedies in law or equity, such as injunctive relief, specific performance, the remedies provided in Section 16.4, and, subject to Section 7.8 and Section 14.6, monetary damages.

ARTICLE 17

M ISCELLANEOUS

17.1 Force Majeure. Neither Party shall be held liable or responsible to the other Party or be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement (other than an obligation to make payments) when such failure or delay is caused by or results from events beyond the reasonable

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control of the non-performing Party, including fires, floods, earthquakes, hurricanes, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not), terrorist acts, insurrections, riots, civil commotion, strikes, lockouts or other labor disturbances (whether involving the workforce of the non-performing Party or of any other Person), acts of God or acts, omissions, or delays in acting by any Governmental Authority (except to the extent such delay results from the breach by the non-performing Party or any of its Affiliates of any term or condition of this Agreement). The non-performing Party shall notify the other Party of such force majeure within [***] days after such occurrence by giving written notice to the other Party stating the nature of the event, its anticipated duration, and any action being taken to avoid or minimize its effect. The suspension of performance shall be of no greater scope and no longer duration than is necessary and the non- performing Party shall use commercially reasonable efforts to remedy its inability to perform.

17.2 Export Control. This Agreement is made to restrictions concerning the export of products or technical information from the United States or other countries that may be imposed on the Parties from time to time. Each Party agrees that it will not export, directly or indirectly, any technical information acquired from the other Party under this Agreement or any products using such technical information to a location or in a manner that at the time of export requires an export license or other governmental approval, without first obtaining the written consent to do so from the appropriate agency or other governmental entity in accordance with Applicable Law.

17.3 Assignment. Without the prior written consent of the other Party, such consent not to be unreasonably withheld, conditioned, or delayed, and subject to the provisions of Section 17.8, neither Party shall sell, transfer, assign, delegate, pledge, or otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights or duties hereunder; provided, however, that (a) either Party may make such an assignment without the other Party’s consent to its Affiliate or to a successor, whether in a merger, sale of stock, sale of assets or any other transaction, of the business to which this Agreement relates and (b) Abbott may make such an assignment without the Reata’s consent to a New Company; provided that, in either case of (a) or (b), any assignment, by operation of law or otherwise, of this Agreement to a New Company where it comprises the Other Abbott Business and not the Proprietary Pharmaceutical Business shall require the consent of Reata. With respect to an assignment to an Affiliate, the assigning Party shall remain responsible for the performance by such Affiliate of the rights and obligations hereunder. Any attempted assignment or delegation in violation of this Section 17.3 shall be void and of no effect. All validly assigned and delegated rights and obligations of the Parties hereunder shall be binding upon and inure to the benefit of and be enforceable by and against the successors and permitted assigns of Reata or Abbott, as the case may be. In the event either Party seeks and obtains the other Party’s consent to assign or delegate its rights or obligations to another Person, the assignee or transferee shall assume all obligations of its assignor or transferor under this Agreement.

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17.4 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of either Party under this Agreement will not be materially and adversely affected thereby: (a) such provision shall be fully severable, (b) this Agreement shall be construed and enforced as if such illegal,

156

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

invalid, or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom, and (d) in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid, and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and reasonably acceptable to the Parties. To the fullest extent permitted by Applicable Law, each Party hereby waives any provision of law that would render any provision hereof illegal, invalid, or unenforceable in any respect.

17.5 Governing Law; Service.

(a) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. The Parties agree to exclude the application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods.

(b) Service. Each Party further agrees that service of any process, summons, notice or document by registered mail to its address set forth in Section 17.7(b) shall be effective service of process for any action, suit, or proceeding brought against it under this Agreement in any such court.

17.6 Dispute Resolution. If a dispute arises between the Parties in connection with or relating to this Agreement or any document or instrument delivered in connection herewith (other than a dispute whose procedures for resolution are set forth in Section 2.9(d), Section 11.10 or Section 17.11) (a “ Dispute ”), it shall be resolved pursuant to this Section 17.6.

(a) General. Any Dispute shall be referred to the Senior Officers of the Parties, who shall confer in good faith on the resolution of the issue. Any final decision mutually agreed to by the Senior Officers shall be conclusive and binding on the Parties. If the Senior Officers are not able to agree on the resolution of any such issue within [***] days after such issue was first referred to them, then, except as set forth in Section 17.6(b), 17.6(d) or 17.6(e), either Party may, by written notice to the other Party, elect to initiate an alternative dispute resolution (“ ADR ”) proceeding pursuant to the procedures set forth in Section 17.6(c) for purposes of having the matter settled.

(b) Intellectual Property Disputes. In the event that a Dispute arises with respect to the validity, scope, enforceability, inventorship or ownership of any Patent, Trademark or other intellectual property rights, and such Dispute cannot be resolved in accordance with Section 17.6(a), unless otherwise agreed by the Parties in writing, such Dispute shall not be submitted to an ADR proceeding in accordance with Section 17.6(c) and instead, either Party may initiate litigation in a court of competent jurisdiction, notwithstanding Section 17.5, in any country in which such rights apply.

157

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(c) ADR. Any ADR proceeding under this Agreement shall take place pursuant to the procedures set forth in Schedule 17.6(c) .

(d) Expert Panel Arbitration .

(i) Any Dispute pertaining to (A) the PDE Rate for a country or region or the applicable inflation index, (B) the terms of a Co-Promotion Agreement, (C) the terms of an MSL Agreement, (D) a Phase III Plan, or (E) whether a proposed amendment to a Unilateral Plan would be a Unilateral Material Amendment, in each case ((A)-(E)), shall be resolved pursuant to Section 17.6(d)(ii).

(ii) Any dispute to be resolved pursuant to this Section 17.6(d)(ii) shall take place pursuant to the following procedures: Promptly following receipt of any notice requiring dispute resolution pursuant to this Section 17.6(d)(ii), the Parties shall meet and discuss in good faith and agree on an expert panel to resolve the issue, which expert panel shall be neutral and independent of both Parties and all of their respective Affiliates, shall have significant experience and expertise in the substantive area in question, and shall have some experience in mediating or arbitrating issues relating to such agreements. If the Parties cannot agree on such expert panel within [***] days of request by a Party for arbitration, then each Party shall select one (1) expert for such panel and the two (2) experts selected by the Parties shall select a third expert for the panel, provided that all such three (3) experts must meet the foregoing criteria. Within [***] days after an arbitrator is selected (or appointed, as the case may be), each Party will deliver to both the expert panel and the other Party a detailed written proposal setting forth its proposed terms for the resolution for the matter at issue (the “ Proposed Terms ” of the Party) and a memorandum (the “ Support Memorandum ”) in support thereof, not exceeding [***] pages in length. The Parties will also provide the expert panel a copy of this Agreement, as may be amended at such time. Within [***] days after receipt of the other Party’s Proposed Terms and Support Memorandum, each Party may submit to the expert panel (with a copy to the other Party) a response to the other Party’s Support Memorandum, such response not exceeding [***] pages in length. Neither Party may have any other communications (either written or oral) with the expert panel other than for the sole purpose of engaging the expert panel or as expressly permitted in this Section 17.6(d)(ii); provided that the expert panel may convene a hearing if the expert panel so chooses to ask questions of the Parties and hear oral argument and discussion regarding each Party’s Proposed Terms. Within [***] days after the expert panel’s appointment, the expert panel will select one of the two Proposed Terms (without modification) provided by the Parties that the expert panel believes is most consistent with the intention underlying and agreed principles set forth in this Agreement. The decision of the expert panel shall be final, binding, and unappealable. The expert panel must select as the only method to resolve the matter at issue one of the two sets of Proposed Terms, and may not combine elements of both Proposed Terms or award any other relief or take any other action.

158

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(iii) Dispute Regarding Phase III Plan. If the dispute pertains to a Phase III Plan, in making its decision, the expert panel shall consider the following factors, none of which is to be the determinative factor: (A) design recommendations of both the FDA and EMA; (B) cost to conduct the proposed Phase III Plan; (C) operational feasibility; (D) potential risks in light of perceived benefit of the proposed Phase III Plan; (E) duration of such proposed Phase III Plan and likely time to product launch in light of market dynamics including competing products; (F) the commercial value of the data and label that may be expected in the event of success; and (G) regulatory environment then existing and impact on success of the proposed Phase III Plan.

(e) Committee Disputes. If the Dispute relates to an issue on which a Committee cannot reach consensus other than Disputes: (i) for which the procedure for decision making is set forth expressly in this Agreement (which shall be resolved in accordance with the procedure set forth in the applicable section); or (ii) relating to allocations of costs by the applicable JMC pursuant to Section 1.20, by the JPC pursuant to Section 12.2(c) or 12.6(a) or by the JSC pursuant to Section 1.69 (which shall be resolved in accordance with Section 17.6(c)), then neither Party shall have final decision-making authority with respect to such issue and such Dispute may only resolved by mutual agreement of the Parties.

(f) Adverse Ruling . Any determination pursuant to this Section 17.6 that a Party is in material breach of its material obligations hereunder shall specify a (nonexclusive) set of actions to be taken to cure such material breach, if feasible.

(g) Interim Relief. Notwithstanding anything to contrary, nothing in this Section 17.6 shall preclude either Party from seeking interim or provisional relief, including a temporary restraining order, preliminary injunction or other interim equitable relief concerning a Dispute, if necessary to protect the interests of such Party. This Section 17.6 shall be specifically enforceable.

17.7 Notices .

(a) Notice Requirements. Any notice, request, demand, waiver, consent, approval, or other communication permitted or required under this Agreement shall be in writing, shall refer specifically to this Agreement and shall be deemed given only if delivered by hand or sent by facsimile transmission (with transmission confirmed) or by internationally recognized overnight delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in Section 17.7(b) or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 17.7(a). Such Notice shall be deemed to have been given as of the date delivered by hand or transmitted by facsimile (with transmission confirmed) or on the second business day (at the place of delivery) after deposit with an internationally recognized overnight delivery service. Any notice delivered by facsimile shall be confirmed by a hard copy delivered as soon as practicable thereafter. This Section 17.7(a) is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.

159

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(b) Address for Notice .

If to Abbott, to:

Abbott Laboratories

Pharmaceutical Products Group

100 Abbott Park Road

Abbott Park, IL 60064-3500

Attention: Executive Vice President

Facsimile: 847-935-3260

with a copy to (which shall not constitute notice):

Abbott Laboratories

Building AP6D, D-364

100 Abbott Park Road

Abbott Park, IL 60064-3500

Attention: Executive Vice President, General Counsel and Secretary

Facsimile: 847-937-3966

If to Reata, to:

Reata Pharmaceuticals, Inc.

2801 Gateway Drive, Suite 150

Irving, Texas 75063

Attention: Casi DeYoung

Facsimile: (214) 614-4717

with a copy to (which shall not constitute notice):

Cooley LLP

3175 Hanover Street

Palo Alto, CA 94304

Attention: Barbara A. Kosacz

Facsimile: (650) 849-7400

17.8 Change of Control.

(a) Reata Change of Control . Upon (i) any Change of Control of Reata, (ii) any Change of Control of the Affiliate of Reata to which the rights or obligations under this Agreement have been transferred or assigned; or (iii) the assignment of this Agreement to any Person (by operation of law or otherwise) who is not then an Affiliate of Reata (any of (i), (ii) or (iii), a “ Reata CoC ”), Reata shall provide written notice to Abbott within [***] days of the consummation of such transaction, and for a period of [***] months after the consummation of such Reata CoC, Abbott shall have the right to effectuate the following amendments to this Agreement in its sole discretion, which amendments shall automatically become effective upon written notice given by Abbott to Reata on or before the end of such [***] month period without further action by the Parties:

160

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(i) Section 4.2(e)(ii)(1) shall be amended to read in its entirety as follows: “If such Development Candidate is a FirstGen Targeted AIM or a NextGen Targeted AIM that has been Developed under a Joint Exploratory Development Plan directly preceding such determination and either (A) such Development Candidate is then eligible for designation as a Product Candidate in only one Indication, or (B) such Development Candidate is then eligible for designation as a Product Candidate in more than one Indication but only one Party believes that such Development Candidate should be designated as a Development Candidate in any eligible Indication, then in either case ((A) or (B)) [***].”

(ii) Section 4.2(e)(ii)(2) shall be amended to read in its entirety as follows: “If such Development Candidate is a FirstGen Targeted AIM or a NextGen Targeted AIM that has been Developed under a Joint Exploratory Development Plan directly preceding such determination and such Development Candidate is then eligible for designation as a Product Candidate in more than one Indication and each Party believes that such Development Candidate should be designated as a Product Candidate in a different Indication, then [***].”

(iii) Section 4.2(e)(ii)(3) shall be deleted in its entirety.

(iv) Section 1.97 shall be amended to replace the reference to Section 4.2(e)(ii)(3) with a reference to Section 4.2(e)(ii)(2).

(b) Abbott Change of Control . Upon (i) any Change of Control of Abbott, (ii) any Change of Control of the Affiliate of Abbott to which the rights or obligations under this Agreement have been transferred or assigned; or (iii) the assignment of this Agreement to any Person (by operation of law or otherwise) who is not then an Affiliate of Abbott other than a New Company (in the event a New Company does not constitute an Affiliate of Abbott and provided that this Agreement is not assigned, conveyed, or otherwise transferred, by operation of law or otherwise (including a transfer of shares of Abbott to the New Company) to the New Company where it comprises the Other Abbott Business and not the Proprietary Pharmaceutical Business) (any of (i), (ii) or (iii), an “ Abbott CoC ”), Abbott shall provide written notice to Reata within [***] days of the consummation of such transaction, and for a period of [***] months after the consummation of such Abbott CoC, Reata shall have the right to effectuate the following amendments to this Agreement in its sole discretion, which amendments shall automatically become effective upon written notice given by Reata to Abbott on or before the end of such [***] month period without further action by the Parties:

(i) Section 1.51 shall be amended to read in its entirety as follows:

“ FirstGen Targeted AIM ” means any Targeted AIM: (a) that is Controlled by Reata or any of its Affiliates as of the Effective Date and that is derived from oleanolic acid or generated using oleanolic acid (or a metabolite of oleanolic acid) as a starting material, but excluding bardoxolone methyl; (b) that is Controlled by Abbott or any of its Affiliates as of the Effective Date and that is derived from oleanolic acid or generated using oleanolic acid (or a metabolite of oleanolic acid) as a starting material; or (c) that is invented solely by or on behalf of either Party, or jointly by or on behalf of the Parties, during the Exclusivity Period and is derived from oleanolic acid or generated using oleanolic acid (or a metabolite of oleanolic acid) as a starting material.

161

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(ii) Section 4.2(e)(ii)(3) shall be amended to read in its entirety as follows:

“If such Development Candidate is a NextGen Targeted AIM that has been Developed under a Joint Exploratory Development Plan directly preceding such determination, then, after the Initial Studies Period:

(A) If either (x) such Development Candidate is then eligible for designation as a Product Candidate in only one Indication, or (y) such Development Candidate is then eligible for designation as a Product Candidate in more than one Indication but only one Party believes that such Development Candidate should be designated as a Development Candidate in any eligible Indication, then in either case ((x) or (y)) [***].

(B) If such Development Candidate is then eligible for designation as a Product Candidate in more than one Indication and each Party believes that such Development Candidate should be designated as a Product Candidate in a different Indication, then [***].”

(iii) Section 1.97 shall be amended to replace the reference to Section 4.2(e)(ii)(3) with a reference to Section 4.2(e)(ii)(3)(B).

(c) Abbott CoC or Reata CoC. In addition to the rights above in Sections 17.8 (a) and (b), respectively, upon (1) consummation of an Abbott CoC, and for a period of [***] months after consummation of such Abbott CoC, Reata shall have the right to effectuate the following amendments to this Agreement in its sole discretion, which amendments shall automatically become effective upon written notice given by Reata to Abbott on or before the end of such [***] month period without further action by the Parties; and (2) consummation of a Reata CoC, and for a period of [***] months after consummation of such Reata CoC, Abbott shall have the right to effectuate the following amendments to this Agreement in its sole discretion, which amendments shall automatically become effective upon written notice given by Abbott to Reata on or before the end of such [***] month period without further action by the Parties:

(i) Section 5.5(a)(i) shall be amended to add the following at the end of such Section: “In the event the Parties’ representatives on the JDC cannot agree on whether to initiate Phase IIb Clinical Studies for a particular Product Candidate, then [***].”

(ii) Section 5.5(a)(ii) shall be amended to replace the words “either Party’s” in the first sentence thereof with the words “both Parties’”.

(iii) The third sentence of Section 5.5(b)(i)(2) shall be amended to read in its entirety as follows: “If such Senior Officers cannot resolve such matter within a [***].”

162

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(iv) Section 5.5(b)(vi) shall be amended to add the following at the end of the Section: “In the event the Parties’ representatives on the JDC cannot agree on whether such Product Candidate is ready to be Developed in a Phase III Clinical Study, then [***].”

(v) Section 5.5(b)(viii) shall be amended to replace the words “either (or both) Party’s” in the first sentence thereof with the words “both Parties’”.

(vi) The first sentence of Section 5.5(c)(i) shall be amended to read in its entirety as follows: “[***] (collectively, the “ EOP2 Meeting ”).”

(vii) The last sentence of Section 5.5(c)(ii) shall be amended to read in its entirety as follows: “If such Senior Officers cannot agree on such content within a [***]-day period, then [***].”

(viii) The last two sentences of Section 5.5(c)(iii) shall be amended to read in their entirety as follows: “If only one Party’s representatives on the JDC believe that such Product Candidate is ready for Phase III Clinical Studies, [***].”

(ix) Section 17.6(d)(i) shall be amended to read in its entirety as follows: “Any Dispute pertaining to (A) the PDE Rate for a country or region or the applicable inflation index, (B) the terms of a Co-Promotion Agreement, (C) the terms of an MSL Agreement, (D) a Phase III Plan, (E) a Phase IIb Plan, (F) the content of an EOP2 Meeting briefing package, or (G) whether a proposed amendment to a Unilateral Plan would be a Unilateral Material Amendment, in each case ((A)-(G)), shall be resolved pursuant to Section 17.6(d)(ii)

(d) Definitions. For the purposes of this Section 17.8, “Change of Control” with respect to a Party means (i) a merger or consolidation of a Party, or any Affiliate having control (as defined under Section 1.8) of such Party (each, an “Entity” ), into or with any Person in a transaction or series of related transactions that results, immediately after giving effect to such transaction or series of related transactions, in more than fifty percent (50%) of the voting securities of such Entity or the surviving or resulting entity in such transaction or series of related transactions that are outstanding immediately after the consummation thereof being held by Persons other than those Persons that (individually or collectively) held such voting securities of such Entity immediately prior to the consummation thereof; or (ii) a sale or other disposition of all or substantially all of the assets or voting securities of an Entity to any Person(s) that was not, immediately prior to the time of such sale or disposition, an Affiliate of such Entity, unless, in either of clauses (i) or (ii), immediately following such merger, consolidation, sale or other disposition, at least fifty percent (50%) of the members of the board of directors or similar governing body of such Entity or other entity resulting from such transaction were members of the board of directors of the Entity at the time of the execution of the initial agreement or the action of the board of directors of the Entity providing for or approving such transaction; provided, however, that notwithstanding the foregoing, in no event shall either of (x) a sale of an Entity’s stock to underwriters of a public

163

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

offering of the capital stock of an Entity or (y) a Spin Off Transaction in either case ((x) or (y)) constitute a Change of Control, require any consent or notice to the other Party, or violate, constitute a breach or default of or any loss of any rights or benefits under, or result in any right of termination, payment or cancellation of, this Agreement. As used herein, “Spin Off Transaction” means any transaction involving the following: (i) the distribution by Abbott Laboratories, an Illinois corporation, or any successor thereof ( “Abbott Parent” ), to its shareholders of shares of a corporation (“ New Company” ), which New Company’s business operations comprise substantially either (A) the research (non-generic) based pharmaceutical business (the “ Proprietary Pharmaceutical Business ”) of Abbott Parent or (B) the business of Abbott Parent other than the Proprietary Pharmaceutical Business (the “Other Abbott Business” ), and (ii) any contribution or other transfer of the shares of Abbott or any Affiliate of Abbott to New Company or any Affiliate of New Company related to or in connection therewith; provided that this Agreement is not assigned, conveyed, or otherwise transferred, by operation of law or otherwise (including a transfer of shares of Abbott to New Company) to the New Company where it comprises the Other Abbott Business and not the Proprietary Pharmaceutical Business.

17.9 Entire Agreement . This Agreement, together with the Schedules attached hereto, sets forth and constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof, and all prior agreements, understandings, promises, and representations, whether written or oral, with respect thereto are superseded hereby, including the Bilateral Confidential Disclosure Agreement between Reata and Abbott Laboratories and its subsidiaries dated May 26, 2011, as amended. Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically set forth in this Agreement. Subject to Section 17.8, no amendment, modification, release, or discharge shall be binding upon the Parties unless in writing and duly executed by authorized representatives of both Parties.

17.10 English Language . This Agreement shall be written and executed in, and all other communications under or in connection with this Agreement shall be in, the English language. Any translation into any other language shall not be an official version thereof, and in the event of any conflict in interpretation between the English version and such translation, the English version shall control.

17.11 Equitable Relief . Each Party acknowledges and agrees that the restrictions set forth in Section 10.6 and Article 15 are reasonable and necessary to protect the legitimate interests of the other Party and that such other Party would not have entered into this Agreement in the absence of such restrictions, and that any breach or threatened breach of any provision of such Sections or Articles may result in irreparable injury to such other Party for which there will be no adequate remedy at law. In the event of a breach or threatened breach of any provision of such Sections or Articles, the non-breaching Party shall be authorized and entitled to obtain from any court of competent jurisdiction injunctive relief, whether preliminary or permanent, specific performance, and an equitable accounting of all earnings, profits, and other benefits arising from such breach, which rights shall be cumulative and in addition to any other rights or remedies to which such non-breaching Party may be entitled in law or equity.

164

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Both Parties agree to waive any requirement that the other (i) post a bond or other security as a condition for obtaining any such relief, and (ii) show irreparable harm, balancing of harms, consideration of the public interest, or inadequacy of monetary damages as a remedy. Nothing in this Section 17.11 is intended, or should be construed, to limit either Party’s right to equitable relief or any other remedy for a breach of any other provision of this Agreement.

17.12 Waiver and Non-Exclusion of Remedies . Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. The waiver by either Party hereto of any right hereunder or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise. The rights and remedies provided herein are cumulative and do not exclude any other right or remedy provided by Applicable Law or otherwise available except as expressly set forth herein.

17.13 No Benefit to Third Parties . The covenants and agreements set forth in this Agreement are for the sole benefit of the Parties hereto and their successors and permitted assigns, and they shall not be construed as conferring any rights on any other Persons.

17.14 Further Assurance . Each Party shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents, and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof, or to better assure and confirm unto such other Party its rights and remedies under this Agreement.

17.15 Relationship of the Parties . It is expressly agreed that Reata, on the one hand, and Abbott, on the other hand, shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture, or agency. Neither Reata, on the one hand, nor Abbott, on the other hand, shall have the authority to make any statements, representations, or commitments of any kind, or to take any action, which shall be binding on the other, without the prior written consent of the other Party to do so. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.

17.16 Counterparts; Facsimile Execution . This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed by facsimile or electronically transmitted signatures and such signatures shall be deemed to bind each Party hereto as if they were original signatures.

165

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

17.17 References . Unless otherwise specified, (i) references in this Agreement to any Article, Section or Schedule shall mean references to such Article, Section or Schedule of this Agreement, (ii) references in any Section to any clause are references to such clause of such Section, and (iii) references to any agreement, instrument, or other document in this Agreement refer to such agreement, instrument, or other document as originally executed or, if subsequently amended, replaced, or supplemented from time to time, as so amended, replaced, or supplemented and in effect at the relevant time of reference thereto.

17.18 Construction . Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense (and/or). The captions of this Agreement are for convenience of reference only and in no way define, describe, extend, or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term “including” as used herein shall mean including, without limiting the generality of any description preceding such term. The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party hereto.

[Signature Page Follows]

166

IN WITNESS W HEREOF , the Parties have executed this Collaboration Agreement by their duly authorized officers as of the date first written above.

