F-1

As filed with the Securities and Exchange Commission on August 20, 2020

Registration Statement No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Silence Therapeutics plc

(Exact name of registrant as specified in its charter)

England and Wales	2834	Not applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

72 Hammersmith Road

London W14 8TH

United Kingdom

Tel: +44 20 3457 6900

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Silence Therapeutics Inc.

434 West 33rd Street, Office 814

New York, New York 10001

Tel: + 1 917 374 0372

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications, including communications sent to agent for service, should be sent to:

Joshua A. Kaufman Divakar Gupta Brian F. Leaf Cooley LLP 55 Hudson Yards New York, New York 10001 +1 212 479 6000 Claire A. Keast-Butler Cooley (UK) LLP Dashwood 69 Old Broad Street London EC2M 1QS United Kingdom +44 20 7785 9355

Approximate date of commencement of proposed sale to public:

As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☑

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act.

Emerging growth company  ☑

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered(1)	Proposed Maximum Offering Price Per Unit(2)	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
Ordinary shares, nominal value £0.05per ordinary share(3)(4)	53,732,291	$5.86	$314,871,225	$40,870.29

(1) The registrant is filing this registration statement with respect to an aggregate of 53,732,291 ordinary shares held by the shareholders identified herein.

(2) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based on the average of the high and low trading prices of the ordinary shares on AIM, a market operated by the London Stock Exchange, on August 14, 2020 (£4.51, as expressed in U.S. dollars based on an exchange rate of $1.30 per £1.00, the noon buying rate of the Federal Reserve Bank of New York on August 12, 2020.

(3) These ordinary shares are represented by American Depositary Shares, or ADSs, each of which represents three ordinary shares of the registrant.

(4) ADSs issuable upon deposit of the ordinary shares registered hereby are being registered pursuant to a separate registration statement on Form F-6 (File No. 333-               ).

The registrant hereby amends this registration statement on such date or datesas may be necessary to delay its effective date until the registrant shall file afurther amendment which specifically states that this registration statement shallthereafter become effective in accordance with Section 8(a) of the Securities Actof 1933, as amended or until the registration statement shall become effective on such date asthe Commission, acting pursuant to such Section 8(a), shalldetermine.

† The term “new or revised financial accounting standards” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

The information contained in this prospectus is not complete and may be changed. No securities may be sold pursuant to this prospectus until the registration statement filed with the Securities and Exchange Commission with respect to such securities has been declared effective. This prospectus is not an offer to sell these securities and no offers to buy these securities are being solicited in any jurisdiction where their offer or sale is not permitted.

SUBJECT TO COMPLETION, DATEDAUGUST 20, 2020

PROSPECTUS

       53,732,291 Ordinary Shares

Represented by 17,910,764 American Depositary Shares

We have applied to list American Depositary Shares, or ADSs, each representing three ordinary shares of Silence Therapeutics plc, on the Nasdaq Capital Market, or Nasdaq, under the symbol “SLN”. The ADSs are expected to begin trading on Nasdaq on September 8, 2020. Our ordinary shares are currently traded on AIM, a market operated by the London Stock Exchange, under the symbol “SLN”. The closing price of our ordinary shares on AIM on August 14, 2020 was £4.48 per ordinary share, which is equivalent to a price of $5.82 per share based on the noon buying rate of the Federal Reserve Bank of New York on August 12, 2020, or $17.46 per ADS, after giving effect to the ratio of one ADS for every three ordinary shares. We have appointed The Bank of New York Mellon to act as the depositary for the ADSs representing our ordinary shares, including the Registered Shares, as defined below. Upon the effectiveness of the registration statement of which this prospectus forms a part, holders of ordinary shares registered hereby are expected to be able to deposit such ordinary shares with the depositary in exchange for ADSs representing such ordinary shares at the ratio referred to in the first sentence of this paragraph. ADSs representing the ordinary shares registered hereby will be freely tradeable on the effective date of the registration statement of which this prospectus forms a part.

We are filing the registration statement of which this prospectus forms a part with respect to an aggregate of 53,732,291 ordinary shares held by the shareholders identified herein. Holders of all such ordinary shares are identified in this prospectus as the Registered Holders and the aggregate of 53,732,291 ordinary shares registered hereby as the Registered Shares. Any Registered Shares offered and sold in the United States by the Registered Holders will be in the form of ADSs. The Registered Holders are also permitted to sell ordinary shares not represented by ADSs in private transactions, including on AIM, which resales are not covered by this prospectus. The Registered Holders are offering their securities in order to create a public trading market for our equity securities in the United States. However, unlike an initial public offering, any disposition by the Registered Holders of the Registered Shares represented by ADSs is not being underwritten by any investment bank. We expect that the opening public price of our ADSs on Nasdaq will be determined by reference to the most recent trading price of our ordinary shares on AIM, as adjusted for the currency exchange rate and an ADS-to-share ratio of one to three. Thereafter, trades of our ADSs will be made through brokerage transactions on Nasdaq at prevailing market prices or as otherwise provided in the section entitled “Plan of Distribution”. The Registered Holders may, or may not, elect to dispose of Registered Shares represented by ADSs as and to the extent that they may individually determine. Such dispositions, if any, will be made through brokerage transactions on Nasdaq or other securities exchanges in the United States at prevailing market prices. See the section entitled “Plan of Distribution.” We will not receive proceeds from any disposition of Registered Shares in the form of ADSs by Registered Holders.

We are an “emerging growth company” and a “foreign private issuer,” each as defined under the federal securities laws, and, as such, we will be subject to reduced public company reporting requirements. See the section entitled “Prospectus Summary—Implications of Being an Emerging Growth Company and a Foreign Private Issuer” for additional information.

Neither the U.S. Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

Investing in ADSs representing our ordinary shares involves a high degree of risk. Before buying any ADSs representing our ordinary shares you should carefully read the discussion of material risks of investing in such securities in “Risk Factors” beginning on page 9 of this prospectus.

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS	ii
PRESENTATION OF FINANCIAL AND SHARE INFORMATION	iii
PROSPECTUS SUMMARY	1
THE REGISTERED SHARES	7
SUMMARY CONSOLIDATED FINANCIAL DATA	9
RISK FACTORS	10
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	44
INDUSTRY AND MARKET DATA	45
USE OF PROCEEDS	45
DIVIDEND POLICY	46
CAPITALIZATION	47
SELECTED CONSOLIDATED FINANCIAL DATA	48
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	49
BUSINESS	62
MANAGEMENT	92
RELATED PARTY TRANSACTIONS	106
PRINCIPAL SHAREHOLDERS	107
REGISTERED HOLDERS	109
DESCRIPTION OF SHARE CAPITAL AND ARTICLES OF ASSOCIATION	110
DESCRIPTION OF AMERICAN DEPOSITARY SHARES	129
ORDINARY SHARES AND ADSS ELIGIBLE FOR FUTURE SALE	137
MATERIAL INCOME TAX CONSIDERATIONS	138
PLAN OF DISTRIBUTION	146
EXPENSES OF THIS OFFERING	149
LEGAL MATTERS	150
EXPERTS	150
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES	150
WHERE YOU CAN FIND ADDITIONAL INFORMATION	152
INDEX TO FINANCIAL STATEMENTS	F-1

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We and the Registered Holders are responsible for the information contained in this prospectus and any free writing prospectus that we may prepare or authorize. Neither we nor the Registered Holders have authorized anyone to provide you with different or additional information, and neither we nor they take any responsibility for, or provide any assurance as to the reliability of, any other information that others may give you. Neither we nor the Registered Holders are making an offer to sell ADSs representing our ordinary shares in any jurisdiction where the offer or sale thereof is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of our ADSs.

For investors outside the United States: Neither we nor the Registered Holders have taken any action to permit the possession or distribution of this prospectus in any jurisdiction other than the United States where action for that purpose is required. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the ADSs and the distribution of this prospectus outside the United States.

We are a public limited company incorporated under the laws of England and Wales and a majority of our outstanding securities are owned by non-U.S. residents. Under the rules of the U.S. Securities and Exchange Commission, or the SEC, we are currently eligible for treatment as a “foreign private issuer.” As a foreign private issuer, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as domestic registrants whose securities are registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

ABOUT THIS PROSPECTUS

Unless otherwise indicated or the context otherwise requires, all references in this prospectus to the terms “Silence,” “Silence Therapeutics,” “Silence Therapeutics plc,” “the company,” “we,” “us” and “our” refer to Silence Therapeutics plc together with its subsidiaries.

This prospectus includes trademarks, tradenames and service marks, certain of which belong to us and others that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this prospectus appear without the ®, ™ and ^SM symbols, but the absence of those symbols is not intended to indicate, in any way, that we will not assert our rights or that the applicable owner will not assert its rights to these trademarks, tradenames and service marks to the fullest extent under applicable law. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

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PRESENTATION OF FINANCIAL AND SHARE INFORMATION

We maintain our books and records in pounds sterling and report under International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. None of the financial statements included in this prospectus were prepared in accordance with generally accepted accounting principles in the United States. All references in this prospectus to “$” are to U.S. dollars and all references to “£” are to pounds sterling. Except with respect to U.S. dollar amounts presented as contractual terms or otherwise indicated, all amounts presented in this prospectus in U.S. dollars have been translated from pounds sterling solely for convenience at an assumed exchange rate of $1.32 per £1.00, based on the noon buying rate of the Federal Reserve Bank of New York on December 31, 2019. We make no representation that any pounds sterling or U.S. dollar amounts referred to in this prospectus could have been, or could be, converted into U.S. dollars or pounds sterling, as the case may be, at any particular rate, or at all. These translations should not be considered representations that any such amounts have been, could have been or could be converted from pounds sterling into U.S. dollars at that or any other exchange rate as of that or any other date.

We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them. Additionally, numerical figures under £100,000 have been rounded to the nearest thousand in this prospectus.

All references to “shares” in this prospectus refer to ordinary shares of Silence Therapeutics plc with a nominal value of £0.05 per share.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should consider in making your investment decision. Before investing in our ADSs, you should read this entire prospectus carefully, including the sections of this prospectus entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and the related notes, in each case contained elsewhere in this prospectus. You should carefully consider, among other things, the matters discussed in the section of this prospectus titled “Business” before making an investment decision.

Overview

We are a biotechnology company focused on discovering and developing novel molecules incorporating short interfering ribonucleic acid, or siRNA, to inhibit the expression of specific target genes thought to play a role in the pathology of diseases with significant unmet medical need. Our siRNA molecules are designed to harness the body’s natural mechanism of RNA interference, or RNAi, by specifically binding to and degrading messenger RNA, or mRNA, molecules that encode specific targeted disease-associated proteins in a cell. By degrading the message that encodes the disease-associated protein, the production of that protein is reduced and its level of activity is lowered. In the field of RNAi therapeutics, this reduction of disease-associated protein production and activity is referred to as “gene silencing.” Our siRNA delivery system is designed to enable delivery of our therapeutic siRNA molecules to targeted cells in the liver, where thousands of disease-associated genes are expressed. Using our RNAi-directed platform technologies, we have generated siRNA product candidates both for our internal development pipeline as well as for out-licensed programs with third-party collaborators. We are currently focused on developing siRNA molecules to bring into clinical trials for the potential treatment of cardiovascular disease, rare diseases such as iron overload disorders, and complement-mediated disorders. However, we have not yet conducted any clinical trials to date. We believe that our siRNA technology and delivery approach, combined with our expertise in RNAi biology, oligonucleotide chemistry and in vivo pharmacology, as well as our broad intellectual property estate and our relationships with key opinion leaders, provide us with a number of potential competitive advantages.

Our siRNA molecules are designed to bind to mRNA, which plays an essential role in the process used by living cells to translate the genetic information encoded by deoxyribonucleic acid, or DNA, into proteins. A specific stretch of DNA in the cell nucleus generates many identical copies of mRNA, which carry in the sequence of its nucleotides the molecular blueprints required for the cell to synthesize that particular encoded protein outside of the nucleus.  In some cases, cells produce mRNA erroneously, resulting in synthesis of too much of a particular protein, or a mutated protein variant, which can lead to disease. Our RNAi therapeutics are designed to address this problem by delivering siRNA that binds specifically to mRNA encoding the undesirable protein through Watson-Crick base pairing. Once the therapeutic siRNA molecule binds specifically to the targeted mRNA, the natural RNAi process is triggered, resulting in catalytic degradation of the targeted mRNA, which ultimately induces gene silencing while the RNAi pathway is active.  The level and duration of gene silencing that may be achieved by treatment with a particular siRNA molecule varies, as the catalytic activity of the RNAi pathway eventually fades, meaning that RNAi-mediated protein reduction is not permanent. In our preclinical studies, we have observed a durable, dose-dependent silencing effect with our product candidates, with the highest dose resulting in reductions of between 50% and 85% or more of the target protein level over the course of several weeks following subcutaneous injection. Although we have not yet commenced clinical trials of our product candidates, we believe that these observed results suggest that our product candidates could lead to similar results in humans.

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Our preclinical development programs include our product candidate SLN360, which has been shown in preclinical studies to reduce the genetically controlled activity of Lipoprotein(a), or Lp(a), to address the high and prevalent unmet medical need in reducing cardiovascular risk in people born with high Lp(a) levels; our product candidate SLN124, which has been shown in preclinical studies to reduceTMPRSS6 gene expression to up-regulate hepcidin levels key in mediating iron overload disorders, including beta-thalassemia and myelodysplastic syndrome, or MDS; and our SLN500 program candidates, which have been shown in preclinical studies to reduce the expression of the C3 protein for the treatment of complement pathway-mediated diseases. We have licensed the development and commercialization rights to the SLN500 program to Mallinckrodt Pharma IP Trading DAC, a wholly owned subsidiary of Mallinckrodt plc, and together with Cache Holdings Limited, another wholly owned subsidiary of Mallinckrodt plc, collectively referred to as Mallinckrodt. We are seeking regulatory approvals to start human clinical trials of SLN360 in the United States and Europe and of SLN124 in a number of countries, including in Europe and Asia, later this year. We also expect to nominate a lead candidate in the SLN500 program by the end of 2020.  

Our current product candidate pipeline is set forth in the chart below:

* We are responsible for discovery and preclinical activities and for executing the development program of each product in this program until the end of Phase 1 clinical trials, after which Mallinckrodt will assume clinical development and responsibility for global commercialization.

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We believe that siRNA molecules can, in theory, be engineered to bind specifically to and silence almost any gene in the human genome to which siRNA can be delivered. This potentially broad application of siRNA therapeutics could allow them to become a new major class of drugs. We are currently able to deliver siRNA molecules to liver cells using N-acetylgalactosamine, or GalNac, for receptor-mediated targeting. GalNAc is an amino-modified monosaccharide that binds to asialoglycoprotein receptors, or ASGPRs, with high affinity and specificity. When GalNAc-conjugated siRNA molecules reach the surface of liver cells, they are internalized in those cells, with those not internalized being excreted. Once internalized, the siRNAs specifically bind to their target mRNAs, degrading them through the RNAi pathway. A single siRNA molecule, once in the liver and incorporated into the RNAi cellular machinery, can reduce the production of the target protein by thousands of copies due to the catalytic nature of the cell’s RNAi machinery. This GalNAc-siRNA drug modality is intended to enable precision medicine through the accuracy of Watson-Crick base pairing of the siRNA to its target gene mRNA, coupled with the specificity of GalNAc-mediated delivery to the target gene-containing liver cell.  Our technology uses a novel structure of double-stranded RNA with chemical modifications designed to improve the stability and efficacy of our siRNA molecules as well as to enhance delivery to targeted liver cells. We incorporate proprietary chemical modifications to enhance drug properties of our siRNA molecules, such as potency, stability and tissue distribution.We believe this approach results in a powerful modular technology that will be well-suited to tackle life-changing diseases. Particular siRNA molecules are designed to reduce the levels of a disease-associated protein directly, such as in the case of SLN360, which in our preclinical studies has been shown to directly reduce Lp(a) expression.  Alternatively, in cases in which a disease-associated protein is normally subject to inhibition by a regulatory protein, siRNA molecules are designed to increase the levels of the disease-associated protein by silencing the inhibitory protein, thereby relieving inhibition and indirectly increasing levels of the protein normally subject to inhibition.  In preclinical studies, SLN124 was shownto indirectly up-regulate hepcidin levels by reducing the expression of a specific gene, TMPRSS6, which normally inhibits the production of hepcidin. We will use this approach to address iron overload disorders in which hepcidin expression is typically low. Using these techniques, we believe we can design siRNA molecules to decrease high protein levels, and in some cases, to increase low protein levels, depending on the particular disease genes being targeted.

The potential of our siRNA platform has been recognized through collaborations with subsidiaries of two large pharmaceutical companies, AstraZeneca PLC, or AstraZeneca, and Mallinckrodt plc, or Mallinckrodt, as well as a technology evaluation agreement entered into in January 2020 with another large pharmaceutical company, The Takeda Pharmaceutical Company Limited, or Takeda. In March 2020, we announced a strategic collaboration with AstraZeneca to discover, develop and commercialize siRNA therapeutics for the treatment of cardiovascular, renal, metabolic and respiratory diseases. AstraZeneca made an upfront cash payment to us of $20 million in May 2020 and has unconditionally agreed to make an additional cash payment to us of $40 million no later than the first half of 2021. AstraZeneca also made an equity investment of $20 million in our company in March 2020. We anticipate initiating work on five targets within the first three years of the collaboration, with AstraZeneca having the option to extend the collaboration to a further five targets. AstraZeneca has agreed to pay us $10 million for each option exercised. For each target selected under the collaboration, we will be eligible to receive up to $140 million in milestone payments upon the achievement of milestones relating to the initiation of specified clinical trials, the acceptance of specified regulatory filings and the first commercial sale in specified jurisdictions.  For each target selected, we will also be eligible to receive up to $250 million in milestone payments as well as tiered royalties as a percentage of net sales ranging from the high single digits to the low double digits.

In July 2019, we announced a strategic collaboration with Mallinckrodt to develop and commercialize RNAi drug targets designed to silence the complement cascade in complement-mediated disorders. Under the agreement, we granted Mallinckrodt an exclusive worldwide license to our C3 targeting program, SLN500, with options to license additional complement-mediated disease targets from us, with Mallinckrodt exercising two additional targets in July 2020. We are responsible for preclinical activities, and for conducting each development program until the end of Phase 1 clinical trials, after which Mallinckrodt will assume clinical development and responsibility for global commercialization. In connection with the execution of the agreement, Mallinckrodt made an upfront cash payment to us of $20 million and purchased $5 million of our ordinary shares. We are eligible to receive up to $10 million in potential research milestone payments, in addition to funding for Phase 1 clinical development of SLN500 including GMP manufacturing. We will fund all other preclinical activities. We received a research milestone payment of $2 million in October 2019 upon the initiation of work under our work plan for a particular target. The collaboration provides for potential additional development and regulatory milestone payments in aggregate of up to $100 million for the initial C3 target and up to $140 million for each of the two optioned complement-mediated disease targets,

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with such milestones relating to the initiation of specified clinical trials in specified jurisdictions, and upon the receipt of regulatory approvals by specified authorities, in each case for multiple indications. We are also eligible to receive potential commercial milestone payments of up to $562.5 million upon the achievement of specified levels of annual net sales of licensed products for each program. We are also eligible to receive tiered, low double-digit to high-teen percentage royalties on net sales for licensed products for each program.

Corporate Information

We were incorporated as a public limited company under the laws of England and Wales on November 18, 1994 under the name Stanford Rook Holdings plc with company number 2992058. In July 2005, we acquired Atugen AG, a company specializing in siRNA. On April 26, 2007, we changed our name to Silence Therapeutics plc. Our principal executive offices are located at 72 Hammersmith Road, London W14 8TH, United Kingdom and our telephone number is +44 (0)20-3457-6900. Our registered office address is 27 Eastcastle Street, London, W1W 8DH. Our ordinary shares are traded on AIM under the symbol “SLN”.  Our website address is www.silence-therapeutics.com.  The information contained on, or that can be accessed from, our website does not form part of this prospectus.  

Our agent for service of process in the United States is Silence Therapeutics Inc., 434 West 33rd Street, Office 814, New York, New York 10001.

Risks Associated with Our Business

Our business is subject to a number of risks of which you should be aware before making an investment decision. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth in the section titled “Risk Factors” before deciding whether to invest in our ADSs. Among these important risks are, but not limited to, the following:

• The approach we are taking to discover and develop drugs is novel and we may not be successful in our efforts to identify or discover potential drug product candidates to bring into clinical trials.

• If clinical trials of our product candidates fail to commence or, once commenced, fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities, or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.

• We have a history of net losses and we anticipate that we will continue to incur significant losses for the foreseeable future.

• We will need to raise additional capital, which may not be available on acceptable terms, or at all.

• We face competition from other companies that are working to develop novel drugs and technology platforms using technologies similar to ours. If these companies develop drugs more rapidly than we do or their technologies, including delivery technologies, are more effective, our ability to successfully commercialize drugs may be adversely affected.

• We rely on third parties to conduct some aspects of our manufacturing, research and development activities, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of research or clinical testing.

• If we are unable to obtain or protect intellectual property rights related to our current or future product candidates, we may not be able to compete effectively in our markets.

• An active trading market for our ADSs may not develop and you may not be able to resell your ADSs at or above the price you pay for them, if at all.

• We qualify as a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

• If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, the price and trading volume of our ADSs could decline.

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• If we are a passive foreign investment company, there could be adverse U.S. federal income tax consequences to U.S. Holders.

• The ongoing COVID-19 pandemic could adversely affect our operations, including at our clinical trial sites, as well as the business or operations of our contract research organizations, or CROs, or other third parties with whom we conduct business.

Implications of Being an Emerging Growth Company and a Foreign Private Issuer

Emerging Growth Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we may take advantage of certain exemptions from various reporting requirements that are applicable to other publicly traded entities that are not emerging growth companies. These exemptions include:

• the option to present only two years of audited financial statements and related discussion in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus;

• not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002;

• not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board, or PCAOB, regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

• not being required to submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency,” and “say-on-golden parachutes”; and

• not being required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.

We will remain an emerging growth company until the earliest of: (1) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion; (2) the last day of 2025; (3) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur on the last day of any fiscal year that the aggregate worldwide market value of our common equity held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter; or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during any three-year period.

Foreign Private Issuer

Upon the effectiveness of the registration statement of which this prospectus forms a part, we will report under the Exchange Act as a non-U.S. company with foreign private issuer status. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

• the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

• the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

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• the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specific information, and current reports on Form 8-K upon the occurrence of specified significant events.

Foreign private issuers are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company, but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither an emerging growth company nor a foreign private issuer.

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The REGISTERED SHARES

Nasdaq Stock Market Symbol	We have applied to list ADSs representing our ordinary shares on the Nasdaq Capital Market under the symbol “SLN”
AIM trading symbol for our ordinary shares	“SLN”
Registered Shares being registered on behalf of the Registered Holders	53,732,291 ordinary shares, represented by an aggregate of 17,910,764 ADSs
Ordinary shares issued and outstanding immediately before and after the effectiveness of the registration statement of which this prospectus forms a part	82,826,259 ordinary shares
ADSs issued and outstanding immediately after the effectiveness of the registration statement of which this prospectus forms a part	17,910,764 ADSs (assuming deposit with the depositary of all the ordinary shares registered hereby)
American Depositary Shares	Each ADS represents three ordinary shares, nominal value £0.05 per ordinary share. Holders of ADSs have the rights of an ADS holder or beneficial owner of ADSs (as applicable) as provided in the deposit agreement among us, the depositary and holders and beneficial owners of ADSs issued thereunder from time to time. To better understand the terms of the ADSs representing our ordinary shares, see the section of this prospectus captioned “Description of American Depositary Shares.” We also encourage you to read the deposit agreement, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part.
Depositary	The Bank of New York Mellon
Use of proceeds	We will not receive proceeds from the disposition, if any, of Registered Shares in the form of ADSs by the Registered Holders.
Risk factors	See “Risk Factors” and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our ADSs.

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Unless otherwise stated in this prospectus, the number of our ordinary shares set forth herein is as of June 30, 2020 and is based on 82,826,259 ordinary shares issued and outstanding on such date but excludes:

• 3,901,958 ordinary shares issuable upon the exercise of outstanding options under our 2018 Long Term Incentive Plan, or the Employee LTIP, as of June 30, 2020, at a weighted average exercise price of £1.48 per share;

• 510,000 ordinary shares issuable upon the exercise of outstanding options under the 2018 Non-Employee Long Term Incentive Plan, or the Non-Employee LTIP, as of June 30, 2020, at a weighted average exercise price of £1.23 per share;

• 4,288,042 ordinary shares reserved for issuance pursuant to the Employee LTIP and the Non- Employee LTIP, which amount is equal to 8,700,000 ordinary shares less the shares issuable upon the exercise of outstanding options as of June 30, 2020, as described in the preceding two bullets;

• additional shares that may become reserved for issuance under the Employee LTIP and the Non-Employee LTIP upon the cancellation of previously granted options and upon provisions of the plans that automatically increase the number of shares reserved for issuance, beginning on January 1, 2021 and continuing until January 1, 2028, in an amount equal to 5% of the total number of our outstanding ordinary shares on the immediately preceding December 31; and

• 758,715 ordinary shares issuable upon the exercise of options outstanding under individual share option contracts as of June 30, 2020, at a weighted average exercise price of £0.59 per share.

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Summary Consolidated Financial Data

The following tables present summary consolidated financial data as of the dates and for the periods indicated. We have derived the summary consolidated statement of operations data for the years ended December 31, 2019 and 2018 and the consolidated balance sheet data as of December 31, 2019 and 2018 from our audited consolidated financial statements, included elsewhere in this prospectus, which have been prepared in accordance with IFRS, as issued by the IASB, and audited in accordance with the standards of the PCAOB (United States), and included elsewhere in this prospectus.

You should read this data together with our consolidated financial statements and related notes appearing elsewhere in this prospectus and the information under the sections titled “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our historical results are not necessarily indicative of our future results.

	For the Year Ended December 31,
(in thousands except share and per share data)	2019			2019			2018
	($)(1)			(£)			(£)
Consolidated Statements of Operations Data:
Revenue	$	322		£	244		£	—
Operating expenses:
Research and development costs		(17,583	)		(13,336	)		(9,743	)
Administrative expenses		(12,713	)		(9,642	)		(10,828	)
Total operating expenses		(30,296	)		(22,978	)		(20,571	)
Operating loss		(29,974	)		(22,734	)		(20,571	)
Finance and other expenses		(215	)		(163	)		—
Finance and other income		36			27			45
Loss before taxation		(30,153	)		(22,870	)		(20,526	)
Taxation		4,335			3,288			2,115
Loss after taxation	$	(25,818	)	£	(19,582	)	£	(18,411	)
Loss per ordinary share (basic and diluted)	$	(0.34	)	£	(0.26	)	£	(0.26	)
Weighted average ordinary shares (basic and diluted)		75,126,869			75,126,869			70,312,880

(1) Translated solely for convenience into U.S. dollars at an assumed exchange rate of $1.32 per £1.00, which was the rounded official exchange rate of such currencies as of December 31, 2019.

	As of December 31,
(in thousands except share and per share data)	2019		2019		2018
	($)(1)		(£)		(£)
Consolidated Balance Sheet Data:
Cash, cash equivalents and term deposits	$	44,188	£	33,515	£	26,494
Total assets		60,751		46,077		38,885
Total liabilities		33,183		25,168		3,830
Total equity		27,567		20,909		35,055

(1) Translated solely for convenience into U.S. dollars at an assumed exchange rate of $1.32 per £1.00, which was the rounded official exchange rate of such currencies as of December 31, 2019.

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RISK FACTORS

Investing in ADSs representing our ordinary shares involves a high degree of risk. You should carefully consider the following risk factors and all other information contained in this prospectus, including our consolidated financial statements and the related notes, before investing in the ADSs. The risks and uncertainties described below are those significant risk factors, currently known and specific to us, that we believe are relevant to an investment in the ADSs. If any of these risks materialize, our business, results of operations or financial condition could suffer, the price of the ADSs could decline and you could lose part or all of your investment. Additional risks and uncertainties not currently known to us or that we now deem immaterial may also harm us and adversely affect your investment in the ADSs.

Risks Related to Our Financial Condition and Need for Additional Capital

We have a history of net losses and we anticipate that we will continue to incur significant losses for the foreseeable future.

In recent years, our operations have been primarily limited to developing our siRNA product platform, undertaking basic research around siRNA targets, conducting preclinical studies for our initial development programs and out-licensing some of our intellectual property rights. We have not yet initiated clinical trials for, nor have we obtained marketing regulatory approval for any product candidates. Consequently, any predictions about our future success or viability, or any evaluation of our business and prospects, may not be accurate.

We have incurred losses in each year since our inception. Our net losses were £19.6 million and £18.4 million for the years ended December 31, 2019 and 2018, respectively. We have devoted most of our financial resources to research and development, including our preclinical and clinical development activities.

We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future, although these losses may fluctuate significantly between periods. We anticipate that our expenses will increase substantially as we continue the research and preclinical and clinical development of our product candidates, both independently and under our collaboration agreements with third parties. We would also incur additional expenses in connection with seeking marketing approvals for any product candidates that successfully complete clinical trials, if any, and ultimately establishing a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval. We will also need to maintain, expand and protect our intellectual property portfolio, hire additional personnel, and create additional infrastructure to support our operations and our product development and planned future commercialization efforts. We expect that all of these additional expenses will cause our total expenses to substantially exceed our revenue over the near term, resulting in continuing operating losses and increasing accumulated deficits.

We have never generated any revenue from product sales and may never be profitable.

Our ability to generate revenue and achieve profitability depends on our ability, alone or with collaboration partners, to successfully complete the development of, obtain the necessary regulatory approvals for and commercialize our product candidates. We do not anticipate generating revenues from sales of products for the foreseeable future, if ever. Our ability to generate future revenues from product sales will depend heavily on our success in:

• identifying and validating therapeutic targets;

• completing our research and preclinical development of product candidates;

• initiating and completing clinical trials for product candidates;

• seeking and obtaining marketing approvals for product candidates that successfully complete clinical trials;

• establishing and maintaining supply and manufacturing relationships with third parties;

• launching and commercializing product candidates for which we obtain marketing approval, either with a collaborator or, if launched independently, successfully establishing a sales force, marketing and distribution infrastructure;

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• maintaining, protecting and expanding our intellectual property portfolio; and

• attracting, hiring and retaining qualified personnel.

Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to predict the timing or amount of increased expenses and when we will be able to achieve or maintain profitability, if ever. In addition, our expenses could increase if we were required by the FDA, the European Medicines Agency, or EMA, the United Kingdom Medicines and Healthcare products Regulatory Agency, or MHRA, or other foreign regulatory agencies to perform studies and trials in addition to those that we currently anticipate.

Even if one or more of our product candidates is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product on our own. Even if we were able to generate revenues from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations.

We will need to raise additional capital, which may not be available on acceptable terms, or at all.

We have used substantial funds to develop our RNAi technologies and will require substantial funds to conduct further research and development, including preclinical testing and clinical trials of our product candidates, and to manufacture, market and sell any of our products that may be approved for commercial sale. Because the length of time or activities associated with successful development of our product candidates may be greater than we anticipate, we are unable to estimate the actual funds we will require to develop and commercialize them.

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is expensive. We expect our research and development expenses to substantially increase in connection with our ongoing activities, particularly as we advance our product candidates towards or through clinical trials. We will need to raise additional capital to fund our operations and such funding may not be available to us on acceptable terms, or at all. We may need to raise additional capital or otherwise obtain funding through additional strategic collaborations if we choose to initiate clinical trials for product candidates other than those currently licensed to Mallinckrodt and AstraZeneca. In any event, we will require additional capital to obtain regulatory approval for, and to commercialize, future product candidates.

For the foreseeable future, we expect to rely primarily on additional non-dilutive collaboration arrangements, as well as equity and/or debt financings, to fund our operations. Raising additional capital through the sale of securities could cause significant dilution to our shareholders. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. Our ability to raise additional funds will depend, in part, on the success of our preclinical studies and clinical trials and other product development activities, regulatory events, our ability to identify and enter into licensing or other strategic arrangements, and other events or conditions that may affect our value or prospects, as well as factors related to financial, economic and market conditions, many of which are beyond our control. There can be no assurances that sufficient funds will be available to us when required or on acceptable terms, if at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to:

• significantly delay, scale back or discontinue the development or commercialization of any future product candidates;

• seek strategic alliances for research and development programs at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available;

• dispose of technology assets, or relinquish or license on unfavorable terms, our rights to technologies or any future product candidates that we otherwise would seek to develop or commercialize; and

• file for bankruptcy or cease operations altogether.

Any of these events would have a material adverse effect on our business, operating results and prospects and could significantly impair the value of your investment in our ADSs.

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Raising additional capital may cause dilution to our holders, including holders of our ADSs, restrict our operations or require us to relinquish rights to our technologies or product candidates.

We expect that significant additional capital will be needed in the future to continue our planned operations, including expanded research and development activities and potential commercialization efforts. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through any or a combination of securities offerings, debt financings, license and collaboration agreements and research grants and tax credits.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a shareholder. Debt financing and preferred equity financing, if available, could result in fixed payment obligations, and we may be required to accept terms that restrict our ability to incur additional indebtedness, force us to maintain specified liquidity or other ratios or restrict our ability to pay dividends or make acquisitions. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. In addition, we could also be required to seek funds through arrangements with collaborators or others at an earlier stage than otherwise would be desirable.

If we raise funds through research grants or take advantage of research and development tax credits, we may be subject to certain requirements, which may limit our ability to use the funds or require us to share information from our research and development. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to a third party to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Raising additional capital through any of these or other means could adversely affect our business and the holdings or rights of our shareholders, and may cause the market price of our ADSs to decline.

Risks Related to the Discovery, Development, Regulatory Approval and Potential Commercialization of Our Product Candidates

The approach we are taking to discover and develop drugs is novel and may never lead to marketable products.

We have concentrated our therapeutic product research and development efforts on siRNA technology, and our future success depends on the successful development of this technology and products based on our siRNA product platform. Although the FDA has approved two siRNA treatments for marketing in the United States since 2018, no assurance can be given that the FDA will approve any other siRNA treatments such as ours.

The scientific discoveries that form the basis for our efforts to discover and develop product candidates based on siRNA technology are relatively new. The scientific evidence to support the feasibility of developing product candidates based on these discoveries is both preliminary and limited. If we do not successfully develop and commercialize product candidates based upon our technological approach, we may not become profitable and the value of our ordinary shares may decline.

Further, our focus solely on siRNA technology for developing drugs as opposed to multiple, more proven technologies for drug development increases the risks associated with the ownership of our ordinary shares. If we are not successful in developing any product candidates using siRNA technology, we may be required to change the scope and direction of our product development activities. In that case, we may not be able to identify and successfully implement an alternative product development strategy.

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We may not be successful in our efforts to identify or discover potential product candidates.

The success of our business depends primarily upon our ability to identify, develop and commercialize siRNA therapeutics. Our research programs may show initial promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for a number of reasons, including:

• our research methodology or that of any strategic collaborator may be unsuccessful in identifying potential product candidates that are successful in clinical development;

• 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;

• our current or future strategic collaborators may change their development profiles for potential product candidates or abandon a therapeutic area; or

• new competitive developments in the evolving field of RNAi, including gene therapy or gene editing, may render our product candidates obsolete or noncompetitive.

If any of these events occur, we may be forced to abandon our development efforts for a program or programs, which would have a material adverse effect on our business and could potentially cause us to cease operations. 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.

We may not be successful in our efforts to increase our pipeline, including by pursuing additional indications for our current product candidates, identifying additional indications for our proprietary platform technology or in-licensing or acquiring additional product candidates for other indications.

We may not be able to develop or identify product candidates that are safe, tolerable and effective. Even if we are successful in continuing to build our pipeline, the potential product candidates that we identify, in-license or acquire may not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance.

Preclinical studies and clinical trials of our product candidates may not be successful. If we are unable to generate successful results from these studies and trials, or experience significant delays in doing so, our business may be materially harmed.

We have invested a significant portion of our efforts and financial resources in the identification and development of siRNA-based product candidates. Our ability to generate product revenues, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates.

The success of our product candidates will depend on several factors, including, inter alia, the following:

• successfully designing preclinical studies which may be predictive of clinical outcomes;

• successfully conducting clinical trials;

• receipt of marketing approvals from applicable regulatory authorities;

• obtaining and maintaining patent or trade secret protection for future product candidates;

• establishing and maintaining supply and manufacturing relationships with third parties or establishing our own manufacturing capability; and

• successfully commercializing our products, if and when approved, whether alone or in collaboration with others.

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If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully complete the development of, or commercialize, our product candidates, which would materially harm our business.

If clinical trials of our product candidates fail to commence or, once commenced fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities, or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.

In clinical development, the risk of failure for product candidates is high. It is impossible to predict when or if any of our product candidates will prove effective or safe in humans or will receive regulatory approval. Before obtaining marketing approval from regulatory authorities for the sale of product candidates, we or a strategic collaborator must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates in humans. As of the date hereof, none of our product candidates are in clinical trials. Clinical trials are expensive, difficult to design and implement, can take many years to complete and are uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. Moreover, clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in clinical trials have nonetheless failed to obtain marketing approval for their products.

Events which may result in a delay or unsuccessful completion of clinical development include, among other things:

• delays in reaching an agreement with the FDA, EMA, MHRA or other regulatory authorities on final trial design;

• imposition of a clinical hold on our clinical trial operations or trial sites by the FDA or other regulatory authorities;

• delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites;

• inability to adhere to clinical trial requirements directly or with third parties such as CROs;

• delays in obtaining required institutional review board approval at each clinical trial site;

• delays in recruiting suitable patients to participate in a trial;

• delays in the testing, validation, manufacturing and delivery of the product candidates to the clinical sites;

• delays in having patients complete participation in a trial or return for post-treatment follow-up;

• delays caused by patients dropping out of a trial due to protocol procedures or requirements, product side effects or disease progression;

• clinical sites dropping out of a trial to the detriment of enrollment;

• time required to add new clinical sites;

• investigator fraud, including data fabrication by clinical trial personnel; or

• delays by our contract manufacturers to produce and deliver sufficient supply of clinical trial materials.

If we or our current or future strategic collaborators are required to conduct additional clinical trials or other testing of any product candidates beyond those that are currently contemplated, are unable to successfully complete clinical trials of any such product candidates or other testing, or if the results of these trials or tests are not positive or are only moderately positive, or if there are safety concerns, we and they may:

• be delayed in obtaining marketing approval for our future product candidates;

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• not obtain marketing approval at all;

• obtain approval for indications or patient populations that are not as broad as originally intended or desired;

• obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

• be subject to additional post-marketing testing requirements; or

• have the product removed from the market after obtaining marketing approval.

Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. In addition, our product development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether any clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which would impair our ability to successfully commercialize our product candidates and may harm our business and results of operations. Any inability to successfully complete clinical development, whether independently or with a strategic collaborator, could result in additional costs to us or impair our ability to generate revenues from product sales, regulatory and commercialization milestone payments and royalties.

Conducting successful clinical trials requires the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.

Patient enrollment in clinical trials and completion of patient participation and follow-up depends on many factors, including the size of the patient population; the nature of the trial protocol; the attractiveness of, or the discomforts and risks associated with, the treatments received by enrolled subjects; the availability of appropriate clinical trial investigators; support staff; the number of ongoing clinical trials in the same indication that compete for the same patients; proximity of patients to clinical sites and ability to comply with the eligibility and exclusion criteria for participation in the clinical trial and patient compliance. For example, patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety and effectiveness of our products or if they determine that the treatments received under the trial protocols are not attractive or involve unacceptable risks or discomforts. Patients may also not participate in our clinical trials if they choose to participate in contemporaneous clinical trials of competitive products.

We rely on third parties to conduct some aspects of our manufacturing, research and development activities, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of research or clinical testing.

We do not expect to independently conduct all aspects of our drug discovery activities, research or preclinical and clinical studies of product candidates. We currently rely and expect to continue to rely on third parties to conduct some aspects of our drug development studies and chemical syntheses. Any of these third parties may terminate their engagements with us at any time. If we need to enter into alternative arrangements, it would delay our product development activities. Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of our responsibilities. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our studies in accordance with regulatory requirements or our stated study plans and protocols, we will not be able to complete, or may be delayed in completing, the necessary preclinical studies to enable us to progress viable product candidates for investigational new drug, or IND, submissions and will not be able to, or may be delayed in our efforts to, successfully develop and commercialize such product candidates.

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Although our research and development services can only be performed by us or at our discretion, we rely on third party clinical investigators, CROs, clinical data management organizations, medical institutions and consultants to design, conduct, supervise and monitor preclinical studies and clinical trials in relation to our product candidates. Because we rely on third parties and do not have the ability to conduct clinical trials independently, we have less control over the timing, quality and other aspects of clinical trials than we would if we conducted them on our own. These investigators, CROs and consultants are not our employees and we have limited control over the amount of time and resources that they dedicate to our programs. These third parties may have contractual relationships with other entities, some of which may be our competitors, which may draw time and resources from our programs. If we cannot contract with acceptable third parties on commercially reasonable terms, or at all, or if these third parties do not carry out their contractual duties, satisfy legal and regulatory requirements for the conduct of clinical trials or meet expected deadlines, our clinical development program could be delayed or otherwise adversely affected. In all events, we are responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. The FDA and comparable foreign regulatory agencies require us to comply with good clinical practices, or GCP, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible, accurate and complete and that the rights, integrity and confidentiality of trial participants are protected. We rely, for example, on third parties for aspects of quality control which are especially important in monitoring compliance with GCP requirements and avoiding any investigator fraud or misconduct in clinical research, such as practices including adherence to an investigational plan; accurate recordkeeping; drug accountability; obtaining completed informed consent forms; timely reporting or any adverse drug reactions; notifying appropriate Institutional Review Boards, or IRBs, and Ethics Committees of progress reports and any significant changes; and obtaining documented IRB approvals. Our reliance on third parties that we do not control does not relieve us of these responsibilities and requirements. The third parties with which we contract might not be diligent, careful or timely in conducting our clinical trials, as a result of which we could experience one or more lapses in quality controls or other aspects of clinical trial management, and the clinical trials could be delayed or unsuccessful. Any such event could have a material adverse effect on our business, financial condition, results of operations and prospects.

Our dependence on collaborators for capabilities and funding means that our business could be adversely affected if any collaborator materially amends or terminates its collaboration agreement with us or fails to perform its obligations under that agreement. Our current or future collaborations, if any, may not be scientifically or commercially successful. Disputes may arise in the future with respect to the ownership of rights to technology or products developed with collaborators, which could have an adverse effect on our ability to develop and commercialize any affected product candidate. Our current collaborations allow, and we expect that any future collaborations will allow, either party to terminate the collaboration for a material breach by the other party. In addition, our collaborators may have additional termination rights for convenience with respect to the collaboration or a particular program under the collaboration, under certain circumstances. For example, our collaboration agreement with Mallinckrodt, for an exclusive worldwide license for SLN500 and additional complement-target products, and our collaboration agreement with AstraZeneca to discover, develop and commercialize siRNA therapeutics for the treatment of cardiovascular, renal, metabolic and respiratory diseases, may be terminated by Mallinckrodt and AstraZeneca, respectively, at any time upon prior written notice to us. If we were to lose a commercialization collaborator, we would have to attract a new collaborator or develop expanded sales, distribution and marketing capabilities internally, which would require us to invest significant amounts of financial and management resources.

We rely on third-party manufacturers to produce our preclinical and clinical product candidates, and we intend to rely on third parties to produce future clinical supplies of product candidates that we advance into clinical trials and commercial supplies of any approved product candidates.

Reliance on third-party manufacturers entails risks, including risks that we would not be subject to if we manufactured the product candidates ourselves, including:

• the inability to meet any product specifications and quality requirements consistently;

• a delay or inability to procure or expand sufficient manufacturing capacity;

• manufacturing and product quality issues related to scale-up of manufacturing;

• costs and validation of new equipment and facilities required for scale-up;

• a failure to comply with applicable government regulations;

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• the inability to negotiate manufacturing or supply agreements with third parties under commercially reasonable terms or at all;

• termination or non-renewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;

• the reliance on a limited number of sources, such that if we were unable to secure a sufficient supply of these product components, we will be unable to manufacture and sell future product candidates in a timely fashion, in sufficient quantities or under acceptable terms; and

• the losses incurred by us if our insurance coverage is insufficient to cover any loss, contamination or damage of chemical materials, product components or products made by any of our CMOs, once the materials or products have been shipped to us and the risk of loss has been transferred to us.

We face risks inherent in relying on contract manufacturing organizations, or CMOs, as any disruption, such as a fire, natural hazards, pandemic, epidemic, or outbreak of an infectious disease at a CMO could significantly interrupt our manufacturing capability. If necessary to avoid future disruption, we may have to establish alternative manufacturing sources. This would require substantial capital on our part, which we may not be able to obtain on commercially acceptable terms or at all. Additionally, we may experience manufacturing delays as we build or locate replacement facilities and seek and obtain necessary regulatory approvals. If this occurs, we will be unable to satisfy manufacturing needs on a timely basis, if at all. Also, operating any new facilities may be more expensive than operating our current facility. Further, business interruption insurance may not adequately compensate us for any losses that may occur and we would have to bear the additional cost of any disruption. For these reasons, a significant disruptive event of the manufacturing facility could have drastic consequences, including placing our financial stability at risk.

Even if we complete the necessary preclinical studies and clinical trials, we cannot predict whether or when we will obtain regulatory approval to commercialize a product candidate and we cannot, therefore, predict the timing of any revenue from a future product.

Neither we nor any strategic collaborator can commercialize a product until the appropriate regulatory authorities, such as the FDA, EMA or MHRA, have reviewed and approved the product candidate. The regulatory agencies may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval. Additional delays may result if an FDA Advisory Committee, or similar foreign governmental institution, recommends restrictions on approval or recommends non-approval. In addition, we or a strategic collaborator may experience delays or rejections based upon additional government regulation from future legislation or administrative action, or changes in regulatory agency policy during the period of product development, clinical trials and the review process.

Even if we obtain regulatory approval for a product candidate, we will still face extensive regulatory requirements and our products may face future development and regulatory difficulties.

Even if we obtain regulatory approval in the United States and the European Union, or EU, the FDA and the EMA may still impose significant restrictions on the indicated uses or marketing of our product candidates or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance. The holder of an approved new drug application, or NDA, in the United States, or a marketing authorization, or MA, in the EU is obligated to monitor and report adverse events, or AEs, and any failure of a product to meet the specifications in the NDA. The holder of an approved NDA or MA must also submit new or supplemental applications and obtain regulatory approval for certain changes to the approved product, product labeling or manufacturing process. Advertising and promotional materials must comply with the relevant regulatory rules and, in the United States, are subject to FDA review, in addition to other potentially applicable federal and state laws.

In addition, drug product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections regulatory authorities for compliance with current good manufacturing practices, or cGMP, and adherence to commitments made in the NDA or MA. If we or 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, a regulatory agency may impose restrictions relative to that product or the manufacturing facility, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.

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If there are changes in the application of legislation or regulatory policies, or if problems are discovered with a product or our manufacture of a product, or if we or one of our distributors, licensees or co-marketers fails to comply with regulatory requirements, the regulators could take various actions such as:

• issuing a warning letter asserting that we are in violation of the law;

• seeking an injunction or impose civil or criminal penalties or monetary fines;

• suspending or withdrawing regulatory approval;

• suspending any ongoing clinical trials;

• refusing to approve a pending NDA or MA or supplements to an NDA or MA submitted by us;

• seizing product; or

• refusing to allow us to enter into supply contracts, including government contracts.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize our future products and generate revenues.

Even if we obtain and maintain approval for our product candidates in one jurisdiction, we may never obtain approval for our product candidates with other regulatory authorities in other jurisdictions. Sales of our product candidates outside of the United States and the EU will be subject to foreign regulatory requirements governing clinical trials and marketing approval and continual regulatory review. We will be subject to ongoing obligations and oversight by regulatory authorities, including adverse event reporting requirements, marketing restrictions and, potentially, other post-marketing obligations, all of which may result in significant expense and limit our ability to commercialize such products.

We may not be able to obtain or maintain orphan drug designations for any of our product candidates, and we may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.

Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs or biologics for relatively small patient populations as orphan drugs. In the United States, under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat a rare disease or condition. Such diseases and conditions are those that affect fewer than 200,000 individuals in the United States, or if they affect more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and making a drug available in the United States for these types of diseases or conditions will be recovered from sales of the drug. However, orphan drug designation must be requested before submitting an NDA and there can be no assurance that any such designation will be granted. If the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by that agency. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.

In the United States, orphan drug designation recipients can take advantage of special incentives provided by the FDA such as (i) potential market exclusivity of the product for seven years, as the first sponsor (ii) tax credits of the qualified clinical research for a designated orphan product and (iii) waiver of associated fees when submitting a marketing application to the FDA.

Similarly, in the EU, orphan designation is intended to promote the development of medicinal products that are intended for (i) the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than five in 10,000 persons in, or that are intended for the diagnosis, prevention, or treatment of a life-threatening, seriously debilitating or serious and chronic condition when, without incentives, it is unlikely that sales in Europe would be sufficient to justify the necessary investment, and (ii) there exists no satisfactory method of diagnosis, prevention or treatment of the condition that has been authorized in Europe or, if such method exists, that the medicinal product will be of significant benefit to those affected. In Europe, orphan designation entitles a party to a number of incentives, such as protocol assistance and scientific advice specifically for designated orphan medicines, and potential fee reductions depending on the status of the sponsor.  European orphan medicines also benefit from ten

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years of market exclusivity, which precludes the EMA from approving another marketing application during this time period for the same drug and indication.  This marketing exclusivity period can however, be reduced to six years if a drug no longer meets the criteria for orphan designation or if the drug is sufficiently profitable, such that market exclusivity is no longer justified.

Our product candidate SLN124 has received orphan drug designation from the EMA for the treatment of beta-thalassemia and from the FDA for the treatment of both beta-thalassemia in adults and MDS. Even though we have these designations, or if we obtain orphan drug exclusivity in the future for a product candidate for these or other indications, exclusivity may not effectively protect the product candidate from competition because different therapies can be approved for the same condition and the same therapies can be approved for different conditions but used off-label. Even after an orphan drug is approved, the FDA or EMA can subsequently approve the same drug for the same condition if such regulatory authority concludes that the later drug is clinically superior because it is shown to be safer, more effective or makes a major contribution to patient care. Orphan drug exclusivity may also be lost if the regulatory authority later determines that the initial request for designation was materially defective. In addition, orphan drug exclusivity does not prevent the regulatory authority from approving competing drugs for the same or similar indication containing a different active ingredient. In addition, if a subsequent drug is approved for marketing for the same or a similar indication as any of our product candidates that receive marketing approval, we may face increased competition and lose market share regardless of orphan drug exclusivity.

Although we have obtained Rare Pediatric Disease Designation for SLN124 for the treatment of beta-thalassemia, we may not realize the expected benefits of this designation.

In 2012, Congress authorized the FDA to award priority review vouchers to sponsors of certain rare pediatric disease product applications. This provision is designed to encourage development of new drug and biological products for prevention and treatment of certain rare pediatric diseases. Specifically, under this program, a sponsor who receives an approval for a drug or biologic for a “rare pediatric disease” may qualify for a voucher that can be redeemed to receive a priority review of a subsequent marketing application for a different product. The sponsor of a rare pediatric disease drug product receiving a priority review voucher may transfer (including by sale) the voucher to another sponsor. The voucher may be further transferred any number of times before the voucher is used, as long as the sponsor making the transfer has not yet submitted the application. The FDA may also revoke any priority review voucher if the rare pediatric disease drug for which the voucher was awarded is not marketed in the U.S. within one year following the date of approval.

SLN124 has been granted rare pediatric disease designation, but designation of a drug for a rare pediatric disease does not guarantee that an NDA will meet the eligibility criteria for a rare pediatric disease priority review voucher at the time the application is approved. Specifically, Congress has only authorized the Rare Pediatric Disease Priority Review Voucher program until September 30, 2020. However, if a drug candidate receives Rare Pediatric Disease Designation before October 1, 2020, it is eligible to receive a voucher if an NDA for the drug for the designated indication is approved before October 1, 2022.  We may not submit our NDA prior to October 1, 2022 and the U.S. Congress may not further extend the Rare Pediatric Disease Priority Voucher Program.  Furthermore, a Rare Pediatric Disease Designation does not lead to faster development or regulatory review of the product, or increase the likelihood that it will receive marketing approval. We may or may not realize any benefit from receiving a voucher.

We may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and human resources, we intend to leverage our existing licensing and collaboration agreements and may enter into new strategic collaboration agreements for the development and commercialization of our programs and potential product candidates in indications with potentially large commercial markets while focusing our internal development resources, and any future internal sales and marketing organization that we may establish, on research programs and product candidates intended for selected markets or patient populations, such as rare diseases. As a result, and even as we prioritize rare indications with expansion opportunities to large populations, we may forego or delay pursuit of other programs or product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on research and development programs and product candidates for specific indications may not yield any commercially viable

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products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through strategic collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate, or we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a collaboration arrangement.

Any of our product candidates may cause adverse effects or have other properties that could delay or prevent their regulatory approval or limit the scope of any approved label or market acceptance.

AEs caused by our product candidates could cause us, other reviewing entities, clinical trial sites or regulatory authorities to interrupt, delay or halt clinical trials and could result in the denial of regulatory approval. Certain oligonucleotide therapeutics have been observed to result in injection site reactions and pro-inflammatory effects and may also lead to impairment of kidney or liver function. There is a risk that our future product candidates may induce similar AEs.

If AEs are observed in any clinical trials of our product candidates, including those that a strategic collaborator may develop under an agreement with us, our or our collaborators’ ability to obtain regulatory approval for product candidates may be negatively impacted.

Further, if any of our future products, if and when approved for commercial sale, cause serious or unexpected side effects, a number of potentially significant negative consequences could result, including:

• regulatory authorities may withdraw their approval of the product or impose restrictions on our distribution in the form of a modified risk evaluation and mitigation strategy;

• regulatory authorities may require the addition of labeling statements, such as warnings or contraindications;

• we may be required to change the way the product is administered or conduct additional clinical trials;

• we could be sued and held liable for harm caused to patients; or

• our reputation may suffer.

Any of these events could prevent us or our collaborators from achieving or maintaining market acceptance of the affected product and could substantially increase the costs of commercializing our future products and impair our ability to generate revenues from the commercialization of these products either on our own or with the collaborator.

Even if any of our product candidates receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, third party payors and others in the medical community necessary for commercial success.

The product candidates that we are developing are based upon new technologies or therapeutic approaches. Key participants in pharmaceutical marketplaces, such as physicians, third-party payors and consumers, may not accept a product intended to improve therapeutic results based on RNAi technology. As a result, it may be more difficult for us to convince the medical community and third-party payors to accept and use our product, or to provide favorable reimbursement. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:

• the efficacy, safety and potential advantages of any of our product candidates compared to alternative treatments;

• our ability to offer our products for sale at competitive prices;

• the stability, shelf life, convenience and ease of storage and administration compared to alternative treatments;

• the willingness of the target patient population to try new treatments and of physicians to prescribe these treatments;

• our ability to hire and retain a sales force, or to engage one or more third party distributors for our products;

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• the strength of marketing and distribution support;

• the availability of third-party coverage and adequate reimbursement for our product candidates;

• the prevalence and severity of any side effects; and

• any restrictions on the use of our products together with other medications.

Risks Related to Our Business Operations and Compliance with Government Regulations

The ongoing COVID-19 pandemic could adversely affect our operations, including at our clinical trial sites, as well as the business or operations of our CROs or other third parties with whom we conduct business.

Our business could be adversely affected by the effects of the recent and evolving COVID-19 pandemic, which was declared by the World Health Organization as a global pandemic. The COVID-19 pandemic has resulted in travel and other restrictions in order to reduce the spread of the disease including in London and Berlin, where our European operations are focused and in New York, where our U.S. operations are focused. The State of New York declared a state of emergency related to the spread of COVID-19, and the Governor of New York and other health officials in New York and surrounding states have announced aggressive orders, health directives and recommendations to reduce the spread of the disease. Further, the Governor of New York issued an executive order directing that all non-essential businesses close their physical operations and implement work-from-home schedules, effective as of March 20, 2020, while the United Kingdom issued a similar order on March 23, 2020 and Germany issued social distancing measures on March 22, 2020. Accordingly, we implemented work-from-home policies for all employees and continue to follow national, regional and local government guidance and rules in the jurisdictions in which we operate. The effects of the executive order and our work-from-home policies may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.

In addition, our planned clinical trials may be affected by the COVID-19 pandemic. Clinical site initiation and patient enrollment may be delayed due to prioritization of hospital resources toward the COVID-19 pandemic. Some patients may not be able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. Similarly, our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to the virus that causes COVID-19, may adversely impact our clinical trial operations. This may be particularly challenging in the context of trials that seek to enroll patients with underlying conditions such as cardiovascular disease or diabetes which increase the risk of serious morbidity and mortality related to COVID-19. In addition, it is possible that COVID-19 exposure may affect the response to one or more of our drug candidates or confound the interpretation of our clinical trial results in unknown ways in patients exposed to the virus prior to or following enrollment in clinical trials or future clinical trials.  Our ability to evaluate and adjust for the potential effects of COVID-19 on our clinical trial data may be difficult if reliable COVID-19 antibody tests are not available or molecular assay results for the virus in an acutely infected patient are unavailable or falsely negative.

Our business, operations and clinical development timelines and plans could also be adversely affected by the COVID-19 pandemic if our CMOs, CROs and other service providers upon whom we rely experience delays in providing services.

The spread of COVID-19, which has caused a broad impact globally, may materially affect us economically. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread and lasting pandemic could result in prolonged significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our ADSs.

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The global pandemic of COVID-19 continues to rapidly evolve. The extent to which the COVID-19 pandemic impacts our business, our clinical development and regulatory efforts will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries, business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease. Although recent declines in the infection rate have been observed in several western European countries, including the United Kingdom, Germany, Spain, Italy and France, as well as some regions of North America, decisions on the part of states and countries to relax social distancing requirements, or widespread noncompliance with infection control precautions within a region, may result in local resurgence of COVID-19 infection. Accordingly, we do not yet know the full extent of potential delays or impacts on our business, our clinical and regulatory activities, healthcare systems or the global economy as a whole. However, these impacts could adversely affect our business, financial condition, results of operations and growth prospects.

In addition, to the extent the ongoing COVID-19 pandemic adversely affects our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties described in this “Risk Factors” section.

We face competition from other companies that are working to develop novel drugs and technology platforms using technologies similar to ours. If these companies develop drugs more rapidly than we do or their technologies, including delivery technologies, are more effective, our ability to successfully commercialize drugs may be adversely affected.

In addition to the competition we face from competing drugs in general, we also face competition from other companies working to develop novel drugs using technology that competes more directly with our own. We are aware of several other companies that are working to develop RNAi therapeutic products. Some of these companies are seeking, as we are, to develop chemically synthesized siRNA molecules as drugs. Others are following a gene therapy approach, with the goal of treating patients not with synthetic siRNAs but with synthetic, exogenously-introduced genes designed to produce siRNA-like molecules within cells. Companies working on chemically synthesized siRNAs include, but are not limited to, Alnylam Pharmaceuticals, Arcturus Therapeutics, Arrowhead Pharmaceuticals, Avidity Biosciences, Dicerna Pharmaceuticals, Genevant Sciences, OliX Pharmaceuticals, Nitto BioPharma and Quark Pharmaceuticals. With respect to our SLN360 product candidate targeting Lp(a), Ionis Pharmaceuticals and Akcea Therapeutics partnered with Novartis are developing TQJ230, a single-stranded antisense oligonucleotide therapeutic directed against Lp(a) and Arrowhead Pharmaceuticals partnered with Amgen are developing AMG 890, a different siRNA directed against Lp(a), which we consider to be potentially competitive products. With respect to our SLN124 product candidate targeting TMPRSS6 for iron regulation, potential competitors include, but are not limited to, Bristol-Myers Squibb’s Luspatercept (Reblozyl®), Ionis Pharmaceuticals’ IONIS-TMPRSS6-LRx, Vifor Pharma’s VIT-2763, Disc Medicine’s matriptase-2 inhibitor, Protagonist’s PTG-300, Bluebird’s Lentiglobin (Zynteglo®), Orchard Therapeutics’ OTL-300, Vertex’s CTX001, Sanofi’s ST-400, MedPacto’s Vactosertib (TEW-7197), Geron’s Imetelstat, Imara’s IMR-687, Agios’s Mitapivat, AstraZeneca/Astellas’s Roxadustat, H3 Biomedicine’s H3B-8800, Boehringer Ingelheim’s BI-836858, and Astex’s ASTX727. However, other companies may also develop alternative treatments for the diseases we have identified as being potentially treated with our siRNA molecules. To the extent those alternative treatments are more efficacious, less expensive, more convenient or produce fewer side effects, our market opportunity would be reduced.

In addition to competition with respect to RNAi and with respect to specific products, we face substantial competition to discover and develop safe and effective means to deliver siRNAs to relevant cell and tissue types. Safe and effective means to deliver siRNAs to the relevant cell and tissue types may be developed by our competitors, and our ability to successfully commercialize a competitive product would be adversely affected. In addition, substantial resources are being expended by third parties in the effort to discover and develop a safe and effective means of delivering siRNAs into relevant cell and tissue types, both in academic laboratories and in the corporate sector. Some of our competitors have substantially greater resources than we do, and if our competitors are able to negotiate exclusive access to those delivery solutions developed by third parties, we may be unable to successfully commercialize our product candidates.

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There has also been in the past, and there may again be in the future, instances of our competitors using developing product candidates for the same gene targets or indications that we are targeting once they are revealed to the public, in which case we may lose a competitive advantage or market share. Our competitors may also attempt to appropriate our technologies, which may force us to enforce our intellectual property rights through legal action, which may be costly and time consuming and may or may not ultimately prove to be effective.

Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

We are highly dependent on principal members of our executive team, the loss of whose services may adversely impact the achievement of our objectives. Recruiting and retaining other qualified employees for our business, including scientific and technical personnel, will also be critical to our success. There is currently a shortage of skilled executives in our industry, which is likely to continue. As a result, competition for skilled personnel is intense and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous life sciences companies for individuals with similar skill sets. In addition, failure to succeed in preclinical studies and clinical trials may make it more challenging to recruit and retain qualified personnel.

The inability to recruit or loss of the services of any executive or key employee might impede the progress of our research, development and commercialization objectives.

We may need to expand our organization and may experience difficulties in managing this growth, which could disrupt our operations.

As of June 30, 2020 we had 58 employees. In the future we may expand our employee base to increase our managerial, scientific, operational, commercial, financial and other resources and to hire more consultants and contractors. Future growth would impose significant additional responsibilities on our management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors. Also, our management may need to divert a disproportionate amount of its attention away from its day-to-day activities and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates. Moreover, if our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenues could be reduced, and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth.

If we fail to keep pace with advances in technology, our business, financial condition and results of operations could be adversely affected.

We spend a relatively low amount on technological innovation compared to our larger competitors. There is a risk that competitors will be quicker to develop new technologies, new products for the same gene targets or new delivery methods of nucleic acids into novel cell types, particularly once competitors learn about new gene targets that we or our collaborators have selected for development of siRNA molecules. We will need to successfully introduce new products to achieve our strategic business objectives. Our successful product development will depend on many factors, including our ability to attract strong talent to lead our research and development efforts, adapt to new technologies, obtain regulatory approvals on a timely basis, demonstrate satisfactory clinical results, manufacture products in an economical and timely manner, obtain appropriate intellectual property protection for our products, gain and maintain market acceptance of our products, and differentiate our products from those of our competitors. In addition, patents attained by others may preclude or delay our commercialization of a product. There can be no assurance that any products now in development or that we may seek to develop in the future will achieve technological feasibility, obtain regulatory approval or gain market acceptance. If we cannot successfully introduce new products or adapt to changing technologies, our products may become obsolete and our revenue and profitability could suffer.

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We face potential product liability, and, if successful claims are brought against us, we may incur substantial liability and costs.

The use of our product candidates in clinical trials and the sale of any products for which we obtain marketing approval exposes us to the risk of product liability claims, including claims related to impurities in our products or potential product recalls. Product liability claims might be brought against us by consumers, healthcare providers, life sciences companies or others selling or otherwise coming into contact with our products. Certain single-stranded oligonucleotide therapeutics have led to injection site reactions and pro-inflammatory effects and may also lead to impairment of kidney or liver function. There is a risk that our current and future product candidates, although double-stranded, may induce similar or other adverse events. If we cannot successfully defend against product liability claims, we could incur substantial liability and costs. In addition, regardless of merit or eventual outcome, product liability claims may result in, among other things:

• impairment of our business reputation;

• withdrawal of clinical trial participants;

• costs due to related litigation;

• distraction of management’s attention from our primary business;

• substantial monetary awards to patients or other claimants;

• the inability to commercialize our product candidates; and

• decreased demand for our product candidates, if approved for commercial sale.

We maintain product liability insurance relating to the use of our therapeutics in clinical trials. However, such insurance coverage may not be sufficient to reimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive and in the future we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. If and when we obtain marketing approval for product candidates, we intend to expand our insurance coverage to include the sale of commercial products; however, we may be unable to obtain product liability insurance on commercially reasonable terms or in adequate amounts. On occasion, large judgments have been awarded in class action lawsuits based on drugs that had unanticipated adverse effects. A successful product liability claim or series of claims brought against us could cause our stock price to decline and, if judgments exceed our insurance coverage, could adversely affect our results of operations and business.

Cybersecurity risks and the failure to maintain the confidentiality, integrity, and availability of our computer hardware, software, and internet applications and related tools and functions could result in damage to our reputation and/or subject us to costs, fines or lawsuits.

Our business requires manipulating, analyzing and storing large amounts of data. We also maintain personally identifiable information about our employees. Our business therefore depends on the continuous, effective, reliable, and secure operation of our computer hardware, software, networks, internet servers, and related infrastructure. To the extent that our hardware or software malfunctions or access to our data by internal research personnel is interrupted, our business could suffer. The integrity and protection of our employee and company data is critical to our business and employees have a high expectation that we will adequately protect their personal information. The regulatory environment governing information, security and privacy laws is increasingly demanding and continues to evolve, as further described below. Maintaining compliance with applicable security and privacy regulations may increase our operating costs. Although our computer and communications hardware is protected through physical and software safeguards, we are still vulnerable to fire, storm, flood, power loss, earthquakes, telecommunications failures, physical or software break-ins, software viruses, and similar events. These events could lead to the unauthorized access, disclosure and use of non-public information. The techniques used by criminal elements to attack computer systems are sophisticated, change frequently and may originate from less regulated and remote areas of the world. As a result, we may not be able to address these techniques proactively or implement adequate preventative measures. If our computer systems are compromised, we could be subject to fines, damages, litigation and enforcement actions, and we could lose trade secrets, the occurrence of which could harm our business. In addition, any sustained disruption in internet access provided by other companies could harm our business.

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The collection, processing and cross-border transfer of personal information is subject to restrictive laws and regulations.

We are subject to privacy and data protection laws and regulations that apply to the collection, transmission, storage and use of personally identifiable information. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing amount of focus on compliance in this area, with the potential to affect our business.

In the EU, the collection and use of personal data (including health data) is governed by the provisions of the General Data Protection Regulation, or the GDPR, which became effective and enforceable across all then-current member states of the EU on May 25, 2018. The GDPR enhances data protection obligations for both processors and controllers of personal data, including by materially expanding the definition of what is expressly noted to constitute personal data, requiring additional disclosures about how personal data is to be used, imposing limitations on retention of personal data, creating mandatory data breach notification requirements in certain circumstances, and establishing onerous new obligations on services providers who process personal data simply on behalf of others, as well as obligations regarding the security and confidentiality of the personal data.  The GDPR also imposes strict rules on the transfer of personal data out of the European Economic Area to third countries, including the United States.  The GDPR has expanded its reach to include any business, regardless of its location, that processes personal data in relation to the offering of goods or services to individuals in the EU and/or the monitoring of their behavior.  This expansion would incorporate any clinical trial activities in EU member states. The GDPR imposes special protections for “sensitive information” which includes health and genetic information of data subjects residing in the EU. The GDPR also grants individuals the opportunity to object to the processing of their personal information, allows them to request deletion of personal information in certain circumstances, and provides an express right to seek legal remedies in the event the individual believes his or her rights have been violated. Failure to comply with the requirements of the GDPR may result in fines of up to 4% of an undertaking’s total global annual turnover for the preceding financial year, or €20,000,000, whichever is greater. In addition to administrative fines, a wide variety of other potential enforcement powers are available to competent authorities in respect of potential and suspected violations of the GDPR, including extensive audit and inspection rights, and powers to order temporary or permanent bans on all or some processing of personal data carried out by noncompliant actors.  While we have taken steps to comply with the GDPR, and implementing legislation in applicable member states, including by seeking to establish appropriate lawful bases for the various processing activities we carry out as a controller, reviewing our security procedures, and entering into data processing agreements with relevant customers and business partners, we cannot guarantee that our efforts to achieve and remain in compliance have been, and/or will continue to be, fully successful.

In the United Kingdom, the Data Protection Act 2018 complements the GDPR. Following the United Kingdom’s withdrawal from the EU on January 31, 2020, pursuant to transitional arrangements, the GDPR will continue to have effect in U.K. law until December 31, 2020 in the same fashion as was the case prior to that withdrawal, as if the United Kingdom had remained a member state of the EU for such purposes. Following December 31, 2020, it is likely that the data protection obligations of the GDPR will continue to apply to U.K.-based organizations’ processing of personal data in substantially unvaried form and fashion, for at least the short term thereafter. However, the United Kingdom’s withdrawal from the EU could still lead to further legislative and regulatory changes and increase our compliance costs. In particular, from January 2021 (after the end of the transitional period), we could potentially be exposed to two parallel regimes, each with the power to impose fines up to the greater of either 4% of total global annual revenue, or €20,000,000 (for the EU) or £17,500,000 (for the United Kingdom).

Similarly, failure to comply with federal and state laws in the United States regarding privacy and security of personal information could further expose us to penalties under privacy and data protection laws. Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our business.

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Our employees, consultants and contractors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements or insider trading violations, which could significantly harm our business.

We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees, consultants or contractors could include intentional failures to comply with governmental regulations, comply with healthcare fraud and abuse and anti-kickback laws and regulations in the United States, the United Kingdom and other jurisdictions, or failure to report financial information or data accurately or disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of, including improper trading based upon, information obtained in the course of clinical studies, which could result in regulatory sanctions and serious harm to our reputation. We have adopted a code of business conduct and ethics and a robust compliance program, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these 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 have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions.

Healthcare legislative reform measures may have a negative impact on our business and results of operations.

In the United States, there have been, and continue to be, legislative and regulatory developments regarding the healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities, and affect our ability to profitably sell any product candidates for which we obtain marketing approval. Additionally, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics. Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. While any proposed measures will require authorization through additional legislation to become effective, Congress and the current administration have each indicated that they will continue to seek new legislative and / or administrative measures to control drug costs. At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or successfully commercialize our drugs.

The withdrawal of the United Kingdom from the EU, commonly referred to as “Brexit,” may adversely impact our ability to obtain regulatory approvals of our product candidates in the EU, result in restrictions or imposition of taxes and duties for importing our product candidates into the EU, and may require us to incur additional expenses in order to develop, manufacture and commercialize our product candidates in the EU.

Following the result of a referendum in 2016, the United Kingdom left the EU on January 31, 2020, commonly referred to as Brexit. Pursuant to the formal withdrawal arrangements agreed between the United Kingdom and the EU, the United Kingdom will be subject to a transition period until December 31, 2020, or the Transition Period, during which EU rules will continue to apply. Negotiations between the United Kingdom and the EU have continued in relation to the customs and trading relationship between the United Kingdom and the EU following the expiry of the Transition Period. Under the formal withdrawal arrangements between the United Kingdom and the EU, the parties had until June 30, 2020 to agree to extend the Transition Period if required.  No such extension was agreed prior to such date.  No agreement has yet been reached between the United Kingdom and the EU and it may be the case that no formal customs and trading agreement will be reached prior to the expiry of the Transition Period on December 31, 2020.

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Since a significant proportion of the regulatory framework in the United Kingdom applicable to our business and our product candidates is derived from EU directives and regulations, the withdrawal could materially impact the regulatory regime with respect to the development, manufacture, importation, approval and commercialization of our product candidates in the United Kingdom or the EU. Following the Transition Period, the United Kingdom will no longer be covered by the centralized procedures for obtaining EU-wide marketing authorization from the EMA and, unless a specific agreement is entered into, a separate process for authorization of drug products, including our product candidates, will be required in the United Kingdom, the potential process for which is currently unclear. Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, could make it more difficult for us to commercialize our product candidates in the EU or in the United Kingdom and restrict our ability to generate revenue and achieve and sustain profitability. In addition, we may be required to pay taxes or duties or be subjected to other hurdles in connection with the importation of our product candidates into the EU and the United Kingdom. If any of these outcomes occur, we may be forced to restrict or delay efforts to seek regulatory approval in the United Kingdom or the EU for our product candidates, or incur significant additional expenses to operate our business, which could significantly and materially harm or delay our ability to generate revenues or achieve profitability of our business.

In the near term, there is a risk of disrupted import and export processes due to a lack of administrative processing capacity by the respective U.K. and EU customs agencies that may delay time-sensitive shipments and may negatively impact our product supply chain. Any further changes in international trade, tariff and import/export regulations as a result of Brexit or otherwise may impose unexpected duty costs or other non-tariff barriers on us. These developments, or the perception that any of them could occur, may significantly reduce global trade and, in particular, trade between the impacted nations and the United Kingdom. It is also possible that Brexit may negatively affect our ability to attract and retain employees, particularly those from the EU, and make travel between our U.K. and German offices more difficult, time-consuming and expensive than previously was the case.

Legal, political and economic uncertainty surrounding Brexit may be a source of instability in international markets, create significant currency fluctuations, adversely affect our operations in the United Kingdom and pose additional risks to our business, revenue, financial condition, and results of operations.

The lack of clarity on future U.K. laws and regulations, including financial laws and regulations, tax and free trade agreements, intellectual property rights, data protection laws, supply chain logistics, environmental, health and safety laws and regulations, immigration laws and employment laws, after the expiration of the Transition Period may negatively impact foreign direct investment in the United Kingdom, increase costs, depress economic activity and restrict access to capital.

The uncertainty concerning the United Kingdom’s legal, political and economic relationship with the EU after the Transition Period may be a source of instability in the international markets, create significant currency fluctuations, and/or otherwise adversely affect trading agreements or similar cross-border co-operation arrangements (whether economic, tax, fiscal, legal, regulatory or otherwise).

These developments, or the perception that any of them could occur, have had, and may continue to have, a significant adverse effect on global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and limit the ability of key market participants to operate in certain financial markets. In particular, it could also lead to a period of considerable uncertainty in relation to the U.K. financial and banking markets, as well as on the regulatory process in Europe. Asset valuations, currency exchange rates and credit ratings may also be subject to increased market volatility.

If the United Kingdom and the EU are unable to negotiate acceptable trading and customs terms or if other EU member states pursue withdrawal, barrier-free access between the United Kingdom and other EU member states or among the European Economic Area overall could be diminished or eliminated. The long-term effects of Brexit will depend on any agreements (or lack thereof) between the United Kingdom and the EU and, in particular, any arrangements for the United Kingdom to retain access to EU markets after the Transition Period.

Such a withdrawal from the EU is unprecedented, and it is unclear how the United Kingdom’s access to the European single market for goods, capital, services and labor within the EU, or single market, and the wider commercial, legal and regulatory environment, will impact our U.K. operations and customers.

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There may continue to be economic uncertainty surrounding the consequences of Brexit, following the Transition Period, which could adversely impact customer confidence resulting in customers reducing their spending budgets on our products, which could adversely affect our business, revenue, financial condition, results of operations and could adversely affect the market price of our ADSs.

Exchange rate fluctuations may adversely affect our results of operations and cash flows.

Our functional currency is pounds sterling, and our transactions are commonly denominated in that currency. However, we receive payments under our collaboration agreements in U.S. dollars and we incur a portion of our expenses in other currencies, primarily Euros. As a result, fluctuations in exchange rates, particularly between the pound sterling on the one hand and the U.S. dollar and Euro on the other hand, may adversely affect our reported results of operations and cash flows. Since the Brexit referendum in 2016, there has been a significant increase in the volatility of these exchange rates and an overall weakening of the pound sterling. Our business and the price of our ADSs may be affected by fluctuations in foreign exchange rates between the pound sterling and these and other currencies, any of which may have a significant impact on our results of operations and cash flows from period to period.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of 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. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. 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.

Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.

Risks Related to our Intellectual Property

If we are unable to obtain or protect intellectual property rights related to our current or future products and product candidates, we may not be able to compete effectively in our markets.

We rely upon a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to our current and future products and product candidates. The strength of patents in the biotechnology and life sciences field involves complex legal and scientific questions and can be uncertain. The patent applications that we own may fail to result in patents with claims that cover the products in the United States, European countries or in other territories. Even if patents do successfully issue, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed or invalidated. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property, or our current and future product candidates, and may not prevent others from designing around our claims.

If the patent applications we hold and/or have out-licensed with respect to our product candidates fail to issue or if their breadth or strength of protection is threatened, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize, future products. We cannot offer any assurances about which, if any, patents will issue or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties. A patent may be challenged through one or more of several administrative proceedings including post-grant challenges, re-examination or opposition before the United States Patent Office or European

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Patent Office and in other jurisdictions. For example, re-examination of, or oppositions to, patents owned by us have previously been initiated, and while we believe these concluded proceedings did not result in a commercially relevant impact on the individual patents, any successful challenge of patents or any other patents owned by us could deprive us of rights necessary for the successful commercialization of any product candidates that we or our strategic alliance partners may develop. Since patent applications in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we were the first to file any patent application related to a product candidate or a siRNA related technology or method. Furthermore, in certain situations, if we and one or more third parties have filed patent applications in the United States claiming the same subject matter, an administrative proceeding, previously known as an interference, which may now fall under the scope of an action known as a derivation proceeding, can be initiated to determine which applicant is entitled to the patent on that subject matter. Such administrative proceedings provoked by third parties or brought by us may be necessary to determine the priority of inventions with respect to our patents or patent applications, or those of our alliance partners. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to us from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of a patent or patent application in such a proceeding may not be successful and, even if successful, may result in substantial costs and distract our management and other employees.

In addition, patents have a limited lifespan. In the United States and many other countries and regions of the world, the natural expiration of a patent is generally 20 years after it is filed as a non-provisional patent application, or a PCT international patent application. Various extensions may be available, however, the life of a patent, and the protection it affords, is limited. Once the patent life has expired for a product, we may be open to competition from generic medications. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced.

In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of our drug discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. Although each of our employees agrees to assign their inventions to us through an employee inventions agreement, and all of our employees, consultants, advisers and any third parties who have access to our proprietary know-how, information or technology enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed or that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or confidential proprietary information and independently develop substantially equivalent information and techniques. In addition, others may independently discover our trade secrets, proprietary know-how and information. For example, the FDA, as part of its transparency initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.

Further, 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 in the United States, Europe and in other jurisdictions. If we are unable to prevent material disclosure of the non-patented intellectual property related to our technologies to third parties, and there is no guarantee that we will have any such enforceable trade secret protection, we may not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, results of operations and financial condition.

Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.

Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and life sciences industries, including patent infringement lawsuits. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we and our strategic collaborators are pursuing development candidates.

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Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to sequences, structures, materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in patents that our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of our product candidates, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire. Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our compositions, formulations, processes for manufacture or methods of use, including combination therapy, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product candidate unless we obtained a license or until such patent expires. In either case, such a license may not be available on commercially reasonable terms or at all.

Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of our management, other employees and resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.

We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful.

Competitors may infringe our patents or the patents of our licensors. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming, even if we ultimately prevail. For example, in 2017, we commenced patent infringement litigation against Alnylam Pharmaceuticals Inc., or Alnylam. In December 2018, we and Alnylam entered into a settlement and license agreement to settle the litigation, which was related to Alnylam’s RNAi product ONPATTRO. As part of the settlement, we now license specified patents to Alnylam, and Alnylam pays us a tiered royalty of up to one percent of its net sales of ONPATTRO in the EU.

In addition to the costs and potential distraction associated with enforcing our patents in a lawsuit, in an infringement proceeding, a court may decide that a patent of ours or our licensors is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.

Our efforts in a litigation may fail and, even if successful, may result in substantial costs and distract our management and other employees. We may not be able to prevent, alone or with our licensors, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our ADSs.

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We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.

We employ individuals who were previously employed at other biotechnology or life sciences companies. We may be subject to claims that our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of our employees’ former employers or other third parties. We may also be subject to claims that former employers or other third parties have an ownership interest in our patents. Litigation may be necessary to defend against these claims. There is no guarantee of success in defending these claims, and if we are successful, litigation could result in substantial cost and be a distraction to our management and other employees.

Risks Related to Our ADSs and Shares and Our Prospective Nasdaq Listing

An active trading market for our ADSs may not develop and you may not be able to resell your ADSs at or above the price you pay for them, if at all.

While our ordinary shares have been traded on AIM since 1995, no public market has previously existed for our ADSs or ordinary shares in the United States. We have applied to list our ADSs on Nasdaq. Any delay in the commencement of trading of our ADSs on Nasdaq would impair the liquidity of the market for the ADSs and make it more difficult for holders to sell the ADSs. There can be no assurance that an active trading market for the ADSs will develop or be sustained after our ADSs are listed on Nasdaq. The lack of an active trading market may also reduce the fair market value of the ADSs and could also affect the market price for our ordinary shares on AIM. The price at which ADSs trade on Nasdaq may or may not be correlated with the price at which our ordinary shares trade on AIM.

The trading price of our ADSs may be volatile, and you could lose all or part of your investment.

The trading price of our ADSs is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. The stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their ADSs at or above the price paid for the ADSs. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this prospectus, factors that are expected to affect the market price of our securities include:

• the commencement, enrollment or results of our planned and future clinical trials;

• positive or negative results from, or delays in, testing and clinical trials by us, collaborators or competitors;

• the results of our efforts to discover, develop, acquire or in-license additional product candidates and technologies;

• the loss of any of our key scientific or management personnel;

• regulatory, legal or tax developments in the United States, United Kingdom, the EU and other countries;

• the success of competitive products or technologies;

• adverse actions taken by regulatory agencies with respect to our clinical trials or manufacturers;

• changes or developments in laws or regulations applicable to our product candidates or technologies;

• changes to our relationships with collaborators, manufacturers or suppliers;

• concerns regarding the safety of our product candidates;

• announcements concerning our competitors or the pharmaceutical industry in general;

• actual or anticipated fluctuations in our operating results;

• changes in financial estimates or recommendations by securities analysts;

• potential acquisitions, financings, collaborations or other corporate transactions;

• the trading volume of our ADSs on Nasdaq;

• sales of our ADSs or ordinary shares by us, members of our senior management and directors or our shareholders;

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• general economic, political, and market conditions and overall fluctuations in the financial markets in the United States, the United Kingdom, the EU, and other countries, including the global and regional impacts of the COVID-19 pandemic;

• stock market price and volume fluctuations of comparable companies and, in particular, those that operate in the biopharmaceutical industry; and

• investors’ general perception of us and our business.

These and other market and industry factors may cause the market price and demand for our ADSs to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from selling their ADSs at or above the price paid for the ADSs and may otherwise negatively affect the liquidity of our ADSs.

Some companies that have experienced volatility in the trading price of their shares have been the subject of securities class action litigation. Any lawsuit to which we are a party, with or without merit, may result in an unfavorable judgment. We also may decide to settle lawsuits on unfavorable terms.

Any such negative outcome could result in payments of substantial damages or fines, damage to our reputation or adverse changes to our business practices. Defending against litigation is costly and time-consuming, and could divert our management’s and key employees’ attention and our resources. Furthermore, during the course of litigation, there could be negative public announcements of the results of hearings, motions or other interim proceedings or developments, which could have a negative effect on the market price of our ADSs.

Future sales, or the possibility of future sales, of a substantial number of ADSs representing our shares or our shares could adversely affect the price of such securities.

Future sales of a substantial number of ADSs or shares, or the perception that such sales will occur, could cause a decline in the market price of our ADSs. All of our outstanding shares are freely tradeable on AIM. Upon the effectiveness of the registration statement of which this prospectus forms a part, holders of our shares registered by this prospectus are expected to be able to deposit such shares with the depositary in exchange for ADSs representing such shares at the ratio referred to on the cover page of this prospectus. These ADSs will be freely tradeable on Nasdaq. If holders sell substantial amounts of ADSs on Nasdaq or ordinary shares on AIM, or if the market perceives that such sales may occur, the market price of the ADSs and our ability to raise capital through an issue of equity securities in the future could be adversely affected.

If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, the price and trading volume of our ADSs could decline.

The trading market for our ADSs will be influenced by the research and reports that equity research analysts publish about us and our business. As a company admitted to trading on AIM, our equity securities are currently subject to coverage by a number of analysts.  However, we do not currently have and may never obtain broad research coverage by equity research analysts published in the United States. Equity research analysts may elect not to provide research coverage of our ADSs, and such lack of research coverage may adversely affect the market price of our ADSs. We will not have any control over the analysts or the content and opinions included in their reports. The price of our ADSs could decline if one or more equity research analysts downgrade our ADSs or issue other unfavorable commentary or research about us. If one or more equity research analysts ceases coverage of us or fails to publish reports on us regularly, demand for our ADSs could decrease, which in turn could cause the trading price or trading volume of our ADSs to decline.

The dual-listing of ordinary shares and ADSs is costly to maintain and may adversely affect the liquidity and value of our ordinary shares and ADSs.

Our ordinary shares trade on AIM and we have applied to list our ADSs on Nasdaq.  We plan for the foreseeable future to maintain a dual listing, which will generate additional costs, including increased legal, accounting, investor relations and other expenses that we did not incur prior to the listing of our ADSs on Nasdaq, in addition to the costs associated with the additional reporting requirements described elsewhere in this prospectus.  We cannot predict the effect of this dual listing on the value of our ADSs and ordinary shares.  However, the dual listing of ADSs and ordinary shares may dilute the liquidity of these securities in one or both markets and may adversely affect the development of an active trading market for our ADSs.  The price of our ADSs could also be adversely affected by trading in our ordinary shares on AIM.  

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Concentration of ownership of our ordinary shares (including ordinary shares represented by ADSs) among our existing senior management, directors and principal shareholders may prevent new investors from influencing significant corporate decisions and matters submitted to shareholders for approval.

Upon the listing of our ADSs on Nasdaq, members of our senior management, directors and current beneficial owners of 5% or more of our ordinary shares and their respective affiliates will, in the aggregate, beneficially own approximately 76% of our issued and outstanding ordinary shares, based on the number of ordinary shares issued and outstanding as of June 30, 2020. As a result, depending on the level of attendance at general meetings of our shareholders, these persons, acting together, would be able to significantly influence all matters requiring shareholder approval, including the election, re-election and removal of directors, any merger, scheme of arrangement, or sale of all or substantially all of our assets, or other significant corporate transactions, and amendments to our articles of association. In addition, these persons, acting together, may have the ability to control the management and affairs of our company. Accordingly, this concentration of ownership may harm the market price of our ADSs by:

• delaying, deferring, or preventing a change in control;

• entrenching our management and/or the board of directors;

• impeding a merger, scheme of arrangement, takeover, or other business combination involving us; or

• discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

In addition, some of these persons or entities may have interests different than yours. For example, because many of these shareholders purchased their shares at prices substantially below the current market price for an ordinary share on AIM and have held their shares for a longer period, they may be more interested in selling our company to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other shareholders.

Because we do not anticipate paying any cash dividends on our ordinary shares (including ordinary shares represented by ADSs) in the foreseeable future, capital appreciation, if any, will be your sole source of gains and you may never receive a return on your investment.

You should not rely on an investment in our ADSs to provide dividend income. Under current English law, a company’s accumulated realized profits must exceed its accumulated realized losses (on a non-consolidated basis) before dividends can be paid. Therefore, we must have distributable profits before issuing a dividend. We have never declared or paid a dividend on our ordinary shares in the past, and we currently intend to retain our future earnings, if any, to fund the development of our technologies and product candidates and the growth of our business. As a result, capital appreciation, if any, on our ADSs will be your sole source of gains for the foreseeable future. Investors seeking cash dividends should not purchase our ADSs.

We will incur increased costs as a result of simultaneously having our ADSs listed in the United States and our ordinary shares admitted to trading on AIM in the United Kingdom, and our senior management will be required to devote substantial time to new compliance initiatives and corporate governance practices.

As a company whose securities are publicly listed in the United States, and particularly after we no longer qualify as an “emerging growth company,” or EGC, we will incur significant legal, accounting and other expenses that we did not incur previously, even though our ordinary shares are admitting to trading on AIM. For example, the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable U.S. securities rules and regulations impose various requirements on non-U.S. reporting public companies, including the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our senior management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, which in turn could make it more difficult for us to attract and retain qualified senior management personnel or members for our board of directors.

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However, these rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, regardless of whether or not we are an EGC we will be required to furnish a report by our senior management on our internal control over financial reporting, beginning with our annual report filed with the SEC for the year ending December 31, 2021, which we expect to file by April 2022. However, while we remain an EGC we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To prepare for eventual compliance with Section 404, including the attestation report required once we no longer qualify as an EGC, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants, adopt a detailed work plan to assess 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. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404.

Further, being a U.S. listed company and an English public company with ordinary shares admitted to trading on AIM impacts the disclosure of information and requires compliance with two sets of applicable rules.  From time to time, this may result in uncertainty regarding compliance matters and result in higher costs necessitated by legal analysis of dual legal regimes, ongoing revisions to disclosure and adherence to heightened governance practices.  As a result of the enhanced disclosure requirements of the U.S. securities laws, business and financial information that we report is broadly disseminated and highly visible to investors, which we believe may increase the likelihood of threatened or actual litigation, including by competitors and other third parties, which could, even if unsuccessful, divert financial resources and the attention of our management and key employees from our operations.

We have identified a material weakness in our internal control over financial reporting. If we are unable to remediate this material weakness, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business.

In connection with the PCAOB audits of our consolidated financial statements as of and for the years ended December 31, 2019 and 2018, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. If we are unable to remediate this material weakness, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, our stock price and ability to access the capital markets in the future.

The material weakness we identified was that we did not design or implement sufficient processes, controls and other review procedures to evaluate the recognition and accrual of research and development related expenses such as CRO and CMO activities. As we move from preclinical to clinical activity, with a related increase in expenditure, it will be important for us to strengthen internal controls in this area. We have taken steps to remediate this weakness including through training and more regular external confirmation of work progress.    

This control deficiency did not result in any adjustments to our financial statements included in this registration statement, but we acknowledge that this control deficiency could result in a potential misstatement of our accounts or disclosures that would result in a material misstatement of our annual or interim consolidated financial statements that would not be prevented or detected, and accordingly, we determined that this control deficiency constitutes a material weakness.

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We cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiency that led to this material weakness in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. In addition, neither our management nor an independent auditor has performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act because no such evaluation has been required. Had we or our independent auditors performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act, additional material weaknesses may have been identified. If we are unable to successfully remediate our existing or any future material weaknesses in our internal control over financial reporting, or identify any additional material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, potentially resulting in restatements of our financial statements, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports and applicable Nasdaq listing requirements, investors may lose confidence in our financial reporting, and our share price may decline as a result.

We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our ADSs less attractive to investors.

We are an EGC as defined in the SEC’s rules and regulations and we will remain an EGC until the earlier to occur of (1) the last day of 2025, (2) the last day of the fiscal year in which we have total annual gross revenues of at least $1.07 billion, (3) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” under SEC rules, which means the market value of our equity securities that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (4) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. For so long as we remain an EGC, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not EGCs. These exemptions include:

• not being required to comply with the auditor attestation requirements of Section 404;

• not being required to comply with any requirement that has or may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements;

• being permitted to provide only two years of audited financial statements in this initial registration statement, in addition to any required unaudited interim financial statements, with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure;

• reduced disclosure obligations regarding executive compensation; and

• an exemption from the requirement to seek nonbinding shareholder advisory votes on executive compensation or golden parachute arrangements.

We may choose to take advantage of some, but not all, of the available exemptions. We have taken advantage of reduced reporting burdens in this prospectus. In particular, we have not included all of the executive compensation information that would be required if we were not an EGC. We cannot predict whether investors will find our ADSs less attractive if we rely on certain or all of these exemptions. If some investors find our ADSs less attractive as a result, there may be a less active trading market for our ADSs and our ADS price may be more volatile.