R EATA P HARMACEUTICALS , I NC .	A BBOTT P HARMACEUTICALS PR L TD .
By:	By:
Name:	Name:
Title:	Title:

Signature Page to Collaboration Agreement

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SCHEDULES

Schedule 1.30 -	Development Candidates as of the Effective Date
Schedule 1.45 -	Existing Lead Compounds
Schedule 1.69 -	Manufacturing Costs for Product Manufactured by a Party
Schedule 2.3 -	Initial Members of the JEC
Schedule 2.4 -	Initial Members of the JRDI
Schedule 3.1 -	Discovery Research Plan
Schedule 4.3(a) -	Joint Exploratory Development Plan
Schedule 11.3(b) -	Form of Operating Profit/Loss Reconciliation Statement
Schedule 13.2(a) -	Existing Patents
Schedule 13.2(g) -	Academic Research Agreements
Schedule 15.4 -	Joint Press Release
Schedule 17.6(c) -	ADR Procedures
Schedule of Exceptions

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

S CHEDULE 1.30

D EVELOPMENT C ANDIDATES AS OF THE E FFECTIVE D ATE

1.	[***]
2.	[***]
3.	[***]
4.	[***]

Note: TX            designations are assigned in the corporate compound library of Reata. RTA numbers are assigned at approximately the time of designation as Development Candidate.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

S CHEDULE 1.45

E XISTING L EAD C OMPOUNDS

[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SCHEDULE 1.69

M ANUFACTURING C OSTS FOR P RODUCT M ANUFACTURED BY A P ARTY

“ Manufacturing Cost ” means, with respect to Product Manufactured by a Party or its Affiliate, a Party’s actual cost of Manufacturing a Product or a New Collaboration Compound, as the case may be, determined in accordance with GAAP, including the cost of Materials, Direct Labor and Benefits, and allocated Overhead (as such terms are defined below), the total expressed as Manufacturing Cost per unit of Product or New Collaboration Compound, as the case may be, Manufactured. Manufacturing Costs shall not include any site remediation or closure expenses and shall only include an amount with respect to overhead that has been prorated for the days of the year for which the Product or New Collaboration Compound, as the case may be, was Manufactured for Development or Commercialization hereunder.

For purposes of this Schedule, the terms below have the following meanings:

A. “Materials” means those items that form an integral and direct part of the Product or New Collaboration Compound, as the case may be, or are necessary for its production, as well as chemicals, intermediates, media, filters, one-way equipment, cartons, labels (if applicable), package inserts (if applicable) and shippers.

B. “Direct Labor and Benefits” means that portion of wages and related payroll taxes and employment benefits spent in the actual production of the Product or New Collaboration Compound, as the case may be, that can be identified with or charged to the Product or the New Collaboration Compound, as the case may be.

C. “Overhead” means all operating expenses incurred by and in support of all Manufacturing cost centers and quality operations. Overhead includes:

• wages for indirect labor, related payroll taxes and employee benefits;

• depreciation on specific assets used to Manufacture the Product or New Collaboration Compound;

• taxes;

• insurance;

• rent (paid at market rates);

• repairs and maintenance;

• supplies, including gowning supplies;

• utilities;

• factory administration expenses;

• other similar cost elements of factory overhead;

• an allocation of general and administrative overhead and the cost of manufacturing centers and quality operations, which allocation shall be made in a manner consistent with such allocations applied to other products made in the same production center with the same technology, and consistent with past practice; and

• an allocation of depreciation on assets being used in the same production center using the same technology, which allocation shall be made in a manner consistent with such allocations applied to other products made in the same production center with the same technology, and consistent with past practice.]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

The following expenses shall not be included in Manufacturing Cost

• idle capacity; and

• general and administrative costs not associated with the production process

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SCHEDULE 2.3

I NITIAL M EMBERS OF THE JEC

Reata

[***]

[***]

Abbott

[***]

[***]

[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SCHEDULE 2.4

INITIAL MEMBERS OF THE JRDI

Reata

[***]

[***]

[***]

[***]

Abbott

[***]

[***]

[***]

[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SCHEDULE 3.1

D ISCOVERY R ESEARCH P LAN

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

[***]

[***]

S CHEDULE 4.3( A )

J OINT E XPLORATORY D EVELOPMENT P LAN

4.3(a)(i) The plans for characterization of the Lead Compounds and Development Candidates existing as of the Effective Date are as follows:

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

[***]Pre-Clinical Assessment of Lead Compounds and Development Candidates

[***][***]Title	[***]General Description	Responsible Party	[***]
[***]	[***]	[***]	[***]
	[***]	[***]	[***]
	[***]	[***]	[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

[***]
[***]	[***]	[***]
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	[***]	[***]
	[***]	[***]
	[***]	[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Title	General Description	Estimated Start Date	Responsible Party
[***]	[***] [***] [***] [***] [***] [***] [***] [***] [***]	[***]	[***]
[***]	[***] [***] [***] [***] [***] [***] [***] [***] [***]
[***]	[***] [***] [***] [***] [***] [***] [***]

4.3(a)(ii) The Initial Indications in which the Parties intend to conduct Indication Survey Studies are as follows: [***].

4.3(a)(iii) The general parameters of the Phase I studies and the Indication Survey Studies; including number of participants and duration of treatment are as follows:

Assumption: [***]

General Description	Patient Population	Aprx # Patients	Expected Dosing Period	Potential Start Date	Responsible Party / Comment
Phase I Studies
[***]	[***]	[***]	[***]	[***]	[***]
[***] [***] [***]	[***]	[***]	[***]	[***]	[***]
[***] [***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***] [***]	[***]	[***]	[***]	[***]	[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Assumption: [***]

General Description	Patient Population	Aprx # Patients	Expected Dosing Period	Potential Start Date	Responsible Party / Comment
Phase II (ISS) Studies – “Fixed Indications”
[***]	[***]	[***] [***]	[***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]	[***]
[***]	[***]	[***] [***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***] [***] [***] [***] [***]	[***]	[***]	[***]	[***]
Phase II (ISS) Studies – “Flexible” indications
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]

4.3(a)(iv) The Related Indications for the Initial Indications are as follows:

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

Fixed Indications	Related Indications
[***]	[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***]	[***] [***] [***] [***]
[***]	[***] [***]
[***]	[***] [***] [***]
[***]	[***] [***] [***]
Flexible Indications	Related Indications
[***]	[***]
[***]	[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

[***]

[***]

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]		[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]		[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]
[***]				[***]	[***]	[***]	[***]		[***]
[***]				[***]	[***]	[***]	[***]	[***]

SCHEDULE 11.3( B )

FORM OF OPERATING PROFIT /LOSS RECONCILIATION STATEMENT

Calculation of Operating Profit or Operating Loss Example

[***]
[***]
[***]
		[***]			[***]			[***]
	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]
[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SCHEDULE 13.2( A )

EXISTING PATENTS

Owned Patents:

[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SCHEDULE 13.2( G ) ACADEMIC

RESEARCH AGREEMENTS

[***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SCHEDULE 15.4

JOINT PRESS RELEASE

[SEE ATTACHED]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

FOR IMMEDIATE RELEASE

Abbott and Reata Pharmaceuticals Announce Agreement to Develop and Commercialize Next-Generation Antioxidant Inflammation Modulators

• Agreement Calls for 50/50 Global Profit Share for Multiple New Molecules

• Companies Plan to Explore Broad Therapeutic Potential of AIM Class

ABBOTT PARK, Ill. and IRVING, Texas, December XX, 2011 – Abbott and Reata Pharmaceuticals today announced that they have entered into a worldwide collaboration to jointly develop and commercialize Reata’s portfolio of second-generation oral antioxidant inflammation modulators (AIMs). The agreement is in addition to the partnership between the two companies announced in September 2010 in which Reata granted to Abbott exclusive rights to develop and commercialize its lead AIM compound, bardoxolone methyl, outside of the United States, excluding certain Asian markets.

The collaboration announced today is a global agreement and includes a large number of molecules in a broad range of therapeutic areas, including pulmonary, central nervous system disorders and immunology. Abbott and Reata will equally share costs and profits for all new AIMs in all newly licensed indications except for rheumatoid arthritis and select other autoimmune diseases, in which Abbott will take 70 percent of costs and profits and Reata will take 30 percent. The deal also includes a research agreement in which the companies will work together to discover new molecules that exhibit the same pharmacology as the AIMs already in Reata’s pipeline.

Abbott will make a one-time license payment of $400 million to Reata. The companies expect the first compound in this collaboration to enter into human clinical trials in 2012.

“We are excited to work with Abbott to develop this promising class of compounds,” Reata CEO Warren Huff said. “This deal helps Reata advance new molecules into clinical development in multiple important diseases and enables our company to build a global commercial presence.”

AIMs are potent activators of the transcription factor Nrf2. Activation of Nrf2 promotes the production of a wide range of antioxidant, detoxification, and anti-inflammatory genes. Activation of Nrf2 also inhibits NF- K B, a transcription factor that regulates many pro-inflammatory enzymes. Suppression of Nrf2 and activation of NF- K B have been associated with numerous chronic diseases, including multiple sclerosis, rheumatoid arthritis, chronic kidney disease, neurodegenerative disease and COPD. Therefore, agents that activate Nrf2 and inhibit NF- K B may be beneficial in the treatment of these chronic diseases.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

“This partnership allows Abbott to enhance its promising research pipeline across multiple therapeutic areas,” said John Leonard, M.D., senior vice president, pharmaceuticals, research and development, Abbott. “Accumulating data has established the potential for antioxidant inflammation modulators in neuroscience and immunology, and we look forward to expanding our knowledge through further research.”

Under an agreement reached in September 2010, Reata granted to Abbott exclusive rights to develop and commercialize its lead AIM compound, bardoxolone methyl, outside of the United States, excluding certain Asian markets. Reata retains U.S. development and commercialization rights. Reata and Abbott are currently conducting the BEACON study, a multi-national Phase 3 clinical trial of bardoxolone methyl in patients with stage 4 chronic kidney disease and type 2 diabetes.

About Reata Pharmaceuticals, Inc.

Reata Pharmaceuticals, Inc. is the leader in discovering and developing novel, oral anti- inflammatory drugs that activate Nrf2, the primary regulator of cellular antioxidant and detoxification enzymes, and suppress NFkB, the primary regulator of inflammatory genes. Reata is developing these compounds – called antioxidant inflammation modulators (AIMs) – with the goal of one day making them available to patients suffering from a broad range of diseases associated with inflammation and oxidative stress. Reata plans to build a stand-alone, fully integrated pharmaceutical company with a worldwide medical, commercial, and regulatory presence. For more information, please visit www.reatapharma.com.

About Abbott

Abbott is a global, broad-based health care company devoted to the discovery, development, manufacturing and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs nearly 90,000 people and markets its products in more than 130 countries.

Reata Contacts

Matt Middleman or David Schull, matt.middleman@russopartnersllc.com , 212-845-4272; david.schull@russopartnersllc.com , 212-845-4271

Investors: Alan Roemer, aroemer@troutgroup.com, 646-378-2945

Abbott Contacts

Media: Raquel Powers (847) 935-6563

Financial: Larry Peepo (847) 935-6722

###

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SCHEDULE 17.6( C )

ADR P ROCEDURES

Any Dispute referred to ADR under this Agreement shall be resolved as follows:

1. To begin an ADR proceeding, a Party shall provide written notice to the other Party of the Dispute to be resolved by ADR. Within [***] days after its receipt of such notice, the other Party may, by written notice to the Party initiating the arbitration, add additional issues to be resolved within the same ADR. Thereafter, no new issues can be added absent consent of the tribunal, which consent shall be granted for good cause. In assessing whether good cause exists for permitting the addition of new issues, the tribunal shall consider all relevant factors, including whether justice is served by allowing the addition of new issues, whether a Party unduly delayed in seeking to add a new issue, and whether the other Party would be unfairly prejudiced by the addition of the new issues. The ADR shall be administered by JAMS pursuant to the then-current JAMS Comprehensive Rules and Procedures, except as modified under this Schedule 17.6(c).

2. Within [***] days following the initiation of the ADR proceeding, the Parties shall select a mutually acceptable independent, impartial and conflicts-free neutral from the JAMS list of neutrals to preside in the resolution of all issues in this ADR proceeding. If the Parties are unable to agree on a mutually acceptable neutral within such period, each Party will select one independent, impartial and conflicts-free neutral (who does not need to be from the JAMS list) and, within [***] days thereafter, those two neutrals will select a third independent, impartial and conflicts-free neutral from the JAMS list of neutrals to preside as the chair of the panel of such three neutrals (such neutral(s), the “ Neutral ”). None of the neutrals selected may be current or former employees, officers or directors of either Party or its Affiliates. Furthermore, the following provisions shall supplement (but not replace) the provisions of the JAMS Comprehensive Rules and Procedures regarding neutrality:

(a) A person shall be deemed to have a conflict, and shall not be appointed as a Neutral absent the consent of both parties, if such person (i) has presided over an evidentiary hearing relating to, or issued a ruling on, the merits of a dispute, involving either Party; (ii) has conducted a mediation involving either Party, or (iii) has been retained to perform and has performed professional services for either Party within the last 10 years. The “merits of a dispute” are matters substantially related to the substance of the underlying claim, and do not include procedural or discovery-related matters;

(b) A person shall be deemed to have a conflict, and shall not be appointed as a Neutral absent consent of both parties, if such person previously served as a party-appointed arbitrator appointed by either Party, or by any party represented in a previous arbitration by one of the law firms representing either Party in any Dispute referred to ADR under this Agreement, if the governing rules of such arbitration did not require such arbitrator to be impartial and independent; and

(c) Neither Party nor any person acting on behalf of a Party may have any ex parte communications with any Neutral at any time before or during the proceedings. Notwithstanding JAMS Comprehensive Rules and Procedures, prohibited ex parte

communications shall include, advising the candidate of the general nature of the controversy and of the anticipated proceedings and to discuss the candidate’s qualifications, availability or independence in relation to the Parties.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

3. No earlier than [***]days or later than [***] days after selection, the Neutral shall hold a hearing to resolve each of the issues identified by the Parties.

4. At least [***] days prior to the hearing, each Party shall submit the following to the other Party and the Neutral:

(a) a copy of all exhibits on which such Party intends to rely in any oral or written presentation to the Neutral;

(b) a list of any witnesses such Party intends to call at the hearing, and a short summary of the anticipated testimony of each witness;

(c) a proposed ruling on each issue to be resolved, together with a request for a specific damage award or other remedy for each issue. The proposed ruling shall not contain any recitation of the facts or any legal arguments, and the proposed remedy shall not include any punitive damages. The proposed ruling and the proposed remedy collectively shall not exceed [***] per issue.

(d) a brief in support of such Party’s proposed rulings and remedies, provided that the brief shall not exceed [***] pages. This page limitation shall apply regardless of the number of issues raised in the ADR proceeding.

4. Each Party shall be entitled to [***] document requests and one deposition. The Neutral can permit additional discovery, subject to the limits specified below, where such discovery is reasonably calculated to lead to admissible evidence regarding liability or damages, and with respect to a request for an additional deposition, the necessity of an additional deposition shall be determined by the Neutral based upon the reasonable need for the requested information, the availability of other discovery options and the burdensomeness of the request on the opposing Parties and the witness. For such additional discovery, in no event shall a Party be permitted more than [***] interrogatories, [***] additional document requests (resulting in [***] total document requests) or more than [***] of the opposing Party (with all depositions limited to [***] day, up to [***] hours). No corporate representative deposition shall be permitted. Within [***] days of the service of document requests, the Parties shall agree to defined search terms in order to search for responsive electronic documents as efficiently and economically as possible. If the Parties cannot agree to such search terms, the Neutral shall meet with the Parties within [***] days thereafter and, at that meeting, determine the applicable search terms. No other discovery shall be permitted in any form. All discovery must be completed [***] days before the arbitration hearing.

4. The hearing shall be conducted on no more than [***] consecutive days and shall be governed by the following rules:

(a) Each party shall be entitled to [***] hours of hearing time to present its case. The Neutral shall determine whether each Party has had the [***] hours to which it is entitled.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(b) Each Party shall be entitled, but not required, to make an opening statement, to present regular and rebuttal testimony, documents, or other evidence, to cross-examine witnesses, and to make a closing argument. Cross-examination of witnesses shall occur immediately after their direct testimony, and cross-examination time shall be charged against the Party conducting the cross-examination.

(c) The Party initiating the ADR shall begin the hearing and, if it chooses to make an opening statement, shall address therein not only issues it raised but also any issues raised by the responding party. The responding party, if it chooses to make an opening statement, also shall address all issues raised in the ADR. Thereafter, the presentation of regular and rebuttal testimony and documents, other evidence, and closing arguments shall proceed in the same sequence.

(d) Except when testifying, witnesses shall be excluded from the hearing until closing arguments.

(e) Settlement negotiations, including any statements made therein, shall not be admissible under any circumstances.

(f) Affidavits prepared for purposes of the ADR hearing shall not be admissible.

(g) As to all other matters, the Neutral shall have sole discretion regarding the admissibility of any evidence.

5. Prior to the completion of the hearing, a Party may seek leave from the Neutral to modify its proposed rulings on one or more issues to be resolved. If the Neutral finds good cause for such modification, within [***] days following completion of the hearing, the Parties shall file a substitute proposed ruling on each issue for which the Neutral allows a modification, together with a request for a specific damage award or other remedy for each such issue. The proposed ruling shall not contain any recitation of the facts or any legal arguments, and the proposed remedy shall not include any punitive damages. The proposed ruling and the proposed remedy collectively shall not exceed [***] per issue.

6. Within [***] days following completion of the hearing, each Party may submit to the other Party and the Neutral a post-hearing brief in support of its proposed rulings and remedies, provided that such brief shall not contain or discuss any new evidence and shall not exceed [***] pages. This page limitation shall apply regardless of the number of issues raised in the ADR proceeding.

7. The Neutral shall rule on each disputed issue within [***] days following completion of the post-hearing briefing. Such ruling shall adopt in its entirety the proposed ruling and remedy of one of the Parties on each disputed issue but may adopt one party’s proposed rulings and remedies on some issues and the other Party’s proposed rulings and remedies on other issues. The Neutral shall not issue any written opinion or otherwise explain the basis of the ruling.

8. The Neutral shall be paid a reasonable fee plus expenses. These fees and expenses, along with the reasonable legal fees and expenses of the prevailing Party (including all expert witness fees and expenses), the fees and expenses of a court reporter, and any expenses for a hearing room, shall be paid as follows:

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

(a) If the Neutral rules in favor of one Party on all disputed issues in the ADR, the losing Party shall pay 100% of such fees and expenses.

(b) If the Neutral rules in favor of one Party on some issues and the other Party on other issues, the Neutral shall issue with the rulings a written determination as to how such fees and expenses shall be allocated between the Parties. The Neutral shall allocate fees and expenses in a way that bears a reasonable relationship to the outcome of the ADR, with the Party prevailing on more issues, or on issues of greater value or gravity, recovering a relatively larger share of its legal fees and expenses.

9. The rulings of the Neutral and the allocation of fees and expenses shall be binding, non- reviewable, and non-appealable, and may be entered as a final judgment in any court having jurisdiction.

10. Except as provided in paragraph 9 or as required by law, the existence of the Dispute, any settlement negotiations, the ADR proceeding, any submissions (including exhibits, testimony, proposed rulings, and briefs), and the rulings shall be deemed to be Confidential Information of both Parties. The Neutral shall have the authority to impose sanctions for unauthorized disclosure of Confidential Information.

11. All ADR proceedings shall be conducted in the English language and shall be conducted in New York, New York.

12. Each Party shall have the right to be represented by counsel in all aspects of any ADR proceeding.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

SCHEDULE OF E XCEPTIONS

Section 13.2(a) : Reata makes no representation under the second sentence of Section 13.2(a) with respect to:

[***]

Section 13.2(c) and (o): Reference is made to PCT Application [***].

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

IN WITNESS WHEREOF, the Parties have executed this Collaboration Agreement by their duly authorized officers as of the date first written above.

REATA PHARMACEUTICALS, INC.		ABBOTT PHARMACEUTICALS PR LTD.
By:	/s/ J. Warren Huff	By:	/s/ Thomas C. Freyman
Name:	J. Warren Huff	Name:	Thomas C. Freyman
Title:	President & CEO	Title:	Chief Financial Officer

Signature Page to Collaboration Agreement

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EX-10.30

Exhibit 10.30

THIRD SUPPLEMENT TO EXCLUSIVE LICENSE AND SUPPLY AGREEMENT

Regarding Phase 3 Clinical Study (Alport Syndrome) in Japan

This Third Supplement (herein so called), effective as of December 6, 2017 (the “Supplement Effective Date”), to the Exclusive License and Supply Agreement, effective as of December 24, 2009 (the “Original Agreement”), is by and between Reata Pharmaceuticals, Inc., a corporation organized and existing under the laws of Delaware, USA, with an address at 2801 Gateway Drive, Suite 150, Irving, Texas 75063 (“Reata”), and Kyowa Hakko Kirin Co., Ltd., a company organized and existing under the laws of Japan, with an address at 1-9-2 Ohtemachi, Chiyoda-ku, Tokyo, 100-0004, Japan (“Kyowa Kirin”). Reata and Kyowa Kirin are sometimes hereinafter referred to each as a “Party” and collectively as the “Parties”.

WHEREAS, pursuant to the Original Agreement, Reata has granted to Kyowa Kirin an exclusive, royalty-bearing license under the Licensed Technology to research, develop, use, sell, offer for sale, import, and export Licensed Compound and Licensed Product in the Field in the Territory.

WHEREAS, Reata wishes to perform portions of a Phase 3 clinical study of RTA 402 (which is included in the Licensed Compound) in the field of Alport Syndrome (which is included in the Field) (“AS”) in Japan (where is included in the Territory) (“Study”).

WHEREAS, in order to permit Reata to perform in Japan all activities necessary to complete the Study without violating the terms and provisions of the Original Agreement, the Parties wish to supplement the terms of the Original Agreement as set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the Parties hereby agree as follows:

1. License

Kyowa Kirin grants to Reata a non-exclusive, royalty-free license to perform the Study under the Licensed Technology, which is exclusively granted to KHK in the Territory, to the extent necessary to support Reata’s efforts to develop, use, sell, offer for sale, import and export RTA 402 in the Field outside the Territory. Reata shall be entitled to undertake all activities necessary to complete the Study in accordance with the protocol of the Study and Applicable Laws.

2. Obligation and Responsibility of Reata

2.1The IND holder and site responsibility of the Study shall be Reata. For clarity, Reata shall designate an in-country (Japan) caretaker of the Study at Reata’s sole discretion and responsibility. Kyowa Kirin shall reimburse actual Study costs incurred by or on behalf of Reata, whether incurred before or after the Supplement Effective Date (the “Costs”) up to three million United States dollars (US$3,000,000) (the “Reimbursement Amount”). Costs shall not include the salary or other overhead costs of any Reata employee. Reata shall invoice Kyowa Kirin each

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

quarter for the Costs, and Kyowa Kirin shall pay each invoice within 30 days after receipt until Kyowa Kirin has paid the Reimbursement Amount. Reata shall bear any and all Costs above the Reimbursement Amount.

2.2Reata shall provide Kyowa Kirin with a protocol of the Study. Reata shall report and discuss the current status and the progress of the Study at the JSC as reasonably required or upon Kyowa Kirin’s reasonable request. In addition, Reata, at any time, shall discuss the current status of the Study with Kyowa Kirin as reasonably required or upon Kyowa Kirin’s reasonable request, and Reata shall report the progress of the Study to Kyowa Kirin in written manner at least quarterly. The discussion and the update by report shall include but not be limited to the topics such as interaction with Regulatory Authorities, Study sites, key opinion leaders and/or CROs.