Even after we no longer qualify as an EGC, we may still qualify as a “smaller reporting company” if the market value of our ordinary shares held by non-affiliates is below $250 million (or $700 million if our annual revenue is less than $100 million) as of June 30 in any given year, which would allow us to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and, when required, our proxy statements.

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We qualify as a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

Upon the listing of our ADSs on Nasdaq, we will report under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K upon the occurrence of specified significant events. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers also are exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.

As a foreign private issuer listed on Nasdaq, we will be subject to corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country in lieu of certain Nasdaq corporate governance listing standards. Certain corporate governance practices in England, which is our home country, may differ significantly from Nasdaq corporate governance listing standards. For example, neither the corporate laws of England nor our articles of association require a majority of our directors to be independent; we may include non-independent directors as members of our nominations and remuneration committees; and our independent directors would not necessarily hold regularly scheduled meetings at which only independent directors are present. We are required to follow the AIM Rules for Companies published by London Stock Exchange plc, and have adopted the Corporate Governance Code published by the Quoted Companies Alliance. Therefore, our shareholders may be afforded less protection than they otherwise would have under Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. See “Management—Foreign Private Issuer Exemption” for the exemptions to the Nasdaq corporate governance rules applicable to foreign private issuers.

We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.

As a foreign private issuer, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. We may no longer be a foreign private issuer as of June 30, 2021 (the end of our second fiscal quarter in the fiscal year after this listing), which would require us to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers as of January 1, 2022. In order to maintain our current status as a foreign private issuer, either (a) a majority of our voting securities must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive officers or directors cannot be U.S. citizens or residents, (ii) more than 50% of our assets must be located outside the United States and (iii) our business must be administered principally outside the United States. If we lose our status as a foreign private issuer, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time consuming and costly. We also expect that if we were required to comply with the rules and regulations

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applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage and/or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.

Securities traded on AIM may carry a higher risk than securities traded on other exchanges, which may impact the value of your investment.

Our ordinary shares are currently traded on AIM. Investment in equities traded on AIM is sometimes perceived to carry a higher risk than an investment in equities quoted on exchanges with more stringent listing requirements, such as the main market of the London Stock Exchange, New York Stock Exchange or Nasdaq. This is because AIM imposes less stringent corporate governance and ongoing reporting requirements than those other exchanges. In addition, AIM requires only half-yearly, rather than quarterly, financial reporting. You should be aware that the value of our ordinary shares may be influenced by many factors, some of which may be specific to us and some of which may affect AIM companies generally, including the depth and liquidity of the market, our performance, a large or small volume of trading in our ordinary shares, legislative changes and general economic, political or regulatory conditions, and that the prices may be volatile and subject to extensive fluctuations. Therefore, the market price of our ordinary shares, the ADSs, or the ordinary shares underlying the ADSs, may not reflect the underlying value of our company.

Fluctuations in the exchange rate between the U.S. dollar and the British pound sterling may increase the risk of holding ADSs and ordinary shares.

The share price of our ordinary shares is quoted on AIM in British pence sterling, while our ADSs will trade on Nasdaq in U.S. dollars. Fluctuations in the exchange rate between the U.S. dollar and the British pound sterling may result in differences between the value of our ADSs and the value of our ordinary shares, which may result in heavy trading by investors seeking to exploit such exchange rate differences. In addition, as a result of fluctuations in the exchange rate between the U.S. dollar and the British pound sterling, the U.S. dollar equivalent of the proceeds that a holder of the ADSs would receive upon the sale in the United Kingdom of any ordinary shares withdrawn from the depositary, and the U.S. dollar equivalent of any cash dividends paid in British pounds sterling on ordinary shares represented by the ADSs, could also decline.

Holders of our ADSs have fewer rights than our shareholders and must act through the depositary to exercise their rights.

Holders of our ADSs do not have the same rights as our shareholders who hold our ordinary shares directly and may only exercise their voting rights with respect to the underlying ordinary shares in accordance with the provisions of the deposit agreement. Holders of the ADSs will appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the ordinary shares represented by the ADSs. When a general meeting is convened, if you hold ADSs, you may not receive sufficient notice of a shareholders’ meeting to permit you to withdraw the ordinary shares underlying your ADSs to allow you to vote with respect to any specific matter. We will use commercially reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, but we cannot assure you that you will receive voting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote. Furthermore, the depositary will not be liable for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, you may not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you request. In addition, in your capacity as an ADS holder, you will not be able to call a shareholders’ meeting.

You may be subject to limitations on transfers of your ADSs.

Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when deemed necessary or advisable by it in good faith in connection with the performance of its duties or at our reasonable written request, subject in all cases to compliance with applicable U.S. securities laws. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so

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because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason, subject to certain rights to cancel ADSs and withdraw the underlying ordinary shares. Temporary delays in the cancellation of ADSs and withdrawal of the underlying ordinary shares may arise because the depositary has closed its transfer books or we have closed our transfer books, the transfer of ordinary shares is blocked to permit voting at a shareholders’ meeting, or because we are paying a dividend on our ordinary shares or similar corporate actions.

The depositary for our ADSs is entitled to charge holders fees for various services, including annual service fees.

The depositary for our ADSs is entitled to charge holders fees for various services, including for the issuance of ADSs upon deposit of ordinary shares, cancellation of ADSs, distributions of cash dividends or other cash distributions, distributions of ADSs pursuant to share dividends or other free share distributions, distributions of securities other than ADSs and annual service fees. In the case of ADSs issued by the depositary into The Depository Trust Company, or DTC, the fees will be charged by the DTC participant to the account of the applicable beneficial owner in accordance with the procedures and practices of the DTC participant as in effect at the time. The depositary for our ADSs will not generally be responsible for any United Kingdom stamp duty or stamp duty reserve tax arising upon the issuance or transfer of ADSs.

You may not receive distributions on our ordinary shares represented by the ADSs or any value for them if it is illegal or impractical to make them available to holders of ADSs.

Although we do not have any present plans to declare or pay any dividends, in the event we declare and pay any dividend, the depositary for the ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of our ordinary shares your ADSs represent. However, in accordance with the limitations set forth in the deposit agreement, it may be unlawful or impractical to make a distribution available to holders of ADSs. We have no obligation to register under U.S. securities laws any offering of ADSs, ordinary shares or other securities received through such distributions. We also have no obligation to take any other action to permit distribution on the ADSs, ordinary shares, rights or anything else to holders of the ADSs. This means that you may not receive the distributions we make on our ordinary shares or any value from them if it is unlawful or impractical to make them available to you. These restrictions may have an adverse effect on the value of your ADSs.

Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings.

Under English law, shareholders usually have preemptive rights to subscribe on a pro rata basis in the issuance of new shares for cash. The exercise of preemptive rights by certain shareholders not resident in the United Kingdom may be restricted by applicable law or practice in the United Kingdom and overseas jurisdictions.  We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we cannot make rights available to you in the United States unless we register the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available. Also, under the deposit agreement, the depositary bank will not make rights available to you unless either both the rights and any related securities are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. If the depositary does not distribute the rights, it may, under the deposit agreement, either sell them, if possible, or allow them to lapse. Accordingly, you may be unable to participate in our rights offerings and may experience dilution in your holdings.  We are also permitted under English law to disapply preemptive rights (subject to the approval of our shareholders by special resolution or the inclusion in our articles of association of a power to disapply such rights) and thereby exclude certain shareholders, such as overseas shareholders, from participating in a rights offering (usually to avoid a breach of local securities laws).

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If we are a passive foreign investment company, there could be adverse U.S. federal income tax consequences to U.S. Holders.

Under the Internal Revenue Code of 1986, as amended, or the Code, we will be a passive foreign investment company, or PFIC, for any taxable year in which (1) 75% or more of our gross income consists of passive income, or (2) 50% or more of the average quarterly value of our assets consists of assets that produce, or are held for the production of, passive income (including cash). For purposes of these tests, passive income includes dividends, interest, gains from the sale or exchange of investment property and certain rents and royalties. In addition, for purposes of the above calculations, a non-U.S. corporation that directly or indirectly owns at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets and received directly its proportionate share of the income of such other corporation. If we are a PFIC for any taxable year during which a U.S. Holder (as defined below under “Material Income Tax Considerations—Material U.S. Federal Income Tax Considerations for U.S. Holders”) holds our ADSs, the U.S. Holder may be subject to adverse tax consequences regardless of whether we continue to qualify as a PFIC, including ineligibility for any preferred tax rates on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements.

Based on estimates of our income and assets, and certain assumptions with respect to the characterization of our assets as active or passive, we do not believe we were a PFIC for our taxable year ended December 31, 2019. However, no assurances regarding our PFIC status can be provided for any past, current or future taxable year. The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation. Accordingly, our U.S. counsel expresses no opinion with respect to our PFIC status for any prior, current or future taxable year.

For further discussion of the PFIC rules and the adverse U.S. federal income tax consequences in the event we are classified as a PFIC, see the section titled ‘‘Material Income Tax Considerations—Material U.S. Federal Income Considerations for U.S. Holders” in this prospectus.

We may be unable to use U.K. carryforward tax losses to reduce future tax payments or benefit from favorable U.K. tax legislation.

As a U.K. resident trading entity, we are subject to U.K. corporate taxation. Due to the nature of our business, we have generated losses since inception. As of December 31, 2019, we had cumulative carryforward tax losses of £112.6 million. Subject to any relevant restrictions (including those that limit the percentage of profits that can be reduced by carried forward losses and those that can restrict the use of carried forward losses where there is a change of ownership of more than half the ordinary shares of the company and a major change in the nature, conduct or scale of the trade), we expect these to be available to carry forward and offset against future operating profits.

As a company that carries out extensive research and development activities, we benefit from the U.K. research and development tax credit regime under the scheme for small and medium-sized enterprises, or SMEs. Under the SME scheme, we are able to surrender some of our trading losses that arise from our qualifying research and development activities for a cash rebate of up to 33.35% of such qualifying research and development expenditures. We may not be able to continue to claim payable research and development tax credits in the future if we cease to qualify as an SME, based on size criteria concerning employee headcount, turnover and gross assets. Qualifying expenditures largely are comprised of employment costs for research staff, research materials, outsourced CRO costs and R&D consulting costs incurred as part of research projects. Specified subcontracted qualifying research expenditures are eligible for a cash rebate of up to 21.67%.

In the event we generate revenues in the future, we may benefit from the U.K. “patent box” regime that allows profits attributable to revenues from patents or patented products to be taxed at an effective rate of 10%. We are the exclusive licensee or owner of one patent and several patent applications which, if issued, would cover our product candidates, and accordingly, future upfront fees, milestone fees, product revenues and royalties could be taxed at this tax rate. When taken in combination with the enhanced relief available on our research and development expenditures, we expect a long-term lower effective rate of corporation tax to apply to us. If, however, there are unexpected adverse changes to the U.K. research and development tax credit regime or the “patent box” regime, or for any reason we are unable to qualify for such advantageous tax legislation, or we are unable to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments, our business, results of operations, and financial condition may be adversely affected. This may impact our ongoing requirement for investment and the timeframes within which additional investment is required.

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Changes and uncertainties in the tax system in the countries in which we have operations, could materially adversely affect our financial condition and results of operations, and reduce net returns to our shareholders.

We conduct business in the United Kingdom, Germany and the United States and file income tax returns in multiple jurisdictions. Our consolidated effective income tax rate could be materially adversely affected by several factors, including: changing tax laws, regulations and treaties, or the interpretation thereof; tax policy initiatives and reforms under consideration (such as those related to the Organisation for Economic Co-Operation and Development’s, or OECD, Base Erosion and Profit Shifting, or BEPS, Project, the European Commission’s state aid investigations and other initiatives); the practices of tax authorities in jurisdictions in which we operate; the resolution of issues arising from tax audits or examinations and any related interest or penalties. Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends received or (in the specific context of withholding tax) dividends paid.

Tax authorities may disagree with our positions and conclusions regarding certain tax positions, or may apply existing rules in an unforeseen manner, resulting in unanticipated costs, taxes or non-realization of expected benefits.

A tax authority may disagree with tax positions that we have taken, which could result in increased tax liabilities. For example, Her Majesty’s Revenue & Customs, or HMRC, the U.S. Internal Revenue Service or another tax authority could challenge our allocation of income by tax jurisdiction and the amounts paid between our affiliated companies pursuant to our intercompany arrangements and transfer pricing policies, including amounts paid with respect to our intellectual property development. Similarly, a tax authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable connection, often referred to as a ‘‘permanent establishment’’ under international tax treaties, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions.

A tax authority may take the position that material income tax liabilities, interest and penalties are payable by us, for example where there has been a technical violation of contradictory laws and regulations that are relatively new and have not been subject to extensive review or interpretation, in which case we expect that we might contest such assessment. High-profile companies can be particularly vulnerable to aggressive application of unclear requirements. Many companies must negotiate their tax bills with tax inspectors who may demand higher taxes than applicable law appears to provide. Contesting such an assessment may be lengthy and costly and if we were unsuccessful in disputing the assessment, the implications could increase our anticipated effective tax rate, where applicable.

Protections found in provisions under the U.K. City Code on Takeovers and Mergers, or the Takeover Code, may delay or discourage a takeover attempt, including attempts that may be beneficial to holders of our ADSs.

The Takeover Code applies, amongst other things, to an offer for a public company whose registered office is in the United Kingdom and whose securities are admitted to trading on a multilateral trading facility in the United Kingdom, which includes AIM.  We are therefore currently subject to the Takeover Code.

The Takeover Code provides a framework within which takeovers of certain companies organized in the United Kingdom are regulated and conducted. The following is a brief summary of some of the most important rules of the Takeover Code:

• In connection with a potential offer, if, following an approach by or on behalf of a potential bidder, the company is “the subject of rumor or speculation” or there is an “untoward movement” in the company’s share price, there is a requirement for the potential bidder to make a public announcement about a potential offer for the company, or for the company to make a public announcement about its review of a potential offer.

• When a person or group of persons acting in concert (a) acquires, whether by a series of transactions over a period of time or not, interests in shares carrying 30% or more of the voting rights of a company (which percentage is treated by the Takeover Code as the level at which effective control is obtained) or (b) increases the aggregate percentage interest they have when they are already interested in not less than 30% and not more than 50%, they must make a cash offer to all other shareholders at the highest price paid by them or any person acting in concert with them in the 12 months before the offer was announced.

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• When interests in shares carrying 10% or more of the voting rights of a class have been acquired for cash by an offeror (i.e. a bidder) or any person acting in concert with them in the offer period (i.e. before the shares subject to the offer have been acquired) or within the previous 12 months, the offer must be in cash or be accompanied by a cash alternative for all shareholders of that class at the highest price paid by the offeror or any person acting in concert with them in that period. Further, if an offeror or any person acting in concert with them acquires for cash any interest in shares during the offer period, the offer must be in cash or accompanied by a cash alternative at a price at least equal to the price paid for such shares during the offer period.

• If after an announcement is made, the offeror or any person acting in concert with them acquires an interest in shares in an offeree company (i.e. a target) at a price higher than the value of the offer, the offer must be increased accordingly.

• The board of directors of the offeree company must appoint a competent independent adviser whose advice on the financial terms of the offer must be made known to all the shareholders, together with the opinion of the board of directors of the offeree company.

• Favorable deals for selected shareholders are not permitted, except in certain circumstances where independent shareholder approval is given and the arrangements are regarded as fair and reasonable in the opinion of the financial adviser to the offeree company.

• All shareholders must be given the same information.

• Those issuing documents in connection with a takeover must include statements taking responsibility for the contents thereof.

• Profit forecasts, quantified financial benefits statements and asset valuations must be made to specified standards and must be reported on by professional advisers.

• Misleading, inaccurate or unsubstantiated statements made in documents or to the media must be publicly corrected immediately.

• Actions during the course of an offer by the offeree company which might frustrate the offer are generally prohibited unless shareholders approve these plans. Frustrating actions would include, for example, lengthening the notice period for directors under their service contract or agreeing to sell off material parts of the target group.

• Stringent requirements are laid down for the disclosure of dealings in relevant securities during an offer, including the prompt disclosure of positions and dealings in relevant securities by the parties to an offer and any person who is interested (directly or indirectly) in 1% or more of any class of relevant securities.

• Employees of both the offeror and the offeree company and the trustees of the offeree company’s pension scheme must be informed about an offer. In addition, the offeree company’s employee representatives and pension scheme trustees have the right to have a separate opinion on the effects of the offer on employment appended to the offeree board of directors’ circular or published on a website.

The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation.

We are incorporated under English law. The rights of holders of ordinary shares and, therefore, certain of the rights of holders of our ADSs, are governed by English law, including the provisions of the U.K. Companies Act 2006, or the Companies Act, and by our articles of association. These rights differ in certain respects from the rights of shareholders in typical U.S. corporations. See the section titled “Description of Share Capital and Articles of Association—Differences in Corporate Law” in this prospectus for a description of the principal differences between the provisions of the Companies Act applicable to us and, for example, the Delaware General Corporation Law relating to shareholders’ rights and protections.

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As an English public company, certain capital structure decisions will require shareholder approval, which may limit our flexibility to manage our capital structure.

English law provides that a board of directors may only allot shares (or grant rights to subscribe for, or to convert any security into, shares) with the prior authorization of shareholders by ordinary resolution, being a resolution passed by a simple majority of votes cast, such authorization stating the aggregate nominal amount of shares that it covers and being valid for a maximum period of five years, each as specified in the articles of association or relevant shareholder resolution. In either case, this authorization would need to be renewed by our shareholders upon expiration (i.e., at least every five years). Typically, English public companies renew the authorization of their directors to allot shares on an annual basis at their annual general meeting.

English law also generally provides shareholders with preemptive rights when new shares are issued for cash. However, it is possible for the articles of association, or for shareholders to pass a special resolution at a general meeting, being a resolution passed by at least 75% of the votes cast, to disapply preemptive rights. Such a disapplication of preemptive rights may be for a maximum period of up to five years from the date of adoption of the articles of association, if the disapplication is contained in the articles of association, or from the date of the shareholder special resolution, if the disapplication is by shareholder special resolution, but not longer than the duration of the authority to allot shares to which the disapplication relates. In either case, this disapplication would need to be renewed by our shareholders upon its expiration (i.e., at least every five years). Typically, English public companies renew the disapplication of preemptive rights on an annual basis at their annual general meeting.

English law also generally prohibits a public company from repurchasing its own shares without the prior approval of shareholders by ordinary resolution, being a resolution passed by a simple majority of votes cast, and other formalities. Such approval may be for a maximum period of up to five years. See “Description of Share Capital and Articles of Association.”

Claims of U.S. civil liabilities may not be enforceable against us.

We are incorporated under English law. Substantially all of our assets are located outside the United States. The majority of our senior management and board of directors reside outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce judgments obtained in U.S. courts against them or us, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws.  

The United States and the United Kingdom do not currently have a treaty providing for the reciprocal recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters. Consequently, a final judgment for payment given by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized or enforceable in England and Wales. In addition, uncertainty exists as to whether the English and Welsh courts would entertain original actions brought in England and Wales against us or our directors or senior management predicated upon the securities laws of the United States or any state in the United States. Any final and conclusive monetary judgment for a definite sum obtained against us in U.S. courts would be treated by the courts of England and Wales as a cause of action in itself and sued upon as a debt so that no retrial of the issues would be necessary, provided that certain requirements are met consistent with English law and public policy. Whether these requirements are met in respect of a judgment based upon the civil liability provisions of the U.S. securities laws is an issue for the English court making such decision. If an English court gives judgment for the sum payable under a U.S. judgment, the English judgment will be enforceable by methods generally available for this purpose.  

As a result, U.S. investors may not be able to enforce against us or our senior management, board of directors or certain experts named herein who are residents of the United Kingdom or countries other than the United States any judgments obtained in U.S. courts in civil and commercial matters, including judgments under the U.S. federal securities laws.  

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Our articles of association provide that the U.S. federal district courts are the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

Our articles of association provide that the U.S. federal district courts are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. Although such a provision has been determined to be enforceable under the laws of Delaware by the courts of Delaware, there is uncertainty as to whether other courts would enforce such provision, and the enforceability of similar choice of forum provisions in other companies’ constitutive documents has been challenged in legal proceedings. If a court were to find the choice of forum provision contained in our articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our results of operations and financial condition. This choice of forum provision may limit a shareholder’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.

In addition, holders of ADSs may not be able to cancel their ADSs and withdraw the underlying ordinary shares when they owe money for fees, taxes and similar charges and when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to the ADSs or to the withdrawal of our ordinary shares or other deposited securities.

ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable results to the plaintiff(s) in any such action.

The deposit agreement governing our ADSs provides that owners and holders of ADSs irrevocably waive the right to a trial by jury in any legal proceeding arising out of or relating to the deposit agreement or the ADSs, including claims under U.S. federal securities laws, against us or the depositary to the fullest extent permitted by applicable law. If this jury trial waiver provision is prohibited by applicable law, an action could nevertheless proceed under the terms of the deposit agreement with a jury trial. Although we are not aware of a specific federal decision that addresses the enforceability of a jury trial waiver in the context of U.S. federal securities laws, it is our understanding that jury trial waivers are generally enforceable. Moreover, insofar as the deposit agreement is governed by the laws of the State of New York, New York laws similarly recognize the validity of jury trial waivers in appropriate circumstances. In determining whether to enforce a jury trial waiver provision, New York courts and federal courts will consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party has knowingly waived any right to trial by jury. We believe that this is the case with respect to the deposit agreement and the ADSs.

In addition, New York courts will not enforce a jury trial waiver provision in order to bar a viable setoff or counterclaim of fraud or one which is based upon a creditor’s negligence in failing to liquidate collateral upon a guarantor’s demand, or in the case of an intentional tort claim (as opposed to a contract dispute). No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any provision of U.S. federal securities laws and the rules and regulations promulgated thereunder.

If any owner or holder of our ADSs brings a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under U.S. federal securities laws, such owner or holder may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us or the depositary. If a lawsuit is brought against us or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different results than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action, depending on, among other things, the nature of the claims, the judge or justice hearing such claims, and the venue of the hearing.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. The forward-looking statements and opinions contained in this prospectus are based upon information available to us as of the date of this prospectus and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Forward-looking statements include statements about:

• the development of our product candidates, including statements regarding the timing of initiation, completion and the outcome of preclinical studies or clinical trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs;

• our ability to obtain and maintain regulatory approval of our product candidates in the indications for which we plan to develop them, and any related restrictions, limitations or warnings in the label of an approved drug or therapy;

• our plans to collaborate, or statements regarding the ongoing collaborations, with third parties;

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

• the timing of our regulatory filings for our product candidates;

• the size and growth potential of the markets for our product candidates;

• our ability to raise additional capital;

• our commercialization, marketing and manufacturing capabilities and strategy;

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

• our ability to attract and retain qualified employees and key personnel;

• our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

• our estimates regarding future revenue, expenses and needs for additional financing;

• our belief that our existing cash, cash equivalents and term deposits will be sufficient to fund our operating expenses and capital expenditure requirements through the end of 2022; and

• regulatory developments in the United States, United Kingdom, EU and other jurisdictions.

You should refer to the section of this prospectus titled “Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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INDUSTRY AND MARKET DATA

This prospectus contains estimates, projections and other information concerning our industry, our business, and the markets for our product candidates. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from our own internal estimates and research as well as from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources. While we believe our internal company research as to such matters is reliable, it has not been verified by any independent source.

In addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Special Note Regarding Forward-Looking Statements.”

USE OF PROCEEDS

We will not receive proceeds from the disposition, if any, of Registered Shares in the form of ADSs by Registered Holders.

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DIVIDEND POLICY

We have never declared or paid any dividends on any class of our issued share capital. We intend to retain any earnings for use in our business and do not currently intend to pay dividends on our ordinary shares. The declaration and payment of any future dividends will be at the discretion of our board of directors and will depend upon our results of operations, cash requirements, financial condition, contractual restrictions, any future debt agreements or applicable laws and other factors that our board of directors may deem relevant.

Under the laws of England and Wales, among other things, we may only pay dividends if we have sufficient distributable reserves (on a non-consolidated basis), which are our accumulated realized profits that have not been previously distributed or capitalized less our accumulated realized losses, so far as such losses have not been previously written off in a reduction or reorganization of capital. See “Description of Share Capital and Articles of Association” for additional information.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents, term deposits, indebtedness and capitalization as of December 31, 2019. This table should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and the related notes included elsewhere in this prospectus.

	As of December 31, 2019
(in thousands)	($)(1)			(£)
Cash and cash equivalents	$	17,819		£	13,515
Term deposits		26,369			20,000
Cash, cash equivalents and term deposits	$	44,188		£	33,515
Indebtedness		—		—
Equity:
Share capital		5,167			3,919
Capital reserves and translation reserve		222,805			168,989
Accumulated losses		(200,405	)		(151,999	)
Total equity	$	27,567		£	20,909
Total capitalization	$	27,567		£	20,909

(1) Translated solely for convenience into U.S. dollars at an assumed exchange rate of $1.32 per £1.00, which was the rounded official exchange rate of such currencies as of December 31, 2019.

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SELECTED CONSOLIDATED FINANCIAL DATA

The following tables present selected consolidated financial data as of the dates and for the periods indicated. We have derived the selected consolidated statement of operations data for the years ended December 31, 2019 and 2018 and the consolidated balance sheet data as of December 31, 2019 and 2018 from our audited consolidated financial statements included elsewhere in this prospectus, which have been prepared in accordance with IFRS, as issued by the IASB, and audited in accordance with the standards of the PCAOB (United States).

You should read this data together with our consolidated financial statements and related notes appearing elsewhere in this prospectus and the information under the sections titled “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our historical results are not necessarily indicative of our future results.

	For the Year Ended December 31,
(in thousands except share and per share data)	2019			2019			2018
	($)(1)			(£)			(£)
Consolidated Statements of Operations Data:
Revenue	$	322		£	244		£	—
Operating expenses:
Research and development costs		(17,583	)		(13,336	)		(9,743	)
Administrative expenses		(12,713	)		(9,642	)		(10,828	)
Total operating expenses		(30,296	)		(22,978	)		(20,571	)
Operating loss		(29,974	)		(22,734	)		(20,571	)
Finance and other expenses		(215	)		(163	)		—
Finance and other income		36			27			45
Loss before taxation		(30,153	)		(22,870	)		(20,526	)
Taxation		4,335			3,288			2,115
Loss after taxation	$	(25,818	)	£	(19,582	)	£	(18,411	)
Loss per ordinary share (basic and diluted)	$	(0.34	)	£	(0.26	)	£	(0.26	)
Weighted average ordinary shares (basic and diluted)		75,126,869			75,126,869			70,312,880

(1) Translated solely for convenience into U.S. dollars at an assumed exchange rate of $1.32 per £1.00, which was the rounded official exchange rate of such currencies as of December 31, 2019.

	As of December 31,
(in thousands except share data)	2019		2019		2018
	($)(1)		(£)		(£)
Consolidated Balance Sheet Data:
Cash, cash equivalents and term deposits	$	44,188	£	33,515	£	26,494
Total assets		60,751		46,077		38,885
Total liabilities		33,183		25,168		3,830
Net assets		27,567		20,909		35,055
Share capital		5,167		3,919		3,554
Number of ordinary shares outstanding		78,370,265		78,370,265		71,069,933

(1) Translated solely for convenience into U.S. dollars at an assumed exchange rate of $1.32 per £1.00, which was the rounded official exchange rate of such currencies as of December 31, 2019.

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MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of financial condition and operating results together with the information in “Selected Consolidated Financial Data” and our consolidated financial statements as of and for the years ended December 31, 2019 and 2018 and the related notes to those financial statements included elsewhere in this prospectus. The following discussion is based on our financial information prepared in accordance with IFRS, as issued by the IASB.

The statements in this discussion with respect to our plans and strategy for our business, including expectations regarding our future liquidity and capital resources and other non-historical statements, are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including the risks and uncertainties described in the section of this prospectus titled “Risk Factors.” Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Overview

We are a biotechnology company focused on discovering and developing novel molecules incorporating short interfering ribonucleic acid, or siRNA, to inhibit the expression of specific target genes thought to play a role in the pathology of diseases with significant unmet medical need. Our siRNA molecules are designed to harness the body’s natural mechanism of RNA interference, or RNAi, by specifically binding to and degrading messenger RNA, or mRNA, molecules that encode specific targeted disease-associated proteins in a cell. By degrading the message that encodes the disease-associated protein, the production of that protein is reduced and its level of activity is lowered. In the field of RNAi therapeutics, this reduction of disease-associated protein production and activity is referred to as “gene silencing.” Our siRNA delivery system is designed to enable delivery of our therapeutic siRNA molecules to targeted cells in the liver, where thousands of disease-associated genes are expressed. Using our RNAi-directed platform technologies, we have generated siRNA product candidates both for our internal development pipeline as well as for out-licensed programs with third-party collaborators. We are currently focused on developing siRNA molecules to bring into clinical trials for the potential treatment of cardiovascular disease, rare diseases such as iron overload disorders, and complement-mediated disorders. However, we have not yet conducted any clinical trials to date. We believe that our siRNA technology and delivery approach, combined with our expertise in RNAi biology, oligonucleotide chemistry and in vivo pharmacology, as well as our broad intellectual property estate and our relationships with key opinion leaders, provide us with a number of potential competitive advantages.

Our preclinical development programs include our product candidate SLN360, which has been shown in preclinical studies to reduce the genetically controlled expression of Lipoprotein(a), or Lp(a), to address the high and prevalent unmet medical need in reducing cardiovascular risk in people born with high Lp(a) levels; our product candidate SLN124, which has been shown in preclinical studies to reduce TMPRSS6 gene expression to up-regulate hepcidin levels key in mediating iron overload disorders, including beta-thalassemia and myelodysplastic syndrome, or MDS; and our SLN500 program candidates, which have been shown in preclinical studies to reduce the expression of C3 for the treatment of complement pathway-mediated diseases.  In 2019, we licensed the development and commercialization rights to our SLN500 program to Mallinckrodt as part of a larger RNAi collaboration program. The potential of our siRNA platform has been recognized through this collaboration with Mallinckrodt, as well as a collaboration entered into in March 2020 with AstraZeneca, both of which collaboration agreements are described in further detail below, and through a January 2020 technology evaluation agreement with Takeda.

We are seeking regulatory approvals to start human clinical trials of SLN360 in the United States and Europe and of SLN124 in a number of countries, including in Europe and in Asia, later this year.  In the first quarter of 2020, we were recruiting patients for an SLN124 clinical trial, however, in view of the COVID-19 pandemic and to ensure the integrity of safety monitoring procedures for patients, in March 2020 we paused patient recruitment under that protocol for SLN124 and expect to recommence patient recruitment under two new protocols.  

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We do not have any approved products and, as a result, have not generated any revenue from product sales or otherwise. Our ability to generate revenue sufficient to achieve profitability will depend on our successful development and eventual commercialization of our product candidates, if approved, for one or more of their targeted indications. Since our inception, we have incurred significant operating losses. For the years ended December 31, 2019 and 2018, we incurred net losses of £19.6 million and £18.4 million, respectively. As of December 31, 2019, we had an accumulated deficit of £152.0 million.