2.3Reata shall be responsible for undertaking all communications and obligations that derive from this Third Supplement with or toward Regulatory Authorities under Applicable Laws regarding the enforcement of the Study (“Regulatory Activities For Study”) and all activities under this Third Supplement (collectively “Activities”). Such Activities include but are not limited to the supply of RTA 402 to Third Parties. For clarity, Reata confirms that Reata shall not obligate Kyowa Kirin to supply RTA 402 to patients or doctors as part of “compassionate use” programs or other similar regulations or orders in Japan. All such Activities shall be conducted in a manner consistent with the protocol of the Study. Kyowa Kirin will use Commercially Reasonable Efforts to assist Reata in connection with Regulatory Activities For Study. For Kyowa Kirin’s review and comments, Reata shall provide Kyowa Kirin with a draft of the Japanese regulatory filing for the Study (“Study Regulatory Filing”), which includes a description of the development of RTA 402 for the treatment of chronic kidney disease, one (1) month prior to the filing of such draft of the Study Regulatory Filing. Reata shall discuss with Kyowa Kirin any comments to the draft of the Study Regulatory Filing that Kyowa Kirin provides to Reata prior to the filing. Reata shall provide Kyowa Kirin with the copy of all correspondence with Regulatory Authorities and Study Regulatory Filings that Reata files with Japanese Regulatory Authorities. Reata shall keep Kyowa Kirin informed of all material events and developments occurring in the course of Regulatory Activities For Study. Reata shall provide Kyowa Kirin with advance notice of any formal, scheduled meetings with Japanese Regulatory Authorities and provide a brief description of the topics to be presented or discussed at the meeting. Reata shall allow Kyowa Kirin to participate in preparation and /or attendance of any such meeting if applicable.

2.3Upon the request from Kyowa Kirin and/or completion of the Study, Reata shall provide Kyowa Kirin with all data generated from the Study (“Study Data”), including but not limited to any Japanese regulatory filings for RTA 402, under no obligation and at no cost to Kyowa Kirin above the Reimbursement Amount. Kyowa Kirin shall have a right to access, a right of reference, and a right to use and incorporate all Study Data in any regulatory filings, including all Study Regulatory Filings, or for other uses with respect to Licensed Products in the Territory under no obligation and at no cost to Kyowa Kirin. Reata will hold title to all Study Data, including all Study Regulatory Filings.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

3. Regulatory Activities

In accordance with Section 5.1 of the Original Agreement, [***].

4. Original Agreement

4.1Notwithstanding Section 8.3.1 of the Original Agreement, the term of negotiation and execution of Commercial Supply Agreement shall be postponed and a new term shall be discussed and determined promptly after the Supplement Effective Date by both Parties.

4.2Except as supplemented and amended by this Third Supplement, the Original Agreement, the Supplement to Exclusive License and Supply Agreement dated January 1, 2016, between the Parties (the “First Supplement”), and the Second Supplement to Exclusive License and Supply Agreement dated March 21, 2017, between the Parties, shall remain in full force and effect pursuant to their terms. For the avoidance of doubt, the initiation of the Study shall not require Kyowa Kirin to make any Regulatory Milestone Payment related to the “Initiation of Phase 2b Clinical Trial for a Licensed Product in Japan” or “Initiation of Phase 3 Clinical Trial for a Licensed Product in Japan” as set forth in Section 7.2 of the Original Agreement; provided, however, any payments required to be made pursuant to Section 7.2 of the Original Agreement as a result of future milestone events, including unpaid Regulatory Milestone Payments related to the “Initiation of Phase 2b Clinical Trial for a Licensed Product in Japan” or “Initiation of Phase 3 Clinical Trial for a Licensed Product in Japan”, shall continue to be due and payable pursuant to the terms of Section 7.2 of the Original Agreement.

5. Other Provisions

5.1This Third Supplement shall become effective on the Supplement Effective Date and shall continue until the termination of the Original Agreement.

5.2Kyowa Kirin will have the right to terminate this Third Supplement upon breach of any obligations of Reata if Reata has not cured such breach within ninety (90) days after receipt of written Notice thereof (describing such breach in reasonable detail) by Kyowa Kirin.

5.3Except where specifically defined herein, capitalized terms used herein shall have the same meanings ascribed to them in the Original Agreement.

5.4The headings to the several Articles hereof are not part of this Third Supplement, but are merely guides or labels to assist the locating and reading the several Articles hereof.

IN WITNESS WHEREOF, the Parties have executed this Third Supplement to be effective as of the Supplement Effective Date.

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

KYOWA HAKKO KIRIN CO., LTD.

By:	/s/ Tamao Watanabe
Name:	Tamao Watanabe
Title:	Executive Officer, Director,
	Business Development Department
Date:	December 6, 2017

REATA PHARMACEUTICALS, INC.

By:	/s/ J. Warren Huff
Name:	J. Warren Huff
Title:	President and Chief Executive Officer
Date:	December 7, 2017

EX-10.31

Exhibit 10.31

FOURTH SUPPLEMENT TO EXCLUSIVE LICENSE AND SUPPLY AGREEMENT

Regarding Milestone payments, Supply price and Products manufacturing

This Fourth Supplement (herein so called), effective as of December 6, 2017 (the “Supplement Effective Date”), to the Exclusive License and Supply Agreement, effective as of December 24, 2009 (the “Original Agreement”), is by and between Reata Pharmaceuticals, Inc., a corporation organized and existing under the laws of Delaware, USA, with an address at 2801 Gateway Drive, Suite 150, Irving, Texas 75063 (“Reata”), and Kyowa Hakko Kirin Co., Ltd., a company organized and existing under the laws of Japan, with an address at 1-9-2 Ohtemachi, Chiyoda-ku, Tokyo, 100-0004, Japan (“Kyowa Kirin”). Reata and Kyowa Kirin are sometimes hereinafter referred to each as a “Party” and collectively as the “Parties”.

WHEREAS, pursuant to the Original Agreement, Reata has granted to Kyowa Kirin an exclusive, royalty-bearing license under the Licensed Technology to research, develop, use, sell, offer for sale, import, and export Licensed Compound and Licensed Product in the Field in the Territory.

WHEREAS, the Parties executed the Supplement to the Original Agreement dated January 1, 2016 (“First Supplement”), under which Kyowa Kirin agreed to allow Reata to perform a Phase 3 clinical study of RTA 402 (which is included in the Licensed Compound) in the field of connective tissue disease associated pulmonary arterial hypertension (which is included in the Field) (“CTD-PAH”) in Japan (which is included in the Territory) (“CTD-PAH Study”).

WHEREAS, the Parties executed the Second Supplement to the Original Agreement dated March 21, 2017 (“Second Supplement”), under which Kyowa Kirin agreed to allow Reata to perform portions of CTD-PAH studies in the Philippines (which is included in the Territory).

WHEREAS, the Parties executed the Third Supplement to the Original Agreement dated December 6, 2017 (“Third Supplement”), under which Kyowa Kirin agreed to allow Reata to perform a Phase 3 clinical study of RTA 402 in the field of Alport Syndrome (“AS”) in Japan (“AS Study”) and agreed to bear Reata’s actual development costs incurred in the AS Study up to three million United States dollars (US $3,000,000).

WHEREAS, the Parties wish to amend the terms of the Original Agreement as set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the Parties hereby agree as follows:

1. Milestone payments

1.1 Section 7.2.1 (Regulatory Milestones) of the Original Agreement is hereby amended by adding the following to the end of the section:

“Notwithstanding the foregoing, if the milestone event of [***] shall be as follows:

i) [***]

ii) [***]

Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

iii) [***]

iv) [***]

For the avoidance of doubt, [***]. [***].

Additionally, notwithstanding anything in this Agreement to the contrary, a Regulatory Milestone Payment of [***].

The Parties agree that an amount of Regulatory Milestone Payments [***] shall be discussed in good faith and determined by the Parties in writing prior to the achievement of such Regulatory Milestone Events.

1.2 Section 7.2.2 (Sales Milestones) of the Original Agreement is hereby amended by adding the following to the end of the section:

“The Parties agree that the maximum amount of Regulatory Milestone Payments for Licensed Product in Japan and Sales Milestone Payments shall be US $[***]. Notwithstanding the foregoing, [***] shall be added to the Sales Milestone Payments in order of the sales milestone events set forth in the Sales Milestone Payment table in this Section 7.2.2; provided, however, that the addition of any Unpaid Regulatory Milestone Payment for [***] to a Sales Milestone Payment shall not cause the amount of a Sales Milestone Payment to exceed the amount set forth in the following table.  If a Submission Milestone Payment is paid to Reata after the Unpaid Regulatory Milestone Payment for [***] has been added to the Sales Milestone Payments, then the amount of such Submission Milestone Payment shall be deducted, in reverse order of the sales milestone events set forth in the Sales Milestone Payment table, with the amount deducted from a Sales Milestone Payment not to exceed the amount of the Unpaid Regulatory Milestone Payment for [***] previously added to such Sales Milestone Payment.

Sales Milestone Event	Sales Milestone Payment (US$)
[***]	$[***]
[***]	$[***]
[***]	$[***]
[***]	$[***]

[***]:

Sales Milestone Event	Sales Milestone Payment (US$) set forth in this Section 7.2.2	Unpaid Regulatory Milestone Payment for DKD in total: $[***]	Sales Milestone Payment (US$) for AS
[***]	$[***]	$[***]	$[***]

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]

[***].

2. Product manufacturing

   Section 8.1 (Reata Obligation to Supply Licensed Product) of the Original Agreement is hereby eliminated and substituted with the following:

“8.1 Reata Obligation to Supply of the Licensed Product.   Kyowa Kirin will obtain [***] percent ([***]%) of its and its Affiliates’ requirements of the finished formulation of the Licensed Product (“Finished Product”) for Commercialization in the Territory from Reata, and Reata agrees to manufacture or have manufactured and supply to Kyowa Kirin [***] of Kyowa Kirin’s and its Affiliates’ requirements of the Finished Product for Commercialization in the Territory, in all such cases except to the extent otherwise provided in, and in any event subject to and in accordance with the terms of, this ARTICLE VIII. Reata also agrees to grant Kyowa Kirin an option (“KHK Option”) to (i) request Reata to supply to Kyowa Kirin and [***] of Kyowa Kirin’s and its CMOs’ their requirements of the intermediate, Spray-Dried Dispersion (“SDD”) for manufacture of the Finished Product, and (ii) obtain a license from Reata to manufacture or have its CMOs (including Reata’s designated CMOs) manufacture the Finished Product using SDD supplied by Reata. Upon Kyowa Kirin’s such exercise of KHK Option, Reata shall supply the SDD to Kyowa Kirin or its CMOs and, consistent with the provisions of Section 8.4.6(b) with respect to the manufacturing technology transfer from Reata to Kyowa Kirin, , provided that Kyowa Kirin shall bear the expense for such transfer , shall grant Kyowa Kirin or its CMOs a non-exclusive royalty-free license to manufacture the Finished Product in and outside the Territory using all Reata’s necessary technologies, patents or know-how and shall provide all necessary technical support to such parties set forth above. For clarity, in this Agreement, the word “Licensed Product” includes both the Finished Product and the SDD.”

3.  Supply Agreement

3.1  The first sentence of Section 8.3.1 (Commercial Supply Agreement) of the Original Agreement shall be eliminated and substituted with the following:

“8.3.1 Commercial Supply Agreement. [***], the Parties shall negotiate and execute definitive commercial supply agreements for the supply of both the Finished Product (“Commercial Supply Agreement for Finished Product”) and the SDD  (“Commercial Supply Agreement for SDD ”) to Kyowa Kirin and its Affiliates for marketing and sales (including post-approval studies) of such Licensed Products in the Territory (collectively, “Commercial Supply Agreements”). ”

Accordingly, the word “Commercial Supply Agreement” in the Original Agreement shall be substituted with the word “Commercial Supply Agreements”.

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

3.2  The words “[***]” in the third sentence of Section 8.3.1 of the Original Agreement shall be eliminated and substituted with the following:  “[***]”.

4. Supply price

The first sentence of the Section 8.3.2 (Commercial Supply Price) of the Original Agreement shall be eliminated and substituted with the following:

“ 8.3.2 Commercial Supply Price for The Finished Product and SDD. During the Term of this Agreement, Reata shall supply the Finished Product to Kyowa Kirin and its Affiliates for use in marketing and sales (including post-marketing studies) in the Territory at [***], consistent with the provisions of Section 8.4 and 8.5 of this Agreement.

5. Other Provisions

5.1   This Fourth Supplement shall become effective on the Supplement Effective Date and shall continue until the termination of the Original Agreement.

5.2 Except where specifically defined herein, capitalized terms used herein shall have the same meanings ascribed to them in the Original Agreement.

5.3  The headings to the several Articles hereof are not part of this Fourth Supplement, but are merely guides or labels to assist the locating and reading the several Articles hereof.

5.4  Except as stated herein, all terms and conditions of the Original Agreement, the First Supplement, the Second Supplement, and the Third Supplement shall remain in full force and effect during the effective period of the Original Agreement.

IN WITNESS WHEREOF, the Parties have executed this Fourth Supplement to be effective as of the Supplement Effective Date.

KYOWA HAKKO KIRIN CO., LTD.

By:/s/Tamao Watanabe ________________

Name:Tamao Watanabe

Title: Executive Officer, Director,

Business Development Department

Date:_December 6, 2017_________________

REATA PHARMACEUTCALS, INC.

By:/s/J. Warren Huff__________________

Name:J. Warren Huff

Title:President and Chief Executive Officer

Date:_December 7, 2017_________________

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Specific terms in this Exhibit have been redacted because such terms are both not material and are of the type that the Company treats as private or confidential. These redacted terms have been marked in this Exhibit with three asterisks [***].

EX-10.38

Exhibit 10.38

LEASE AMENDMENT NO. 13

THIS LEASE AMENDMENT NO. 13 (this “Amendment”) is made and entered into effective as of February 4, 2022 (the “Effective Date”) by and between SDCO GATEWAY COMMERCE I & II, INC., a Delaware corporation (“Landlord”), and REATA PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).  

Recitals:

WHEREAS, by Lease dated with a Lease Reference Date as of May 25, 2006 between Landlord and Tenant (the “Original Lease”), as amended by Lease Amendment No. 1 dated March 2, 2010 (the “First Amendment”), Lease Amendment No. 2 dated May 24, 2010 (the “Second Amendment”), Lease Amendment No. 3 dated July 1, 2010 (the “Third Amendment”), Lease Amendment No. 4 dated February 17, 2011 (the “Fourth Amendment”), Lease Amendment No. 5 dated May 1, 2011 (the “Fifth Amendment”), Lease Amendment No. 6 dated July 7, 2011 (the “Sixth Amendment”), Lease Amendment No. 7 dated July 23, 2012 (the “Seventh Amendment”), Lease Amendment No. 8 dated September 25, 2012 (the “Eighth Amendment”), Lease Amendment No. 9 dated June 12, 2013 (the “Ninth Amendment”), Lease Amendment No. 10 dated May 26, 2015 (the “Tenth  Amendment”), Lease Amendment No. 11 dated November 9, 2017 (the “Eleventh Amendment”) and Lease Amendment No. 12 dated December 12, 2019 (the “Twelfth Amendment”) (which Original Lease together with the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment, Sixth Amendment, Seventh Amendment, Eighth Amendment, Ninth Amendment, Tenth Amendment, Eleventh Amendment, Twelfth Amendment and all Commencement Date Agreements executed by Landlord and Tenant in connection therewith are herein together called the “Lease”), the leased space comprising Suite 150 measuring approximately 34,890 square feet (collectively, the “Premises”), within that part of the Building (as defined in the Lease) known as Gateway Commerce II, at 2801 Gateway Drive, Irving, Texas 75063 was leased to Tenant upon the terms and subject to the conditions contained in the Lease; and

WHEREAS, Landlord and Tenant have agreed to modify the Lease in the manner hereinafter appearing.

Agreement:

NOW, THEREFORE, for and in consideration of the foregoing recitals, Ten and No/100 Dollars ($10.00) in hand paid and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby acknowledge and agree to the following:

1.Recitals; Definitions.  The above Recitals are true and correct and are incorporated herein by reference.  Capitalized but otherwise undefined terms herein shall have the meanings set forth for such terms in the Lease.

2.Extension of Term.  Notwithstanding anything to the contrary contained in the Lease, the Lease Term is extended from its current expiration date of October 31, 2022, so that the same shall expire on October 31, 2024 unless sooner terminated as provided in the Lease as modified by this Amendment.   As of the Effective Date, all references to the Term in the Lease shall mean the Term as extended by this Amendment.  Tenant shall have no further right to extend the Term of the Lease except only as set forth in Paragraph 7 below.  

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3.“As-Is” Delivery.  Subject to compliance by Landlord with its repair and maintenance obligations in the Lease, Tenant accepts the Premises for the Term as extended by this Amendment in its“AS-IS” condition.  Landlord shall not be required to perform any demolition work or tenant finish work in the Premises nor to provide any allowances therefor.      

4.Rent.  Rent shall remain payable as set forth in the Lease through October 31, 2022.  Thereafter and notwithstanding anything to the contrary contained in the Lease, the Annual Rent and Monthly Installment of Rent for the Premises during the Term, as extended by this Amendment, shall be as follows:

Period		Rentable Square	Annual Rent	Annual	Monthly
		Footage	Per Square Foot	Rent	Installment of Rent
11/1/2022	10/31/2023	34,890	$21.00	$732,690.00	$61,057.50
11/1/2023	10/31/2024	34,890	$21.50	$750,135.00	$62,511.25

All other charges due under the Lease with respect to the Premises including Tenant’s Proportionate Share of excess Expenses and Taxes over Base Year (Expenses) and Base Year (Taxes) respectively (as modified by Paragraph 5 below), shall remain payable as set forth in the Lease during the remainder of the Term as extended by this Amendment.  Tenant shall be responsible for payment of its own utilities and janitorial costs. At Landlord’s request and to the extent not already occurring, all Rent shall be paid to Landlord by Electronic Funds Transfer (EFT), Automated Clearing House (ACH) or wire transfer to the bank account specified by Landlord, or to such other person or at such other place and/or by such other methods as Landlord may from time to time designate in writing.  Upon request, Tenant agrees to cooperate with Landlord to complete all necessary forms in order to accomplish such method of payment.

5.Base Year.  Effective as of November 1, 2022 and continuing for the remainder of the Term as extended by this Amendment, the Lease is revised so that (i) Base Year (Expenses) shall be Expenses for January 1, 2022 to December 31, 2022 and (ii) Base Year (Taxes) shall be Taxes for January 1, 2022 to December 31, 2022.

6.Parking.  During the renewal term, Tenant shall continue to have the right to use up to one hundred forty (140) unreserved parking spaces in the surface parking areas associated with the Building, free of charge, and on a “first come” “first served” basis for passenger-size automobiles only.

7.Renewal Option. The renewal option set forth in Paragraph 6 of the Twelfth Amendment is deleted and is of no further force or effect. Instead, provided that (i) no uncured Event of Default then exists under the Lease, and (ii) Tenant provides Landlord with written notice (which notice shall be irrevocable) of its intention to exercise its option by no later than February 1, 2024 (time being of the essence), Tenant shall have the option to renew the Lease for a fixed twelve (12) month term ending on October 31, 2025 with the Monthly Installment of Rent increased to $63,965.00 (calculated at the annual rental rate of $22.00 per square foot) and otherwise on the terms, covenants and conditions of the Lease including the obligation to pay all additional rent, charges and other payments due under the Lease as set forth therein. The Premises shall be taken by Tenant during the renewal term, in its “AS-IS” condition and Landlord shall have no liability to perform any renovation work nor to provide any improvement allowances therefor.  Upon exercise of this option, Tenant shall, if so requested by Landlord, execute an amendment to the Lease confirming the exercise of the option and the new Monthly Installment of Rent for the Premises during the renewal term.  Landlord’s failure to prepare or Tenant’s failure to execute such amendment shall not affect the validity of the exercise of this option or alter Tenant’s obligations during the renewal term as determined hereby.  This option shall terminate and be of no further force or effect if (a) Landlord terminates Tenant’s right to possession due to an Event of Default, or (b) Tenant subleases the Premises or assigns the

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Lease, in each case other than to an Affiliate. Upon exercise of this renewal option Tenant shall have no further right to extend the Term of the Lease other than by agreement with Landlord in its sole discretion.  

8.Landlord’s Address for Notices.  Landlord’s Address in the Reference Pages attached to and made part of the Lease is deleted and the following is substituted instead:

Landlord’s Address:	SDCO Gateway Commerce I & II, Inc.
	c/o RREEF Management L.L.C.
	200 Crescent Court, Suite 510
	Dallas, Texas 75201
	Attention: Asset Manager
	and
	SDCO Gateway Commerce I & II, Inc.
	c/o RREEF Management L.L.C.
	222 South Riverside Plaza, 34th Floor
	Chicago, Illinois  60606
	Attention: Portfolio Manager

9.Landlord Remedies in the Event of a Default.  Section 19.3 in the Original Lease, as amended, is further amended so that the Concession Amount as therein defined shall include the aggregate of all amounts expended by Landlord for brokers’ commissions payable by reason of this Amendment.

10.Authority.  Tenant represents and warrants that Tenant has been and is qualified to do business in the State of Texas and that the entity has full right and authority to enter into this Amendment.  Tenant warrants that the person executing this Amendment on behalf of Tenant has been duly authorized to sign on behalf of Tenant by appropriate actions. Landlord represents and warrants that Landlord has been and is qualified to do business in the State of Texas and that the entity has full right and authority to enter into this Amendment.  Landlord warrants that the persons executing this Amendment on behalf of Landlord have been duly authorized to sign on behalf of Landlord by appropriate actions.

11.Exculpation.  Article 41 of the Original Lease shall apply in full to this Amendment.

12.Brokerage.  Landlord and Tenant each hereby warrant to the other that it has not dealt with any broker or agent in connection with the negotiation or execution of this Amendment, other than Fults Commercial, LLC (representing Landlord) and CBRE, Inc. (representing Tenant), whose commissions shall be paid by Landlord pursuant to separate written agreements. Landlord and Tenant shall each indemnify the other against all costs, expenses, attorneys’ fees, and other liability for commissions or other compensation claimed by any other broker or agent claiming the same by, through, or under the indemnifying party in respect of this Amendment.

13.Ratification.  Landlord and Tenant hereby ratify and affirm the Lease, and agree that the Lease is and shall remain in full force and effect, except as expressly amended hereby.

14.Successors and Assigns.  The covenants, conditions, provisions and agreements contained in this Amendment shall bind the parties and their successors and assigns and inure to the benefit of the parties and their successors and assigns.

15.Counterparts. This Amendment may be executed in any number of identical counterparts each of which ‎‎shall be ‎deemed to be an original and all, when taken together, shall constitute one and the same ‎‎instrument. ‎To facilitate execution of this Amendment, the parties may execute and exchange

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‎‎signature ‎pages ‎via electronic mail (*.pdf or DocuSign). All such signatures may be used in the ‎‎place of original ‎‎"wet ink" ‎signatures to this Amendment and shall have the same legal effect as the ‎‎physical ‎delivery of an ‎original “wet ink” signature.      ‎  ‎

[Signature Page Follows]

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IN WITNESS WHEREOF, this Amendment is hereby executed by Landlord and Tenant as of the Effective Date.

LANDLORD:
SDCO GATEWAY COMMERCE I & II, INC.,
a Delaware corporation
By:	/s/ Kim M. Boudreau
	Kim M. Boudreau
	Authorized Signatory
By:	/s/ Stephen J. George
	Stephen J. George
	Authorized Signatory
TENANT:
REATA PHARMACEUTICALS, INC.,
a Delaware corporation
By:	/s/ Manmeet S. Soni
	Manmeet S. Soni
	Chief Operating Officer  and Executive
	Vice President

 

EX-10.48

Exhibit 10.48

Date

Notice of Grant of Restricted Stock Units

(Employee)

Award Details

Name :

Address :

Employee ID :

Award Amount :

Grant ID :

Date of Grant:

Award Type :

Vesting Schedule :

Vesting Start Date :

Vesting End Date :

Expiration Date :

Deadline to Accept : 30 days from grant notification

Award Vesting Summary

The Forfeiture Restrictions on the Restricted Stock Units granted pursuant to the Restricted Stock Unit Agreement (the "Agreement") will expire and the Restricted Stock Units will vest and become nonforfeitable as set in Section 6 of the Agreement, as detailed in the table above under "Vesting Schedule"; provided, however, that the vesting of the Restricted Stock Units shall be subject to the standard methodology for handling fractions of vested Restricted Stock Units that is applied by the Company's third-party Restricted Stock Unit administrator; provided further, however, that, except as otherwise provided in the Agreement or any applicable employment agreement, such unvested Restricted Stock Units will become vested Restricted Stock Units on such dates only if you remain in the employ of or a service provider to the Company or its Subsidiaries continuously from the Date of Grant through the applicable vesting date.

Notwithstanding the foregoing, following a Change in Control, any Restricted Stock Units that are unvested on the date of the Change in Control shall vest with respect to one eighteenth of all such unvested Restricted Stock Units on the one month anniversary of the Change in Control and thereafter with respect to an additional one eighteenth of all such unvested Restricted Stock Units

at the time of the Change in Control on each subsequent month anniversary of the Change in Control such that the Restricted Stock Units will be 100% vested on the eighteenth month anniversary of the Change in Control, in each case, so long as you remain in the employ of or a service provider to the Company or its Subsidiaries continuously from the Date of Grant through the applicable vesting date; provided, however, that if 100% of the Restricted Stock Units would otherwise become vested pursuant to the vesting rules set forth in the preceding paragraph prior to the eighteenth month anniversary of the date of the Change in Control, then the Restricted Stock Units will become vested in accordance with such vesting rules.

The Restricted Stock Units shall not be settled with a fraction of a share of Stock, and, on the expiration date of the Restricted Stock Units, any fraction of a share of Stock, unless otherwise determined by the Committee, shall be canceled and terminated without consideration.

Settlement Event

Class A common stock ("Stock") will become issuable (which Stock will be fully transferrable when issued) and Dividend Equivalents payable to you on the date of vesting of the Restricted Stock Units, which is referred to as the Settlement Event. Absent a provision in the Agreement or the Plan to the contrary and subject to the paragraph following, Stock and Dividend Equivalents with respect to vested Restricted Stock Units will be delivered to you no later than 45 days following the Settlement Event. At any time on or after the date of vesting of Restricted Stock Units, the Company may direct the Company's third-party Restricted Stock Unit administrator to (a) sell shares of stock on the open market and (b) remit the proceeds from such sale to the Company in order to cover any withholding taxes that you are required to pay; provided, however, if the Company or the Agreement or any applicable employment agreement permits you to elect to pay required withholding taxes by having the Company withhold, or not issue in settlement of the RSUs, shares of Stock equal in Fair Market Value to the amount of required withholding taxes, then the Company is hereby authorized to give instructions to the Company's third-party Restricted Stock Unit administrator in connection therewith.

Black Out Periods and Other Payments that Would Violate Applicable Law

You acknowledge that, to the extent the settlement of Restricted Stock Units occurs (i) during a “blackout” period wherein you are precluded from selling Stock, or (ii) at such other time where the Company reasonably anticipates that the issuance of Stock (or the sale of Stock to cover withholding taxes associated with the Award) will violate Federal securities laws or other applicable law, the Company retains the right, in its sole discretion, to defer the delivery of the Stock pursuant to the Restricted Stock Unit; provided, that payment is made to you at the earliest date at which the Company reasonably anticipates that the making of the payment will not cause such violation and; provided, further, that the Company shall not exercise its right to defer your receipt of such Stock due to the application of a blackout period if such shares of Stock are specifically covered by a Rule 10b5-1 trading plan which causes such shares to be exempt from any applicable blackout period then in effect. The delay in settlement contemplated by the paragraph will only be exercised to the extent such exercise does not cause Restricted Stock

Units that are not subject to the Nonqualified Deferred Compensation Rules to be subject to the Nonqualified Deferred Compensation Rules.

Online Grant Acceptance

By your acceptance of the Restricted Stock Units, you hereby acknowledge your receipt of the Restricted Stock Units granted on the Date of Grant indicated above, which have been issued to you under the terms and conditions of this Notice of Grant, the Second Amended and Restated Long Term Incentive Plan (the "Plan") and the Agreement, including the vesting and risk of forfeiture provisions set forth therein. Capitalized terms used but not defined in this Notice of Grant shall have the meanings set forth in the Plan or the Agreement.

By your acceptance of the Restricted Stock Units, you agree to the following provisions of this paragraph. You acknowledge and agree that (a) you are not relying upon any written or oral statement or representation of the Company, its affiliates, or any of their respective employees, directors, officers, attorneys or agents (the "Company Parties") regarding the tax effects associated with your acceptance of the Restricted Stock Units and your receipt and holding of the Restricted Stock Units, and (b) in deciding to accept the Restricted Stock Units, you are relying on your own judgment and the judgment of the professionals of your choice with whom you have consulted. You hereby release, acquit and forever discharge the Company Parties from all actions, causes of actions, suits, debts, obligations, liabilities, claims, damages, losses, costs and expenses of any nature whatsoever, known or unknown, on account of, arising out of, or in any way related to the tax effects associated with your acceptance of the Restricted Stock Units and your receipt and holding of the Restricted Stock Units. You consent to receive documents from the Company and any plan administrator by means of electronic delivery, provided that such delivery complies with applicable law, including, without limitation, documents pursuant or relating to any equity award granted to you under the Plan or any other current or future equity or other benefit plan of the Company (collectively, a "Company Plan"). This consent shall be effective for the entire time that you are a participant in a Company Plan.

EX-10.49

Exhibit 10.49

Date

Notice of Grant of Restricted Stock Units

(Directors/Consultants)

Award Details

Name :

Address :

Employee ID :

Award Amount :

Grant ID :

Date of Grant:

Award Type :

Vesting Schedule :

Expiration Date :

Deadline to Accept : 30 days from grant notification

Award Vesting Summary

The Forfeiture Restrictions on the Restricted Stock Units granted pursuant to the Restricted Stock Unit Agreement (the “Agreement”) will expire and the Restricted Stock Units will vest and become nonforfeitable as set in Section 6 of the Agreement, as detailed in the table above under “Vesting Schedule”; provided, however, that the vesting of the Restricted Stock Units shall be subject to the standard methodology for handling fractions of vested Restricted Stock Units that is applied by the Company’s third-party Restricted Stock Unit administrator; provided further, however, that, except as otherwise provided in the Agreement, such unvested Restricted Stock Units will become vested Restricted Stock Units on such dates only if you remain a director or employee of or a service provider to the Company or its Subsidiaries continuously from the Date of Grant through the applicable vesting date.

Notwithstanding the foregoing, in the event of (i) a Change in Control, (ii) a separation from service by reason of death, or (iii) a separation of service by reason of Disability (as defined in the Agreement), any Restricted Stock Units that are unvested on the date of such event shall become vested Restricted Stock Units on such date.

The Restricted Stock Units shall not be settled with a fraction of a share of Stock, and, on the expiration date of the Restricted Stock Units, any fraction of a share of Stock, unless otherwise determined by the Committee, shall be canceled and terminated without consideration.

Settlement Event

Stock will become issuable (which Stock will be fully transferrable when issued) and Dividend Equivalents payable to you on the later to occur of (i) the date of vesting of the Restricted Stock Units, or (ii) to the extent you have timely and properly elected to defer settlement of your Restricted Stock Units pursuant to a “Time of Settlement Election Form,” the time of settlement elected in such form, which, in either case, is referred to as the Settlement Event. Absent a provision in the Agreement or the Plan to the contrary and subject to the paragraph following, Stock and Dividend Equivalents with respect to vested Restricted Stock Units will be delivered to you no later than 45 days following the Settlement Event.

Black Out Periods and Other Payments that Would Violate Applicable Law

You acknowledge that, to the extent the settlement of Restricted Stock Units occurs (i) during a “blackout” period wherein you are precluded from selling Stock, or (ii) at such other time where the Company reasonably anticipates that the issuance of Stock (or the sale of Stock to cover taxes associated with the Award) will violate Federal securities laws or other applicable law, the Company retains the right, in its sole discretion, to defer the delivery of the Stock pursuant to the Restricted Stock Unit; provided, that payment is made to you at the earliest date at which the Company reasonably anticipates that the making of the payment will not cause such violation and; provided, further, that the Company shall not exercise its right to defer your receipt of such Stock due to the application of a blackout period if such shares of Stock are specifically covered by a Rule 10b5-1 trading plan which causes such shares to be exempt from any applicable blackout period then in effect. The delay in settlement contemplated by the paragraph will only be exercised to the extent such exercise does not cause Restricted Stock Units that are not subject to the Nonqualified Deferred Compensation Rules to be subject to the Nonqualified Deferred Compensation Rules.

Online Grant Acceptance

By your acceptance of the Restricted Stock Units, you hereby acknowledge your receipt of the Restricted Stock Units granted on the Date of Grant indicated above, which have been issued to you under the terms and conditions of this Notice of Grant, the Second Amended and Restated  Long Term Incentive Plan (the ”Plan”) and the Agreement, including the vesting and risk of forfeiture provisions set forth therein. Capitalized terms used but not defined in this Notice of Grant shall have the meanings set forth in the Plan or the Agreement.

By your acceptance of the Restricted Stock Units, you agree to the following provisions of this paragraph. You acknowledge and agree that (a) you are not relying upon any written or oral statement or representation of the Company, its affiliates, or any of their respective employees, directors, officers, attorneys or agents (the “Company Parties”) regarding the tax effects associated with your acceptance of the Restricted Stock Units and your receipt and holding of the Restricted Stock Units, and (b) in deciding to accept the Restricted Stock Units, you are relying on your own judgment and the judgment of the professionals of your choice with whom you have consulted.  You hereby release, acquit and forever discharge the Company Parties from all actions, causes of actions, suits, debts, obligations, liabilities, claims, damages, losses, costs and expenses of any nature whatsoever, known or unknown, on account of, arising out of, or in any way related to the tax effects associated with your acceptance of the Restricted Stock Units and your receipt and holding of the

Restricted Stock Units. You consent to receive documents from the Company and any plan administrator by means of electronic delivery, provided that such delivery complies with applicable law, including, without limitation, documents pursuant or relating to any equity award granted to you under the Plan or any other current or future equity or other benefit plan of the Company (collectively, a “Company Plan”).  This consent shall be effective for the entire time that you are a participant in a Company Plan.

EX-10.50

Exhibit 10.50

Pursuant to Section 141(f) of the General Corporation Law of the State of Delaware and the authority contained in Article III, Section 3.10 of the Second Amended and Restated Bylaws of Reata Pharmaceuticals, Inc., a Delaware corporation (the “Company”), the undersigned, being all the members of the Board of Directors of the Company (the “Board”), hereby consent to the adoption of, and hereby consent to and authorize, the following resolutions by unanimous written consent.

Sixth Amended and Restated Non-Employee Director Compensation Policy

WHEREAS, the Compensation Committee of the Board (the “Compensation Committee”) has reviewed and approved the Sixth Amended and Restated Non-Employee Director Compensation Policy attached hereto as Exhibit A (the “Policy”) and recommended that the Policy be submitted to a subcommittee of the Compensation Committee composed of Jack B. Nielsen and William E. Rose (the “Subcommittee”) for the Subcommittee’s review and approval and adoption of the Policy and the Subcommittee’s recommendation that the Policy be submitted to the Board for the Board’s approval and adoption of the Policy;

WHEREAS, the Subcommittee approved and adopted the Policy and submitted the Policy to the Board with the Subcommittee’s recommendation that the Board approve and adopt the Policy: and

WHEREAS, the Board has reviewed the Policy.

NOW, THEREFORE, BE IT RESOLVED, that the Policy is hereby approved and adopted in all respects.

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IN WITNESS WHEREOF, each of the undersigned has executed this Unanimous Written Consent as of the date indicated below his name; thereby agreeing that the foregoing recitals and resolutions shall be of the same force and effect as if regularly adopted at a meeting of the Board held upon due notice. This Unanimous Written Consent may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. This Unanimous Written Consent may be executed by facsimile or email transmission and such facsimile or email transmission shall be valid and binding to the same extent as if it was an original, and this Unanimous Written Consent shall be effective at such time as all of the undersigned shall have executed this Unanimos Written Consent.

By:	/s/ Martin W. Edwards, MD.
Name:	Martin W. Edwards, MD.
Date:	December 17, 2022
By:	/s/ J. Warren Huff
Name:	J. Warren Huff
Date:	December 17, 2022
By:	/s/ William D. McClellan, Jr.
Name:	William D. McClellan, Jr.
Date:	December 17, 2022
By:	/s/ R Kent McGaughy, Jr.
Name:	R Kent McGaughy Jr.
Date:	December 17, 2022
By:	/s/ Jack B. Nielsen
Name:	Jack B. Nielsen
Date:	December 17, 2022
By:	/s/ William D. McClellan, Jr.
Name:	William D. McClellan, Jr.
Date:	December 17, 2022
By:	/s/ Christy Oliger
Name:	Christy Oliger
Date:	December 17, 2022
By:	/s/ William E. Rose
Name:	William E. Rose
Date:	December 17, 2022
By:	/s/ Shamim Ruff
Name:	Shamim Ruff
Date:	December 17, 2022

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EXHIBIT A

REATA PHARMACEUTICALS, INC.

SIXTH AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

Each member of the Board of Directors (the “Board”) of Reata Pharmaceuticals, Inc. (“Reata”) who is not also serving as an employee of or consultant to Reata or any of its subsidiaries (each such member, an “Eligible Director”) will receive the compensation described in this Sixth Amended and Restated Non-Employee Director Compensation Policy (the “Policy”) for his or her Board service or service on a committee of the Board (“Committee”). This Policy is effective as of December 15, 2021 (the “Effective Date”) and may be amended at any time in the sole discretion of the Board or the Compensation Committee of the Board.

Annual Cash Compensation

The annual cash compensation amount set forth below is payable in equal quarterly installments, payable after each regular quarterly Board meeting, beginning with the Board meeting held on September 1, 2021 (collectively, the “Annual Cash Fees”). All Annual Cash Fees are vested upon payment.

1. Annual Board Service Retainer:

a. All Eligible Directors: $50,000

b. Lead Independent Director Service Retainer (in addition to Annual Board Service Retainer): $25,000

2. Annual Committee Member Service Retainer:

a. Member of the Audit Committee: $10,000

b. Member of the Compensation Committee: $7,500

c. Member of the Nominating and Corporate Governance Committee: $5,000

d. Member of the Regulatory Development Committee: $7,500

e. Member of the Commercial Committee: $7,500

3. Annual Committee Chair Service Retainer (in addition to Annual Committee Member Service Retainer):

a. Chairman of the Audit Committee: $25,000

b. Chairman of the Compensation Committee: $7,500

c. Chairman of the Nominating and Corporate Governance Committee: $5,000

d. Chairman of the Regulatory Development Committee: $7,500

e. Chairman of the Commercial Committee: $7,500

Beginning with the second regular Board meeting held after the 2022 annual stockholder meeting, the Annual Cash Fees shall be as follows:

1. Annual Board Service Retainer:

a. All Eligible Directors: $50,000

b. Lead Independent Director Service Retainer (in addition to Annual Board Service    Retainer): $25,000

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2. Annual Committee Member Service Retainer:

a. Member of the Audit Committee: $10,000

b. Member of the Compensation Committee: $10,000

c. Member of the Nominating and Corporate Governance Committee: $5,000

d. Member of the Regulatory Development Committee: $10,000

e. Member of the Commercial Committee: $10,000

3. Annual Committee Chair Service Retainer (in addition to Annual Committee Member Service Retainer):

a. Chairman of the Audit Committee: $25,000

b. Chairman of the Compensation Committee: $10,000

c. Chairman of the Nominating and Corporate Governance Committee: $5,000

d. Chairman of the Regulatory Development Committee: $10,000

e. Chairman of the Commercial Committee: $10,000

Equity Compensation

The equity compensation set forth below will be granted under the Reata’s Second Amended and Restated Long Term Incentive Plan (the “Plan”). All stock options granted under this Policy will be nonstatutory stock options to purchase shares of Class A common stock of Reata (“Common Stock”), with (a) an exercise price per share equal to 100% of the Fair Market Value (as defined in the Plan) of the underlying Common Stock on the date of grant, which shall be the closing price on the date of grant (or, if not a business day, the business day determined pursuant to the Plan) of a share ofCommonStock on the Nasdaq Global Market, and (b) a term often years from the date of grant. All restricted stock units granted under this Policy will be settled on the later to occur of (a) each vesting date or (b) if applicable, the date of settlement elected by the director pursuant to any applicable deferred compensation arrangement in effect and administered by Reata, in either case, in shares of Common Stock; provided, however, with respect to the foregoing clauses (a) and (b), the settlement date may be deferred pursuant to the provisions included in a Notice of Grant of Restricted Stock Units-Directors/Consultants relating to the date of delivery of shares.  The other terms and provisions of the stock options and restricted stock units, including vesting on termination of service, Disability (as defined in the form stock option agreement or form restricted stock agreement, as applicable), death and Change in Control (as defined in the Plan) will be in conformity with the Plan and the form of stock option agreement or restricted stock unit agreement, as applicable, and notice of grant previously approved by the Board or Compensation Committee of the Board, as the Plan or any such form or notice of grant may be amended from time to time; provided, however, that stock options that are vested at the time of termination of service as a director may be exercised on or before the third anniversary of such termination of service, notwithstanding the provisions of the form of stock option agreement or notice of grant to the contrary. The terms and provisions of the stock options or restricted stock units as set forth in this paragraph are referred to herein as the “Terms”.

1. Initial Grant: On the date of the Eligible Director’s initial election or appointment to the Board (or, if such date is not a market trading day, the first market trading day thereafter), the Eligible Director will automatically, and without further action by the Board or Compensation Committee of the Board, be granted, at the election of the Eligible

2

Director, either (a) a stock option to purchase a number of shares of Common Stock with a grant date Black-Scholes value of $200,000 and a number of restricted stock units with a grant date value of $200,000 or (b) a stock option to purchase a number of shares of Common Stock with a grant date Black-Scholes value of $400,000 (the “Initial Grant”).  The closing price of the Common Stock on the date of grant shall be utilized to determine the applicable value. The stock option and restricted stock units constituting each Initial Grant will vest in equal annual installments over a three-year period so that the Initial Grant will become fully vested on the third anniversary of the date of grant, subject to the Terms.

2. Annual Grant: On the date of the first regular Board meeting held after each Reata annual stockholder meeting, for each Eligible Director who continues to serve as a non-employee member of the Board (or who is first elected to the Board at such annual stockholder meeting) (an “ Annual EligibleDirector”), the Annual Eligible Director will automatically, and without further action by the Board or Compensation Committee of the Board, be granted , at the election of the Eligible Director, either (a) a stock option to purchase a number of shares of Common Stock with a grant date Black-Scholes value of $200,000 and a number of restricted stock units with a grant date value of $200,000 or (b) a stock option to purchase a number of shares of Common Stock with a grant date Black-Scholes value of $400,000 (the “Annual Grant”).  The closing price of the Common Stock on the date of grant shall be utilized to determine the applicable value. In addition, each Eligible Director who is first elected or appointed to the Board other than at a Reata annual stockholder meeting (a “Mid-YearEligibleDirector”) will automatically, and without further action by the Board or Compensation Committee of the Board, be granted an Annual Grant on the date of the Mid-Year Eligible Director’s initial election or appointment to the Board, prorated by multiplying the values of the Annual Grant by a fraction (1) the numerator of which is the number of days remaining until Reata’s next annual stockholder meeting (including both the day of the grant and the day of Reata’s next annual stockholder meeting) and (2) the denominator of which is 365 (the “ProrationFactor”) (an “InterimAnnualGrant”). Subject to the Terms, the stock options constituting the Annual Grant for an Annual Eligible Director will vest in four equal installments, the first three of which shall be three-month, sixth-month, and nine-month anniversaries of the date of grant, and the last of which shall be the date of the next annual stockholder meeting. Subject to the Terms, the restricted stock units constituting the Annual Grant for an Annual Eligible Director will vest and settle (unless otherwise elected by the Annual Eligible Director) on the date of the next annual stockholder meeting.  Subject to the Terms, the stock options constituting the Interim Annual Grant for a Mid-Year Eligible Director will vest in equal installments at the times that the stock options included in the last Annual Grant (including an annual grant prior to the Effective Date) to Annual Eligible Directors vest.  Subject to the Terms, the restricted stock units constituting the Interim Annual Grant for a Mid-Year Eligible Director will vest and settle (unless otherwise elected by the Mid-Year Eligible Director)  on the date of the next annual stockholder meeting.  

3

Election to Receive a Combination of Stock Options and Restricted Stock Units or Only Stock Options in Lieu of Cash Compensation

An Eligible Director may elect to receive a grant of a combination of stock options and restricted stock units or only stock options pursuant to the Equity Compensation provisions of this Policy in lieu of receiving future cash compensation payments, or any portion thereof, of the Annual Board Service Retainer, the Lead Independent Director Service Retainer, the Annual Committee Member Service Retainer, and/or the Annual Committee Chair Service Retainer (the “Election Grant”). This election to receive an Election Grant may be made (1) by a new Annual Eligible Director  on the date of Reata’s first regular Board meeting held after the annual stockholder meeting at which such Annual Eligible Director was elected and (2) by an existing Eligible Director  on or before December 31 of the year preceding such annual stockholder meeting, by submitting an executed election form (the “Election Form”) to Reata’s chief legal officer in the form and pursuant to procedures established by the Company.  The stock options granted pursuant to an Election Grant to an Annual Eligible Director will be granted on the day of Reata’s first regular Board meeting held after an annual stockholder meeting, will have a Black-Scholes value equal to 50% of the annual amount of the applicable Retainer unless the Annual Eligible Director elected to receive only stock options, in which case the stock options will have a Black-Scholes value equal to 100% the annual amount of the applicable Retainer, and will otherwise be subject to the Terms. The restricted stock units granted pursuant to an Election Grant to an Annual Eligible Director will be granted on the day of Reata’s first regular Board meeting held after an annual stockholder meeting, will have a value equal to 50% of the annual amount of the applicable Retainer, and will otherwise be subject to the Terms.  In addition, each Mid-Year Eligible Director may execute an Election Form on the date of such Mid-Year Eligible Director’s election or appointment to the Board, in which case, in addition to receiving a grant of stock options and restricted stock units pursuant to an Election Grant on the day of Reata’s first regular Board meeting held after an annual stockholder meeting, such Mid-Year Eligible Director will also be granted on the date of execution of the Election Form a Prorated Election Grant (herein so called). The stock options included in the Prorated Election Grant will have a Black-Sholes value equal to 50% of the annual amount of the applicable Retainer, or 100% of the annual amount of the applicable Retainer if the Mid-Year Eligible Director elected to receive only stock options, in each case, multiplied by the Proration Factor.  The restricted stock units included in the Prorated Election Grant will have a value equal to 50% of the annual amount of the applicable Retainer multiplied by the Proration Factor. The closing price of the Common Stock on the date of grant shall be utilized to determine the applicable value. The stock options and restricted stock units constituting Election Grants will vest and settle in the same manner and at the same times as set forth above under Equity Compensation-Annual Grant for grants of stock options and restricted stock units to an Annual Eligible Director or a Mid-Year Eligible Director, as applicable. Notwithstanding the foregoing, if an Annual Eligible Director elects by December 31, 2021, to receive a grant of a combination of stock options and restricted stock units or only stock options in lieu of a Regulatory Development Committee or Commercial Committee Retainer, then such Annual Eligible Director will be deemed to be a Mid-Year Election Director and receive a Prorated Election Grant with respect to such Retainer pursuant to the provisions of this section, and the date of grant of such stock options and restricted stock units shall be January 3, 2022. Any election to receive an Election Grant will be irrevocable until the third anniversary of such election. Once an Election Form has been executed and delivered to

4

Reata, no additional Election Form is required to be executed, unless (1) an Eligible Director has revoked an election to receive an Election Grant and thereafter determines to again receive an Election Grant or (2) an Eligible Director becomes entitled to receive a Retainer which the Eligible Director was not entitled to receive at the time of the execution of an Election Form. If the amount of any Retainer is changed, no additional Election Form is required to be executed if it included an election as to that type of Retainer. Notwithstanding the foregoing, all Election Forms executed prior to the Effective Date shall automatically be null and void on the date of Reata’s annual stockholder meeting held following the Effective Date. After the Effective Date, an existing Eligible Director must execute an Election Form prior to December 31 in order to make an Election Grant with respect to compensation payable to such Eligible Director after the annual stockholder meeting held in the following year.