We expect to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates into clinical development, and seek regulatory approval and pursue commercialization of our product candidates, if they are approved. In addition, if we obtain regulatory approval for our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. In addition, we may incur expenses in connection with the in-license or acquisition of additional technologies or product candidates and the potential clinical development of any such product candidates. Furthermore, after the effectiveness of the registration statement of which this prospectus forms a part, we expect to incur additional costs associated with operating as a foreign private issuer listed on Nasdaq, including significant legal, accounting, investor relations and other expenses that we did not previously incur.

As a result of these anticipated expenditures, we will need additional financing to support our continuing operations. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity or debt financings or other sources, which may include collaborations with third parties, such as those described below with AstraZeneca and Mallinckrodt. Adequate additional financing may not be available to us on acceptable terms, or at all. Our inability to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. We will need to generate significant revenue to achieve profitability, and we may never do so.

Recent Developments

COVID-19 Pandemic

In December 2019, a novel strain of coronavirus, since named SARS-CoV-2, causing the disease known as COVID-19, was reported in China. Since then, COVID-19 has spread globally, including throughout the United Kingdom and Europe, as well as the United States. In March 2020, the World Health Organization declared the outbreak of COVID-19 as a “pandemic,” or worldwide spread of a new disease. In response, many countries around the world, including the United Kingdom and the United States, have imposed quarantines and restrictions on travel and mass gatherings to slow the spread of the virus, and have closed non-essential businesses.

We could be materially and adversely affected by the risks, or the public perception of the risks, related to an epidemic, pandemic, outbreak, or other public health crisis, such as the recent outbreak of COVID-19. Among other things, the planned initiation of our clinical trials for SLN360 and SLN124 by the end of 2020 could be delayed, extending the timelines and increasing the overall costs to finish the clinical trials. In addition, we could seek to make changes to our operations to assist in the efforts to combat the COVID-19 pandemic. In April 2020, we announced that we had repurposed some of the equipment at our laboratory in Berlin, Germany to produce critical reagents for COVID-19 PCR diagnostic test kits. This initiative does not impact our core business, and any funds generated as a result will be donated to COVID-19 relief efforts.

The ultimate extent of the impact of any epidemic, pandemic, outbreak, or other public health crisis on our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of such epidemic, pandemic, outbreak, or other public health crisis and actions taken to contain or prevent the further spread, among others. Accordingly, we cannot predict the extent to which our business, financial condition and results of operations will be affected. We remain focused on maintaining a strong balance sheet, liquidity and financial flexibility and continue to monitor developments as we deal with the disruptions and uncertainties from a business and financial perspective relating to COVID-19.

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Collaboration Agreement with AstraZeneca

In March 2020, we entered into a collaboration agreement with AstraZeneca to discover, develop and commercialize siRNA therapeutics for the treatment of cardiovascular, renal, metabolic and respiratory diseases.  Under this agreement, AstraZeneca made an upfront cash payment to us of $20.0 million in May 2020 (equivalent to £16.0 million as of the payment date). AstraZeneca is obligated to make an additional unconditional cash payment to us of $40.0 million no later than the first half of 2021. In March 2020, an affiliate of AstraZeneca also subscribed for 4,276,580 new ordinary shares for an aggregate subscription price of $20.0 million.  

We anticipate initiating work on five targets within the first three years of the collaboration, with AstraZeneca having the option to extend the collaboration to an additional five targets. AstraZeneca has agreed to pay us $10.0 million upon the exercise of each option. For each target selected, we will be eligible to receive up to $140.0 million in potential milestone payments upon the achievement of milestones relating to the initiation of specified clinical trials, the acceptance of specified regulatory filings and the first commercial sale in specified jurisdictions.  For each target selected, we will also be eligible to receive up to $250.0 million in potential commercial milestone payments, upon the achievement of specified annual net sales levels, as well as tiered royalties as a percentage of net sales ranging from the high single digits to the low double digits.

Collaboration Agreement with Mallinckrodt

In July 2019, we entered into a collaboration agreement with Mallinckrodt Pharma IP Trading DAC, a wholly owned subsidiary of Mallinckrodt plc, to develop and commercialize RNAi drug targets designed to silence the complement cascade in complement-mediated disorders. Under the agreement, we granted Mallinckrodt an exclusive worldwide license to our C3 targeting program, SLN500, with options to license additional complement-mediated disease targets from us from which Mallinckrodt exercised two such targets in July 2020.

While we are responsible for the Phase 1 clinical trial in each case, Mallinckrodt will be funding all of our research personnel costs on a full-time equivalent, or FTE, basis associated with preparing for and conducting the Phase 1 clinical trials. We are also responsible for the provision of drug product for preclinical activities and for the Phase 1 clinical trials, but any manufacturing expense relating to the Phase 1 trial will be paid for by Mallinckrodt. After completion of the Phase 1 clinical trials, Mallinckrodt will assume clinical development and responsibility for potential global commercialization.

The collaboration provides for potential additional development and regulatory milestone payments in aggregate of up to $100 million for the initial C3 target and up to $140 million for each of the two optioned complement-mediated disease targets, with such milestones relating to the initiation of specified clinical trials in specified jurisdictions, and upon the receipt of regulatory approvals by specified authorities, in each case for multiple indications. We are also eligible to receive potential commercial milestone payments of up to $562.5 million upon the achievement of specified levels of annual net sales of licensed products for each program. We are also eligible to receive tiered, low double-digit to high-teen percentage royalties on net sales for licensed products for each program. We received a research milestone payment of $2 million in October 2019 upon the initiation of work under our work plan for a particular target.

In connection with the execution of this agreement, Mallinckrodt made an upfront cash payment to us of $20.0 million (equivalent to £16.4 million as of the payment date). Under a separate subscription agreement, Cache Holdings Limited, a wholly owned subsidiary of Mallinckrodt plc, concurrently subscribed for 5,062,167 new ordinary shares for an aggregate subscription price of $5.0 million (equivalent to £4.0 million as of the payment date).

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Financial Operations Overview

Revenue

We do not have any approved products. Accordingly, we have not generated any revenue from product sales, and we do not expect to generate any revenue from the sale of any products unless and until we obtain regulatory approvals for, and commercialize any of, our product candidates. In the future, we will seek to generate revenue primarily from product sales and, potentially, regional or global strategic collaborations with third parties.

In December 2018, we entered into a settlement and license agreement with Alnylam Pharmaceuticals Inc., or Alnylam, pursuant to which we settled outstanding patent litigation with Alnylam related to its RNAi product ONPATTRO.  As part of the settlement, we license specified patents to Alnylam, and Alnylam pays us a tiered royalty of up to one percent of net sales of ONPATTRO in the EU. We are eligible to receive these royalties until 2023.  We invoice Alnylam quarterly in arrears based on sales data for that quarter as reported to us by Alnylam. Royalty revenue is recognized based on the level of sales when the related sales occur. During the year ended December 31, 2019, we recognized a total of £73,000 in royalty income from Alnylam.

Under our collaboration agreement with Mallinckrodt, we received an upfront cash payment of $20.0 million (£16.4 million as of the payment date) and are eligible to receive specified development, regulatory and commercial milestone payments. We received a milestone payment of $2.0 million (£1.7 million as of the payment date) during the year ended December 31, 2019. In addition to these potential payments, Mallinckrodt has agreed to fund some of our research personnel and preclinical development costs. We recognize the upfront payment, milestone payments, payments for personnel costs and other research funding payments over time, in accordance with IFRS 15. During the year ended December 31, 2019, we recognized a total of £0.2 million in revenue under this agreement.

Operating Expenses

We classify our operating expenses into two categories: research and development expenses and administrative expenses. Personnel costs, including salaries, benefits, bonuses and share-based payment expense, comprise a significant component of each of these expense categories. We allocate expenses associated with personnel costs based on the function performed by the respective employees.

Research and Development Expenses. The largest component of our total operating expenses since inception has been costs related to our research and development activities, including the preclinical and clinical development of our product candidates. We expense research and development costs based on stage of completion and classify them as either direct or indirect.

Our direct research and development expense primarily consists of:

• salaries and personnel-related costs, including bonuses, benefits, recruitment costs and any share-based payment expense, for our personnel performing research and development activities or managing those activities that have been out-sourced;

• costs incurred under agreements with CROs and investigative sites that conduct preclinical studies and clinical trials;

• costs related to manufacturing active pharmaceutical ingredients and drug products for preclinical studies and clinical trials; and

• costs for materials used for in-house research and development activities.

Our indirect research and development expense primarily consists of:

• costs of related facilities, equipment and other overhead expenses that are considered directly attributable to research and development; 

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• consultants’ costs associated with target selection, preclinical and clinical research activities, and the progression of programs towards clinical trials;

• costs associated with obtaining and maintaining patents for intellectual property; and 

• depreciation of capital assets used for research and development activities.

The successful development of our product candidates is highly uncertain. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. Accordingly, we expect research and development costs to increase significantly for the foreseeable future as programs progress. However, we do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization. We are also unable to predict when, if ever, material net cash inflows will commence from our product candidates to offset these expenses. Our expenditures on current and future preclinical and clinical development programs are subject to numerous uncertainties in timing and cost to completion.

The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, including:

• the scope, rate of progress, results and expenses of our ongoing and future clinical trials, preclinical studies and research and development activities;

• the potential need for additional clinical trials or preclinical studies requested by regulatory agencies;

• potential uncertainties in clinical trial enrollment rates or drop-out or discontinuation rates of patients;

• competition with other drug development companies in, and the related expense of, identifying and enrolling patients in our clinical trials and contracting with third-party manufacturers for the production of the drug product needed for our clinical trials;

• the achievement of milestones requiring payments under in-licensing agreements, if any;

• any significant changes in government regulation;

• the terms and timing of any regulatory approvals;

• the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights; and

• the ability to market, commercialize and achieve market acceptance for any of our product candidates, if they are approved.

We have not historically tracked research and development expenses on a program-by-program basis for our preclinical product candidates.

Administrative Expenses. Administrative expenses consist of personnel costs, allocated expenses and other expenses for outside professional services, including legal, audit, tax and accounting services and public relations and investor relations services. Personnel costs consist of salaries, bonuses, benefits, recruitment costs and share-based payment expense for personnel in executive, finance, business development and other support functions. Other administrative expenses include office space-related costs not otherwise allocated to research and development expense, costs of our information systems and costs for compliance with the day-to-day requirements of being a listed public company in the United Kingdom. We anticipate that our administrative expenses will continue to increase in the future as we increase our headcount to support our continued research and development and potential commercialization of our product candidates. We also expect to incur additional expenses as a public company in the United States, including expenses related to compliance with the rules and regulations of the SEC and Nasdaq, additional insurance expenses, and expenses related to investor relations activities and other administrative and professional services.

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Finance and Other Income (Expense)

Finance and other income primarily relates to interest earned on our cash, cash equivalents and short-term deposits, as well as foreign exchange gains. Finance and other expense primarily relates to lease liability interest expense and foreign exchange losses.  Foreign exchange gains and losses relate to cash held in foreign currencies (primarily Euros).  

Taxation

We are subject to corporate taxation in the United Kingdom and Germany. Due to the nature of our business, we have generated losses since inception. Our income tax credit recognized represents the sum of the research and development, or R&D, tax credits recoverable in the United Kingdom. The U.K. R&D tax credit, as described below, is fully refundable to us and is not dependent on current or future taxable income. As a result, we have recorded the entire benefit from the U.K. R&D tax credit as a credit to “Taxation.”

As a company that carries out extensive research and development activities, we currently benefit from the U.K. research and development tax credit regime for small or medium-sized enterprises, or SMEs.  Under the SME regime, we are able to surrender some of the trading losses that arise from qualifying R&D activities for a cash rebate of up to 33.35% of such qualifying R&D expenditures. Qualifying expenditures largely comprise employment costs for research staff, materials, outsourced CRO costs and R&D consulting costs incurred as part of research projects, clinical trial and manufacturing costs, including outsourced CRO costs, employment costs for relevant staff and consumables incurred as part of research and development projects. Certain subcontracted qualifying research and development expenditures are eligible for a cash rebate of up to 21.68%. A large portion of costs relating to our research and development, clinical trials and manufacturing activities are eligible for inclusion within these tax credit cash rebate claims. We recognize research and development tax credits when receipt is probable.

We may not be able to continue to claim research and development tax credits in the future under the current research and development tax credit scheme if we cease to qualify as a small or medium-sized company. However, we may be able to file under the U.K. research and development expenditure credit, or RDEC, regime for large companies. However, the relief available under RDEC is not as favorable as that of the SME regime.

Total estimated tax losses of £112.6 million and £102.6 million as of December 31, 2019 and 2018, respectively, were available for relief against our future profits. Unsurrendered U.K. tax losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to £5.0 million plus an incremental 50% of U.K. taxable profits. After accounting for tax credits receivable, we had accumulated tax losses for carry forward in the United Kingdom of £63.6 million as of December 31, 2019. However, in the event of a change in ownership of a U.K. company, certain provisions may apply to restrict the utilization of carried forward tax losses in future periods. These provisions apply where there is a major change in the nature or conduct of a trade in connection with the change in ownership. For the avoidance of doubt, we do not recognize a deferred tax asset in respect of the accumulated tax losses. In addition to our accumulated tax losses in the United Kingdom, we also had £49.0 of accumulated tax losses as of December 31, 2019 related to our operations in Germany.

In the event we generate revenues in the future, we may benefit from the U.K. “patent box” regime that allows profits attributable to revenues from patents or patented products to be taxed at an effective rate of 10%.

Value Added Tax, or VAT, is charged on all qualifying goods and services by VAT-registered businesses. Where applicable, an amount of 20% of goods and services is added to all sales invoices and is payable to the U.K. tax authorities. Similarly, VAT paid on purchase invoices is reclaimable from the U.K. tax authorities.

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Results of Operations

Comparison of Years Ended December 31, 2019 and 2018

The following table summarizes the results of our operations for the years ended December 31, 2019 and 2018.

	Year Ended December 31,
(in thousands)	2019			2019			2018
	($)(1)			(£)			(£)
Revenue	$	322		£	244		£	—
Research and development expenses		(17,583	)		(13,336	)		(9,743	)
Administrative expenses		(12,713	)		(9,642	)		(10,828	)
Operating loss		(29,974	)		(22,734	)		(20,571	)
Finance and other income (expense)		(179	)		(136	)		45
Loss before tax		(30,153	)		(22,870	)		(20,526	)
Taxation		4,335			3,288			2,115
Loss for the year		(25,818	)		(19,582	)		(18,411	)
Other comprehensive expense, net of tax:
Items that may be reclassified subsequently to profit or loss:
Foreign exchange differences on translation of foreign    Operations		(542	)		(411	)		94
Total comprehensive loss for the year	$	(26,360	)	£	(19,993	)	£	(18,317	)

(1) Translated solely for convenience into U.S. dollars at an assumed exchange rate of $1.32 per £1.00, which was the rounded official exchange rate of such currencies as of December 31, 2019.

Revenue

Revenue for the year ended December 31, 2019 was £0.2 million and was primarily the result of recognizing a portion of the payments received under our collaboration with Mallinckrodt.  Additionally, we recognized £73,000 in royalty income from Alnylam on net sales of ONPATTRO in the EU.

We did not recognize any revenue in the year ended December 31, 2018.  

Research and Development Expenses

The following table summarizes our research and development costs for the years ended December 31, 2019 and 2018, based on their classification as direct or indirect.

	Year Ended December 31,
	2019		2019		2018
	($)(1)		(£)		(£)
Direct research and development expenses	$	13,692	£	10,385	£	6,649
Indirect research and development expenses		3,891		2,951		3,094
Research and development expenses	$	17,583	£	13,336	£	9,743

(1) Translated solely for convenience into U.S. dollars at an assumed exchange rate of $1.32 per £1.00, which was the rounded official exchange rate of such currencies as of December 31, 2019.

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Research and development expenses for the year ended December 31, 2019 were £13.3 million as compared to £9.7 million for the year ended December 31, 2018, an increase of £3.6 million. Direct research and development expenses increased by £3.7 million, while indirect expenses decreased by £0.1 million. The increase in direct expenses reflects the advancement of SLN124 toward a first-in-human Phase 1b clinical trial for beta-thalassemia and MDS and the advancement of SLN360 into IND-enabling studies, in preparation for the expected start of clinical activity in 2020.  

Administrative Expenses

Administrative expenses were £9.6 million for the year ended December 31, 2019 as compared to £10.8 million for the year ended December 31, 2018. This decrease was attributable to legal costs related to our patent litigation with Alnylam, which was settled in December 2018, offset in part by an increase in expenses related to various corporate activities.

Finance and Other Income (Expense)

Finance income represents bank interest and was £27,000 and £45,000 for the years ended December 31, 2019 and 2018, respectively.

Finance expense for the year ended December 31, 2019 was £33,000, resulting from interest expense incurred in connection with lease liabilities, compared to zero for the prior year, as IFRS 16 was only applied prospectively in 2019.

Other income (expense) results from foreign exchange gains (losses) and was £(130,000) and £6,000 for the years ended December 31, 2019 and 2018, respectively.  Net foreign exchange gains and losses result primarily from foreign currency (Euro) denominated bank accounts.

Taxation

During 2019 and 2018, we received U.K. research and development tax credits of £2.3 million and £1.8 million, respectively, in respect of R&D expenditures incurred in the previous year. We accrued a receivable of £3.1 million as of December 31, 2019, recognizing a current tax asset in respect of 2019 research and development tax credits, compared to £2.1 million for the prior year.

The increase in the credit between years was primarily attributable to an increase in our eligible research and development expenses, as described above under “—Research and Development Expenses.”  

Liquidity and Capital Resources

Overview

Since our inception, we have incurred significant operating losses and negative cash flows. We anticipate that we will continue to incur losses for at least the next several years. We expect that our research and development and administrative expenses will increase in connection with conducting clinical trials and seeking marketing approval for our product candidates, as well as costs associated with operating as a public company in the United States. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity financings, debt financings, research funding, collaborations, contract and grant revenue or other sources.

As of June 30, 2020, we had cash, cash equivalents and short-term deposits of £50.3 million, which amount gives effect to the proceeds from the issuance of ordinary shares to AstraZeneca in March 2020 and the upfront payment from AstraZeneca received in May 2020. We are unconditionally entitled to receive a further $40.0 million from AstraZeneca no later than the first half of 2021.

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We do not currently have any approved products and have never generated any revenue from product sales or otherwise. To date, we have financed our operations primarily through the issuances of our equity securities and from upfront, milestone and research payments under collaboration agreements with third parties.

We have no ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, other than operating leases.

Cash Flows

The following table summarizes the results of our cash flows for the years ended December 31, 2019 and 2018.

	Year Ended December 31,
(in thousands)	2019			2019			2018
	($)(1)			(£)			(£)
Net cash provided by (used in) operating activities	$	2,277		£	1,727		£	(16,760	)
Net cash used in investing activities		(19,797	)		(15,015	)		(4,830	)
Net cash from financing activities		6,952			5,273			341
Net decrease in cash and cash equivalents	$	(10,567	)	£	(8,015	)	£	(21,249	)

(1) Translated solely for convenience into U.S. dollars at an assumed exchange rate of $1.32 per £1.00, which was the rounded official exchange rate of such currencies as of December 31, 2019.

Operating activities. The increase in net cash provided by operating activities to £1.7 million for the year ended December 31, 2019 from net cash used of £16.8 million for the year ended December 31, 2018 was primarily due to the receipt of $22.0 million (equivalent to £18.1 million based on the exchange rates at the respective payment dates) in upfront and milestone payments received in 2019 under our collaboration agreement with Mallinckrodt, as well as an increase in 2019 of £1.9 million relating to the in-year increase in trade and other payables versus the comparative increase in 2018, and a £0.5 million increase in R&D tax credit received, offset in part by the £2.2 million increase in our operating loss between the years.

Investing activities. Net cash used in investing activities was £15.0 million for the year ended December 31, 2019, compared to £4.8 million for the year ended December 31, 2018. This change was primarily due to the purchase of short-term deposits. Short-term deposits at December 31, 2019 were £20.0 million, an increase of £15.0 million from the previous year. This increase in short-term deposits contributed to an overall increase in cash, cash equivalents and term deposits from £26.5 million at December 31, 2018 to £33.5 million at December 31, 2019, representing a net increase of £7.0 million.

Financing activities. The increase in net cash from financing activities to £5.3 million for the year ended December 31, 2019 from £0.3 million for the year ended December 31, 2018 was due to the $5.0 million investment in our ordinary shares made by Mallinckrodt, as well as proceeds received from the issuance of ordinary shares upon the exercise of share options.

Operating and Capital Expenditure Requirements

We have not achieved profitability on an annual basis since our inception, and we expect to incur net losses in the future. We expect that our operating expenses will increase as we continue to invest to grow our product pipeline, hire additional employees and increase research and development expenses.

Additionally, as a public company in the United States, we will incur significant additional audit, legal and other expenses. We believe that our existing capital resources will be sufficient to fund our operations, including currently anticipated research and development activities and planned capital spending, at least through the end of 2022.  

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

• the scope, rate of progress and cost of our clinical trials, preclinical programs and other related activities;

• the extent of success in our early preclinical and clinical-stage research programs, which will determine the amount of funding required to further the development of our product candidates;

• the cost of manufacturing clinical supplies and establishing commercial supplies of our product candidates and any products that we may develop;

• the costs involved in filing and prosecuting patent applications and enforcing and defending potential patent claims;

• the outcome, timing and cost of regulatory approvals of our product candidates;

• the cost and timing of establishing sales, marketing and distribution capabilities; and

• the costs of hiring additional skilled employees to support our continued growth and the related costs of leasing additional office space.

Contractual Obligations and Commitments

The following table summarizes our contractual commitments and obligations as of December 31, 2019, all of which related to our rental of office space.

	Payments Due by Period
	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
	(in thousands)
Operating lease obligations	£	63	£	63	£	—	£	—	£	—
Total	£	63	£	63	£	—	£	—	£	—

We have agreed to make payments to CROs and manufacturers under various CRO and manufacturing agreements that generally provide for our ability to terminate on short notice. We have not included any such contingent payment obligations in the table above as the amount, timing and likelihood of such payments are not fixed or determinable.

Off-Balance Sheet Arrangements

We did not have during the years presented, and do not currently have, any off-balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

Market risk arises from our exposure to fluctuation in interest rates and currency exchange rates. These risks are managed by maintaining an appropriate mix of cash deposits in the two main currencies we operate in, placed with a variety of financial institutions for varying periods according to expected liquidity requirements.

Interest Rate Risk

As of December 31, 2019, we had cash, cash equivalents and short-term deposits of £33.5 million. Our exposure to interest rate sensitivity is impacted primarily by changes in the underlying U.K. bank interest rates. Our surplus cash and cash equivalents are invested in interest-bearing savings accounts and certificates of deposit from time to time. During the years ended December 31, 2019 and 2018, we have not entered into investments for trading or speculative purposes. Due to the conservative nature of our investment portfolio, which is predicated on capital preservation of investments with short-term maturities, an immediate one percentage point change in interest rates would not have a material effect on the fair market value of our portfolio, and therefore we do not expect our operating results or cash flows to be significantly affected by changes in market interest rates.

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Currency Risk

Our functional currency is U.K. pounds sterling, and our transactions are commonly denominated in that currency. However, we receive payments under our collaboration agreements in U.S. dollars and we incur a portion of our expenses in other currencies, primarily Euros, and are exposed to the effects of these exchange rates. We seek to minimize this exposure by maintaining currency cash balances at levels appropriate to meet foreseeable short to mid-term expenses in these other currencies. Where significant foreign currency cash receipts are expected, we consider the use of forward exchange contracts to manage our exchange rate exposure. A 10% increase in the value of the pound sterling relative to the U.S. dollar or Euro would not have had a material effect on the carrying value of our net financial assets and liabilities in foreign currencies at December 31, 2019.

Credit and Liquidity Risk

Our cash, cash equivalents and short-term deposits are on deposit with financial institutions with a credit rating equivalent to, or above, the main U.K. clearing banks. We invest our liquid resources based on the expected timing of expenditures to be made in the ordinary course of our activities. All financial liabilities are payable in the short term, meaning no more than three months, and we maintain adequate bank balances in either instant access or short-term deposits to meet those liabilities as they fall due. We do not believe we had any credit risk relating to our trade receivables as of December 31, 2019 and 2018, which consisted solely of amounts due from Mallinckrodt and Alnylam.

Critical Accounting Policies, Judgments and Estimates

In the application of our accounting policies, we are required to make judgments, estimates, and assumptions about the value of assets and liabilities for which there is no definitive third-party reference. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. We review our estimates and assumptions on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revisions and future periods if the revision affects both current and future periods.

The following are our critical judgments that we have made in the process of applying our accounting policies and that have the most significant effect on the amounts recognized in our consolidated financial statements included elsewhere in this prospectus.

Revenue Recognition under Collaboration Agreements

As of December 31, 2019, our revenue from collaboration agreements was derived exclusively from our agreement with Mallinckrodt entered into in July 2019. Under this contract, Mallinckrodt obtained an exclusive worldwide license for an early stage RNAi program targeting C3 in the complement cascade (known as SLN500), with options to license additional complement-mediated disease targets.

The license of the intellectual property and the R&D services are not distinct, as Mallinckrodt cannot benefit from the intellectual property absent the R&D services, as those R&D services are used to discover and develop a drug candidate and to enhance the value in the underlying intellectual property, indicating that the two are highly interrelated. On this basis, we have concluded that there is a single performance obligation covering both the R&D services and the license of the intellectual property in respect of each target (i.e., one for the initial target and one for each additional optioned complement-mediated disease targets which represent material rights).  We recognize revenue over the duration of the contract based on an input method based on cost to cost.

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The agreement with Mallinckrodt has four elements of consideration:

• a fixed upfront payment, which we received in July 2019;

• subsequent milestone payments, which are variable and depend upon our achievement of specified development, regulatory and commercial milestones;

• payments in respect of certain research personnel costs on an FTE, basis, which costs are variable depending on activity under the collaboration; and

• funding for Phase 1 clinical development and certain preparatory activities, including GMP manufacturing, which costs are also variable.

The upfront payment has been allocated evenly between the initial target and the optioned complement-mediated disease targets, because the compounds are at a similar stage of development, on the basis of a benchmarking exercise that took into account the standalone selling price per target, of similar precedent transactions that had been publicly announced by comparable companies. The upfront payment will be recognized as revenue in line with the time period over which services are expected to be provided.

As there is only a single performance obligation per target under the collaboration agreement, the revenue for each element of consideration will be recognized over the contract period based on a cost to cost method, which is considered to be the best available measure of our effort during the contract period. The total cost estimate for the contract includes costs expected to be incurred during a Phase 1 clinical trial for which we will be reimbursed. Other variable elements of consideration will only begin to be recognized when the amounts are considered probable.

For the year ended December 31, 2019, we determined actual costs and forecast costs for the remainder of the contract. We then calculated total contract costs across the contract term, including costs that will be reimbursed to us, and costs incurred to date as a percentage of total contract costs. We then multiplied this percentage by the consideration deemed probable, calculating the cumulative revenue to be recognized. When variable consideration increases due to a further milestone becoming probable, a catch-up in revenue is recorded to reflect efforts already expended by us up to that point.

Recognition of Clinical Trial Expenses

As part of the process of preparing our consolidated financial statements, we may be required to estimate accrued expenses related to our preclinical studies and clinical trials. In order to obtain reasonable estimates, we review open contracts and purchase orders. In addition, we communicate with applicable personnel in order to identify services that have been performed, but for which we have not yet been invoiced. In most cases, our vendors provide us with monthly invoices in arrears for services performed. We confirm our estimates with these vendors and make adjustments as needed. Examples of our accrued expenses include fees paid to CROs for services performed on preclinical studies and clinical trials and fees paid for professional services.

Estimated Future Recovery of Goodwill

The carrying amount of goodwill is attributable to the acquisition of our subsidiary, Silence Therapeutics GmbH, in 2005 and forms part of our RNA therapeutics cash generating unit. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is not amortized but is tested for impairment annually, or sooner when an indication of impairment has been identified. Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over our interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary at the date of acquisition. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

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In accordance with IAS 36, Impairment of Assets, the carrying value of goodwill has been assessed by comparing its carrying value to its recoverable amount. The recoverable amount is considered to be the higher of fair value less cost of disposal and value in use. The key assumptions used in our valuation models to determine the fair value less cost of disposal are as follows:

• Fair value has been determined as our market capitalization, calculated as share price multiplied by the number of shares in issue, at December 31, 2019; and

• Disposal costs have been estimated to be minimal.

Management has assessed that the headroom in the valuation model used demonstrates that there is no reasonably possible change to a key assumption used in determining fair value less cost of disposal that would cause the cash generating unit’s carrying amount to exceed its recoverable amount. Our market capitalization at December 31, 2019 was approximately £274 million, with our share price not dropping significantly below its December 31, 2019 value at any point so far in 2020. Notwithstanding these assumptions, our market capitalization is predicated on share price, which is subject to fluctuation, and any significant, unexpected movements could result in an impairment in goodwill.

Recent Accounting Pronouncements

See Note 2 “Significant Accounting Policies—Accounting Standards” of the notes to our audited consolidated financial statements for the year ended December 31, 2019 included elsewhere in this prospectus for a discussion of new standards and interpretations recently and not yet adopted by us.

Jumpstart Our Business Startups Act of 2012

In April 2012, the U.S. Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107(b) of the JOBS Act provides that an “emerging growth company,” or EGC, can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Given that we currently report and expect to continue to report under IFRS as issued by the IASB, we have irrevocably elected not to avail ourselves of this extended transition period, and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies in the United States.

We intend to rely on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an EGC, we may rely on certain of these exemptions, including exemptions from (1) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (2) complying with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis.

We will remain an EGC until the earliest of (a) the last day of our fiscal year during which we have total annual gross revenue of at least $1.07 billion; (b) December 31, 2025; (c) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, which would occur if the market value of our equity securities that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an EGC, we will not be entitled to the exemptions provided in the JOBS Act.

We have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold equity securities.

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BUSINESS

Overview

We are a biotechnology company focused on discovering and developing novel molecules incorporating short interfering ribonucleic acid, or siRNA, to inhibit the expression of specific target genes thought to play a role in the pathology of diseases with significant unmet medical need. Our siRNA molecules are designed to harness the body’s natural mechanism of RNA interference, or RNAi, by specifically binding to and degrading messenger RNA, or mRNA, molecules that encode specific targeted disease-associated proteins in a cell. By degrading the message that encodes the disease-associated protein, the production of that protein is reduced and its level of activity is lowered. In the field of RNAi therapeutics, this reduction of disease-associated protein production and activity is referred to as “gene silencing.” Our siRNA delivery system is designed to enable delivery of our therapeutic siRNA molecules to targeted cells in the liver, where thousands of disease-associated genes are expressed. Using our RNAi-directed platform technologies, we have generated siRNA product candidates both for our internal development pipeline as well as for out-licensed programs with third-party collaborators. We are currently focused on developing siRNA molecules to bring into clinical trials for the potential treatment of cardiovascular disease, rare diseases such as iron overload disorders, and complement-mediated disorders. However, we have not yet conducted any clinical trials to date. We believe that our siRNA technology and delivery approach, combined with our expertise in RNAi biology, oligonucleotide chemistry and in vivo pharmacology, as well as our broad intellectual property estate and our relationships with key opinion leaders, provide us with a number of potential competitive advantages.

Our siRNA molecules are designed to bind to mRNA, which plays an essential role in the process used by living cells to translate the genetic information encoded by deoxyribonucleic acid, or DNA, into proteins. A specific stretch of DNA in the cell nucleus generates many identical copies of mRNA, which carry in the sequence of its nucleotides the molecular blueprints required for the cell to synthesize that particular encoded protein outside of the nucleus.  In some cases, cells produce mRNA erroneously, resulting in synthesis of too much of a particular protein, or a mutated protein variant, which can lead to disease. Our RNAi therapeutics are designed to address this problem by delivering siRNA that binds specifically to mRNA encoding the undesirable protein through Watson-Crick base pairing. Once the therapeutic siRNA molecule binds specifically to the targeted mRNA, the natural RNAi process is triggered, resulting in catalytic degradation of the targeted mRNA, which ultimately induces gene silencing while the RNAi pathway is active.  The level and duration of gene silencing that may be achieved by treatment with a particular siRNA molecule varies, as the catalytic activity of the RNAi pathway eventually fades, meaning that RNAi-mediated protein reduction is not permanent. In our preclinical studies, we have observed a durable, dose-dependent silencing effect with our product candidates, with the highest dose resulting in reductions of between 50% and 85% or more of the target protein level over the course of several weeks following subcutaneous injection. Although we have not yet commenced clinical trials of our product candidates, we believe that these observed results suggest that our product candidates could lead to similar results in humans.

Our preclinical development programs include our product candidate SLN360, which has been shown in preclinical studies to reduce the genetically controlled expression of Lipoprotein(a), or Lp(a), to address the high and prevalent unmet medical need in reducing cardiovascular risk in people born with high Lp(a) levels; our product candidate SLN124, which has been shown in preclinical studies to reduce TMPRSS6 gene expression to up-regulate hepcidin levels key in mediating iron overload disorders, including beta-thalassemia and myelodysplastic syndrome, or MDS; and our SLN500 program candidates, which have been shown in preclinical studies to reduce the expression of C3 for the treatment of complement pathway-mediated diseases.  We have licensed the development and commercialization rights to the SLN500 program to Mallinckrodt Pharma IP Trading DAC, a wholly owned subsidiary of Mallinckrodt plc, and together with Cache Holdings Limited, another wholly owned subsidiary of Mallinckrodt plc, collectively referred to as Mallinckrodt. We are seeking regulatory approvals to start human clinical trials of SLN360 in the United States and Europe and of SLN124 in a number of countries, including in Europe and Asia, later this year. We also expect to nominate a lead candidate in the SLN500 program by the end of 2020.

We believe that siRNA molecules can, in theory, be engineered to bind specifically to and silence almost any gene in the human genome to which siRNA can be delivered. This potentially broad application of siRNA therapeutics could allow them to become a new major class of drugs. We are currently able to deliver siRNA molecules to liver cells using N-acetylgalactosamine, or GalNac, for receptor-mediated targeting. GalNAc is an amino-modified

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monosaccharide that binds to asialoglycoprotein receptors, or ASGPRs, with high affinity and specificity. When GalNAc-conjugated siRNA molecules reach the surface of liver cells, they are internalized in those cells, with those not internalized being excreted. Once internalized, the siRNAs specifically bind to their target mRNAs, degrading them through the RNAi pathway. A single siRNA molecule, once in the liver and incorporated into the RNAi cellular machinery, can reduce the production of the target protein by thousands of copies due to the catalytic nature of the cell’s RNAi machinery. This GalNAc-siRNA drug modality is intended to enable precision medicine through the accuracy of Watson-Crick base pairing of the siRNA to its target gene mRNA, coupled with the specificity of GalNAc-mediated delivery to the target gene-containing liver cell.

Our technology uses a novel structure of double-stranded RNA with chemical modifications designed to improve the stability and efficacy of our siRNA molecules as well as to enhance delivery to targeted liver cells. We incorporate proprietary chemical modifications to enhance drug properties of our siRNA molecules, such as potency, stability and tissue distribution. We believe this approach results in a powerful modular technology that will be well-suited to tackle life-changing diseases. Particular siRNA molecules are designed to reduce the levels of a disease-associated protein directly, such as in the case of SLN360, which in our preclinical studies has been shown to directly reduce Lp(a) expression.  Alternatively, in cases in which a disease-associated protein is normally subject to inhibition by a regulatory protein, siRNA molecules are designed to increase the levels of the disease-associated protein by silencing the inhibitory protein, thereby relieving inhibition and indirectly increasing levels of the protein normally subject to inhibition.  In preclinical studies, SLN124 was shown to indirectly up-regulate hepcidin levels by reducing the expression of a specific gene, TMPRSS6, which normally inhibits the production of hepcidin. We will use this approach to address iron overload disorders in which hepcidin expression is typically low. Using these techniques, we believe we can design siRNA molecules to decrease high protein levels, and in some cases, to increase low protein levels, depending on the particular disease genes being targeted.

The potential of our siRNA platform has been recognized through collaborations with subsidiaries of two large pharmaceutical companies, AstraZeneca PLC, or AstraZeneca, and Mallinckrodt plc, or Mallinckrodt, as well as a technology evaluation agreement entered into in January 2020 with another large pharmaceutical company, The Takeda Pharmaceutical Company Limited, or Takeda. In March 2020, we announced a strategic collaboration with AstraZeneca to discover, develop and commercialize siRNA therapeutics for the treatment of cardiovascular, renal, metabolic and respiratory diseases. AstraZeneca made an upfront cash payment to us of $20 million in May 2020 and has unconditionally agreed to make an additional cash payment to us of $40 million no later than the first half of 2021. AstraZeneca also made an equity investment of $20 million in our company in March 2020. We anticipate initiating work on five targets within the first three years of the collaboration, with AstraZeneca having the option to extend the collaboration to a further five targets. AstraZeneca has agreed to pay us $10 million for each option exercised. For each target selected under the collaboration, we will be eligible to receive up to $140 million in milestone payments upon the achievement of milestones relating to the initiation of specified clinical trials, the acceptance of specified regulatory filings and the first commercial sale in specified jurisdictions.  For each target selected, we will also be eligible to receive up to $250 million in milestone payments as well as tiered royalties as a percentage of net sales ranging from the high single digits to the low double digits.

In July 2019, we announced a strategic collaboration with Mallinckrodt to develop and commercialize RNAi drug targets designed to silence the complement cascade in complement-mediated disorders. Under the agreement, we granted Mallinckrodt an exclusive worldwide license to our C3 targeting program, SLN500, with options to license additional complement-mediated disease targets from us, with Mallinckrodt exercising two additional targets in July 2020. We are responsible for preclinical activities, and for conducting the development program for each product until the end of Phase 1 clinical trials, after which Mallinckrodt will assume clinical development and responsibility for global commercialization.

In connection with the execution of the agreement, Mallinckrodt made an upfront cash payment to us of $20 million and purchased $5 million of our ordinary shares. We received a research milestone payment of $2 million in October 2019 upon the initiation of work under our work plan for a particular target. The collaboration provides for potential additional development and regulatory milestone payments in aggregate of up to $100 million for the initial C3 target and up to $140 million for each of the two optioned complement-mediated disease targets, with such milestones relating to the initiation of specified clinical trials in specified jurisdictions, and upon the receipt of regulatory approvals by specified authorities, in each case for multiple indications. We are also eligible to receive potential commercial milestone payments of up to $562.5 million upon the achievement of specified levels of annual

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net sales of licensed products for each program. We are also eligible to receive tiered, low double-digit to high-teen percentage royalties on net sales for licensed products for each program.

Our Strengths

Our mission is to use our technology to create a new generation of RNAi therapeutics which can improve outcomes for patients. We believe the following strengths will allow us to continue to build upon our leadership position in developing RNAi technology and achieve our longer-term goal of commercializing our product candidates:

• RNAi therapeutics platform and an internal pipeline of gene silencing RNAi therapeutics. We are focused on developing our portfolio of product candidates, including potential treatments for rare diseases, which may provide advantages such as accelerated regulatory approval timelines, lower competition and potential governmental incentives, as well as potential treatments for indications with large population targets, such as cardiovascular disease. We are principally focused on developing SLN360, which is currently in preclinical development, for the treatment of cardiovascular disease associated with elevated Lp(a). SLN124, a siRNA molecule designed to treat iron overload disorders including beta-thalassemia and MDS, is also currently in preclinical development. We are seeking approvals to begin clinical trials of both SLN360 and SLN124 by the end of 2020.

• Partnerships with leading pharmaceutical companies. We have attempted to mitigate the development risk associated with some of our product candidates by entering into target-based collaboration agreements with leading pharmaceutical companies and out-licensing certain of our siRNA technologies for target-specific applications. We are collaborating with AstraZeneca to discover, develop and commercialize siRNA therapeutics for the treatment of cardiovascular, renal, metabolic and respiratory diseases. Included in the collaboration with AstraZeneca is the possibility of incorporating extra-hepatic delivery of siRNA therapeutics to heart, kidney and lung in addition to our GalNAc-driven hepatic delivery. We have also out-licensed our background intellectual property including our platform technology associated with our siRNA stabilization chemistry techniques to Mallinckrodt through a research and collaboration agreement for the development of RNAi therapeutics targeting specific factors of the complement system. We recently entered into a Technology Evaluation Agreement with Takeda to explore the potential of our platform to generate siRNA molecules against a novel, undisclosed target controlled by Takeda. We have also out-licensed some of our intellectual property covering certain of our siRNA stabilization chemistry techniques to Quark Pharmaceuticals and Alnylam Pharmaceuticals.  

• Strong financial position. As of June 30, 2020, we had £50.3 million of cash, cash equivalents and term deposits, which amount gives effect to the proceeds from the issuance of ordinary shares to AstraZeneca in March 2020 and the upfront payment from AstraZeneca received in May 2020. We are unconditionally entitled to receive a further $40.0 million from AstraZeneca no later than the first half of 2021. We believe that this liquidity provides us with a cash runway that should be able to allow us to generate proof of concept clinical data for both SLN360 and SLN124.  

• Strong intellectual property and know-how. We have been pioneering siRNA technology for over 18 years. In August 2002, we filed one of the early patents for siRNA modification patterns, and the resulting patent family, which remains effective until August 2023, has been out-licensed to certain third parties. We maintain a strong siRNA intellectual property estate covering therapeutic aspects of siRNA modification, delivery, construct design, specific drug products and their uses. We seek to protect our intellectual property and proprietary technology, generally by filing an initial priority filing in the European Patent Office, followed by the filing of an international patent application, then filing regional and national applications for patent grant in territories including, for example, the United States and Europe. As of May 25, 2020, we solely owned 28 granted patents, of which 13 are U.S.-issued patents, and 86 pending patent applications, of which eight are U.S. pending patent applications. We believe that our proprietary intellectual property portfolio provides us with a substantial competitive advantage for the commercial development of our RNAi product candidates, as well as expanded possibilities for new development programs in the future.

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• Experienced R&D team, Scientific Advisory Board, Management team and Board of Directors.We have a leading research and development team led by Dr. Giles Campion, our Chief Medical Officer and Head of R&D, an expert in translational medicine who previously served as the Chief Medical Officer at Albumedix Ltd and Chief Medical Officer and Head of R&D at Prosensa Therapeutics. In February 2020, we announced the formation of a Scientific Advisory Board led by Professor Sir Gordon Duff and comprised of experts in drug discovery and clinical medicine to help steer our research programs. Our Board of Directors and management team are highly experienced in the biotechnology sector, with extensive experience working with private and public pharmaceutical and biotechnology companies.

Our siRNA Therapeutics Platform

We have developed a siRNA therapeutics platform designed to generate a pipeline of product candidates for diseases with unmet medical need. Our platform is comprised of our GalNAc-siRNA toolbox, our liver cell targeting technology and our target selection and screening process.

GalNAc-siRNA Toolbox. Our GalNAc-siRNA platform is a toolbox comprising several different elements that can be incorporated into our double-stranded siRNA structure, known as blunt-ended 19-mers, either singly or in different combinations depending on individual siRNA sequences.  The toolbox elements include:

• sugar modifications of one or more select individual nucleotides;

• stabilizing modifications of one or more internucleoside linkages in the sense and antisense strands;

• stabilizing modifications at one or more of the ends of the siRNA molecules;

• a five-prime, or 5’, modification of the antisense strand of siRNA for improved binding to an RNA-induced silencing complex, or RISC; and

• a versatile linker chemistry for GalNAc ligand conjugation in various numbers and configurations.

When applying these elements of our toolbox, we also aim to reduce the overall content of the sugar modifications and the number of undefined stereogenic centers in the siRNA molecule.

Liver Cell Targeting Technology. Blood flow and fenestra, or small openings in the endothelium, result in a large amount of the injected dose of a conjugated siRNA passing through the liver and reaching the main cell type of the liver known as a hepatocyte. Hepatocytes are cuboidal epithelial cells that line the liver sinusoids. Hepatocytes have approximately 0.5 to 1.0 million ASGPRs. GalNAc binds to ASGPRs with high affinity so that when GalNAc-conjugated siRNA reach the hepatocytes, they are internalized into the cells where siRNA can bind and, as a result, can degrade the target mRNA, which in turn reduces production of the encoded protein and that protein’s activity, and thereby silencing the respective gene. Only a small fraction of the initial dose reaches the hepatocyte and the right compartment of the cell, but once the siRNA is there, it can last for several months, allowing a small number of internalized siRNA to be able to have a potent effect on the target mRNA. We apply the toolbox in the lead optimization phase to identify candidates that we believe will be potent with a long duration of action but that have a favorable safety profile.

Target Selection and Screening Process. We areable to source potential product candidates through a proprietary target selection process. The selection of new targets involves a careful analysis of the biology underlying an indication, disease epidemiology and addressable population, the current standard of care and resulting medical need, the commercial landscape and the envisaged clinical path.

Our screening process relies on a proprietary in silico algorithm that seeks to predict the most efficacious and specific siRNAs for any given target. The bioinformatics function is designed to continuously improve in silico predictions for finding potentially potent and safe siRNA sequences. The highest scoring drug candidates subsequently undergo a multi-step evaluation process involving several rounds of in vitro screening in cell lines and primary hepatocytes to identify the most potent molecules. Top candidates identified in vitro are then tested for safety and potential efficacy in animal models. At this point in the process, additional modification patterns and new chemistries are introduced for improvement of activity and duration of action while maintaining the desired safety profile. To be selected as a drug candidate for clinical trials, it needs to be shown that a molecule is well tolerated, elicits no serious adverse effects, and achieves strong and long-lasting knockdown of the targeted gene in a study with non-human primates.

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Our Product Candidate Pipeline

Our current product candidate pipeline is centered around our liver-targeting GalNAc-siRNA platform technology. Our pipeline consists of a diversified set of therapeutic areas, including rare and metabolic indications.

* We are responsible for discovery and preclinical activities and for executing the development program of each product in this program until the end of Phase 1 clinical trials, after which Mallinckrodt will assume clinical development and responsibility for global commercialization.

In addition to our clinical development pipeline, we have also out-licensed some of the intellectual property associated with our siRNA stabilization chemistries to Quark Pharmaceuticals for p53 targeting. The resulting product candidate, which is referred to as QPI-1002, is being developed by Quark and is currently in later-stage clinical trials.

Background on siRNA Molecules and RNA Interference

mRNA plays an essential role in the process used by cells to transcribe and translate genetic information from DNA to create proteins. Transcription from DNA in the cell nucleus generates different types of RNA, including mRNA, which carries the information required for translation, or protein synthesis, in the sequence of its nucleotides. In some cases, cells produce mRNA erroneously, resulting in synthesis of too much of a particular protein or a mutated protein variant, which can lead to disease. Our siRNAs are designed to bind to undesirable mRNA, whereupon a natural process known as RNAi is triggered, resulting in catalytic degradation of the mRNA and reduced production and activity of the disease-associated protein.

RNAi is a naturally occurring biological pathway within cells for sequence-specific silencing and regulation of gene expression. RNAi was discovered by Andrew Fire and Craig Mello, for which they were awarded the 2006 Nobel Prize in Physiology or Medicine. RNAi therapeutics represent a novel advance in drug development that has the potential to transform the care of patients with genetic and other diseases. Historically, the pharmaceutical industry had developed only small molecules or recombinant proteins to inhibit the activity of disease-associated proteins. While this approach is effective for many diseases, a number of proteins cannot be inhibited by either small molecules or recombinant proteins. Some proteins lack the binding pockets small molecules require for interaction. Other proteins are solely intracellular and are therefore inaccessible to recombinant protein-based therapeutics, which are limited to cell surface and extracellular proteins. The unique advantage of RNAi is that, instead of targeting proteins, RNAi silences the genes themselves via the targeted destruction of the mRNAs made from the gene. Rather than seeking to inhibit a protein directly, the RNAi approach works upstream to prevent its creation in the first place.

Once inside a cell, siRNA molecules are recognized by the endogenous RNAi cellular machinery, which removes one of the strands, referred to as a passenger strand, of the siRNA construct thereby allowing the other strand, referred to as a guide strand, to find its target mRNA and bind to it through Watson-Crick base pairing. This site-specific binding triggers the biological process of RNAi interference, by which natural cellular machinery degrades target mRNA and prevents it from being translated into functional proteins.

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Our medicines are designed to harness this natural pathway to develop a new generation of therapeutics by designing tailored siRNA sequences that are able to bind through Watson-Crick base pairing to mRNAs that code for specific disease-associated genes, or genes that regulate them. Our siRNA molecules are administered by subcutaneous injection. Once administered, our siRNA molecules are taken up specifically by target liver cells or cleared from the body within hours. A single siRNA molecule, once in the liver and incorporated into the RNAi cellular machinery, can degrade thousands of targeted mRNAs due to the catalytic nature of the cell’s RNAi machinery. The graphic below shows the steps involved in the pairing of our siRNA molecules with the bases contained in the mRNA sequence for a particular target gene.

Our siRNA Product Candidates

SLN360

Overview

SLN360 is a siRNA molecule designed for the treatment of cardiovascular disease associated with elevated Lp(a), a fatty particle in the blood. Available human data validate Lp(a) as an independent risk factor increasing the chances of developing premature cardiovascular diseases, including coronary heart disease and unstable angina, as well as myocardial infarction. SLN360 has the potential to reduce these diseases by specifically binding to and inducing RNAi-mediated degradation of the mRNAs made from LPA, the gene that encodes apolipoprotein(a), a protein specifically found in Lp(a). SLN360’s mode of action creates an opportunity to develop this product candidate for several indications for which Lp(a) has been shown to be a causal, independent risk factor. In our preclinical studies, SLN360 significantly reduced Lp(a) levels in healthy non-human primates. We believe the broad applicability of SLN360 against LPA to potentially treat various cardiovascular diseases provides us with significant opportunity for market expansion if it is approved. We submitted an IND and are seeking approval to begin a dose escalation trial in healthy volunteers and secondary prevention patients with elevated Lp(a) by the end of 2020. We are also considering a variety of developmental options as an alternative to a cardiovascular outcomes trial.

We believe SLN360 could be beneficial in addressing increased cardiovascular risk associated with raised levels of Lp(a) greater than 50mg/dL, which is considered to affect up to 20% of the world’s population. The incidence of elevated Lp(a) is higher in people with established cardiovascular disease and calcific aortic valvular stenosis.  Additionally, elevated Lp(a) concentrations are associated with an increased risk of myocardial infarction and ischemic stroke, particularly in stroke patients 55 years of age and younger. There is a genetic link between plasma Lp(a) level and cardiovascular risk. Mutations that genetically cause elevated Lp(a) levels have been linked with

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increases in myocardial infarction, ischemic stroke, carotid stenosis, peripheral arterial disease (including femoral artery stenosis), abdominal aortic aneurysm, obstructed coronary vessels (i.e. coronary atherosclerotic burden), earlier onset of coronary artery disease, cardiovascular and all-cause mortality, increased risk of heart failure and reduced longevity. Importantly, these causal relationships are independent of concentrations of other lipids and lipoproteins, including low-density lipoprotein, or LDL, and conventional cardiovascular disease risk factors. Conversely, a genetically-determined decrease in Lp(a) has been associated with a 29% lower risk of coronary artery disease, 31% lower risk of peripheral vascular disease, 17% lower risk of heart failure, 13% lower risk of stroke and a 37% lower risk of aortic stenosis.

SLN360 is administered by subcutaneous injection and is anticipated to have a long duration of action, potentially allowing for fewer treatments, such as once monthly, every two months or longer. We began IND-enabling studies in February 2019 and have submitted an IND and CTAs seeking approvals to start clinical trials in the United States and Europe by the end of 2020.

Disadvantages of existing treatment options

Lp(a) is not susceptible to lifestyle changes and there are no currently available pharmacological treatments that cause an appreciable reduction in Lp(a). The only existing treatment to reduce Lp(a) is apheresis, which involves the removal of blood plasma from the body by the withdrawal of blood, its separation into plasma and cells, and the reintroduction of the cells, used especially to remove antibodies in treating autoimmune diseases. This process can take between two and four hours and is performed every one to two weeks. As a consequence, it is invasive and burdensome for patients and it is only available at limited centers at a high cost. Apheresis is primarily used in Europe and it is not incorporated in the treatment guidelines in the United States.

There are currently no approved lipid-lowering agents specific to Lp(a). Several non-specific agents, largely targeting LDL cholesterol, have been observed to have only marginal or modest Lp(a) reductions, including ezetimibe (7%), niacin therapy (23%), cholesteryl ester transfer protein (CETP) inhibitors (25-40%), and antisense oligonucleotide-mediated inhibition of apo(b) by mipomersen (26%).  Additionally, two monoclonal antibodies that inhibit proprotein convertase subtilisin/kexin type 9, or, PCSK9, have been observed to reduce Lp(a) levels by 20% to 30%. However, randomization studies have suggested that to produce a clinically significant reduction in cardiovascular risk, a larger reduction in Lp(a) may be required, something that we believe may be achieved by targeted RNA-based approaches such as ours.

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Preclinical Data

In a proof of mechanism study in cynomolgus monkeys, non-human primates also known as long-tailed macaques, administration of SLN360 lowered blood serum Lp(a) levels in a sustained manner. The chart below shows changes from baseline, or BL, levels with each data plot shown as an arithmetic mean plus or minus one standard deviation, or SD. As shown in the chart below, over nine weeks following administration of either a single dose of SLN360 (3 mg/kg or 9 mg/kg) on day 0 or three doses (of 3 mg/kg each) on days 0, 7 and 14, the largest dose resulted in a 95% reduction in Lp(a) levels. Individual animals observed in the study had their serum Lp(a) normalized to their own baseline levels, which are expressed as a nominal value of 100 in the chart below.

SLN360-Induced Reduction in Serum Lp(a) in Cynomolgus Monkeys

SLN360 has undergone an extensive nonclinical safety and pharmacokinetic evaluation, including rat biodistribution, repeat dose toxicity in two animal species (rat and the pharmacologically relevant cynomolgus monkey), including safety pharmacology investigations, and in vitro and in vivo genetic toxicity studies. SLN360 has displayed a typically short pharmacokinetic profile, where the compound is almost completely cleared from circulation in the blood after 24 hours. SLN360 distribution was largely restricted to the liver and kidney, with levels in other organs (including reproductive organs) at less than 1% of peak liver levels. SLN360 was shown to be non-genotoxic in the standard battery of genotoxic tests. In good laboratory practice (GLP) toxicology studies, SLN360 was well tolerated up to the maximum dose administered. All findings in both species were considered to be non-adverse. In the cynomolgus monkey, the most relevant species, the No Observed Adverse Effect Level, or NOAEL, was 60 times the pharmacologically active dose, and no dose-related changes in clinical chemistry, hematology, circulatory and electrocardiography, or ECG, parameters, respiratory rate, neurobehavior, plasma cytokines, complement activation or c-reactive protein levels were noted.

Planned Clinical Trials

We have submitted an IND in the United States and CTAs in Europe seeking approval to begin human clinical trials in 2020. We intend to conduct a multicenter, randomized, double-blind, placebo-controlled, single ascending dose, or SAD, and multiple dose, or MD, trial to assess the preliminary safety, tolerability, pharmacodynamics, or PD, and pharmacokinetics, or PK, of SLN360 administered subcutaneously to healthy volunteers with elevated Lp(a).

SLN124

Overview

SLN124 is a siRNA molecule designed to treat ineffective erythropoiesis, or the production of red blood cells, associated with iron overload disorders and with primary or secondary dysregulation of hepcidin synthesis. These constitute diseases associated with pathologically low hepcidin and diseases in which there is inadequate hepcidin response for the degree of iron loading, such as beta-thalassemia, MDS, and other iron-loading anemias.  Left untreated, iron overload disorders cause damage to the heart, liver, pituitary gland, adrenal gland, testes, pancreas,

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ovaries and kidney and endocrine organs. Beta-thalassemia is often accompanied by the destruction of a large number of red blood cells, which causes the body’s spleen to enlarge and work harder than normal, potentially worsening the anemia. Beta-thalassemia is a rare disease, with an overall prevalence of 1 per 100,000 persons, rising in certain regions (such as Mediterranean Europe, Middle East and South East Asia) to 1 per 10,000 persons. Globally, there are over 60,000 new cases of beta-thalassemia each year, of which there are approximately 15,000 cases in the United States and the top five countries in Europe. MDS is defined as rare genetic disease, with an overall prevalence of 20 per 100,000 persons, and impacts more than 100,000 people in Europe and the United States. SLN124 has the potential to reduce systemic iron, prevent organ iron overload and enhance erythropoiesis. It does so by specifically binding to and inducing RNAi-mediated degradation of mRNAs made from the gene TMPRSS6, a negative regulator of hepcidin, which is the main hormone controlling iron homeostasis.  

SLN124 is administered by subcutaneous injection and is anticipated to have a long duration of action, potentially allowing for once monthly treatments. The EMA granted orphan drug designation for SLN124 in January 2019 for the treatment of beta-thalassemia. In the United States, the FDA granted rare pediatric disease designation for SLN124 in March 2020 for the treatment of beta-thalassemia and granted orphan drug designation in April 2020 and July 2020 for the treatment of MDS and adult beta-thalassemia, respectively.  

Disadvantages of existing treatment options

The cornerstone of treatment for iron loading anemias, like beta-thalassemia and MDS, is the regular transfusion of packed red blood cell, or RBC, units. Despite providing immediate symptomatic relief by boosting hemoglobin levels (therefore reducing anemia), RBC transfusions are burdensome, require frequent hospital visits (every two to five weeks) and carry the risk of further iron overload. Iron chelators are the standard of care for the prevention of iron overload and can be administered by intravenous or subcutaneous twice daily injections (deferoxamine) or taken orally once (deferasirox) to three times daily (deferiprone). While orally available chelators, particularly Deferasirox (Exjade) are currently prescribed due to their ease of administration, some patients still need to receive deferoxamine infusions. Regardless of administration profile, chelator use carries a known risk of severe side effects with several restrictions of use and black box warnings regarding potential renal, ophthalmic, hepatic and gastrointestinal, or GI, toxicity/failure, with common acute GI side effects including abdominal pain, diarrhea, nausea and vomiting. The side effect profile as well as frequency of administration and perceived bad taste are reported as drivers of poor patient compliance with this existing treatment option.

Preclinical Data

In a beta-thalassemia rodent disease model, SLN124 reduced expression of its target gene, TMPRSS6, in the liver after 35 days, while also increasing serum hepcidin levels and lowering transferrin saturation. On days 1 and 15 of the study, mice with heterozygous deletion of two different β-globin genes, also known as Hbbth^3/+, were treated with either 3 mg/kg of SLN124 subcutaneously as monotherapy or with the same dose of SLN124 in combination with 1.25 ng/mL of deferiprone supplied in drinking water. One cohort of mice was treated with deferiprone alone. The control group consisted of mice having TMPRSS6 siRNA without a ligand.

TMPRSS6 mRNA levels were assessed by quantitative Reverse Transcription Polymerase Chain Reaction, or qRT-PCR, a common laboratory technique, and were normalized to the endogenous reference actin relative to their expression levels in control treated animals. These TMPRSS6 mRNA levels are shown in the left panel of the figure below. Serum hepcidin levels were determined using an ELISA assay and are shown in the middle panel of the figure below. Transferrin saturation, a clinical biomarker for serum iron levels, was calculated based on total serum iron and total iron binding capacity, and the observations from the study are shown in the right panel of the figure below.

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In the figure below, we show the results from administration on individual animals as well as the mean for each group plus or minus one standard deviation. The figures show that administration of SLN124, either as monotherapy or in combination with deferiprone, reduced TMPRSS6 mRNA levels as compared to the control group or treatment with deferiprone alone. The two mouse groups receiving SLN124 also experienced comparatively higher hepcidin levels and lower transferrin saturation levels than the control group or the deferiprone only group (the deferiprone only control data being non-statistically signficant or “ns”). However, because this is a preclinical study, the observed results will need to be confirmed in human clinical trials.

SLN124 reduced liver TMPRSS6 mRNA levels in β-thalassemic mice compared to deferiprone

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SLN124 increased serum hepcidin levels in β-thalassemic mice compared to deferiprone

SLN124 reduced transferrin saturation in β-thalassemic mice compared to deferiprone

In our preclinical studies of beta-thalassemic mice, we also observed that administration of SLN124 improved anemia, which led to reduced extramedullary erythropoiesis, evident by the reduction in spleen weight shown in the left panel of the figure below.  In these studies, mice were dosed twice over two weeks, following which their spleen weight and hemoglobin levels were measured over five weeks. As shown in the right panel of the figure below, we observed a median increase of 2.5 g/dL in hemoglobin levels, or 30% more than the control group, in the mice receiving SLN124 in this study. Increases of at least 1.5 g/dL are generally considered to be clinically relevant responses, based on 2018 International Working Group standardized response criteria for showing hematologic improvement in patients with MDS.  

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SLN124 reduced spleen weight and improved anemia in β-thalassemic mice

Data based on collaboration with Dr. J. Vadolas, Australia, Monash Medical Centre/Melbourne.  

SLN124 has undergone an extensive nonclinical safety and pharmacokinetic evaluation including mouse biodistribution, single and repeat dose toxicity in two relevant animal species (mouse and cynomolgus monkey) including safety pharmacology investigations, and in vitro genetic toxicity studies. Drug‑drug interaction studies have also been carried out as the initial clinical trial will also be performed in a patient population that may be using concomitant medications. The toxicological data obtained so far are regarded as adequate to support single and repeated intermittent monthly treatment in humans.