Fractions

Stock options and restricted stock units granted hereunder shall be for a number of whole shares of Common Stock. Any fractional share of Common Stock shall be rounded down to the nearest whole share of Common Stock. Fractions of shares of Common Stock subject to a stock option or restricted stock units shall not vest on a vesting date of an Initial Grant, an Annual Grant, an Interim Annual Grant, or an Election Grant, and the shares of Common Stock that do vest on a vesting date shall be rounded down to the nearest whole share of Common Stock; provided, however, that such fractions of shares of Common Stock shall be added to the number of shares of Common Stock that vest on the final vesting date or that otherwise vest due to the vesting acceleration (with any resulting fraction of a share of Common Stock being rounded down to the nearest whole share of Common Stock).

Waiver

An Eligible Director may, at any time and from time to time, waive receipt of any or all cash or equity compensation payable to such Eligible Director pursuant to the Policy (a “Waiver”). After a Waiver, the Eligible Director may, at any time and from time to time, withdraw the Waiver and begin receiving future cash and equity compensation pursuant to the Policy. Any Waiver or withdrawal of a Waiver shall be made by providing written notice to an officer of Reata.

Equity Value Cap

The number of stock options and restricted stock units that would otherwise be granted pursuant to an Initial Grant, an Annual Grant, an Interim Annual Grant, or an Election Grant shall be reduced, equally in value between stock options and restricted stock units, including if necessary to zero, in order to comply with Section 5 of the Plan (such number of stock options and restricted stock units not granted pursuant to this sentence being referred to as the “Reduced Equity”). If two or more types of grants would otherwise be made simultaneously pursuant to the provisions of the Policy and the number of stock options and restricted stock units permitted to be granted must be reduced in order to comply with Section 5 of the Plan, then, in order to allocate the Reduced Equity to the applicable grant, an Interim Annual Grant, an Annual Grant,

5

and an Election Grant will be reduced, in that order, before an Initial Grant is reduced; and an Annual Grant will be reduced before an Election Grant is reduced.

Prior Policies

Cash payments and equity grants made pursuant to the terms and provisions of any prior version of this Policy shall be governed by the terms and provisions of such prior version of this Policy.

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EX-21.1

Exhibit 21.1

Subsidiaries of the Company

Subsidiaries	State or Jurisdiction
Reata Pharmaceuticals Holdings, LLC	United States
Reata Pharmaceuticals Global, Inc.	United States
Reata Swiss International GmbH	Switzerland
Reata UK Ltd	United Kingdom
Reata Australia Pty Limited	Australia
Reata Ireland Limited	Ireland

Reata Confidential

 

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1) Registration Statement (Form S-8 No. 333-211682) pertaining to the Reata Pharmaceuticals, Inc. Amended and Restated 2007 Long Term Incentive Plan,

(2) Registration Statement (Form S-8 No. 333-216412) pertaining to the Reata Pharmaceuticals, Inc. Amended and Restated 2007 Long Term Incentive Plan,

(3) Registration Statement (Form S-8 No. 333-223407) pertaining to the Reata Pharmaceuticals, Inc. Amended and Restated 2007 Long Term Incentive Plan,

(4) Registration Statement (Form S-8 No. 333-229954) pertaining to the Reata Pharmaceuticals, Inc. Amended and Restated 2007 Long Term Incentive Plan,

(5) Registration Statement (Form S-8 No. 333-232099) pertaining to Reata Pharmaceuticals, Inc. Second Amended and Restated Long Term Incentive Plan,

(6) Registration Statement (Form S-8 No. 333-236657) pertaining to Reata Pharmaceuticals, Inc. Second Amended and Restated Long Term Incentive Plan,

(7) Registration Statement (Form S-8 No. 333-254281) pertaining to Reata Pharmaceuticals, Inc. Second Amended and Restated Long Term Incentive Plan,

(8) Registration Statement (Form S-3 No. 333-218915) and in the related Prospectus,

(9) Registration Statement (Form S-3 No. 333-226289) and in the related Prospectus, and

(10) Registration Statement (Form S-3 No. 333-260856) and in the related Prospectus;

of our reports dated February 28, 2022, with respect to the consolidated financial statements of Reata Pharmaceuticals, Inc. and the effectiveness of internal control over financial reporting of Reata Pharmaceuticals, Inc. included in this Annual Report (Form 10-K) of Reata Pharmaceuticals, Inc. for the year ended December 31, 2021.

/s/ Ernst & Young LLP

Dallas, Texas

February 28, 2022

Reata Confidential

 

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, J. Warren Huff, certify that:

1. I have reviewed this Annual Report on Form 10-K of Reata Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 28, 2022	By:	/s/ J. Warren Huff
		J. Warren Huff
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Manmeet S. Soni, certify that:

1. I have reviewed this Annual Report on Form 10-K of Reata Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 28, 2022	By:	/s/ Manmeet S. Soni
		Manmeet S. Soni
		Chief Operating Officer, Chief Financial Officer, and President
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Reata Pharmaceuticals, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Warren Huff, as Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: February 28, 2022	By:	/s/ J. Warren Huff
		J. Warren Huff
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Reata Pharmaceuticals, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Manmeet S. Soni, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: February 28, 2022	By:	/s/ Manmeet S. Soni
		Manmeet S. Soni
		Chief Operating Officer, Chief Financial Officer, and President
		(Principal Financial Officer)

XML

Document and Entity Information - USD ($)

12 Months Ended

Dec. 31, 2021

Feb. 23, 2022

Jun. 30, 2021

Document Information [Line Items]

Document Type

10-K

Amendment Flag

false

Document Period End Date

Dec. 31, 2021

Document Fiscal Year Focus

2021

Document Fiscal Period Focus

FY

Trading Symbol

RETA

Entity Registrant Name

Reata Pharmaceuticals, Inc.

Entity Central Index Key

0001358762

Current Fiscal Year End Date

--12-31

Entity Well-known Seasoned Issuer

Yes

Entity Current Reporting Status

Yes

Entity Voluntary Filers

No

Entity Interactive Data Current

Yes

Entity Filer Category

Large Accelerated Filer

Entity Small Business

false

Entity Emerging Growth Company

false

Entity Shell Company

false

Entity Public Float

$ 3,870,110,507

Title of 12(b) Security

Class A Common Stock, Par Value $0.001 Per Share

Security Exchange Name

NASDAQ

Entity File Number

001-37785

Entity Incorporation, State or Country Code

DE

Entity Tax Identification Number

11-3651945

Entity Address, Address Line One

5320 Legacy Drive

Entity Address, City or Town

Plano

Entity Address, State or Province

TX

Entity Address, Postal Zip Code

75024

City Area Code

972

Local Phone Number

865-2219

Document Annual Report

true

Document Transition Report

false

ICFR Auditor Attestation Flag

true

Auditor Name

Ernst & Young LLP

Auditor Location

Dallas, Texas  

Auditor Firm ID

42

Documents Incorporated by Reference

Portions of the Registrant’s Definitive Proxy Statement relating to the Annual Meeting of Stockholders, scheduled to be held on June 8, 2022, are incorporated by reference into Part III of this Report.

Common Stock A

Document Information [Line Items]

Entity Common Stock Shares Outstanding

31,484,670

Common Stock B

Document Information [Line Items]

Entity Common Stock Shares Outstanding

4,919,249

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Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Assets
Cash and cash equivalents	$ 590,258	$ 818,150
Prepaid expenses and other current assets	6,217	6,960
Income tax receivable	0	22,228
Total current assets	596,475	847,338
Property and equipment, net	11,604	4,912
Operating lease right-of-use assets	126,777	5,208
Other assets	160	140
Total assets	735,016	857,598
Liabilities and stockholders’ equity
Accounts payable	13,505	4,790
Accrued direct research liabilities	14,249	14,023
Other current liabilities	21,450	19,423
Operating lease liabilities, current	3,142	2,841
Payable to collaborators	0	73,437
Deferred revenue	1,648	4,688
Total current liabilities	53,994	119,202
Other long-term liabilities		3,029
Operating lease liabilities, noncurrent	132,891	2,482
Liability related to sale of future royalties, net	362,142	315,454
Total noncurrent liabilities	495,033	320,965
Commitments and contingencies
Stockholders’ equity:
Additional paid-in capital	1,441,584	1,375,640
Accumulated deficit	(1,255,631)	(958,245)
Total stockholders’ equity	185,989	417,431
Total liabilities and stockholders’ equity	735,016	857,598
Common Stock A
Stockholders’ equity:
Common stock value	31	31
Common Stock B
Stockholders’ equity:
Common stock value	$ 5	$ 5

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
Common Stock A
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	31,478,197	31,109,154
Common stock, shares outstanding	31,478,197	31,109,154
Common Stock B
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	4,919,249	5,044,931
Common stock, shares outstanding	4,919,249	5,044,931

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Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Collaboration revenue
Collaboration revenue	$ 11,490	$ 9,019	$ 26,517
Expenses
Research and development	155,993	159,080	128,109
Reacquired license rights	0	0	124,398
General and administrative	99,002	75,128	58,298
Depreciation	1,203	1,136	932
Total expenses	256,198	235,344	311,737
Other income (expense), net	(53,128)	(43,914)	(4,942)
Loss before taxes on income	(297,836)	(270,239)	(290,162)
Benefit from (provision for) taxes on income	450	22,487	(8)
Net loss	$ (297,386)	$ (247,752)	$ (290,170)
Net loss per share—basic and diluted	$ (8.19)	$ (7.35)	$ (9.54)
Weighted-average number of common shares used in net loss per share basic and diluted	36,321,351	33,709,480	30,414,203
License and milestone
Collaboration revenue
Collaboration revenue	$ 8,040	$ 4,701	$ 25,276
Other revenue
Collaboration revenue
Collaboration revenue	$ 3,450	$ 4,318	$ 1,241

XML

Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Public Offering	Common Stock A	Common Stock B	Common Stock Common Stock A	Common Stock Common Stock A Public Offering	Common Stock Common Stock B	Additional Paid-In Capital	Additional Paid-In Capital Public Offering	Total Accumulated Deficit
Balance, value at Dec. 31, 2018	$ 15,159				$ 24		$ 6	$ 435,452		$ (420,323)
Balance, shares at Dec. 31, 2018					24,000,683		5,728,175
Compensation expense related to stock-based compensation	26,381							26,381
Exercise of options, value	$ 13,445							13,445
Exercise of options, shares	707,849						707,849
Issuance of Common Stock, value		$ 491,935				$ 3			$ 491,932
Issuance of Common Stock, shares						2,760,000
Conversion of common stock Class B to Class A, value					$ 1		$ (1)
Conversion of common stock Class B to Class A, shares					1,117,867		(1,117,867)
Other shareholder transactions	$ 107							107
Net loss	(290,170)									(290,170)
Balance, value at Dec. 31, 2019	256,857				$ 28		$ 5	967,317		(710,493)
Balance, shares at Dec. 31, 2019					27,878,550		5,318,157
Compensation expense related to stock-based compensation	57,633							57,633
Exercise of options, value	$ 17,820						$ 1	17,819
Exercise of options, shares	616,585						616,585
Issuance of Common Stock, value	$ 55,398	$ 277,475				$ 2		55,398	$ 277,473
Issuance of Common Stock, shares					340,793	2,000,000
Conversion of common stock Class B to Class A, value					$ 1		$ (1)
Conversion of common stock Class B to Class A, shares					889,811		(889,811)
Net loss	(247,752)									(247,752)
Balance, value at Dec. 31, 2020	417,431				$ 31		$ 5	1,375,640		(958,245)
Balance, shares at Dec. 31, 2020			31,109,154	5,044,931	31,109,154		5,044,931
Compensation expense related to stock-based compensation	56,806							56,806
Exercise of options, value	$ 9,138							9,138
Exercise of options, shares	234,216						234,216
Issuance of common stock upon vesting of restricted stock units, shares							9,145
Conversion of common stock Class B to Class A, shares					369,043		(369,043)
Net loss	$ (297,386)									(297,386)
Balance, value at Dec. 31, 2021	$ 185,989				$ 31		$ 5	$ 1,441,584		$ (1,255,631)
Balance, shares at Dec. 31, 2021			31,478,197	4,919,249	31,478,197		4,919,249

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Operating activities
Net loss	$ (297,386)	$ (247,752)	$ (290,170)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,203	1,136	932
Amortization of debt issuance costs and imputed interest	6,563	7,545	1,374
Non-cash interest expense on liability related to sale of future royalty	46,688	21,884	0
Stock-based compensation expense	56,806	57,633	26,381
Loss on extinguishment of debt	0	11,183	0
Gain on lease termination	0	(1,286)	0
Changes in operating assets and liabilities:
Income tax receivable and payable	22,217	(22,217)	0
Prepaid expenses, other current assets and other assets	750	222	(59)
Accounts payable	8,713	2,879	(2,114)
Accrued direct research, other current and long-term liabilities	1,346	2,090	8,140
Operating lease obligations	439	(956)	3,835
Payable to collaborators	(80,000)	(150,000)	216,862
Deferred revenue	(3,040)	(4,701)	(216,332)
Net cash used in operating activities	(235,701)	(322,340)	(251,151)
Investing activities
Purchases of property and equipment	(1,329)	(927)	(2,673)
Net cash used in investing activities	(1,329)	(927)	(2,673)
Financing activities
Proceeds from issuance of common stock, net	0	333,278	492,453
Payments on deferred offering costs	0	(405)	(71)
Payments on long-term debt	0	(167,170)	75,000
Payments on deferred issuance costs	0	0	(576)
Exercise of options	9,138	17,820	13,445
Proceeds from sale of future royalties, net	0	293,570	107
Net cash provided by financing activities	9,138	477,093	580,358
Net decrease in cash and cash equivalents	(227,892)	153,826	326,534
Cash and cash equivalents at beginning of year	818,150	664,324	337,790
Cash and cash equivalents at end of period	590,258	818,150	664,324
Supplemental disclosures
Cash paid for interest	0	8,021	8,207
Non-cash activity:
Accrued deferred offering cost	0	102	447
Right-of-use assets obtained in exchange for lease obligations	124,479	4,756	9,068
Purchases of equipment in accounts payable, accrued direct research, other current, and long-term liabilities	295	29	302
Acquisition of property and equipment through tenant improvement allowance	$ 8,702	$ 2,402	$ 0

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Description of Business

12 Months Ended

Dec. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Business

1. Description of Business

Reata Pharmaceuticals, Inc.’s (Reata, the Company, we, us, or our) mission is to identify, develop, and commercialize innovative therapies that change patients’ lives for the better.  The Company focuses on small-molecule therapeutics with novel mechanisms of action for the treatment of severe, life-threatening diseases with few or no approved therapies.  The Company’s lead programs are omaveloxolone in a rare neurological disease called Friedreich’s ataxia (FA) and bardoxolone methyl (bardoxolone) in rare forms of chronic kidney disease (CKD).  Both of the Company’s lead product candidates activate the transcription factor Nrf2 to normalize mitochondrial function, restore redox balance, and resolve inflammation.  Because mitochondrial dysfunction, oxidative stress, and inflammation are features of many diseases, the Company believes omaveloxolone, bardoxolone, and our next-generation Nrf2 activators have many potential clinical applications.  Reata possesses exclusive, worldwide rights to develop, manufacture, and commercialize omaveloxolone, bardoxolone, and our next-generation Nrf2 activators, excluding certain Asian markets for bardoxolone in certain indications, which are licensed to Kyowa Kirin Co., Ltd. (Kyowa Kirin).  In addition, we are developing RTA 901, the lead product candidate from our Hsp90 modulator program, in neurological indications.  We are the exclusive licensee of RTA 901 and have worldwide commercial rights.

The Company’s consolidated financial statements include the accounts of all majority-owned subsidiaries.  Accordingly, the Company’s share of net earnings and losses from these subsidiaries is included in the consolidated statements of operations.  Intercompany profits, transactions, and balances have been eliminated in consolidation.

Prior period reclassifications

Certain prior period amounts in the consolidated financial statements have been reclassified to conform to the current period presentation. Specifically, Operating lease right-of-use assets, Operating lease liabilities, current and Operating lease liabilities, noncurrent have been reclassed out of Other assets, Other current liabilities and Other long-term liabilities in prior periods to conform with current period presentation on the consolidated balance sheets.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Risks and Uncertainties

The Company has experienced losses and negative operating cash flows for many years since inception and has no marketed drug or other products.  The Company’s ability to generate future revenue depends upon the results of its development programs, whose success cannot be guaranteed.  The Company may need to raise additional equity capital in the future in order to fund its operations.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all investments in highly liquid financial instruments with a maturity of three months or less when purchased to be cash equivalents.  Investments qualifying as cash equivalents primarily consist of money market funds.  The carrying amount of cash equivalents approximates fair value.  Investment income consists primarily of interest income on our cash and cash equivalents, which include money market funds.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation.  Depreciation is computed using the straight-line method over the following estimated useful lives:

Computer equipment	2-5 years
Software	3 years
Laboratory equipment	5-7 years
Office furniture	5 years
Office equipment	5 years
Manufacturing equipment	10 years

Leasehold improvements are amortized on the straight-line method over the shorter of the lease term or the estimated useful life of the equipment or improvement.  Such amortization is recorded as depreciation expenses in the consolidated statements of operations.

Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment.  Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered.  Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends, and product development cycles.  If impairments are identified, assets are written down to their estimated fair value.  The Company has not recognized any impairment charges in 2021, 2020, or 2019.

Liability Related to Sale of Future Royalties

On June 24, 2020, the Company closed on the Development and Commercialization Funding Agreement with an affiliate of Blackstone Life Sciences, LLC (BXLS), which provided funding for the development and commercialization of bardoxolone for the treatment of CKD caused by Alport syndrome, autosomal dominant polycystic kidney disease (ADPKD), and certain other rare CKD indications in return for future royalties (the Development Agreement).  The Company accounted for the Development Agreement as a sale of future revenues resulting in a debt classification, primarily because the Company has significant continuing involvement in generating the future revenue on which the royalties are based.  The debt will be amortized under the effective interest rate method and, accordingly, the Company is recognizing non-cash interest expense over the estimated term of the Development Agreement.  The liability related to sale of future royalties, and the debt amortization, are based on the Company’s current estimate of future royalties expected to be paid over the estimated term of the Development Agreement.  The Company will periodically assess the expected royalty payments and, if materially different than its previous estimate, will prospectively adjust and recognize the related non-cash interest expense.  The transaction costs associated with the liability will be amortized to non-cash interest expense over the estimated term of the Development Agreement.  For a complete discussion of accounting for Development Agreement see, Note 6, Liability Related to Sale of Future Royalties of Notes to Consolidated Financial Statements contained in this Annual Report on Form 10-K.

Fair Value Measurements

The Company categorizes its financial instruments measured at fair value into a three-level fair value hierarchy that prioritizes the inputs used in determining the fair value of the asset or liability.  The three levels of the fair value hierarchy are as follows:

• Level 1 - Financial instruments that have values based on unadjusted quoted prices for identical assets or liabilities in an active market which the Company has the ability to access at the measurement date.

• Level 2 - Financial instruments that have values based on quoted market prices in markets where trading occurs infrequently or that have values based on quoted prices of instruments with similar attributes in active markets.

• Level 3 - Financial instruments that have values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.  These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset.

Revenue Recognition

The Company’s revenue to date has been generated primarily from licensing fees received under its collaborative licensing agreements with AbbVie Inc. (AbbVie) and Kyowa Kirin and reimbursements for expenses from Kyowa Kirin.  The terms of the agreements include non-refundable upfront fees, funding of research and development activities, payments based upon achievement of milestones, and royalties on net product sales.

Under Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.  To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the promised goods or services in the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the entity satisfies a performance obligation.

At contract inception, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct.  The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied.

Licenses of intellectual property: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer, and the customer can use and benefit from the license.  For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees.  The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone payments: At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method.  If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission by the Company) is included in the transaction price, which is then allocated to each performance obligation.  Milestone payments that are not within the control of the Company, such as approvals from regulators, are not considered probable of being achieved until those approvals are received.  At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and, if necessary, adjusts its estimate of the overall transaction price.  Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration, and other revenues and earnings in the period of adjustment and in future periods through the end of the performance obligation period.

Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).  To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements.

Manufacturing Supply Services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered options.  The Company assesses if these options provide a material right to the licensee and, if so, they are accounted for as separate performance obligations.  If the Company is entitled to additional payments when the

customer exercises these options, any additional payments are recorded when the customer obtains control of the goods, which is upon delivery.

For a complete discussion of accounting for collaborative licensing agreements, see Note 3, Collaboration Agreements of Notes of Consolidated Financial Statements contained in this Annual Report on Form 10-K.

Acquired License Rights

All acquired license and sublicense costs that are in-process research and development, which were acquired directly in a transaction other than a business combination that does not have an alternative future use, are expensed as incurred.  For a complete discussion of accounting for reacquisition of license rights in 2019, see Note 3, Collaboration Agreements.

Research and Development Costs

All research and development costs are expensed as incurred, including costs for drug supplies used in research and development or clinical studies, property and equipment acquired specifically for a finite research and development project, and nonrefundable deposits incurred at the initiation of research and development activities.  Research and development costs consist principally of costs related to clinical studies managed directly by the Company and through contract research organizations (CROs), manufacture of clinical drug products for clinical studies, preclinical study costs, discovery research expenses, facilities costs, salaries, and related expenses.

In December 2017, the Company and Kyowa Kirin entered into the Third Supplement to the Kyowa Kirin Agreement, which allows the Company to begin a portion of the registrational CARDINAL trial in Japan, for which Kyowa Kirin has reimbursed costs incurred of $3.0 million as of the end of December 31, 2021.  The Company deemed that this was not a material modification to the Kyowa Kirin Agreement because no payment terms or deliverables were changed.  The Company’s expenses were reduced by $0.5 million for Kyowa Kirin’s share of the study costs for twelve months ended December 31, 2019. No such credits were recorded in the twelve months ended December 31, 2020, or 2021, respectively.

In addition, we have also entered into cost sharing agreement for the FALCON trial and have recorded $1.4 million in expenses during the year ended December 31, 2021.  No such costs were incurred in the twelve months ended December 31, 2019, or 2020, respectively.

The Company bases its expense accruals related to clinical trials on its estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical trials on its behalf.  The financial terms of these agreements vary from contract to contract and may result in uneven payment flows.  Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones.  In accruing costs, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period.  Included within total accrued direct research liabilities is $11.8 million, which was accrued but unbilled, as of December 31, 2021.

To date, the Company has not experienced significant changes in its estimates of accrued research and development expenses after a reporting period.  However, due to the nature of estimates, the Company cannot assure that it will not make changes to its estimates in the future as the Company becomes aware of additional information about the status or conduct of its clinical trials and other research activities.

Patents

Costs associated with filing, prosecuting, enforcing, and maintaining patent rights are expensed as incurred and are classified as general and administrative expenses.

Stock-Based Compensation

The Company accounts for its stock-based compensation in accordance with ASC 718 Compensation—Stock Compensation (ASC 718).  ASC 718 requires companies to measure and recognize compensation expense for all stock option and RSU awards based on the estimated fair value of the award on the grant date.  The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards.  The fair value is recognized as expense, over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis when the only condition to vesting is continued service.  If vesting is subject to a market or performance condition, recognition is based on the derived service period of the award.  Expense for awards with performance conditions is estimated and adjusted on a quarterly basis based upon the assessment of the probability that the performance condition will be met.  Use of the Black-Scholes option-pricing model requires management to apply judgment under highly subjective assumptions.  These assumptions include:

• Expected term—The expected term represents the period that the stock-based awards are expected to be outstanding and is based on the average period the stock options are expected to be outstanding and was based on our historical information of the options exercise patterns and post-vesting termination behavior.

• Expected volatility—Since the Company does not have sufficient trading history to estimate the volatility of its common stock, the expected volatility was estimated based on its own historical volatility since its initial public offering (IPO) and the average volatility for comparable publicly traded biopharmaceutical companies.  When selecting comparable publicly traded biopharmaceutical companies on which the Company based its expected stock price volatility, the Company selected companies with comparable characteristics to the Company, including enterprise value, risk profiles, position within the industry, and historical share price information sufficient to meet the expected life of the stock-based awards.

• Risk-free interest rate—The risk-free interest rate is based on the United States Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option.

• Expected dividend—The Company has no plans to pay dividends on its common stock.  Therefore, the company used an expected dividend yield of zero.

In addition to the assumptions used in the Black-Scholes option-pricing model, the Company will continue to use judgment in evaluating the expected volatility and expected terms utilized for its stock-based compensation calculations on a prospective basis.  The Company accounts for forfeitures of share-based awards when they occur.

Stock option and RSU unit awards have been granted to nonemployees, in connection with research and consulting services provided to the Company, and to employees, under its Second Amended and Restated Long Term Incentive Plan (the LTIP Plan).  Equity awards generally vest over terms of four or five years.  For employees and non-employees, stock-based compensation expense is recorded ratably through the vesting period for each stock option or tranche of RSU award.  For performance-based awards, the Company evaluates the probability of the number of shares that are expected to vest and adjusts compensation expense to reflect the number of shares expected to vest and the cumulative vesting period met to date.

Income Taxes

The Company accounts for income taxes and the related accounts under the liability method.  Deferred tax assets and liabilities are determined based on differences between the financial statement and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.  The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, Income Taxes.  The Company recognizes a tax benefit for uncertain tax positions if the Company believes it is more likely than not that the position will be upheld on audit based solely on the technical merits of the tax position.  The Company evaluates uncertain tax positions after consideration of all available information.  As of December 31, 2021, the interest accrued related to provision uncertain tax positions was immaterial.  

Debt Issuance Costs

The Company defers costs related to debt issuance and amortizes these costs to interest expense over the term of the debt, using the effective interest method.  Debt issuance costs are presented in the balance sheet as a deduction from the carrying amount of the debt liability.

Leases

At the inception of an arrangement, the Company determines if an arrangement is, or contains, a lease based on the unique facts and circumstances present in that arrangement.  Lease assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized at the lease commencement date based on the present value of lease payments over the lease term calculated using its incremental borrowing rate based on the information available at commencement unless the implicit rate is readily determinable.  Lease assets also include upfront lease payments, lease incentives paid, and direct costs incurred and exclude lease incentives received.  The lease term used to calculate the lease assets and related lease liabilities includes the options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options.  Lease expense for operating leases is recognized on a straight-line basis over the expected lease term as an operating expense while the expense for finance leases is recognized as depreciation expense over the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise.

The Company accounts for each lease component separately from the nonlease components.  The depreciable life of lease assets and leasehold improvements is limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of its exercise.

Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expenses for these short-term leases and operating leases are recognized on a straight-line basis over the lease term.

Key assumptions and judgments included in the determination of the lease liability include the discount rate applied to the present value of the future lease payments, and the exercise of renewal options. Our leases do not provide information about the rate implicit in the lease; therefore, we utilize an incremental borrowing rate to calculate the present value of our future lease obligations. The incremental borrowing rate represents the rate of interest we would have to pay on a collateralized borrowing, for an amount equal to the lease payments, over a similar term and in a similar economic environment.

Net Income (Loss) per Share

Basic and diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents.  The Company’s potentially dilutive shares, which include unvested RSUs and options to purchase common stock, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.  For periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances from non-owner sources and includes all components of net income (loss) and other comprehensive income (loss).  The other comprehensive income (loss) for the years ended December 31, 2021, 2020, and 2019 was immaterial.

Recent Accounting Pronouncements Adopted

In December 2019, the Financial Accounting Standards Board (FASB) issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes.  The FASB issued this update as part of its Simplification Initiative to improve areas of U.S. GAAP and reduce cost and complexity while maintaining usefulness.  The main provision that impacts the Company is the removal of the exception to the incremental approach of intra-period tax allocation when there is a loss from continuing operations and income or gain from other items.  ASU 2019-12 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2020.  The Company adopted this standard on January 1, 2021, and its adoption did not have material impact to the Company’s consolidated financial statements and related disclosure.

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Collaboration Agreements

12 Months Ended

Dec. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Collaboration Agreements

3. Collaboration Agreements

Subsequent to the 2019 reacquisition of certain rights originally licensed to AbbVie (see “AbbVie” below), the Company’s collaboration revenue and deferred revenue have been generated primarily from licensing fees and reimbursements for expenses received under our exclusive license with Kyowa Kirin Agreement (as defined below).

Kyowa Kirin

In December 2009, the Company entered into an exclusive license with Kyowa Kirin to develop and commercialize bardoxolone in the licensed territory (the Kyowa Kirin Agreement).  The terms of the agreement include payment to the Company of a nonrefundable, up-front license fee of $35.0 million and additional development and commercial milestone payments.  As of December 31, 2021, the Company has received $50.0 million related to regulatory development milestone payments from Kyowa Kirin and has the potential in the future to achieve another $47.0 million from regulatory milestones and $140.0 million from commercial milestones.  The Company also has the potential to achieve tiered royalties ranging from the low teens to the low 20 percent range, depending on the country of sale and the amount of annual net sales, on net sales by Kyowa Kirin in the licensed territory.  The Company is participating on a joint steering committee with Kyowa Kirin to oversee the development and commercialization activities related to bardoxolone.  Any future milestones and royalties received are subject to mid to lower single digit percent declining tiered commissions to certain consultants as compensation for negotiations of the Kyowa Kirin Agreement.  

The up-front payment and regulatory milestones are accounted for as a single unit of accounting.  The Company regularly evaluates its remaining performance obligation under the Kyowa Kirin Agreement.  Accordingly, revenue may fluctuate from period to period due to changes to its estimated performance obligation period and variable considerations.  The Company began recognizing revenue related to the up-front payment upon execution of the Kyowa Kirin Agreement.  

In March 2021, the Company’s performance obligation period under the Kyowa Kirin Agreement was extended to June 2022, which decreased quarterly revenue recognition by approximately $0.4 million prospectively.

On July 27, 2021, Kyowa Kirin, submitted an New Drug Application (NDA) in Japan to the Ministry of Health, Labour and Welfare (MHLW) for bardoxolone for improvement of renal function in patients with Alport syndrome.  Based on this submission, the Company earned a $5.0 million milestone payment, variable consideration previously considered constrained, under the Kyowa Kirin Agreement.  As a result, the Company recorded $4.7 million in collaboration revenue, a cumulative catch-up for the portion of this milestone that was satisfied in prior periods, and $0.3 million in deferred revenue that will be recognized over the remaining performance obligation period, ending in June 2022.

AbbVie

In September 2010, the Company entered into a license agreement with AbbVie (the AbbVie License Agreement) for an exclusive license to develop and commercialize bardoxolone in the Licensee Territory (as defined in the AbbVie License Agreement).

In December 2011, the Company entered into a collaboration agreement with AbbVie (the Collaboration Agreement) to jointly research, develop, and commercialize the Company’s portfolio of second and later generation oral Nrf2 activators.

In October 2019, the Company and AbbVie entered into an Amended and Restated License Agreement (the Reacquisition Agreement) pursuant to which the Company reacquired the development, manufacturing, and commercialization rights concerning its proprietary Nrf2 activator product platform originally licensed to AbbVie in the AbbVie License Agreement and the Collaboration Agreement.  In exchange for such rights, the Company agreed to pay AbbVie $330.0 million, all of which has subsequently been paid.  Additionally, the Company will pay AbbVie an escalating, low single-digit royalty on worldwide net sales, on a product-by-product basis, of omaveloxolone and certain next-generation Nrf2 activators.  The execution of the Reacquisition Agreement ended our performance obligations under the Collaboration Agreement.

The Company recognized interest expense related to the Reacquisition Agreement of approximately $6.6 million, $6.5 million and $1.4 million during twelve months ended December 31, 2021, 2020 and 2019, respectively.  As of December 31, 2021, the Company has fully satisfied its payable to AbbVie.

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Other Income (Expense), Net

12 Months Ended

Dec. 31, 2021

Other Income And Expenses [Abstract]

Other Income (Expense), Net

4. Other Income (Expense), Net

		Years Ended December 31
		2021			2020			2019
	(in thousands)
Other income (expense), net
Investment income		$	177		$	2,769		$	6,248
Interest expense			(6,563	)		(14,895	)		(11,197	)
Non-cash interest expense on liability    related to sale of future royalty			(46,688	)		(21,884	)		—
Other income (expense)			(54	)		1,279			7
Loss on extinguishment of debt			—			(11,183	)		—
Total other income (expense), net		$	(53,128	)	$	(43,914	)	$	(4,942	)

Investment Income

Interest income consists primarily of interest generated from our cash and cash equivalents.

Interest Expense

Interest expense consists primarily of the imputed interest from amounts due to AbbVie under the Reacquisition Agreement and interest on its Amended Restated Loan Agreement (Term Loans) which were paid in full in 2020.

Non-Cash Interest Expense on Liability Related to Sale of Future Royalties

Non-cash interest expense consists of recognition of interest expense based on the Company’s current estimate of future royalties expected to be paid over the estimated term of the Development Agreement.

Other income (expense)

Other income (expense) consists primarily of gains and losses on foreign currency exchange, sales of assets, extinguishment of debt, and lease termination.

Other income of $1.3 million recorded in the twelve months ended December 31, 2020, related to a gain on the Company’s lease termination due to the bankruptcy filing of its lessor.

Loss on Extinguishment of Debt

In June 2020, the Company paid off the Term Loans and recorded a loss on the extinguishment of debt of $11.2 million, which consisted primarily of prepayment fees, exit fees and unamortized debt issuance costs.

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Term Loan

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Term Loan

5. Term Loan

On October 9, 2019, the Company entered into the First Amendment to the Amended and Restated Loan and Security Agreement (the Amended Restated Loan Agreement), under which it borrowed $155.0 million as of December 20, 2019.  On June 24, 2020, the Company paid off the total outstanding balance of the term loans under the Term Loans prior to the maturity date.  The payoff consisted of (i) the outstanding principal balance of $155.0 million, (ii) exit fees of $6.7 million, which were partially accrued up to the date of repayment, (iii) prepayment fees of $5.4 million, and (iv) accrued and unpaid interest of $1.0 million.  At the time of payoff, all liabilities and obligations under the Amended Restated Loan Agreement were terminated.  The Company recognized approximately $8.4 million and $8.3 million in interest expense for the twelve months ended December 31, 2019, and 2020, respectively.  No interest expense was recognized in 2021 as the term loan was paid off in June 2020.

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Liability Related to Sale of Future Royalties

12 Months Ended

Dec. 31, 2021

Liability Related To Sale Of Future Royalties [Abstract]

Liability Related to Sale of Future Royalties

6. Liability Related to Sale of Future Royalties

On June 24, 2020, the Company closed on the Development Agreement.  The Development Agreement included a $300.0 million payment by an affiliate of BXLS in return for various percentage royalty payments on worldwide net sales of bardoxolone, once approved in the United States or certain specified European countries, by Reata and its licensees, other than Kyowa Kirin.  The royalty percentage will initially be in the mid-single digits and, in future years, can vary between higher-mid single digit percentages to low-single digit percentages depending on various milestones, including indication approval dates, cumulative royalty payments, and cumulative net sales.  Pursuant to the Development Agreement, we have granted BXLS a security interest in substantially all of our assets. After a bardoxolone product approval has been obtained by the Company, the Company is obligated to make certain minimum cumulative payment amounts in 2025 through 2033, but only until BXLS has achieved certain internal rate of return target.

In addition, concurrent with the Development Agreement, the Company entered into a common stock purchase agreement (the Purchase Agreement) with affiliates of BXLS to sell an aggregate of 340,793 shares of the Company’s Class A common stock at $146.72 per share for a total of $50.0 million.

The Company concluded that there were two units of accounting for the consideration received, comprised of the liability related to the sale of future royalties and the common shares.  The Company allocated the $300.0 million from the Development Agreement and $50.0 million from the Purchase Agreement between the two units of accounting on a relative fair value basis at the time of the transaction.  The Company allocated $294.5 million, which includes $0.8 million in transaction costs incurred, in transaction consideration to the liability, and $55.5 million to the common shares.  The Company determined the fair value of the common shares based on the closing stock price on the June 24, 2020, the closing date of the Development Agreement.  The effective interest rate under the Development Agreement, including transaction costs, is 13.8%.

The following table shows the activity within the liability related to sale of future royalties for the twelve months ended December 31, 2021:

	Liability Related to Sale of Future Royalties
	(in thousands)
Balance at December 31, 2020	$	316,305
Non-cash interest expense recognized		46,623
Balance at December 31, 2021		362,928
Less: Unamortized transaction cost		(786	)
Carrying value at December 31, 2021	$	362,142

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Property and Equipment

12 Months Ended

Dec. 31, 2021

Property Plant And Equipment [Abstract]

Property and Equipment

7. Property and Equipment

Property and equipment consisted of the following as of December 31:

	2021			2020
	(in thousands)
Computer equipment and software	$	3,748		$	3,306
Laboratory equipment		6,389			5,404
Office furniture		1,990			1,990
Office and other equipment		399			412
Leasehold improvements		14,127			7,829
Manufacturing equipment		213			163
		26,866			19,104
Less: accumulated depreciation		(15,262	)		(14,192	)
Property and equipment, net	$	11,604		$	4,912

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Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

8. Leases

The Company’s headquarters are located in Plano, Texas, where it leases approximately 122,000 square feet of office space, with lease terms extending through August 31, 2022.  The Company leases additional office and laboratory space of approximately 34,890 square feet located in Irving, Texas, with lease terms extending through October 31, 2022 with an option to renew up to six months. On February 4, 2022, the Company extended this lease agreement. See Note 17, Subsequent Events.

The Company has an additional lease of a single-tenant, build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas with an initial lease term of 16 years.  The Company entered into the lease agreement on October 15, 2019 (the 2019 Lease Agreement), and at the Company’s option, it may renew the lease for two consecutive five-year renewal periods or one ten-year renewal period.  The initial annual base rent will be determined based on the project cost, subject to an initial annual cap of approximately $13.3 million.  Beginning in the third lease year, the base rent will increase 1.95% per annum each year.  In addition to the annual base rent, the Company will pay for taxes, insurance, utilities, maintenance and repairs, and building management fees, all of which are variable in nature and were not included in the measurement of the lease liability.  Under the First Amendment to the Lease Agreement executed in May 2020, the landlord will fund the Company’s leasehold improvements up to $31.3 million, of which the Company has recorded approximately $8.7 million, as of December 15, 2021.

On December 15, 2021, the Company obtained control of the space, and, accordingly, we recorded related right-of-use assets and the lease liabilities during the fourth quarter of 2021.  The Company recorded the liability associated with the 2019 Lease Agreement at the present value of the lease payments not yet paid, using the discount rate as of the commencement date. As the discount rate implicit in the 2019 Lease Agreement was not readily determinable, the Company utilized its incremental borrowing rate.  The renewals are not assumed in the determination of the lease term, since they are not deemed to be reasonably assured at the inception of the lease.  We recorded $124.5 million as a right-of-use asset, which represented a lease liability of $133.2 million, net of $8.7 million of lease incentives recognized as of December 31, 2021.

For the year ended December 31, 2021, the Company paid $3.2 million for amounts included in the measurement of lease liabilities.  For the years ended December 31, 2021, 2020, and 2019, the Company recorded total rent expense of $3.6 million, $3.4 million, and $3.4 million, respectively.  

Supplemental balance sheet and other information related to the Company’s operating leases is as follows:

	As of December 31
	2021			2020
Weighted-average remaining lease term (in years)		15.7			1.8
Weighted-average discount rate		6.6	%		8.2	%

Maturities of lease liabilities by fiscal year for the Company’s operating leases:

	As of December 31, 2021
	(in thousands)
2022	$	9,798
2023 (1)		6,672
2024 (1)		6,802
2025		13,737
Thereafter		196,049
Total lease payments (1)		233,058
Less: Imputed interest		(97,025	)
Present value of lease liabilities	$	136,033

(1) Above table assumes one year rent abatement is applied beginning in June 2023 following United States Food and Drug Administration (FDA) approval of omaveloxolone.

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Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act).  The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the U.S. economy and to provide assistance to individuals, families, and businesses affected by the coronavirus disease (COVID-19).  Accordingly, under the provisions of the CARES Act, in March 2020, the Company recognized tax benefits and receivables totaling $22.2 million associated with the ability to carryback an applicable prior year’s net operating losses to a preceding year, which had previously been fully reserved by its valuation allowance.  During the second quarter of 2021, the Company received a total of $22.9 million from the IRS, comprising $22.2 million of the income tax receivable plus $0.7 million in interest.

The following table reconciles the Company’s effective income tax rate from continuing operations to the federal statutory tax rate of 21%:   

	2021			2020			2019
U.S. federal income taxes		21	%		21	%		21	%
Federal and state tax credits		5	%		12			8
Stock-based compensation		(0	)%		4			5
NOL carryback rate differential		—	%		1			—
Foreign rate differential		(3	)%		(2	)		—
Change in valuation allowance		(23	)%		(28	)		(34	)
Recorded federal income tax benefit		—	%		8	%		—	%

Deferred tax assets and liabilities reflect the net effects of net operating loss and tax credit carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  Significant components of the Company’s net deferred tax assets as of December 31 are as follows (in thousands):  

	2021			2020
Deferred tax assets:
Federal and state tax credits	$	102,590		$	87,056
Net operating loss		101,463			68,936
Accrued royalties		79,458			66,389
Intellectual property		60,753			62,838
Lease Liability		29,847			1,626
Stock-based compensation		23,677			15,158
Deferred revenue		362			987
Other		1,422			903
Deferred tax assets before valuation allowance		399,572			303,893
Less: Valuation allowance		(369,215	)		(300,888	)
Net deferred income tax assets		30,357			3,005
Deferred tax liabilities:
Deferred purchase price		—			(1,127	)
Right-of-use assets		(27,817	)		(1,096	)
Other		(2,424	)		(659	)
Net deferred tax assets	$	116		$	123

Deferred tax assets are regularly reviewed for recoverability by jurisdiction and valuation allowances are established based on historical and projected future taxable losses and the expected timing of the reversals of existing temporary differences.  For the majority of its deferred tax assets, the Company cannot currently conclude that it is more likely than not that they will be utilized.  Therefore, the Company has recorded valuation allowances against these deferred tax assets for 2021.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income (including reversals of deferred tax liabilities) during the periods in which those temporary differences will become deductible.  The valuation allowance increased by $68.3 million and $74.6 million in 2021 and 2020, respectively.  

As of December 31, 2021, the Company had United States federal accumulated net operating losses of $350.6 million of which $0.4 million are subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986, as amended (Section 382).  The Company has United States federal accumulated net operating losses of $59.6 million expiring between fiscal years 2023 and 2037, of which $59.2 million begin expiring in 2037.  Under the Tax Cuts and Jobs Act of 2017 (the 2017 Tax Act), the remaining $291.0 million will be carried forward indefinitely but is limited to 80% of our taxable income.  As of December 31, 2021, the Company had net operating losses in Switzerland of $227.6 million expiring in 2028.  

As of December 31, 2021, the Company has federal orphan drug tax credit, federal research and development tax credit, and state research and development tax credit carryforwards of $76.9 million, $19.3 million, and $6.3 million, respectively, with federal orphan drug and federal research and development tax credits expiring between years 2024 and 2041, of which $0.1 million expires in 2024 and the remainder begins expiring in 2030.

The Company's federal income tax returns for 2013, and 2018 through 2020 remain open to examination by the IRS.  

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Patents

12 Months Ended

Dec. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Patents

10. Patents

Business intellectual property protection is critical to the Company’s ability to successfully commercialize its product innovations.  The potential for litigation regarding the Company’s intellectual property rights always exists and may be initiated by third parties attempting to abridge the Company’s rights, as well as by the Company in protecting its rights.  There were no patent matters outstanding at December 31, 2021, 2020, or 2019.  

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Licenses

12 Months Ended

Dec. 31, 2021

License Agreements [Abstract]

Licenses

11. Licenses

The proprietary rights and technical information covered by various patent and patent applications, which are discussed in more detail below, have been licensed by the Company from third parties, including stockholders.  These licenses will continue for the life of the respective patent or until terminated by either party.  Certain agreements call for the payment of royalties on product sales over the life of the patents.  The term of all agreements is through the useful lives of the licensed patents or for a period of 15 to 20 years for technology rights, for which there are no applicable patent rights.

Bardoxolone and Nrf2 Activators

In July 2004, the Company entered into an exclusive technology and patent license agreement (the 2004 CDDO License Agreement) with two academic institutions for certain patents and patent applications, known as the CDDO Patents.  The Company has the right to sublicense these patents.  In the event of a sublicense, the terms of the contract require the Company to pay the licensors sublicense fees based on a percentage of total compensation received that varies depending on the phase of development of a drug candidate as of the time of the sublicense.  The Company agreed to pay a royalty on net sales of any products developed as a result of the license, an annual license fee, and various milestone fees, and issued shares of its common stock as consideration for the license.

In July 2012, the Company amended the 2004 CDDO License Agreement, which provides, among other terms, that the Company will pay to the licensors a low single-digit royalty on net sales of certain Nrf2 activator compounds, including omaveloxolone, that are claimed in certain patents and patent applications that are wholly owned by or licensed to the Company.  In 2021, the Company paid a development milestone and sublicense payments of $0.6 million under the agreement.

In August 2021, the Company amended the 2004 CDDO License Agreement. This amendment, among other terms, provides consent to an internal restructuring by the Company of certain of its intellectual property rights, facilitates the potential monetization by the Trustees of Dartmouth College (Dartmouth) of their rights to royalties under the license, clarifies the applicability of certain running royalty payment obligations with respect to certain compounds, and specifies the dispute resolution procedure regarding a dispute between the Company and Licensors as to whether the Company is obligated under the 2012 amendment to the 2004 CDDO License Agreement to pay the licensors a low single-digit royalty on sales of products containing bardoxolone.

In January 2009, the Company filed a patent application claiming the use of bardoxolone and related compounds in treating CKD, endothelial dysfunction, cardiovascular disease (CVD), and related disorders.  Several of the original inventors of these compounds at an academic institution were named as co-inventors on this application, along with several company employees.  Consequently, the Company and Dartmouth are co-owners of this patent application.  In December 2009, the Company entered into an agreement with Dartmouth that provides the Company with an exclusive worldwide license to the academic institution’s rights in these applications and any resulting patents (the 2009 License Agreement).  The Company agreed to pay a limited super-royalty on product sales that occur during the effective term of the original patents, a royalty on product sales that occur after the effective term of the original patents, a sublicense fee, an annual license fee, and various milestone fees.  In 2021, the Company paid a development milestone and sublicense payments of $0.4 million under the agreement.

In August 2021, the Company amended the 2009 License Agreement.  These amendments, among other terms, provides consent to an internal restructuring by the Company of certain of its intellectual property rights, facilitates

the potential monetization by Dartmouth of its rights to royalties under the 2009 License Agreement, clarifies that there is no minimum royalty provision, and adds provisions regarding the defense of certain patent rights.

Other Technologies

The Company has an exclusive technology and patent license agreement with the University of Kansas and the University of Kansas Medical Center (the University of Kansas) for certain patents and patent applications related to small molecule modulators of heat shock proteins, including RTA 901.  The Company has the right to sublicense this patent.  In the event of a sublicense, the terms of the contract require the Company to pay the licensors sublicense fees based on a percentage of total compensation received that varies depending on the phase of development of a drug candidate as of the time of the sublicense.  The Company paid non-refundable license issue fees and agreed to pay royalties on net sales of any products developed as a result of the license, annual license fees, various milestone fees, including reimbursement of sunk-in patent expenses, and fees for sponsored research performed by the University of Kansas as consideration for the license.

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Convertible Preferred Stock

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Convertible Preferred Stock

12. Convertible Preferred Stock

Under our Thirteenth Amended and Restated Certificate of Incorporation, the Company has 100,000,000 undesignated shares of convertible preferred stock.  As of December 31, 2021 and 2020, there were no shares of convertible preferred stock issued and outstanding.

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

13. Stock-Based Compensation

The LTIP Plan provides for awards of RSUs, nonstatutory stock options, incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the Code), and other incentive awards and rights to purchase shares of the Company’s common stock.  As of December 31, 2021, a total of 2,836,302 shares of common stock are reserved for future grant under the LTIP Plan.  As of December 31, 2021, 809,145 RSUs and stock options to purchase 4,743,180 shares have been granted and are outstanding under the LTIP Plan.