In these nonclinical evaluations, SLN124 was highly absorbed within hours, while its pharmacodynamic effects were sustained over weeks. SLN124 was distributed to the liver and kidney with little or no detectable tissue concentrations in other tissues, including brain and reproductive organs. The nonclinical safety has been assessed in a series of GLP pharmacology studies. In these studies, ECG, blood pressure and respiration were assessed in cynomolgus monkeys without any test-article related observations. Evaluation of SLN124 in weekly repeat dose GLP studies in mouse and non-human primates has not revealed any unexpected findings. The NOAEL was more than 25 times the predicted efficacious pharmacological dose in both the mouse and monkey species. In vitro experiments in mammalian assay systems confirmed the lack of genotoxicity. In drug-drug interaction studies, SLN124 was not a direct or time-dependent inhibitor of analyzed cytochrome enzymes and was neither an inhibitor nor a substrate of analyzed transporters under the conditions examined.

Planned Clinical Trials

We have recently receiveda CTA approval from MHRA to initiate a randomized, double-blind placebo-controlled Phase 1 SAD trial in up to 24 healthy volunteers to evaluate the safety, tolerability, PK and PD of SLN124. The selected dose levels are intended to provide sufficient information about the safety and tolerability of SLN124 while minimizing the risk to trial subjects. Subjects will be followed up for eight weeks, which is informed by PK and PD modelling in preclinical studies.

We have also submitted CTAs and await approval to initiate a global randomized, single-blind, placebo-controlled Phase 1b SAD or MD trial, known as SLN124-002, in adult subjects with non-transfusion dependent thalassemia, or NTDT, and very low- and low-risk, or VL/LR-, MDS to investigate the safety, tolerability, PK and PD response to SLN124.

We believe that, by conducting a healthy volunteer trial in parallel with a trial of beta-thalassemia patients, we will be able to evaluate the safety profile of SLN124 in human participants earlier and increase the safety database to allow for potential expansion of the trials in core countries and hospital settings that do not permit first-in-man studies.

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Part A of the planned SLN124-002 clinical trial will be a SAD, placebo-controlled trial in patients with NTDT and VL/LR-MDS. Up to four dose level cohorts per indication, in a total of up to 64 subjects, will be studied, according to recommendations made by the designated safety review committee, or SRC.

Part B will be a MD, placebo-controlled study in up to three dose level cohorts per indication, to include up to 48 subjects (24 thalassemia and 24 MDS), according to recommendation made by the SRC.  Following the review of the safety, PK, and PD data, and upon observation of a PD effect in subjects participating in the SAD cohorts, those patients can be enrolled to an MD cohort and treated at approximately monthly intervals, for example at days 1, 28, and 56, with three subcutaneous injections.

SLN500: Complement Factor C3 Program

Overview

Our SLN500 program candidates are siRNAs designed to specifically bind to and induce RNAi-mediated degradation of the mRNAs that encode the complement factor C3 for the treatment of complement pathway-mediated diseases. The SLN500 development program is fully funded, directly and through potential milestone payments under our collaboration with Mallinckrodt. We expect to nominate a lead candidate from the C3 program in the second half of 2020.  

Overview of the complement system

The complement system plays a pivotal role in both innate and adaptive immune systems. Complement proteins are produced primarily by the liver and circulate in the blood and through the body’s tissues. The complement system may be activated through three principal pathways, known as the classical, lectin and alternative pathways, each of which requires the C3 protein to enable three principal immune responses: opsonization, inflammation and formation of the membrane attack complex, or MAC. When C3 is activated, C3 fragments, such as C3b, tag cell surfaces in a process called opsonization, which marks the cells for removal from tissues or the bloodstream. Two other fragments, C3a and C5a, are released, contributing to inflammation in the surrounding tissues. Further complement activation causes MAC formation on cell surfaces, piercing holes and causing cells to lyse, or rupture.

Under conditions of excessive or uncontrolled activation, the complement system is believed to play a key role in the incidence and progression of several autoimmune and inflammatory diseases. In these diseases, the complement system acts directly through tissue destruction by the MAC and indirectly by signaling other elements of the immune system to inappropriately target otherwise healthy tissues. Because the contribution of complement activation to the development and progression of these diseases is not fully understood, it has been difficult to develop therapeutics that ameliorate the conditions contributing to these diseases by targeting only one of the complement activation pathways.

Complement activation and its effects can be inhibited in multiple ways. By targeting complement proteins upstream of C3, one of the three principal activation pathways can be inhibited. For example, inhibition of factor B or factor D results in inhibition of the alternative pathway, but not the classical or lectin pathways. The complement system can also be inhibited by targeting complement proteins downstream of C3, which results in limited inhibition of complement effects. For example, inhibition of C5 leads to inhibition of the formation of the membrane attack complex and C5a-mediated inflammation but does not affect opsonization or C3a-mediated inflammation.

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The following graphic illustrates the mechanism of action of SLN500 in targeting the complement system:

Illustration reproduced courtesy of Mastellos D.C. et al., Trends in Immunology.

Potential Market Opportunity

The commercial potential of treatment for complement-mediated disorders has been demonstrated by eculizumab (anti-C5 Ab), the first FDA-approved drug for complement mediated disease. In 2019, eculizumab had global revenues of $4 billion for rare disease indications.

QPI-1002

We have also out-licensed certain intellectual property associated with our siRNA stabilization chemistries to Quark Pharmaceuticals for p53 targeting.  The resulting product candidate, which is referred to as QPI-1002, is currently being developed by Quark in later-stage clinical trials.

Competition

The life sciences industry is characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. We face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions. Any product candidates that we successfully develop and commercialize will compete with existing products and new products that may become available in the future. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical study sites and patient registration for clinical studies, as well as in acquiring technologies complementary to, or necessary for, our programs.

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Companies that complete clinical trials, obtain required regulatory authority approvals and commence commercial sale of their drugs before their competitors may achieve a significant competitive advantage, and our commercial opportunity could be reduced or eliminated if competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop and commercialize. Our competitors also may obtain FDA, EMA or other regulatory approval for their products more rapidly than we obtain approval, which could result in our competitors establishing a strong market position for either the product or a specific indication before we are able to enter the market. Drugs resulting from our research and development efforts or from our joint efforts with collaboration partners therefore may not be commercially competitive with our competitors’ existing products or products under development.

We consider a number of companies to be our competitors in developing siRNA molecules, including, but not limited to, Alnylam Pharmaceuticals, Arcturus Therapeutics, Arrowhead Pharmaceuticals, Avidity Biosciences, Dicerna Pharmaceuticals, Genevant Sciences, OliX Pharmaceuticals, Nitto BioPharma and Quark Pharmaceuticals. With respect to our SLN360 product candidate targeting Lp(a), Ionis Pharmaceuticals and Akcea Therapeutics partnered with Novartis are developing TQJ230, a single-stranded antisense oligonucleotide therapeutic directed against Lp(a) and Arrowhead Pharmaceuticals partnered with Amgen are developing AMG 890, a different siRNA directed against Lp(a), which we consider to be potentially competitive products. With respect to our SLN124 product candidate targeting TMPRSS6 for iron regulation, potential competitors include, but are not limited to, Bristol-Myers Squibb’s Luspatercept (Reblozyl®), Ionis Pharmaceuticals’ IONIS-TMPRSS6-LRx, Vifor Pharma’s VIT-2763, Disc Medicine’s Matriptase-2 inhibitor, Protagonist’s PTG-300, Bluebird’s Lentiglobin (Zynteglo®), Orchard Therapeutics’ OTL-300, Vertex’s CTX001, Sanofi’s ST-400, MedPacto’s Vactosertib (TEW-7197), Geron’s Imetelstat, Imara’s IMR-687, Agios’s Mitapivat, AstraZeneca/Astellas’s Roxadustat, H3 Biomedicine’s H3B-8800, Boehringer Ingelheim’s BI-836858, and Astex’s ASTX727. However, other companies may also develop alternative treatments for the diseases we have identified as being potentially treated with our siRNA molecules. To the extent those alternative treatments are more efficacious, less expensive, more convenient or produce fewer side effects, our market opportunity would be reduced.

We anticipate that we will face intense and increasing competition as new products and therapies enter the market and advanced technologies become available. We expect any treatments that we develop and commercialize to compete on the basis of, among other things, efficacy, safety, delivery, patient friendliness, price and the availability of reimbursement from government and other third-party payors.

Government Regulation and Product Approval

In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and non-U.S. statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable United States requirements at any time during the drug development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve a pending NDA, withdrawal of an approval, imposition of a clinical hold, issuance of warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

The process required by the FDA before a drug may be marketed in the United States generally involves:

• completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;

• submission to the FDA of an IND, which must become effective before human clinical trials may begin;

• approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated;

• performance of adequate and well-controlled clinical trials, in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug for each indication;

• payment of user fees;  

• submission to the FDA of an NDA;

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• satisfactory completion of an FDA advisory committee review, if applicable;

• satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements, and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

• satisfactory completion of an FDA inspection of selected clinical sites to assure compliance with GCPs and the integrity of the clinical data; and

• FDA review and approval of the NDA.

Preclinical Studies

Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess potential safety and efficacy. An IND sponsor must submit the results of the nonclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND. Some nonclinical testing may continue even after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

Clinical Trials

Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must continue to oversee the clinical trial while it is being conducted.  

Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined. In Phase 1, the drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an initial indication of its effectiveness. In Phase 2, the drug typically is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. In Phase 3, the drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the safety and efficacy of the product for approval, to establish the overall risk-benefit profile of the product and to provide adequate information for the labeling of the product.

Progress reports detailing the results of the clinical trials must be submitted, at least annually, to the FDA, and more frequently if SAEs occur. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the 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. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements, or if the drug has been associated with unexpected serious harm to patients.

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Marketing Approval

Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. In most cases, the submission of an NDA is subject to a substantial application user fee. Under the Prescription Drug User Fee Act, or PDUFA, guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA for a new molecular entity to review and act on the submission. This review typically takes twelve months from the date the NDA is submitted to the FDA because the FDA has approximately two months to make a “filing” decision.

In addition, under the Pediatric Research Equity Act, certain NDAs or supplements to an NDA must contain data that are adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation.

The FDA also may require submission of a risk evaluation and mitigation strategy, or REMS, plan to ensure that the benefits of the drug outweigh its risks. The REMS plan could include medication guides, physician communication plans, assessment plans, and/or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools.

The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA will typically inspect one or more clinical trial sites to assure compliance with GCP requirements.

The testing and approval process for an NDA requires substantial time, effort and financial resources, and takes several years to complete. Data obtained from preclinical and clinical testing are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The FDA may not grant approval of an NDA on a timely basis, or at all.

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After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or preclinical testing in order for FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000, there is no reasonable expectation that sales of the drug in the United States will be sufficient to offset the costs of developing and making the drug available in the United States. Orphan drug designation must be requested before submitting an NDA. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.

If the FDA approves a sponsor’s marketing application for a designated orphan drug for use in the rare disease or condition for which it was designated, the sponsor is eligible for a seven-year period of marketing exclusivity, during which the FDA may not approve another sponsor’s marketing application for a drug with the same active moiety and intended for the same use or indication as the approved orphan drug, except in limited circumstances, such as if a subsequent sponsor demonstrates its product is clinically superior. During a sponsor’s orphan drug exclusivity period, competitors, however, may receive approval for drugs with different active moieties for the same indication as the approved orphan drug, or for drugs with the same active moiety as the approved orphan drug, but for different indications. Orphan drug exclusivity could block the approval of one of our products for seven years if a competitor obtains approval for a drug with the same active moiety intended for the same indication before we do, unless we are able to demonstrate that grounds for withdrawal of the orphan drug exclusivity exist, or that our product is clinically superior. Further, if a designated orphan drug receives marketing approval for an indication broader than the rare disease or condition for which it received orphan drug designation, it may not be entitled to exclusivity.

Rare Pediatric Disease, or RPD, designation by FDA enables priority review voucher, or PRV, eligibility upon U.S. market approval of a designated drug for rare pediatric diseases. The RPD-PRV program is intended to encourage development of therapies to prevent and treat rare pediatric diseases. The voucher, which is awarded upon NDA approval to the sponsor of a designated RPD, can be sold or transferred to another entity and used by the holder to receive priority review for a future NDA or BLA submission, which reduces the FDA review time of such future submission from ten to six months. However, priority review does not guarantee that the FDA will review and approve an application within six months of submission.

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Post-approval Requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and 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, manufacturing changes or other labeling claims, are subject to further testing requirements and prior FDA review and approval. There also are continuing annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as application fees for supplemental applications with clinical data.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, including a boxed warning, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs.

In addition, drug manufacturers and other 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 result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new 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 product recalls;

• fines, 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 approvals;

• product seizure or detention, or refusal to permit the import or export of products; or

• injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label, although physicians, in the practice of medicine, may prescribe approved drugs for unapproved indications. 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.

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In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or 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 by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

Federal and State Fraud and Abuse, 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 business practices in the biopharmaceutical industry. These laws may impact, among other things, our current and future business operations, including our clinical research activities, and proposed sales, marketing and education programs and constrain the business or financial arrangements and relationships with healthcare providers and other parties through which we market, sell and distribute our products for which we obtain marketing approval. These laws include anti-kickback and false claims laws and regulations, data privacy and security, and transparency laws and regulations, including, without limitation, those laws described below.

The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value. The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Although there are a number of statutory exemptions and regulatory safe harbors protecting some common activities from prosecution, the exemptions and safe harbors are drawn narrowly. 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 exemption or safe harbor. 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.

A person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act or the civil monetary penalties statute, which imposes penalties against any person who 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.

Federal false claims laws, including the federal civil False Claims Act, prohibits any person or entity from knowingly presenting, or causing to be presented, a false claim for payment 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. A claim includes “any request or demand” for money or property presented to the U.S. government. Several pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and thus non-reimbursable, uses.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing 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. Also, many states have similar fraud and abuse 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.

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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, or HITECH, and their respective implementing regulations, imposes specified requirements on certain types of individuals and entities relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s security standards directly applicable to “business associates,” defined as independent contractors or agents of covered entities that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, 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 are not pre-empted by HIPAA, differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other transfers of value made to physicians and teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by the physicians and their immediate family members.

We may also be subject to state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, as well as 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.

Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, it is possible that some of our business activities could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including criminal and significant civil monetary penalties, damages, fines, individual imprisonment, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, disgorgement, exclusion from participation in government healthcare programs 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 are 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.

Coverage and Reimbursement

The future commercial success of our product candidates or any of our collaborators’ ability to commercialize any approved product candidates successfully will depend in part on the extent to which governmental payor programs at the federal and state levels, including Medicare and Medicaid, private health insurers and other third-party payors provide coverage for and establish adequate reimbursement levels for our product candidates. Government health administration authorities, private health insurers and other organizations generally decide which drugs they will pay for and establish reimbursement levels for healthcare. In particular, in the United States, private health insurers and other third-party payors often provide reimbursement for products and services based on the level at which the government, through the Medicare or Medicaid programs, provides reimbursement for such treatments. In the United States, the European Union, or EU, and other potentially significant markets for our product candidates, government authorities and third-party payors are increasingly attempting to limit or regulate the price of medical products and services, particularly for new and innovative products and therapies, which often has resulted in average selling prices lower than they would otherwise be. Further, the increased emphasis on managed healthcare in the United States will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our future product sales and results of operations. These pressures can arise from rules and practices of managed care groups, judicial decisions and laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical coverage and reimbursement policies and pricing in general.

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Third-party payors are increasingly imposing additional requirements and restrictions on coverage and limiting reimbursement levels for medical products. For example, federal and state governments reimburse covered prescription drugs at varying rates generally below average wholesale price. These restrictions and limitations influence the purchase of healthcare services and products. Third-party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drug products for a particular indication. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain the FDA approvals. Our product candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. 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. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development. Legislative proposals to reform healthcare or reduce costs under government insurance programs may result in lower reimbursement for our products and product candidates or exclusion of our product candidates from coverage. The cost containment measures that healthcare payors and providers are instituting and any healthcare reform could significantly reduce our revenues from the sale of any approved product candidates. We cannot provide any assurances that we will be able to obtain and maintain third-party coverage or adequate reimbursement for our product candidates in whole or in part.

There have been several U.S. government initiatives over the past few years to fund and incentivize certain comparative effectiveness research, including creation of the Patient-Centered Outcomes Research Institute under the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the PPACA. It is also possible that comparative effectiveness research demonstrating benefits in a competitor’s product could adversely affect the sales of our product candidates. If third-party payors do not consider our product candidates to be cost-effective compared to other available therapies, they may not cover our product candidates, once approved, as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our product on a profitable basis.

In addition, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed federal and proposed and enacted state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. These and other healthcare reform initiatives may result in additional reductions in Medicare and other healthcare funding.

Foreign Corrupt Practices Act, the Bribery Act and Other Laws

The Foreign Corrupt Practices Act, or FCPA, prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations. Activities that violate the FCPA, even if they occur wholly outside the United States, can result in criminal and civil fines, imprisonment, disgorgement, oversight, and debarment from government contracts.

Our operations are also subject to non-U.S. anti-corruption laws such as the Bribery Act. As with the FCPA, these laws generally prohibit us and our employees and intermediaries from authorizing, promising, offering, or providing, directly or indirectly, improper or prohibited payments, or anything else of value, to government officials or other persons to obtain or retain business or gain some other business advantage. Under the Bribery Act, we may also be liable for failing to prevent a person associated with us from committing a bribery offense.

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We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of the United Kingdom and the United States and authorities in the European Union, including applicable export control regulations, economic sanctions and embargoes on certain countries and persons, anti-money laundering laws, import and customs requirements and currency exchange regulations, collectively referred to as trade control laws.

Failure to comply with the Bribery Act, the FCPA and other anti-corruption laws and trade control laws could subject us to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses.

Review and Approval of New Drug Products in the European Union

In the European Union, medicinal products, including advanced therapy medicinal products, or ATMPs, are subject to extensive pre- and post-market regulation by regulatory authorities at both the European Union and national levels. ATMPs comprise gene therapy products, somatic-cell therapy products and tissue engineered products, which are cells or tissues that have undergone substantial manipulation and that are administered to human beings in order to regenerate, repair or replace a human tissue. We anticipate that our siRNA products will be regulated as ATMPs in the European Union. There is legislation at a European Union level relating to the standards of quality and safety for the collection and testing of human blood and blood components for use in cell-based therapies, which could apply to our products. Additionally, there may be local legislation in various European Union Member States, which may be more restrictive than the European Union legislation, and we would need to comply with such legislation to the extent it applies.

Clinical Trials

Clinical trials of medicinal products in the European Union must be conducted in accordance with European Union and national regulations and the International Conference on Harmonization, or ICH, guidelines on Good Clinical Practices, or GCP. Additional GCP guidelines from the European Commission, focusing in particular on traceability, apply to clinical trials of ATMPs. The sponsor must take out a clinical trial insurance policy, and in most European Union countries, the sponsor is liable to provide “no fault” compensation to any study subject injured in the clinical trial.

Prior to commencing a clinical trial, the sponsor must obtain a clinical trial authorization from the competent authority, and a positive opinion from an independent ethics committee. The application for a clinical trial authorization must include, among other things, a copy of the trial protocol and an investigational medicinal product dossier containing information about the manufacture and quality of the medicinal product under investigation. Currently, clinical trial authorization applications must be submitted to the competent authority in each EU Member State in which the trial will be conducted. Under the new Regulation on Clinical Trials, which is currently expected to take effect in 2021, there will be a centralized application procedure where one national authority takes the lead in reviewing the application and the other national authorities have only a limited involvement. Any substantial changes to the trial protocol or other information submitted with the clinical trial applications must be notified to or approved by the relevant competent authorities and ethics committees. Medicines used in clinical trials must be manufactured in accordance with cGMP. Other national and European Union-wide regulatory requirements also apply.

During the development of a medicinal product, the EMA and national medicines regulators within the European Union provide the opportunity for dialogue and guidance on the development program. At the EMA level, this is usually done in the form of scientific advice, which is given by the Scientific Advice Working Party of the Committee for Medicinal Products for Human Use, or CHMP. A fee is incurred with each scientific advice procedure. Advice from the EMA is typically provided based on questions concerning, for example, quality (chemistry, manufacturing and controls testing), nonclinical testing and clinical studies, and pharmacovigilance plans and risk-management programs. Given the current stage of the development of our product candidates, we have not yet sought any such advice from the EMA. However, to the extent that we do obtain such scientific advice in the future, such advice will, in accordance with the EMA’s policy, be not legally binding with regard to any future marketing authorization application of the product concerned.

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Marketing Authorizations

In order to market a new medicinal product in the European Union, a company must submit and obtain approval from regulators of a marketing authorization application, or MAA. The process for doing this depends, among other things, on the nature of the medicinal product.

The centralized procedure results in a single marketing authorization, or MA, granted by the European Commission that is valid across the EEA (i.e., the European Union as well as Iceland, Liechtenstein and Norway). The centralized procedure is compulsory for human drugs that are: (i) derived from biotechnology processes, such as genetic engineering, (ii) contain a new active substance indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerative diseases, autoimmune and other immune dysfunctions, and viral diseases, (iii) officially designated orphan medicines and (iv) advanced-therapy medicines, such as gene therapy, somatic cell therapy or tissue-engineered medicines. The centralized procedure may at the request of the applicant also be used in certain other cases. Therefore, the centralized procedure would be mandatory for the products we are developing.

The Committee for Advanced Therapies, or CAT, is responsible in conjunction with the CHMP for the evaluation of ATMPs. The CAT is primarily responsible for the scientific evaluation of ATMPs and prepares a draft opinion on the quality, safety and efficacy of each ATMP for which a marketing authorization application is submitted. The CAT’s opinion is then taken into account by the CHMP when giving its final recommendation regarding the authorization of a product in view of the balance of benefits and risks identified. Although the CAT’s draft opinion is submitted to the CHMP for final approval, the CHMP may depart from the draft opinion, if it provides detailed scientific justification. The CHMP and CAT are also responsible for providing guidelines on ATMPs and have published numerous guidelines, including specific guidelines on gene therapies and cell therapies. These guidelines provide additional guidance on the factors that the EMA will consider in relation to the development and evaluation of ATMPs and include, among other things, the preclinical studies required to characterize ATMPs; the manufacturing and control information that should be submitted in a marketing authorization application; and post-approval measures required to monitor patients and evaluate the long term efficacy and potential adverse reactions of ATMPs. Although these guidelines are not legally binding, we believe that our compliance with them is likely necessary to gain and maintain approval for any of our product candidates.

Under the centralized procedure in the European Union, the maximum timeframe for the evaluation of an MAA by the EMA is 210 days. This excludes so-called clock stops, during which additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP. At the end of the review period, the CHMP provides an opinion to the European Commission. If this is opinion favorable, the Commission may then adopt a decision to grant an MA. In exceptional cases, the CHMP might perform an accelerated review of an MAA in no more than 150 days. This is usually when the product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation.

The European Commission may grant a so-called “marketing authorization under exceptional circumstances”. Such authorization is intended for products for which the applicant can demonstrate that it is unable to provide comprehensive data on the efficacy and safety under normal conditions of use, because the indications for which the product in question is intended are encountered so rarely that the applicant cannot reasonably be expected to provide comprehensive evidence, or in the present state of scientific knowledge, comprehensive information cannot be provided, or it would be contrary to generally accepted principles of medical ethics to collect such information. Consequently, marketing authorization under exceptional circumstances may be granted subject to certain specific obligations, which may include the following:

• the applicant must complete an identified program of studies within a time period specified by the competent authority, the results of which form the basis of a reassessment of the benefit/risk profile;

• the medicinal product in question may be supplied on medical prescription only and may in certain cases be administered only under strict medical supervision, possibly in a hospital and in the case of a radiopharmaceutical, by an authorized person; and

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• the package leaflet and any medical information must draw the attention of the medical practitioner to the fact that the particulars available concerning the medicinal product in question are as yet inadequate in certain specified respects.

A marketing authorization under exceptional circumstances is subject to annual review to reassess the risk-benefit balance in an annual reassessment procedure. Continuation of the authorization is linked to the annual reassessment and a negative assessment could potentially result in the marketing authorization being suspended or revoked. The renewal of a marketing authorization of a medicinal product under exceptional circumstances, however, follows the same rules as a “normal” marketing authorization. Thus, a marketing authorization under exceptional circumstances is granted for an initial five years, after which the authorization will become valid indefinitely, unless the EMA decides that safety grounds merit one additional five-year renewal.

The European Commission may also grant a so-called “conditional marketing authorization” prior to obtaining the comprehensive clinical data required for an application for a full marketing authorization. Such conditional marketing authorizations may be granted for product candidates (including medicines designated as orphan medicinal products), if (i) the risk-benefit balance of the product candidate is positive, (ii) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data, (iii) the product fulfills an unmet medical need, and (iv) the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required. A conditional marketing authorization may contain specific obligations to be fulfilled by the marketing authorization holder, including obligations with respect to the completion of ongoing or new studies, and with respect to the collection of pharmacovigilance data. Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions and/or specific obligations. The timelines for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a conditional marketing authorization.

The European Union medicines rules expressly permit the EU Member States to adopt national legislation prohibiting or restricting the sale, supply or use of any medicinal product containing, consisting of or derived from a specific type of human or animal cell, such as embryonic stem cells. While the products we have in development do not make use of embryonic stem cells, it is possible that the national laws in certain EU Member States may prohibit or restrict us from commercializing our products, even if they have been granted an EU marketing authorization.

Data Exclusivity

Marketing authorization applications for generic medicinal products do not need to include the results of preclinical and clinical trials, but instead can refer to the data included in the marketing authorization of a reference product for which regulatory data exclusivity has expired. If a marketing authorization is granted for a medicinal product containing a new active substance, that product benefits from eight years of data exclusivity, during which generic marketing authorization applications referring to the data of that product may not be accepted by the regulatory authorities, and a further two years of market exclusivity, during which such generic products may not be placed on the market. The two-year period may be extended to three years if during the first eight years a new therapeutic indication with significant clinical benefit over existing therapies is approved.

There is a special regime for biosimilars, or biological medicinal products that are similar to a reference medicinal product but that do not meet the definition of a generic medicinal product, for example, because of differences in raw materials or manufacturing processes. For such products, the results of appropriate preclinical or clinical trials must be provided, and guidelines from the EMA detail the type of quantity of supplementary data to be provided for different types of biological product. There are no such guidelines for complex biological products, such as gene or cell therapy medicinal products, and so it is unlikely that biosimilars of those products will currently be approved in the European Union. However, guidance from the EMA states that they will be considered in the future in light of the scientific knowledge and regulatory experience gained at the time.

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Pediatric Development

In the European Union, companies developing a new medicinal product must agree to a Pediatric Investigation Plan, or PIP, with the EMA and must conduct pediatric clinical trials in accordance with that PIP, unless a deferral or waiver applies, (e.g., because the relevant disease or condition occurs only in adults). The marketing authorization application for the product must include the results of pediatric clinical trials conducted in accordance with the PIP, unless a waiver applies, or a deferral has been granted, in which case the pediatric clinical trials must be completed at a later date. Products that are granted a marketing authorization on the basis of the pediatric clinical trials conducted in accordance with the PIP are eligible for a six month extension of the protection under a supplementary protection certificate (if any is in effect at the time of approval) or, in the case of orphan medicinal products, a two year extension of the orphan market exclusivity. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.

Post-Approval Controls

The holder of a marketing authorization must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, or QPPV, who is responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs.

All new marketing authorization applications must include a risk management plan, or RMP, describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the marketing authorization. Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies. RMPs and PSURs are routinely available to third parties requesting access, subject to limited redactions. All advertising and promotional activities for the product must be consistent with the approved summary of product characteristics, and therefore all off-label promotion is prohibited. Direct-to-consumer advertising of prescription medicines is also prohibited in the European Union. Although general requirements for advertising and promotion of medicinal products are established under EU directives, the details are governed by regulations in each EU Member State and can differ from one country to another.

Pricing and Reimbursement in the European Union

Governments influence the price of medicinal products in the European Union through their pricing and reimbursement rules and control of national healthcare systems that fund a large part of the cost of those products to consumers. Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost-effectiveness of a particular product candidate to currently available therapies. Other EU Member States allow companies to fix their own prices for medicines, but monitor and control company profits. The downward pressure on healthcare costs in general, particularly prescription medicines, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.

Brexit and the Regulatory Framework in the United Kingdom

On June 23, 2016, the electorate in the United Kingdom voted in favor of Brexit and the United Kingdom officially withdrew from the European Union on January 31, 2020. The United Kingdom and the European Union are currently in the Transition Period during which European Union Rules will continue to apply in the United Kingdom and the United Kingdom and the EU are negotiating additional arrangements, including their future trading arrangement.  The United Kingdom has stated that it wants the Transition Period to expire, and the future customs and trading terms to be agreed, by December 31, 2020.

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Since the regulatory framework for pharmaceutical products in the United Kingdom covering quality, safety and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales and distribution of pharmaceutical products is derived from European Union directives and regulations, immediately following the Transition Period, it is expected that the United Kingdom’s regulatory regime will remain aligned to European regulations. It remains to be seen how Brexit will impact regulatory requirements for product candidates and products in the United Kingdom. However, given that European Union law requires that European Union marketing authorization holders are established in the European Union and requires that certain activities are performed in the European Union (or the European Economic Area), there may be requirements to adapt processes and procedures in order to ensure that the company remains in compliance with European Union law.  In the longer term, Brexit could materially impact the future regulatory regime which applies to products and the approval of product candidates in the United Kingdom. In the short term, following the expiry of the Transition Period there is a risk of disrupted import and export processes due to a lack of administrative processing capacity by the respective U.K. and EU customs agencies that may delay time-sensitive shipments and may negatively impact our product supply chain.

Product Development and Manufacturing

We currently rely, and expect to continue to rely, on third-party contract manufacturing organizations, or CMOs, for the supply of both preclinical and clinical trial material of SLN360, SLN124 and any future product candidates.  The clinical trial materials will be produced under cGMP as specified by the FDA and EMA. cGMP is a regulatory standard for the production of pharmaceuticals to be used in humans imposing extensive regulations for the various procedural and documentation requirements governing recordkeeping, manufacturing processes and controls, personnel, quality control and quality assurance, among others.

In the future, we also intend to rely on our CMOs to produce sufficient commercial quantities of SLN360, SLN124 and any future product candidates, if approved. The commercial drug product will be produced under cGMP as well.

We source key raw materials from third parties, either directly from suppliers or indirectly through our CMOs. These raw materials are generally available from at least two vendors.

Intellectual Property

Patents

We actively seek to protect the intellectual property and proprietary technology that we believe is important to our business, including seeking, maintaining, enforcing and defending patent rights and protecting our related know-how for our siRNA platform technologies such as siRNA stabilization chemistries, as well as for our specific siRNA targeting sequences and related therapeutics and processes, whether developed internally or licensed to third parties. Our success will depend on our ability to obtain and maintain patent and other protections including data/market exclusivity for our product candidates and platform technology, preserve the confidentiality of our know-how and operate without infringing the valid and enforceable patents and proprietary rights of third parties. See the “Risk Factors—Risks Related to Intellectual Property” section of this prospectus.