The Company recognizes stock-based compensation expense for awards with service-based vesting conditions as an expense using the straight-line method. In the case of performance-based awards, compensation expense is recognized for awards when achievement of the underlying performance-based targets become probable, which have typically been in the same period as when the targets are achieved.

The following table summarizes time-based and performance-based stock compensation expense reflected in the consolidated statements of operations:

	Years Ended December 31
	2021		2020		2019
	(in thousands)
Research and development	$	23,566	$	28,114	$	8,692
General and administrative		33,240		29,519		17,689
Total stock compensation expense	$	56,806	$	57,633	$	26,381

Restricted Stock Units

RSUs, including service-based and performance-based awards, were granted under the LTIP Plan. The fair value of these RSUs is equal to the closing price of the Company’s common stock at the date of grant multiplied by the number of shares subject to the RSU awards with forfeitures accounted for as they occur.  The vesting is subject to the satisfaction of service requirements or the satisfaction of achieving certain performance targets.

The following table summarizes RSUs as of December 31, 2021, and changes during the year ended December 31, 2021 under the LTIP Plan:

	Number of RSUs			Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2021		108,551		$	115.54
Granted		758,246			64.65
Vested		(9,145	)		164.39
Forfeited		(48,507	)		122.40
Outstanding at December 31, 2021		809,145		$	66.91

As of December 31, 2021, total unrecognized compensation expense related to service-based RSU and performance-based RSU awards that were deemed probable of vesting was approximately $36.6 million which is expected to be recognized over a weighted average of 3.1 years, which excludes 134,000 shares of unvested performance-based RSUs that were deemed not probable of vesting totaling unrecognized stock-based compensation expense of $13.9 million.

Stock Options

Stock options, including service-based and performance-based awards, were granted under the LTIP Plan.  The Company estimates stock awards fair value on the date of grant using the Black-Scholes valuation, with the vesting being subject to service requirements' satisfaction or achieving certain performance targets.  The Company accounts for forfeitures when they occur.

The following table summarizes stock option activity as of December 31, 2021, and changes during the year ended December 31, 2021, under the LTIP Plan and standalone option agreements:

	Number of Options			Weighted- Average Price
Outstanding at January 1, 2021		4,306,269		$	79.47
Granted		1,008,879			120.97
Exercised		(234,216	)		39.05
Forfeited		(284,626	)		127.43
Expired		(53,126	)		199.82
Outstanding at December 31, 2021		4,743,180		$	86.06
Exercisable at December 31, 2021		2,874,424		$	56.21

As of December 31, 2021, total unrecognized compensation expense of $95.1 million related to stock options is expected to be recognized over a weighted average of 2.79 years, which excludes the unvested performance-based stock options that were deemed not probable of vesting as of December 31, 2021, constituting 467,850 shares with unrecognized stock-based compensation expense of $47.6 million.

At December 31, 2021, 4,743,180 stock options are fully vested or are expected to vest and have a weighted-average outstanding term of 7.0 years and a weighted-average exercise price of $86.06. Exercisable stock options have a weighted-average outstanding term of 6.1 years.

The total intrinsic value (the difference between market value and exercise prices of in-the-money options) of all outstanding options at December 31, 2021, 2020, and 2019, was $8.6 million, $269.4 million, and $659.3 million, respectively.  The total intrinsic value of exercisable options at December 31, 2021, 2020, and 2019, was $8.6 million, $185.7 million, and $305.0 million, respectively.  In 2021, 2020, and 2019, 234,216, 616,585, and 707,849 options were exercised, respectively.  The total intrinsic value of options exercised was $21.2 million, $68.6 million and $79.4 million for the years ended December 31, 2021, 2020 and 2019, respectively.  For the year ended December 31, 2021 we received $9.1 million in cash from stock option exercises.

Fair Value Estimates

The Company’s determination of the fair value of stock-based payment awards on the date of grant using the Black-Scholes option pricing model is affected by many factors, including the stock price and a number of highly complex and subjective variables.  These variables include, but are not limited to, the Company’s stock price volatility over the expected term of the awards and estimates of the expected option term.

The weighted-average assumptions used in the Black-Scholes option pricing model were as follows:

	Years Ended December 31
	2021			2020			2019
Dividend yield		—	%		—	%		—	%
Volatility		69.71	%		73.46	%		73.73	%
Risk-free interest rate		0.69	%		1.44	%		2.18	%
Expected term of options (in years)		5.65			5.86			6.23
Weighted average grant date fair value	$	120.97		$	196.96		$	69.76

Expected volatility is based on the Company’s own historical volatility since its IPO and benchmarked public companies during fiscal years 2021, 2020 and 2019.  The risk-free interest rate, ranging from 0.09% to 1.31% during the year ended December 31, 2021, is based on the United States Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the options.  The expected term of options represents the weighted-average period of time that options granted are expected to be outstanding based on historical data.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2021

Compensation And Retirement Disclosure [Abstract]

Employee Benefit Plans

14. Employee Benefit Plans

In 2010, we adopted an Employee Investment Plan, qualified under Section 401(k) of the Code, which is a retirement savings plan covering substantially all of our U.S. employees (the Plan).  The Plan is administered under the “safe harbor” provision of ERISA.  Under the Plan, an eligible employee may elect to contribute a percentage of their salary on a pre-tax basis, subject to federal statutory limitations.  Beginning in January 2019, the Company implemented a discretionary employer matching contribution of $1.00 for every $1.00 contributed by a participating employee up to $6,000 and $5,000 annually in 2021 and 2020, respectively, which such matching contributions become fully vested after four years of service.  The Company recorded expense of $1.7 million, $1.1 million and $0.4 million for the twelve months ended December 31, 2021, 2020, and 2019 respectively, which includes the Company’s contributions and administrative costs.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

15. Commitments and Contingencies

Litigation

From time to time, the Company is a party to legal proceedings in the course of its business, including the matters described below.  The outcome of any such legal proceedings, regardless of the merits, is inherently uncertain.  In addition, litigation and related matters are costly and may divert the attention of our management and other resources that would otherwise be engaged in other activities.  If the Company were unable to prevail in any such legal proceedings, its business, results of operations, liquidity and financial condition could be adversely affected.  The Company recognizes accruals for litigations to the extent that it can conclude that a loss is both probable and reasonably estimable and recognizes legal expenses as incurred.

Patel Litigation

On October 15, 2020, Toshif Patel filed a complaint for alleged violation of federal securities laws against the Company, its Chief Executive Officer and its Chief Financial Officer in the United States District Court for the Eastern District of Texas.  The complaint purported to bring a federal securities class action on behalf of a class of persons who acquired the Company’s common stock between October 15, 2019 and August 7, 2020.  The complaint alleged, among other things, that the defendants made false and misleading statements regarding the sufficiency of its MOXIe Part 2 study results to support a single study marketing approval of omaveloxolone for the treatment of FA in the United States.  On September 27, 2021, the plaintiff voluntarily dismissed the case.

Bardoxolone Securities Litigation

Four putative stockholders of the Company have filed complaints for alleged violations of the federal securities laws against the Company and certain of its executives, including its Chief Executive Officer, its Chief Operating Officer and Chief Financial Officer, and its Chief Innovation Officer (in one of the suits).  The complaints, three of which were filed in the United States District Court for the Eastern District of Texas, and one of which was filed the District of New Jersey, allege, among other things, that the defendants made false and misleading statements regarding the sufficiency of the Phase 3 CARDINAL study to support an NDA for bardoxolone as treatment for chronic kidney disease caused by Alport syndrome, and the Company’s interactions with the FDA concerning the study.  The complaints filed in the United States District Court for the Eastern District of Texas, were filed on December 20, 2021, January 7, 2022, and January 20, 2022, and the complaint filed in the District of New Jersey was filed on February 18, 2022.  The plaintiffs seek, among other things, a class action designation, an award of damages, and costs and expenses, including counsel fees and expert fees.  The Company currently expects all of the cases to be consolidated and for a single, consolidated, amended complaint to be filed in the future.

The Company believes that the allegations contained in the complaints are without merit and intends to defend the cases.  The Company cannot predict at this point the length of time that these actions will be ongoing or the liability, if any, which may arise therefrom.

Indemnifications

ASC 460, Guarantees, requires that, upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligations it assumes under that guarantee.

As permitted under Delaware law and in accordance with the Company’s bylaws, officers and directors are indemnified for certain events or occurrences, subject to certain limits, while the officer or director is or was serving in such capacity.  The maximum amount of potential future indemnification is unlimited; however, the Company has obtained director and officer insurance that limits its exposure and may enable recoverability of a portion of any future amounts paid.  The Company believes the fair value for these indemnification obligations is minimal.  Accordingly, the Company has not recognized any liabilities relating to these obligations as of December 31, 2021.  

The Company has certain agreements with licensors, licensees, collaborators, and vendors that contain indemnification provisions.  In such provisions, the Company typically agrees to indemnify the licensor, licensee, collaborator, or vendor against certain types of third-party claims.  The Company accrues for known indemnification issues when a loss is probable and can be reasonably estimated.  There were no accruals for expenses related to indemnification issues for any period presented.

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Net Loss per Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Net Loss per Share

16. Net Loss per Share

The computation of basic and diluted net loss income per share attributable to common stockholders of the Company for the years ended December 31 is summarized in the following table:

	Years Ended December 31
	2021			2020			2019
Numerator
Net loss (in thousands)	$	(297,386	)	$	(247,752	)	$	(290,170	)
Denominator
Weighted-average number of common shares    used in net loss per share — basic		36,321,351			33,709,480			30,414,203
Dilutive potential common shares		—			—			—
Weighted-average number of common shares    used in net loss per share — diluted		36,321,351			33,709,480			30,414,203
Net loss per share — basic	$	(8.19	)	$	(7.35	)	$	(9.54	)
Net loss per share — diluted	$	(8.19	)	$	(7.35	)	$	(9.54	)

The number of weighted average options and RSUs that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive represented 5,552,325, 4,414,820, and 4,088,949 shares for the years ended 2021, 2020, and 2019, respectively.

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Subsequent Events

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

17. Subsequent Events

On January 3, 2022, the Company awarded 985,531 options to purchase shares of common stock which are time-based awards, vesting over four years. In addition, the Company awarded 493,003 RSUs, vesting over four years and 30,000 performance-based stock options and 15,000 performance-based RSU awards, vesting over approximately four years, upon meeting performance conditions.

On January 7, 2022, January 20, 2022 and February 18, 2022, three putative stockholders of the Company filed complaints for alleged violation of the federal securities laws against the Company. See Note 15, Commitments and Contingencies of Notes to Consolidated Financial Statements for a description of these litigations.

On February 4, 2022, the Company extended the lease for the office and laboratory space in Irving, Texas, to extend until October 31, 2024, with an option to extend for a fixed twelve-month period.

We received a complete response letter (CRL) from the FDA in February 2022 with respect to its review of our NDA for bardoxolone in the treatment of patients with CKD caused by Alport syndrome.  We will continue to work with the FDA to confirm our next steps on our Alport syndrome program.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Risks and Uncertainties

Risks and Uncertainties

The Company has experienced losses and negative operating cash flows for many years since inception and has no marketed drug or other products.  The Company’s ability to generate future revenue depends upon the results of its development programs, whose success cannot be guaranteed.  The Company may need to raise additional equity capital in the future in order to fund its operations.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all investments in highly liquid financial instruments with a maturity of three months or less when purchased to be cash equivalents.  Investments qualifying as cash equivalents primarily consist of money market funds.  The carrying amount of cash equivalents approximates fair value.  Investment income consists primarily of interest income on our cash and cash equivalents, which include money market funds.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation.  Depreciation is computed using the straight-line method over the following estimated useful lives:

Computer equipment	2-5 years
Software	3 years
Laboratory equipment	5-7 years
Office furniture	5 years
Office equipment	5 years
Manufacturing equipment	10 years

Leasehold improvements are amortized on the straight-line method over the shorter of the lease term or the estimated useful life of the equipment or improvement.  Such amortization is recorded as depreciation expenses in the consolidated statements of operations.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment.  Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered.  Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends, and product development cycles.  If impairments are identified, assets are written down to their estimated fair value.  The Company has not recognized any impairment charges in 2021, 2020, or 2019.

Liability Related to Sale of Future Royalties

Liability Related to Sale of Future Royalties

On June 24, 2020, the Company closed on the Development and Commercialization Funding Agreement with an affiliate of Blackstone Life Sciences, LLC (BXLS), which provided funding for the development and commercialization of bardoxolone for the treatment of CKD caused by Alport syndrome, autosomal dominant polycystic kidney disease (ADPKD), and certain other rare CKD indications in return for future royalties (the Development Agreement).  The Company accounted for the Development Agreement as a sale of future revenues resulting in a debt classification, primarily because the Company has significant continuing involvement in generating the future revenue on which the royalties are based.  The debt will be amortized under the effective interest rate method and, accordingly, the Company is recognizing non-cash interest expense over the estimated term of the Development Agreement.  The liability related to sale of future royalties, and the debt amortization, are based on the Company’s current estimate of future royalties expected to be paid over the estimated term of the Development Agreement.  The Company will periodically assess the expected royalty payments and, if materially different than its previous estimate, will prospectively adjust and recognize the related non-cash interest expense.  The transaction costs associated with the liability will be amortized to non-cash interest expense over the estimated term of the Development Agreement.  For a complete discussion of accounting for Development Agreement see, Note 6, Liability Related to Sale of Future Royalties of Notes to Consolidated Financial Statements contained in this Annual Report on Form 10-K.

Fair Value Measurements

Fair Value Measurements

The Company categorizes its financial instruments measured at fair value into a three-level fair value hierarchy that prioritizes the inputs used in determining the fair value of the asset or liability.  The three levels of the fair value hierarchy are as follows:

• Level 1 - Financial instruments that have values based on unadjusted quoted prices for identical assets or liabilities in an active market which the Company has the ability to access at the measurement date.

• Level 2 - Financial instruments that have values based on quoted market prices in markets where trading occurs infrequently or that have values based on quoted prices of instruments with similar attributes in active markets.

• Level 3 - Financial instruments that have values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.  These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset.

Revenue Recognition

Revenue Recognition

The Company’s revenue to date has been generated primarily from licensing fees received under its collaborative licensing agreements with AbbVie Inc. (AbbVie) and Kyowa Kirin and reimbursements for expenses from Kyowa Kirin.  The terms of the agreements include non-refundable upfront fees, funding of research and development activities, payments based upon achievement of milestones, and royalties on net product sales.

Under Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.  To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the promised goods or services in the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the entity satisfies a performance obligation.

At contract inception, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct.  The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied.

Licenses of intellectual property: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer, and the customer can use and benefit from the license.  For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees.  The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone payments: At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method.  If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission by the Company) is included in the transaction price, which is then allocated to each performance obligation.  Milestone payments that are not within the control of the Company, such as approvals from regulators, are not considered probable of being achieved until those approvals are received.  At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and, if necessary, adjusts its estimate of the overall transaction price.  Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration, and other revenues and earnings in the period of adjustment and in future periods through the end of the performance obligation period.

Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).  To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements.

Manufacturing Supply Services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered options.  The Company assesses if these options provide a material right to the licensee and, if so, they are accounted for as separate performance obligations.  If the Company is entitled to additional payments when the

customer exercises these options, any additional payments are recorded when the customer obtains control of the goods, which is upon delivery.

For a complete discussion of accounting for collaborative licensing agreements, see Note 3, Collaboration Agreements of Notes of Consolidated Financial Statements contained in this Annual Report on Form 10-K.

Acquired License Rights

Acquired License Rights

All acquired license and sublicense costs that are in-process research and development, which were acquired directly in a transaction other than a business combination that does not have an alternative future use, are expensed as incurred.  For a complete discussion of accounting for reacquisition of license rights in 2019, see Note 3, Collaboration Agreements.

Research and Development Costs

Research and Development Costs

All research and development costs are expensed as incurred, including costs for drug supplies used in research and development or clinical studies, property and equipment acquired specifically for a finite research and development project, and nonrefundable deposits incurred at the initiation of research and development activities.  Research and development costs consist principally of costs related to clinical studies managed directly by the Company and through contract research organizations (CROs), manufacture of clinical drug products for clinical studies, preclinical study costs, discovery research expenses, facilities costs, salaries, and related expenses.

In December 2017, the Company and Kyowa Kirin entered into the Third Supplement to the Kyowa Kirin Agreement, which allows the Company to begin a portion of the registrational CARDINAL trial in Japan, for which Kyowa Kirin has reimbursed costs incurred of $3.0 million as of the end of December 31, 2021.  The Company deemed that this was not a material modification to the Kyowa Kirin Agreement because no payment terms or deliverables were changed.  The Company’s expenses were reduced by $0.5 million for Kyowa Kirin’s share of the study costs for twelve months ended December 31, 2019. No such credits were recorded in the twelve months ended December 31, 2020, or 2021, respectively.

In addition, we have also entered into cost sharing agreement for the FALCON trial and have recorded $1.4 million in expenses during the year ended December 31, 2021.  No such costs were incurred in the twelve months ended December 31, 2019, or 2020, respectively.

The Company bases its expense accruals related to clinical trials on its estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical trials on its behalf.  The financial terms of these agreements vary from contract to contract and may result in uneven payment flows.  Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones.  In accruing costs, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period.  Included within total accrued direct research liabilities is $11.8 million, which was accrued but unbilled, as of December 31, 2021.

To date, the Company has not experienced significant changes in its estimates of accrued research and development expenses after a reporting period.  However, due to the nature of estimates, the Company cannot assure that it will not make changes to its estimates in the future as the Company becomes aware of additional information about the status or conduct of its clinical trials and other research activities.

Patents

Patents

Costs associated with filing, prosecuting, enforcing, and maintaining patent rights are expensed as incurred and are classified as general and administrative expenses.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for its stock-based compensation in accordance with ASC 718 Compensation—Stock Compensation (ASC 718).  ASC 718 requires companies to measure and recognize compensation expense for all stock option and RSU awards based on the estimated fair value of the award on the grant date.  The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards.  The fair value is recognized as expense, over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis when the only condition to vesting is continued service.  If vesting is subject to a market or performance condition, recognition is based on the derived service period of the award.  Expense for awards with performance conditions is estimated and adjusted on a quarterly basis based upon the assessment of the probability that the performance condition will be met.  Use of the Black-Scholes option-pricing model requires management to apply judgment under highly subjective assumptions.  These assumptions include:

• Expected term—The expected term represents the period that the stock-based awards are expected to be outstanding and is based on the average period the stock options are expected to be outstanding and was based on our historical information of the options exercise patterns and post-vesting termination behavior.

• Expected volatility—Since the Company does not have sufficient trading history to estimate the volatility of its common stock, the expected volatility was estimated based on its own historical volatility since its initial public offering (IPO) and the average volatility for comparable publicly traded biopharmaceutical companies.  When selecting comparable publicly traded biopharmaceutical companies on which the Company based its expected stock price volatility, the Company selected companies with comparable characteristics to the Company, including enterprise value, risk profiles, position within the industry, and historical share price information sufficient to meet the expected life of the stock-based awards.

• Risk-free interest rate—The risk-free interest rate is based on the United States Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option.

• Expected dividend—The Company has no plans to pay dividends on its common stock.  Therefore, the company used an expected dividend yield of zero.

In addition to the assumptions used in the Black-Scholes option-pricing model, the Company will continue to use judgment in evaluating the expected volatility and expected terms utilized for its stock-based compensation calculations on a prospective basis.  The Company accounts for forfeitures of share-based awards when they occur.

Stock option and RSU unit awards have been granted to nonemployees, in connection with research and consulting services provided to the Company, and to employees, under its Second Amended and Restated Long Term Incentive Plan (the LTIP Plan).  Equity awards generally vest over terms of four or five years.  For employees and non-employees, stock-based compensation expense is recorded ratably through the vesting period for each stock option or tranche of RSU award.  For performance-based awards, the Company evaluates the probability of the number of shares that are expected to vest and adjusts compensation expense to reflect the number of shares expected to vest and the cumulative vesting period met to date.

Income Taxes

Income Taxes

The Company accounts for income taxes and the related accounts under the liability method.  Deferred tax assets and liabilities are determined based on differences between the financial statement and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.  The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, Income Taxes.  The Company recognizes a tax benefit for uncertain tax positions if the Company believes it is more likely than not that the position will be upheld on audit based solely on the technical merits of the tax position.  The Company evaluates uncertain tax positions after consideration of all available information.  As of December 31, 2021, the interest accrued related to provision uncertain tax positions was immaterial.  

Debt Issuance Costs

Debt Issuance Costs

The Company defers costs related to debt issuance and amortizes these costs to interest expense over the term of the debt, using the effective interest method.  Debt issuance costs are presented in the balance sheet as a deduction from the carrying amount of the debt liability.

Leases

Leases

At the inception of an arrangement, the Company determines if an arrangement is, or contains, a lease based on the unique facts and circumstances present in that arrangement.  Lease assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized at the lease commencement date based on the present value of lease payments over the lease term calculated using its incremental borrowing rate based on the information available at commencement unless the implicit rate is readily determinable.  Lease assets also include upfront lease payments, lease incentives paid, and direct costs incurred and exclude lease incentives received.  The lease term used to calculate the lease assets and related lease liabilities includes the options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options.  Lease expense for operating leases is recognized on a straight-line basis over the expected lease term as an operating expense while the expense for finance leases is recognized as depreciation expense over the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise.

The Company accounts for each lease component separately from the nonlease components.  The depreciable life of lease assets and leasehold improvements is limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of its exercise.

Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expenses for these short-term leases and operating leases are recognized on a straight-line basis over the lease term.

Key assumptions and judgments included in the determination of the lease liability include the discount rate applied to the present value of the future lease payments, and the exercise of renewal options. Our leases do not provide information about the rate implicit in the lease; therefore, we utilize an incremental borrowing rate to calculate the present value of our future lease obligations. The incremental borrowing rate represents the rate of interest we would have to pay on a collateralized borrowing, for an amount equal to the lease payments, over a similar term and in a similar economic environment.

Net Income (Loss) per Share

Net Income (Loss) per Share

Basic and diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents.  The Company’s potentially dilutive shares, which include unvested RSUs and options to purchase common stock, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.  For periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances from non-owner sources and includes all components of net income (loss) and other comprehensive income (loss).  The other comprehensive income (loss) for the years ended December 31, 2021, 2020, and 2019 was immaterial.

Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted

In December 2019, the Financial Accounting Standards Board (FASB) issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes.  The FASB issued this update as part of its Simplification Initiative to improve areas of U.S. GAAP and reduce cost and complexity while maintaining usefulness.  The main provision that impacts the Company is the removal of the exception to the incremental approach of intra-period tax allocation when there is a loss from continuing operations and income or gain from other items.  ASU 2019-12 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2020.  The Company adopted this standard on January 1, 2021, and its adoption did not have material impact to the Company’s consolidated financial statements and related disclosure.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Depreciation Property and Equipment

Depreciation is computed using the straight-line method over the following estimated useful lives:

Computer equipment	2-5 years
Software	3 years
Laboratory equipment	5-7 years
Office furniture	5 years
Office equipment	5 years
Manufacturing equipment	10 years

Leasehold improvements are amortized on the straight-line method over the shorter of the lease term or the estimated useful life of the equipment or improvement.  Such amortization is recorded as depreciation expenses in the consolidated statements of operations.

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Other Income (Expense), Net (Tables)

12 Months Ended

Dec. 31, 2021

Other Income And Expenses [Abstract]

Summary of Other Income (Expense), Net

		Years Ended December 31
		2021			2020			2019
	(in thousands)
Other income (expense), net
Investment income		$	177		$	2,769		$	6,248
Interest expense			(6,563	)		(14,895	)		(11,197	)
Non-cash interest expense on liability    related to sale of future royalty			(46,688	)		(21,884	)		—
Other income (expense)			(54	)		1,279			7
Loss on extinguishment of debt			—			(11,183	)		—
Total other income (expense), net		$	(53,128	)	$	(43,914	)	$	(4,942	)

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Liability Related to Sale of Future Royalties (Tables)

12 Months Ended

Dec. 31, 2021

Liability Related To Sale Of Future Royalties [Abstract]

Schedule of Activity Within Liability Related to Sale of Future Royalties

The following table shows the activity within the liability related to sale of future royalties for the twelve months ended December 31, 2021:

	Liability Related to Sale of Future Royalties
	(in thousands)
Balance at December 31, 2020	$	316,305
Non-cash interest expense recognized		46,623
Balance at December 31, 2021		362,928
Less: Unamortized transaction cost		(786	)
Carrying value at December 31, 2021	$	362,142

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2021

Property Plant And Equipment [Abstract]

Summary of Property and Equipment

Property and equipment consisted of the following as of December 31:

	2021			2020
	(in thousands)
Computer equipment and software	$	3,748		$	3,306
Laboratory equipment		6,389			5,404
Office furniture		1,990			1,990
Office and other equipment		399			412
Leasehold improvements		14,127			7,829
Manufacturing equipment		213			163
		26,866			19,104
Less: accumulated depreciation		(15,262	)		(14,192	)
Property and equipment, net	$	11,604		$	4,912

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Leases (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Summary of Supplemental Balance Sheet and Other Information Related to Operating Leases

Supplemental balance sheet and other information related to the Company’s operating leases is as follows:

	As of December 31
	2021			2020
Weighted-average remaining lease term (in years)		15.7			1.8
Weighted-average discount rate		6.6	%		8.2	%

Schedule of Maturities of Lease Liabilities

Maturities of lease liabilities by fiscal year for the Company’s operating leases:

	As of December 31, 2021
	(in thousands)
2022	$	9,798
2023 (1)		6,672
2024 (1)		6,802
2025		13,737
Thereafter		196,049
Total lease payments (1)		233,058
Less: Imputed interest		(97,025	)
Present value of lease liabilities	$	136,033

(1) Above table assumes one year rent abatement is applied beginning in June 2023 following United States Food and Drug Administration (FDA) approval of omaveloxolone.

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Reconciliation of Effective Income Tax Rate from Continuing Operations to Federal Statutory Tax Rate

The following table reconciles the Company’s effective income tax rate from continuing operations to the federal statutory tax rate of 21%:

	2021			2020			2019
U.S. federal income taxes		21	%		21	%		21	%
Federal and state tax credits		5	%		12			8
Stock-based compensation		(0	)%		4			5
NOL carryback rate differential		—	%		1			—
Foreign rate differential		(3	)%		(2	)		—
Change in valuation allowance		(23	)%		(28	)		(34	)
Recorded federal income tax benefit		—	%		8	%		—	%

Significant Components of Net Deferred Tax Assets

Significant components of the Company’s net deferred tax assets as of December 31 are as follows (in thousands):

	2021			2020
Deferred tax assets:
Federal and state tax credits	$	102,590		$	87,056
Net operating loss		101,463			68,936
Accrued royalties		79,458			66,389
Intellectual property		60,753			62,838
Lease Liability		29,847			1,626
Stock-based compensation		23,677			15,158
Deferred revenue		362			987
Other		1,422			903
Deferred tax assets before valuation allowance		399,572			303,893
Less: Valuation allowance		(369,215	)		(300,888	)
Net deferred income tax assets		30,357			3,005
Deferred tax liabilities:
Deferred purchase price		—			(1,127	)
Right-of-use assets		(27,817	)		(1,096	)
Other		(2,424	)		(659	)
Net deferred tax assets	$	116		$	123

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Time Based and Performance-Based Stock Compensation Expense

The following table summarizes time-based and performance-based stock compensation expense reflected in the consolidated statements of operations:

	Years Ended December 31
	2021		2020		2019
	(in thousands)
Research and development	$	23,566	$	28,114	$	8,692
General and administrative		33,240		29,519		17,689
Total stock compensation expense	$	56,806	$	57,633	$	26,381

Summary of Restricted Stock Units

The following table summarizes RSUs as of December 31, 2021, and changes during the year ended December 31, 2021 under the LTIP Plan:

	Number of RSUs			Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2021		108,551		$	115.54
Granted		758,246			64.65
Vested		(9,145	)		164.39
Forfeited		(48,507	)		122.40
Outstanding at December 31, 2021		809,145		$	66.91

Summary of Stock Option Activity

The following table summarizes stock option activity as of December 31, 2021, and changes during the year ended December 31, 2021, under the LTIP Plan and standalone option agreements:

	Number of Options			Weighted- Average Price
Outstanding at January 1, 2021		4,306,269		$	79.47
Granted		1,008,879			120.97
Exercised		(234,216	)		39.05
Forfeited		(284,626	)		127.43
Expired		(53,126	)		199.82
Outstanding at December 31, 2021		4,743,180		$	86.06
Exercisable at December 31, 2021		2,874,424		$	56.21

Weighted Average Assumptions in Black-Scholes Pricing Model

The weighted-average assumptions used in the Black-Scholes option pricing model were as follows:

	Years Ended December 31
	2021			2020			2019
Dividend yield		—	%		—	%		—	%
Volatility		69.71	%		73.46	%		73.73	%
Risk-free interest rate		0.69	%		1.44	%		2.18	%
Expected term of options (in years)		5.65			5.86			6.23
Weighted average grant date fair value	$	120.97		$	196.96		$	69.76

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Net Loss per Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Loss Income per Share

The computation of basic and diluted net loss income per share attributable to common stockholders of the Company for the years ended December 31 is summarized in the following table:

	Years Ended December 31
	2021			2020			2019
Numerator
Net loss (in thousands)	$	(297,386	)	$	(247,752	)	$	(290,170	)
Denominator
Weighted-average number of common shares    used in net loss per share — basic		36,321,351			33,709,480			30,414,203
Dilutive potential common shares		—			—			—
Weighted-average number of common shares    used in net loss per share — diluted		36,321,351			33,709,480			30,414,203
Net loss per share — basic	$	(8.19	)	$	(7.35	)	$	(9.54	)
Net loss per share — diluted	$	(8.19	)	$	(7.35	)	$	(9.54	)

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Summary of Estimated Useful Lives of Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2021
Computer equipment | Minimum
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	2 years
Computer equipment | Maximum
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Laboratory equipment | Minimum
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Laboratory equipment | Maximum
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	7 years
Office furniture
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Office equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Manufacturing equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Significant Accounting Policies [Line Items]
Asset impairment charges	$ 0	$ 0	$ 0
Research and development	$ 155,993,000	159,080,000	128,109,000
ASU 2019-12 (Topic 740)
Significant Accounting Policies [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
Change in Accounting Principle, Accounting Standards Update, Adoption Date	Jan. 01, 2021
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]	true
Minimum
Significant Accounting Policies [Line Items]
Equity vesting terms	4 years
Maximum
Significant Accounting Policies [Line Items]
Equity vesting terms	5 years
Collaborative Arrangement
Significant Accounting Policies [Line Items]
Unbilled research and development expense accrued	$ 11,800,000
Kyowa Kirin Agreement | License Agreement Terms
Significant Accounting Policies [Line Items]
Reduction in research and development expense	0	0	500,000
Kyowa Kirin Agreement | Clinical Development Milestones | License Agreement Terms
Significant Accounting Policies [Line Items]
Reduction in research and development expense	3,000,000.0
FALCON Cost Sharing Agreement
Significant Accounting Policies [Line Items]
Research and development	$ 1,400,000	$ 0	$ 0

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Collaboration Agreements - Additional Information (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended	12 Months Ended
	Jul. 27, 2021	Dec. 31, 2009	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Oct. 31, 2019
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Decrease in revenue recognition				$ 3,040	$ 4,701	$ 216,332
Collaboration revenue				11,490	9,019	26,517
Interest expense				6,563	14,895	11,197
Kyowa Kirin Agreement | License Agreement Terms
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Upfront license fee received		$ 35,000
Collaboration revenue, milestone payments received				50,000
Collaboration revenue, potential milestone payments				47,000
Collaboration revenue, additional potential commercial milestone payments				140,000
Decrease in revenue recognition			$ 400
Collaboration agreement earned milestone payment	$ 5,000
Collaboration revenue	4,700
Deferred Revenue	$ 300
Deferred revenue remaining performance obligation period	2022-06
AbbVie
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Payable to collaborators							$ 330,000
Interest expense				$ 6,600	$ 6,500	$ 1,400

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Other Income (Expense), Net - Summary of Other Income (Expense), Net (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Other income (expense), net
Investment income		$ 177	$ 2,769	$ 6,248
Interest expense		(6,563)	(14,895)	(11,197)
Non-cash interest expense on liability related to sale of future royalty		(46,688)	(21,884)	0
Other income (expense)		(54)	1,279	7
Loss on extinguishment of debt	$ (11,200)	0	(11,183)	0
Total other income (expense), net		$ (53,128)	$ (43,914)	$ (4,942)

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Other Income (Expense), Net - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Other Income And Expenses [Abstract]
Other income (expense)		$ (54)	$ 1,279	$ 7
Loss on extinguishment of debt	$ 11,200	$ 0	$ 11,183	$ 0

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Term Loan - Additional Information (Details) - Amended Restated Loan Agreement - Term Loan - USD ($) $ in Millions		12 Months Ended
	Jun. 24, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 20, 2019
Debt Instrument [Line Items]
Loan principal amount					$ 155.0
Repayment of outstanding principal amount	$ 155.0
Debt instrument, exit fee	6.7
Debt instrument, prepayment fee	5.4
Debt instrument, accrued and unpaid interest	$ 1.0
Interest expense recognized		$ 0.0	$ 8.3	$ 8.4

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Liability Related to Sale of Future Royalties - Additional Information (Details) $ / shares in Units, $ in Thousands		12 Months Ended
	Jun. 24, 2020 USD ($) Account $ / shares shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Liability Related To Sale Of Future Royalties [Line Items]
Proceeds from issuance of common stock, net		$ 0	$ 333,278	$ 492,453
Number of units of accounting related to consideration received | Account	2
Liability related to sale of future royalties, net	$ 294,500
Transaction cost of liability related to sale of future royalties	800
Transaction consideration allocated to common shares	$ 55,500
Effective interest rate including transaction costs	13.80%
Development Agreement
Liability Related To Sale Of Future Royalties [Line Items]
Proceeds from royalty agreement	$ 300,000
Purchase Agreement
Liability Related To Sale Of Future Royalties [Line Items]
Proceeds from issuance of common stock, net	50,000
Purchase Agreement | Common Stock A | BXLS
Liability Related To Sale Of Future Royalties [Line Items]
Proceeds from issuance of common stock, net	$ 50,000
Issuance of common stock | shares	340,793
Shares issued, price per share | $ / shares	$ 146.72

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Liability Related to Sale of Future Royalties - Schedule of Activity Within Liability Related to Sale of Future Royalties (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)
Liability Related To Sale Of Future Royalties [Abstract]
Liability related to sale of future royalties, Balance at December 31, 2020	$ 316,305
Non-cash interest expense recognized	46,623
Liability related to sale of future royalties, Balance at December 31, 2021	362,928
Less: Unamortized transaction cost	(786)
Liability related to sale of future royalties, Carrying values at December 31, 2021	$ 362,142

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Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	$ 26,866	$ 19,104
Less: accumulated depreciation	(15,262)	(14,192)
Property and equipment, net	11,604	4,912
Computer equipment and software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	3,748	3,306
Laboratory equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	6,389	5,404
Office furniture
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	1,990	1,990
Office equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	399	412
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	14,127	7,829
Manufacturing equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	$ 213	$ 163

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Leases - Additional Information (Details) $ in Thousands		12 Months Ended
	Oct. 15, 2019 USD ($) ft²	Dec. 31, 2021 USD ($) ft²	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 15, 2021 USD ($)
Lessee Lease Description [Line Items]
Operating lease right-of-use asset		$ 126,777	$ 5,208
Operating lease liability		136,033
Cash paid for amounts included in the measurement of lease liabilities		3,200
Operating lease, expense		$ 3,600	$ 3,400	$ 3,400
Plano Texas
Lessee Lease Description [Line Items]
Operating lease, existence of option to extend		true
Operating lease, option to extend		extending through August 31, 2022
Lease expiration date		Aug. 31, 2022
Plano Texas | Office Space
Lessee Lease Description [Line Items]
Area of real estate property | ft²		122,000
Plano Texas | Office And Laboratory Space | 2019 Lease Agreement
Lessee Lease Description [Line Items]
Area of real estate property | ft²	327,400
Renewal lease term, option one		two consecutive five-year renewal periods
Lease initial term	16 years
Lessor, operating lease, existence of option to extend	true
Renewal lease term, option two		one ten-year renewal period
Initial annual base rent expense	$ 13,300
Percentage of increase in base rent per annum after two years	1.95%
Leasehold improvement maximum amount funded by landlord	$ 31,300				$ 8,700
Operating lease right-of-use asset					124,500
Operating lease liability					133,200
Lease Incentive, net					$ 8,700
Irving Texas
Lessee Lease Description [Line Items]
Operating lease, existence of option to extend		true
Operating lease, option to extend		extending through October 31, 2022
Lease expiration date		Oct. 31, 2022
Irving Texas | Maximum
Lessee Lease Description [Line Items]
Operating lease, renewal Term		6 months
Irving Texas | Office And Laboratory Space
Lessee Lease Description [Line Items]
Area of real estate property | ft²		34,890

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Leases - Summary of Supplemental Balance Sheet and Other Information Related to Operating Leases (Details)	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Weighted-average remaining lease term (in years)	15 years 8 months 12 days	1 year 9 months 18 days
Weighted-average discount rate	6.60%	8.20%

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Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Leases [Abstract]
2022	$ 9,798
2023	6,672
2024	6,802
2025	13,737
Thereafter	196,049
Total lease payments	233,058
Less: Imputed interest	(97,025)
Present value of lease liabilities	$ 136,033

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Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Income Tax Disclosure [Line Items]
Income tax receivable as per CARES Act	$ 22,900				$ 22,200
Federal statutory tax rate		21.00%	21.00%	21.00%
Income tax received	22,200
Income tax, interest	$ 700
Increase in valuation allowance		$ 68,300	$ 74,600
Federal accumulated net operating losses		350,600
Federal accumulated net operating losses, annual limitation		$ 400
Operating loss carry forwards limit percentage		80.00%
Federal research and development tax credit carryforwards		$ 19,300
Federal orphan drug tax credit carryforwards		76,900
Deferred tax assets state research and development tax credit carryforwards		6,300
Federal and state tax credits		$ 102,590	$ 87,056
Tax credit carryforwards remainder expiration beginning year		2030
Between Fiscal Year 2023 and 2037
Income Tax Disclosure [Line Items]
Federal accumulated net operating losses		$ 59,600
Fiscal Year After 2037
Income Tax Disclosure [Line Items]
Federal accumulated net operating losses		291,000
Expiring 2037
Income Tax Disclosure [Line Items]
Federal accumulated net operating losses		59,200
Expiring 2028
Income Tax Disclosure [Line Items]
Federal accumulated net operating losses		$ 227,600
Earliest Tax Year
Income Tax Disclosure [Line Items]
Tax credit carryforwards expiration year		2024
Latest Tax Year
Income Tax Disclosure [Line Items]
Tax credit carryforwards expiration year		2041
Expiring 2024
Income Tax Disclosure [Line Items]
Federal and state tax credits		$ 100

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Income Taxes - Reconciliation of Effective Income Tax Rate from Continuing Operations to Federal Statutory Tax Rate (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
U.S. federal income taxes	21.00%	21.00%	21.00%
Federal and state tax credits	5.00%	12.00%	8.00%
Stock-based compensation	0.00%	4.00%	5.00%
NOL carryback rate differential	0.00%	1.00%	0.00%
Foreign rate differential	(3.00%)	(2.00%)	0.00%
Change in valuation allowance	(23.00%)	(28.00%)	(34.00%)
Recorded federal income tax benefit	0.00%	8.00%	0.00%

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Income Taxes - Significant Components of Net Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Federal and state tax credits	$ 102,590	$ 87,056
Net operating loss	101,463	68,936
Accrued royalties	79,458	66,389
Intellectual property	60,753	62,838
Lease Liability	29,847	1,626
Stock-based compensation	23,677	15,158
Deferred revenue	362	987
Other	1,422	903
Deferred tax assets before valuation allowance	399,572	303,893
Less: Valuation allowance	(369,215)	(300,888)
Net deferred income tax assets	30,357	3,005
Deferred tax liabilities:
Deferred purchase price	0	(1,127)
Right-of-use assets	(27,817)	(1,096)
Other	(2,424)	(659)
Net deferred tax assets	$ 116	$ 123

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Patents - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Loss Contingency [Abstract]
Patent matters outstanding	0	0	0

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Licenses - Additional Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($)
License Agreements [Line Items]
Term of agreements	The term of all agreements is through the useful lives of the licensed patents or for a period of 15 to 20 years for technology rights, for which there are no applicable patent rights.
2004 CDDO License Agreement
License Agreements [Line Items]
Development milestone and sublicense payments	$ 0.6
2009 Method of Use License Agreement
License Agreements [Line Items]
Development milestone and sublicense payments	$ 0.4
Minimum
License Agreements [Line Items]
Term of agreements	15 years
Maximum
License Agreements [Line Items]
Term of agreements	20 years

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Convertible Preferred Stock - Additional Information (Details) - shares	Dec. 31, 2021	Dec. 31, 2020
Undesignated Preferred Stock
Class of Stock [Line Items]
Convertible preferred stock	100,000,000
Convertible Preferred Stock
Class of Stock [Line Items]
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

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Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options to purchase shares outstanding	4,743,180	4,306,269
Stock Option, Weighted-average exercise price	$ 86.06
Exercisable Stock, Weighted-average outstanding	6 years 1 month 6 days
Total intrinsic value of outstanding options	$ 8,600	$ 269,400	$ 659,300
Total intrinsic value of exercisable options	$ 8,600	$ 185,700	$ 305,000
Exercise of options, shares	234,216	616,585	707,849
Total intrinsic value of options exercised	$ 21,200	$ 68,600	$ 79,400
Exercise of options	$ 9,138	$ 17,820	$ 13,445
Risk free interest rate, Minimum	0.09%
Risk free interest rate, Maximum	1.31%
Service Based Restricted Stock Unit (RSUs) and Performance-based (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 36,600
Unrecognized compensation expense, recognition period	3 years 1 month 6 days
Performance-based RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 13,900
Performance-based stock options deemed not probable of vesting	134,000
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 95,100
Unrecognized compensation expense, recognition period	2 years 9 months 14 days
Weighted-average years, vested and expected to vest	7 years
Performance-based Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 47,600
Performance-based stock options deemed not probable of vesting	467,850
LTIP Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock reserved for future grant	2,836,302
LTIP Plan | Restricted Stock Unit (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares of restricted stock outstanding	809,145

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Stock-Based Compensation - Summary of Time Based and Performance-Based Stock Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock compensation expense	$ 56,806	$ 57,633	$ 26,381
Research and development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock compensation expense	23,566	28,114	8,692
General and administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock compensation expense	$ 33,240	$ 29,519	$ 17,689

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Stock-Based Compensation - Summary of Restricted Stock Units (Details)	12 Months Ended
	Dec. 31, 2021 $ / shares shares
Weighted-Average Grant Date Fair Value
Weighted-Average Grant Date Fair Value - Beginning balance	$ 196.96
Weighted-Average Grant Date Fair Value - Ending balance	$ 120.97
Restricted Stock Unit (RSUs)
Number RSUs
Number RSUs - Beginning balance | shares	108,551
Number RSUs, Granted | shares	758,246
Number RSUs, Vested | shares	(9,145)
Number RSUs, Forfeited | shares	(48,507)
Number RSUs - Ending balance | shares	809,145
Weighted-Average Grant Date Fair Value
Weighted-Average Grant Date Fair Value - Beginning balance	$ 115.54
Weighted-Average Grant Date Fair Value, Granted	64.65
Weighted-Average Grant Date Fair Value, Vested	164.39
Weighted-Average Grant Date Fair Value, Forfeited	122.40
Weighted-Average Grant Date Fair Value - Ending balance	$ 66.91

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Stock-Based Compensation - Summary of Stock Option Activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Number of Options, Abstract
Number of Options, Outstanding - Beginning balance	4,306,269
Number of Options, Granted	1,008,879
Number of Options, Exercised	(234,216)	(616,585)	(707,849)
Number of Options, Forfeited	(284,626)
Number of Options, Expired	(53,126)
Number of Options, Outstanding - Ending balance	4,743,180	4,306,269
Number of Options, Exercisable	2,874,424
Weighted Average Price, Abstract
Weighted-Average Price, Outstanding - Beginning balance	$ 79.47
Weighted-Average Price, Granted	120.97
Weighted-Average Price, Exercised	39.05
Weighted-Average Price, Forfeited	127.43
Weighted-Average Price, Expired	199.82
Weighted-Average Price, Outstanding - Ending balance	86.06	$ 79.47
Weighted-Average Price, Exercisable	$ 56.21

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Stock-Based Compensation - Weighted Average Assumptions in Black-Scholes Pricing Model (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Dividend yield	0.00%	0.00%	0.00%
Volatility	69.71%	73.46%	73.73%
Risk-free interest rate	0.69%	1.44%	2.18%
Expected term of options (in years)	5 years 7 months 24 days	5 years 10 months 9 days	6 years 2 months 23 days
Weighted average grant date fair value	$ 120.97	$ 196.96	$ 69.76

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Employee Benefit Plans - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Compensation And Retirement Disclosure [Abstract]
Defined benefit plan, description	we adopted an Employee Investment Plan, qualified under Section 401(k) of the Code, which is a retirement savings plan covering substantially all of our U.S. employees (the Plan).
Defined contribution plan employer discretionary contribution amount	$ 1,000.00	$ 1,000.00
Maximum employee contributions to the plan	$ 6,000,000	$ 5,000,000
Period of matching contributions to vest	4 years	4 years
Defined contribution plan including contributions and administrative costs expenses	$ 1,700,000	$ 1,100,000	$ 400,000

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Commitments and Contingencies - Additional Information (Details)	12 Months Ended
	Dec. 31, 2021 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Accrual expenses related to indemnification	$ 0

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Net Loss per Share - Computation of Basic and Diluted Net Loss Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Numerator
Net loss	$ (297,386)	$ (247,752)	$ (290,170)
Denominator
Weighted-average number of common shares used in net loss per share — basic	36,321,351	33,709,480	30,414,203
Dilutive potential common shares	0	0	0
Weighted-average number of common shares used in net loss per share — diluted	36,321,351	33,709,480	30,414,203
Net loss per share — basic	$ (8.19)	$ (7.35)	$ (9.54)
Net loss per share — diluted	$ (8.19)	$ (7.35)	$ (9.54)

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Net Loss per Share - Additional Information (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Earnings Per Share [Abstract]
Weighted average anti-dilutive shares excludes from computation of earnings per share	5,552,325	4,414,820	4,088,949

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Subsequent Events - Additional Information (Details) - shares			12 Months Ended
	Feb. 04, 2022	Jan. 03, 2022	Dec. 31, 2021
Subsequent Event [Line Items]
Options awarded to purchase shares of common stock			1,008,879
Irving Texas
Subsequent Event [Line Items]
Operating lease, existence of option to extend			true
Operating lease, option to extend			extending through October 31, 2022
Lease expiration date			Oct. 31, 2022
Restricted Stock Unit (RSUs)
Subsequent Event [Line Items]
Number RSUs, Granted			758,246
Subsequent Event | Irving Texas
Subsequent Event [Line Items]
Operating lease, existence of option to extend	true
Operating lease, option to extend	extend until October 31, 2024
Lease expiration date	Oct. 31, 2024
Operating lease, renewal Term	12 months
Subsequent Event | Time-Based Awards
Subsequent Event [Line Items]
Options awarded to purchase shares of common stock		985,531
Equity vesting terms		4 years
Subsequent Event | Performance-based Stock Options
Subsequent Event [Line Items]
Number RSUs, Granted		30,000
Equity vesting terms		4 years
Subsequent Event | Performance-based RSUs
Subsequent Event [Line Items]
Number RSUs, Granted		15,000
Equity vesting terms		4 years
Subsequent Event | Restricted Stock Unit (RSUs)
Subsequent Event [Line Items]
Number RSUs, Granted		493,003
Equity vesting terms		4 years