Our policy is to seek to protect our proprietary position early, generally by filing an initial priority filing in the European Patent Office. This is followed by the filing of an international patent application under the Patent Cooperation Treaty, or PCT, claiming priority from the initial application(s) and then filing regional and national applications for patent grant in territories including, for example, the United States and Europe. In each case, we determine the strategy and territories required after discussion with our patent attorneys and collaboration partners so that we obtain relevant coverage in territories that are commercially important to our technologies and product candidates. With respect to our product candidates and related methods that we intend to develop and commercialize in the normal course of business, we will seek patent protection covering, when legally possible, siRNA sequences alone and with chemical modifications, compositions, methods of use, dosing and formulations. We may also pursue patent protection with respect to manufacturing and drug development processes when possible.  We intend to additionally rely on data exclusivity, market exclusivity, other regulatory exclusivities and patent term extensions when available. We also rely on trade secrets and know-how relating to our underlying platform technology and product candidates. In each case, we seek to balance the value of patent protection against the advantage of keeping know-how confidential.

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Issued patents can provide exclusivity on claimed subject matter for varying periods of time, typically starting on the date of patent grant and expiring at the end of the legal term of a patent in the country in which it is granted.  In general, patents provide exclusionary rights for 20 years from the effective filing date of a non-provisional patent application in a particular country, or for a PCT international patent application, from the international filing date, assuming all maintenance fees are paid.  In some instances, patent terms may be increased or decreased, depending on the laws and regulations of the country or jurisdiction that grants the patent. In the United States, a patent term may be shortened if a patent is terminally disclaimed over another patent or as a result of delays in patent prosecution by the patentee. A U.S. patent’s term may be lengthened by a patent term adjustment, which compensates a patentee for administrative delays by the U.S. Patent and Trademark Office, or USPTO, in granting a patent. The patent term of a European patent is 20 years from its effective filing date, which, unlike in the United States, is not subject to patent term adjustments in the same way as U.S. patents.

The level of protection afforded by a patent may vary and depends upon many factors, including the type of patent, the scope of its claim coverage, claim interpretation and patent law in the country or region that granted the patent, the validity and enforceability of the patent under such laws, and the availability of legal remedies in each particular country.

In certain regions or countries, regulatory-related patent extensions may be available to extend the term of a patent that claims an approved product or method.  Regulatory-based patent term extensions allow patentee to recapture a portion of patent term effectively lost as a result of the regulatory review period for a product candidate.  The term of a United States patent that covers an FDA-approved drug or biologic, for example, may be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process. The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug or biologic is under regulatory review. Patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended. Similar provisions are available in Europe, Japan and other jurisdictions to extend the term of a patent that covers an approved drug, for example Supplementary Protection Certificates in Europe. In the future, if and when our products receive FDA approval, we expect to apply for regulatory patent term extensions on patents covering those products. We anticipate that some of our issued patents may be eligible for patent term extensions in certain jurisdictions based on an approved product or method, but such extensions may not be available and therefore its commercial monopoly may be restricted solely to patent term.

As of May 25, 2020, we solely owned 28 granted patents, of which 13 are U.S.-issued, and 86 pending patent applications, of which eight are U.S. pending patent applications. Commercially or strategically important non-U.S. jurisdictions in which we hold issued or pending patent applications include (in addition to Europe): Australia, Brazil, Canada, China, Egypt, India, Indonesia, Israel, Japan, Mexico, New Zealand, Philippines, Russia, Singapore, South Africa, South Korea and Vietnam. In addition, we own six international PCT patent applications.

Our granted patents and pending patent applications include compositions of matter claims directed to siRNA molecules and compositions. They also include claims directed to siRNA molecules having specific nucleic acid modifications and linkers as well as specific nucleic acid sequences.  In addition, our pending patent applications with an effective filing date after 2003 also include claims directed to methods of use and processes relating to such siRNA molecules and compositions.

Our earliest filed patent applications directed to 19-mer blunt-ended siRNAs with particular siRNA modification patterns expire in August 2023, subject to potential extension.  Our current patent application families directed to toolbox elements, if and when granted, would not be expected to expire until at least 2036. Our current patent families covering siRNA sequences directed to specific target genes and associated uses for our SLN360, SLN124 and SLN500 product candidates, if and when granted, would not be expected to expire until at least 2038.

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Trademarks

We currently own trademarks in the EU and the United States on our company name “Silence Therapeutics” or “Silence,” and on the mark “AtuRNAi”.  

Material Agreements

Mallinckrodt License and Collaboration Agreement

In July 2019, we announced a strategic collaboration with Mallinckrodt to develop and commercialize RNAi drug targets designed to silence the complement cascade in complement-mediated disorders. Under the agreement, we granted Mallinckrodt an exclusive worldwide license to our C3 targeting program, SLN500, with options to license additional complement-mediated disease targets from us, with Mallinckrodt exercising two such targets in July 2020. We are responsible for preclinical activities, and for conducting the development program for each product until the end of Phase 1 clinical trials, after which Mallinckrodt will assume clinical development and responsibility for global commercialization. In connection with the execution of the agreement, Mallinckrodt made an upfront cash payment to us of $20 million and purchased $5 million of our ordinary shares. We are eligible to receive up to $10 million in research milestone payments for each program, in addition to funding for Phase 1 clinical development including GMP manufacturing. We will fund all other preclinical activities. We received a research milestone payment of $2 million in October 2019 upon the initiation of work under our work plan for a particular target. The collaboration provides for potential additional development and regulatory milestone payments in aggregate of up to $100 million for the initial C3 target and up to $140 million for each of the two optioned complement-mediated disease targets, with such milestones relating to the initiation of specified clinical trials in specified jurisdictions, and upon the receipt of regulatory approvals by specified authorities, in each case for multiple indications. We are also eligible to receive potential commercial milestone payments of up to $562.5 million upon the achievement of specified levels of annual net sales of licensed products for each program. We are also eligible to receive tiered, low double-digit to high-teen percentage royalties on net sales for licensed products for each program.

The agreement will terminate on the last to expire royalty term, which is determined on a licensed product-by-licensed product and country-by-country basis, and is the later of (1) 10 years from the first commercial sale of the licensed product in the country, (2) the last to expire valid claim within the licensed patent in the country or (3) expiration of regulatory exclusivity granted by the prevailing governmental authority for the licensed product in the country. Mallinckrodt has the right to terminate the agreement in its entirety or on a target-by-target basis, for any reason upon specified prior written notice to us. We may terminate the agreement in the event that Mallinckrodt begins a legal or administrative proceeding challenging the validity, ownership or enforceability of our patents. Either party may terminate the agreement upon a material breach by the other party that is not cured within a specified period after receiving written notice, or upon giving written notice following the other party’s bankruptcy, insolvency or similar instance. If Mallinckrodt terminates the agreement with respect to a target after we have commenced a Phase 1 trial of a product candidate directed to that target, then we would have the right to either complete or wind down the Phase 1 trial, and Mallinckrodt would be responsible for our costs incurred through the date of termination.

AstraZeneca Research Collaboration, Option and License Agreement

We have also out-licensed the rights to some of our intellectual property associated with our siRNA stabilization chemistry technology to AstraZeneca in the context of a Research Collaboration, Option and License Agreement dated March 24, 2020, under which we and AstraZeneca will collaborate to discover, develop and commercialize siRNA therapeutics for the treatment of cardiovascular, renal, metabolic and respiratory diseases.  

AstraZeneca agreed to make an upfront cash payment of $60 million, of which $20 million was paid in May 2020 and the remaining $40 million will be paid unconditionally no later than the first half of 2021.  AstraZeneca also made an equity investment of $20 million in us. We anticipate initiating work on five targets within the first three years of the collaboration, with AstraZeneca having the option to extend the collaboration to a further five targets. AstraZeneca would be obligated to pay us an option exercise payment of $10 million for each option exercised.

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Under the collaboration, we are responsible for designing siRNA molecules against gene targets selected by AstraZeneca, and for manufacturing of material to support GLP toxicology studies and Phase 1 clinical trials. We and AstraZeneca will collaborate during the discovery phase, and AstraZeneca will lead clinical development and commercialization of molecules arising from the collaboration. We will have the option to negotiate for co-development of two programs beginning with Phase 2 clinical trials.

For each target selected under the collaboration, we will be eligible to receive up to $140 million in milestone payments upon the achievement of milestones relating to initiation of specified clinical trials, the acceptance of specified regulatory filings and the first commercial sale in specified jurisdictions. For each target selected, we are also eligible to receive up to $250 million in sales-based milestone payments upon the achievement of specified annual net sales levels, as well as tiered royalties as a percentage of net sales ranging from the high single digits to the low double digits.

The agreement with AstraZeneca will expire on the last to expire royalty term, which is determined on a licensed product-by-licensed product and country-by-country basis, and is the later of (1) 10 years from the first commercial sale of the licensed product in the country, (2) the last to expire valid claim within the patent covering the composition of matter of the licensed compound contained in the licensed product in the country or (3) expiration of regulatory exclusivity granted by the prevailing governmental authority for the licensed product in the country. AstraZeneca has the right to terminate the agreement in its entirety or on a target-by-target basis, for any reason upon specified prior written notice to us. We may terminate the agreement on a target-by-target basis in the event that AstraZeneca begins a legal or administrative proceeding challenging the patentability, validity, ownership or enforceability of our patents. Either party may terminate the agreement on a target-by-target basis upon a material breach by the other party that is not cured within a specified period after receiving written notice, or in its entirety upon giving written notice following the other party’s bankruptcy, insolvency or similar instance.

Employees

As of June 30, 2020, we had 58 employees. Of these employees, 41 employees are engaged in research and development activities and 17 employees are engaged in finance, legal, human resources, business development and general management. We have no collective bargaining agreements with our employees and we have not experienced any work stoppages.

Facilities

We lease office space in London, England for our corporate headquarters and other administrative functions under a lease with a term through September 2022, although we have the ability to terminate the lease in September 2021. We also lease regional offices and laboratory space in Berlin, Germany and New York, New York.

We believe that our current facilities are adequate to meet our needs for the near future and that suitable additional or alternative space will be available on commercially reasonable terms to accommodate our foreseeable future operations.

LegalProceedings

From time to time, we may become involved in litigation or other legal proceedings relating to claims arising from the ordinary course of business. We are currently not party to any legal proceedings that are likely to have a material adverse effect on our results of operations, financial condition or cash flows.

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MANAGEMENT

Executive Officers and Directors

The following table sets forth information regarding our executive officers and directors, including their ages, as of June 30, 2020.

Name	Age	Position(s)
Executive Officers:
Iain Ross	66	Executive Chairman
Giles Campion, M.D.	65	Head of R&D, Chief Medical Officer and Executive Director
Rob Quinn, Ph.D.	37	Chief Financial Officer and Company Secretary
Barbara Ruskin, Ph.D., J.D.	60	Senior Vice President, General Counsel and Chief Patent Officer
Non-Executive Directors:
James Ede-Golightly	40	Non-Executive Director
Alistair Gray	71	Senior Independent Non-Executive Director
Dave Lemus	57	Non-Executive Director
Steven Romano, M.D.	61	Non-Executive Director

Executive Officers

Iain Ross has served as our Executive Chairman since December 2019 after serving as Non-Executive Chairman beginning in April 2019. Mr. Ross previously served as our Chairman between 2004 and 2010. Mr. Ross has over 40 years’ experience in the international life sciences and technology sectors, where he has held leadership positions as an executive and board member of numerous companies. In addition to serving as our executive chairman, Mr. Ross currently serves as non-executive chairman of Redx Pharma plc and Kazia Therapeutics Limited. In his career, Mr. Ross has held senior positions at several companies including Sandoz AG, Fisons Plc, Hoffmann-La Roche AG and Celltech Group Plc and he has also advised banks and private equity firms on numerous company turnarounds. Mr. Ross has overseen multiple financing transactions in his career, and he has led and participated in six initial public offerings, including four on the London Stock Exchange, one on Nasdaq and one on the Australian Stock Exchange. Mr. Ross holds a BSc degree in Biochemistry from London University, is a qualified Chartered Director and is the former Vice Chairman of the Council of Royal Holloway, London University. We believe that Mr. Ross is qualified to serve on our board of directors because of his extensive experience in the biotechnology and pharmaceutical industries as well as his track record while leading numerous multinational companies.

Giles Campion, M.D. has served as our Head of R&D and Chief Medical Officer since June 2019 and as a member of our board of directors since May 2020.  Dr. Campion is an expert in translational medicine and a highly experienced biotech and pharmaceutical professional across many therapeutic areas, most recently in orphan neuromuscular disorders. He has held senior global research and development roles in several large pharmaceutical, diagnostics and biotech companies, including responsibilities at the board level. Dr. Campion served as Chief Medical Officer for Albumedix Ltd. from January 2017 to July 2018.  He previously served Group Vice President, Neuromuscular Franchise at BioMarin Pharmaceutical Inc., or BioMarin, from February 2015 to March 2016, following BioMarin’s acquisition of Prosensa Holding N.V., or Prosensa. Dr. Campion served as Chief Medical Officer and Senior Vice President of Research and Development at Prosensa from 2009 until its acquisition by BioMarin. Dr. Campion has also served as a medical advisor to MyoTherix, Inc. and a co-founder of PepGen Ltd. Dr. Campion holds bachelors and doctorate degrees in medicine from the University of Bristol, is listed on the General Medical Council (UK) Specialist Register (Rheumatology). We believe that Dr. Campion is qualified to serve on our board of directors because of his medical background and his significant industry experience in senior research and development positions.

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Rob Quinn, Ph.D. has served as our Chief Financial Officer and Company Secretary since January 2019. Dr. Quinn initially joined us in April 2017, serving as Head of Financial Planning and Analysis, with responsibilities covering Legal, IT and Manufacturing until his appointment as Chief Financial Officer. Dr. Quinn served in a number of roles of increasing responsibility at GlaxoSmithKline, or GSK, a pharmaceutical company, including Finance Analyst from 2013 to February 2015, Financial Controller for the Africa & Developing Countries business unit from May 2015 to May 2016 and Area Finance Director for that business unit from May 2016 until April 2017. From 2010 to 2013, Dr. Quinn was a consultant on the Enterprise Risk Services team and then an executive on the Corporate Finance Advisory team at Deloitte UK. Dr. Quinn received his Ph.D. in Biochemistry from the University of Manchester and is also a qualified chartered accountant.  

Barbara Ruskin, Ph.D., J.D. has served as our Senior Vice President, General Counsel and Chief Patent Officer since March 2020, following a period of overseeing these responsibilities in a consultant capacity beginning in May 2019. Dr. Ruskin brings over 25 years of experience in life science IP and corporate law, having served as outside counsel for pharmaceutical and biotechnology companies and their investors, including as a Partner at Ropes & Gray LLP and an associate at Fish & Neave LLP, both in New York City. From September 2017 to February 2019, Dr. Ruskin served as SVP, General Counsel/Chief Patent Officer of Molecular Templates, Inc. From April 2015 to August 2016, she served as SVP, General Counsel/Chief Patent Officer of Bionor Pharma ASA, a public company in Oslo, Norway. Dr. Ruskin holds a B.A. degree in Biochemistry from the University of California, Berkeley, a Ph.D. in Biochemistry and Molecular Biology from Harvard University and a J.D. from Fordham University School of Law. She is admitted to practice law in New York State and is a registered United States Patent Attorney. She currently serves as Chairman of the Board of St. Jude Children's Hospital GMP, LLC and has previously served as a director on the Board of the Burke Neurological Institute.

Non-Executive Directors

James Ede-Golightly has served as a member of our board of directors since April 2019. Mr. Ede-Golightly is currently chairman of Gulfsands Petroleum Plc, East Balkan Properties Plc and Oxford Advanced Surfaces Ltd.  Among other directorships, Mr. Ede-Golightly is a non-executive director of Oxehealth Ltd, Sarossa plc and Serendipity Capital Ltd and has extensive experience as a non-executive director of AIM-quoted companies with international business interests. Mr. Ede-Golightly was a founder of ORA Capital Partners in 2006, having previously worked as an analyst at Merrill Lynch Investment Managers and Commerzbank. Mr. Ede-Golightly is a CFA Charterholder and holds an M.A. degree in economics from Cambridge University. In 2012, he was awarded New Chartered Director of the Year by the Institute of Directors. We believe that Mr. Ede-Golightly is qualified to serve on our board of directors because of his experience as a director on several publicly-listed companies and his financial background.

Alistair Gray has served as a member of our board of directors since November 2015 and was appointed as Senior Independent Director in December 2019. Mr. Gray currently serves as non-executive director/chair of the Edrington Group’s Employee Benefit Trust, Scottish Enterprise’s Pension Trustee Board and Clyde Bergemann Pension Scheme. Mr. Gray is also a founder and director of Renaissance & Company, a strategic management consultancy firm. Mr. Gray previously held senior management positions with Unilever and John Wood Group PLC, and he also chaired the Audit and Remuneration committees of AorTech International PLC and Highland Distillers PLC. Mr. Gray entered strategic management consulting at Arthur Young (now Ernst and Young) Management Consultants and PA Consulting Group, where he served as a director for over ten years. Mr. Gray also served as a Fellow of the Institute of Directors and Institute of Consultants. He graduated from the University of Edinburgh in Mathematics and Economics, following this with a management accounting qualification. He is a member of the faculty of Strathclyde Business School and a Visiting Professor at the University’s Design Manufacturing and Engineering Management department. We believe that Mr. Gray is qualified to serve on our board of directors because of his extensive consultancy and business experience.

Dave Lemus has served as a member of our board of directors since June 2018. Mr. Lemus is currently the Chief Executive Officer & Chief Financial Officer of Ironshore Pharmaceuticals Inc.. From January 2016 to May 2017, Mr. Lemus served as Chief Operating Officer and Chief Financial Officer of Medigene AG. From 2011 to 2015, he served as Chief Executive Officer of Sigma Tau Pharmaceuticals, Inc. Mr. Lemus was Chief Financial Officer and Executive Vice President of MorphoSys AG from 1998 to 2011, during which time he helped take the company public on the Frankfurt Stock Exchange in Germany’s first biotechnology initial public offering. In addition to his position on our

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board of directors, Mr. Lemus also currently serves on the boards of Sorrento Therapeutics, Inc. and BioHealth Innovation, Inc.. Mr. Lemus received an M.S. from the Massachusetts Institute of Technology and received a B.S. in accounting from the University of Maryland College Park. Mr. Lemus is also a Certified Public Accountant in the United States. We believe that Mr. Lemus is qualified to serve on our board of directors because of his financial expertise and experience in the biotechnology and pharmaceutical industries.

Steven Romano, M.D. has served as a member of our board of directors since July 2019. Dr. Romano is a board-certified psychiatrist and pharmaceutical executive with 25 years of research and development experience across a wide range of therapeutic and disease areas. Dr. Romano currently serves as executive vice president and chief scientific officer at Mallinckrodt plc, where he has responsibility for research and development and regulatory and medical affairs. Prior to joining Mallinckrodt, Dr. Romano spent 16 years at Pfizer, Inc. where he held a series of senior research and development and medical roles of increasing responsibility, culminating in his most recent position as SVP, Head, Global Medicines Development, Global Innovative Pharmaceuticals Business. Dr. Romano received his M.D. from the University of Missouri-Columbia School of Medicine, and graduated from Washington University in St. Louis with a bachelor’s degree in biology and English literature. We believe that Dr. Romano is qualified to serve on our board of directors because of his experience in the pharmaceutical industry and his medical background.

Foreign Private Issuer Exemption

We are a “foreign private issuer,” as defined by the SEC. As a result, in accordance with Nasdaq rules, we will comply with home country governance requirements and certain exemptions thereunder rather than complying with Nasdaq corporate governance standards. While we expect to voluntarily follow most Nasdaq corporate governance rules, we may choose to take advantage of the following limited exemptions:

• Exemption from filing quarterly reports on Form 10-Q containing unaudited financial and other specified information or current reports on Form 8-K upon the occurrence of specified significant events;

• Exemption from Section 16 under the Exchange Act, which requires insiders to file public reports of their securities ownership and trading activities and provides for liability for insiders who profit from trades in a short period of time;

• Exemption from the Nasdaq rules applicable to domestic issuers requiring disclosure within four business days of any determination to grant a waiver of the code of business conduct and ethics to directors and officers;

• Exemption from the requirement to obtain shareholder approval for certain issuances of securities, including shareholder approval of share option plans;

• Exemption from the requirement that our audit committee have review and oversight responsibilities over all “related party transactions,” as defined in Item 7.B of Form 20-F;

• Exemption from the requirement that our board have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

• Exemption from the requirements that director nominees are selected, or recommended for selection by our board, either by (1) independent directors constituting a majority of our board’s independent directors in a vote in which only independent directors participate, or (2) a committee comprised solely of independent directors, and that a formal written charter or board resolution, as applicable, addressing the nominations process is adopted.

Furthermore, Nasdaq Rule 5615(a)(3) provides that a foreign private issuer, such as us, may rely on home country corporate governance practices in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d), provided that we nevertheless comply with Nasdaq’s Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640) and that we have an audit committee that satisfies Rule 5605(c)(3), consisting of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii). We intend to comply with the Nasdaq corporate governance rules applicable to foreign private issuers, which means that we are permitted to follow certain corporate governance rules that conform to U.K. requirements in lieu of many of the Nasdaq corporate governance rules. Accordingly, our shareholders will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. We may utilize these exemptions for as long as we continue to qualify as a foreign private issuer. For an overview of differences between

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corporate governance principles for a U.K. plc such as us and those that are applicable to a Delaware corporation, see “Description of Share Capital and Articles of Association—Differences in Corporate Law.”

Composition of our Board of Directors

Our board of directors is currently composed of six members, consisting of Mr. Ross, Dr. Campion and four non-executive directors. As a foreign private issuer, under the listing requirements and rules of Nasdaq, we are not required to have independent directors on our board of directors, except that our audit committee is required to consist fully of independent directors, subject to certain phase-in schedules. Our board of directors has determined that for the purposes of the Corporate Governance Code published by the Quoted Companies Alliance, which is the corporate governance code that we apply in the United Kingdom, all of our non-executive directors are independent. Our board of directors has determined that none of our directors, other than Mr. Ross and Dr. Campion, who are executive officers of our company, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of director and that each of these four directors is “independent” as that term is defined under Nasdaq rules. There are no family relationships among any of our executive officers or directors.

In accordance with our articles of association, any director who served as a director at each of the preceding two annual general meetings of shareholders and who was not appointed or re-appointed by the shareholders at a general meeting at, or since, either such meeting shall retire from office at the next annual general meeting of shareholders. Retiring directors are eligible for re-election. See “Description of Share Capital and Articles of Association—Articles of Association—Board of Directors.”

Committees of our Board of Directors

Our board of directors has three standing committees: an audit and risk committee, a remuneration committee and a nominations committee.

Audit and Risk Committee

Our audit and risk committee, which consists of Messrs. Ede-Golightly, Gray and Lemus, assists the board of directors in overseeing our accounting and financial reporting processes and the audits of our financial statements. Mr. Lemus serves as chairman of the audit and risk committee. The audit and risk committee consists exclusively of members of our board who are financially literate, and Mr. Lemus is considered an “audit committee financial expert” as defined by applicable SEC rules and has the requisite financial sophistication as defined under applicable Nasdaq rules. Our board has determined that all of the members of the audit and risk committee satisfy the “independence” requirements set forth in Rule 10A-3 under the Exchange Act. The audit and risk committee is governed by a charter that complies with the rules of Nasdaq.

The audit and risk committee’s responsibilities include:

• monitoring the integrity of our financial and narrative reporting, preliminary announcements and any other formal announcements relating to our financial performance;

• reviewing the appropriateness and completeness of our internal controls;

• considering annually whether we should have an internal audit function;

• overseeing our relationship with the external auditors and assessing the effectiveness of the external audit process, including in relation to appointment and tendering, remuneration and other terms of engagement, and appropriate planning ahead of each annual audit cycle;

• maintaining regular, timely, open and honest communication with the external auditors, ensuring the external auditors report to the committee on all relevant matters to enable the committee to carry out its oversight responsibilities;

• monitoring risk;

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• reviewing accounting policies and key estimates and judgments; and

• establishing procedures for compliance, whistleblowing and fraud.

Remuneration Committee

Our remuneration committee, which consists of Messrs. Ede-Golightly, Gray and Lemus and Dr. Romano, assists the board of directors in determining executive officer compensation. Mr. Ede-Golightly serves as chairman of the remuneration committee.

The remuneration committee’s responsibilities include:

• setting a remuneration policy that is designed to promote our long-term success;

• ensuring that the remuneration of executive directors and other senior executives reflects both their individual performance and their contribution to our overall results;

• determining the terms of employment and remuneration of executive directors and other senior executives, including recruitment and retention terms;

• approving the design and performance targets of any annual incentive schemes that include the executive directors and other senior executives;

• agreeing upon the design and performance targets, where applicable, of all share incentive plans requiring shareholder approval;

• rigorously assessing the appropriateness and subsequent achievement of the performance targets related to any share incentive plans;

• recommending to our board of directors the fees to be paid to our Chair, who is excluded from this process;

• gathering and analyzing appropriate data from comparator companies in the biotechnology sector; and

• the selection and appointment of external advisers to the remuneration committee, if any, to provide independent remuneration advice where necessary.

Nomination Committee

Our nomination committee, which consists of Messrs. Ede-Golightly, Gray and Lemus and Dr. Romano, and with Mr. Ross serving on the nomination committee in an executive role, assists our board of directors in identifying individuals qualified to become members of our board and executive officers consistent with criteria established by our board in developing our corporate governance principles. The nomination committee is normally chaired by the Chairperson of our board of directors.  However, Mr. Gray, our Senior Independent Non-Executive Director, is currently chairing the nomination committee while Mr. Ross, in the absence of a chief executive officer, is fulfilling the role of Executive Chairman.

The nominations committee’s responsibilities include:

• regularly reviewing the structure, size and composition (including the skills, knowledge, experience and diversity) required of our board of directors compared to its current position and making recommendations to the board of directors with regard to any changes;

• determining the qualities and experience required of our executive and non-executive directors and identifying suitable candidates, assisted where appropriate by recruitment consultants;

• formulating plans for succession for both executive and non-executive directors, and in particular for the key roles of Chair and Chief Executive Officer;

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• assessing the re-appointment of any non-executive director at the conclusion of his or her specified term of office, having given due regard to the director’s performance and ability to continue to contribute to our board of directors in the light of the knowledge, skills and experience required; and

• assessing the re-election by shareholders of any director, having due regard to his or her performance and ability to continue to contribute to our board of directors in the light of the knowledge, skills and experience required and the need for progressive refreshing of the board of directors.

Code of Business Conduct and Ethics

In connection with our listing on Nasdaq, we have adopted a Code of Business Conduct and Ethics that covers a broad range of matters including the handling of conflicts of interest, compliance issues and other corporate policies such as equal opportunity and non-discrimination standards.

Compensation of Executive Officers and Directors

For the year ended December 31, 2019, the aggregate compensation accrued or paid to the members of our board of directors and our executive officers for services in all capacities was £1,628,464.

During the year ended December 31, 2019, our executive officers had performance-based compensation programs and amounts paid to provide pension and healthcare benefits.

During the year ended December 31, 2019, options to purchase 2,100,000 ordinary shares were awarded to our current executive officers and directors. As of December 31, 2019, our current executive officers and directors held options to purchase 2,166,877 ordinary shares. Our current executive officers and directors exercised options to purchase 3,252 ordinary shares during the year ended December 31, 2019.

We periodically grant share options to employees, directors and consultants to enable them to share in our successes and to reinforce a corporate culture that aligns their interests with that of our shareholders. Since December 31, 2017, we have granted options to purchase 1,453,475 ordinary shares to 51 current and former employees who are not directors or executive officers. Of these, options to purchase 1,317,025 ordinary shares were outstanding as of December 31, 2019.

Director Compensation

Our Chair and non-executive directors receive fees paid in cash on a monthly basis. Our non-executive directors do not participate in any performance-related incentive schemes, nor do they receive any benefits in connection with their roles other than life assurance benefits and reimbursement of travel costs for attendance at meetings of our board of directors. The non-executive directors may be offered the opportunity to participate in the Non-Employee LTIP (as defined below) in the form of non-performance restricted stock units with careful consideration being made with respect to ensuring their independence. All non-executive directors have specific terms of engagement which may be terminated on not less than three months’ notice by either party. The remuneration of our non-executive directors is proposed by the remuneration committee and determined by our board of directors as a whole, based on a review of current practices in other companies.

Where it is necessary to recruit or replace an executive director, the remuneration committee determines the compensation package of the new director in accordance with the provisions of our remuneration policy. In setting the base salary for a new executive director, the remuneration committee considers the existing salary package of the new director and the individual’s level of experience. In setting the annual performance bonus, the remuneration committee may wish to set different performance metrics (compared to those of other executive directors) in the first year of appointment. The remuneration committee will have the discretion to allow phased salary increases over a period of time for the newly appointed director, even though this may involve increases in excess of inflation and the increases awarded to the wider workforce.

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The following table sets forth the remuneration paid to our directors for service on our board of directors during the year ended December 31, 2019:

Name	Base Salary		Taxable Benefits(1)		Pension		Total
	(£ in thousands)
Executive Directors:
Iain Ross(2)	£	91	£	1	£	—	£	92
David Horn Solomon, Ph.D.(3)		316		283		24		623
David Ellam(4)		5		2		—		7
Non-Executive Directors:
James Ede-Golightly(5)		27		—		—		27
Alistair Gray		40		13		—		53
Dave Lemus		40		2		—		42
Steven Romano, M.D. (6)		17		—		—		17
Stephen Parker, Ph.D., D.Phil., M.B.A.(7)		13		1		—		14
Andy Richards, CBE, Ph.D.(8)		12		—		—		12

(1) For Non-Executive Directors, the taxable benefits comprise travel costs (and the gross-up for associated income tax and National Insurance Contributions which will be settled on behalf of the Non-Executive Directors) for attendance at meetings of our board of directors.

(2) Mr. Ross was appointed as our Non-Executive Chairman on April 25, 2019. Mr. Ross was subsequently appointed as Executive Chairman on December 17, 2019. Base salary includes additional remuneration of £9,000 (exclusive of VAT) relating to duties undertaken in December 2019 as Executive Chairman. This amount was billed by Mr. Ross’s consultancy company in January 2020.

(3) Dr. Solomon ceased being a member of our board of directors on December 17, 2019. Dr. Solomon’s base salary included £16,000 in lieu of holiday pay not taken prior to his departure. Dr. Solomon’s base salary set forth in the table does not include settlement agreement payments of £355,000, comprising £290,000 pay in lieu of notice and £65,000 for committed accommodation benefits, both of which were accrued at December 31, 2019. Dr. Solomon’s taxable benefits reflected in the table (inclusive of accommodation allowance) totaled £283,000, of which £141,000 related to the gross-up for associated income tax and National Insurance contributions, which will be settled on his behalf.

(4) Mr. Ellam ceased being a member of our board of directors on January 9, 2019. Mr. Ellam’s base salary does not include settlement agreement payments totaling £136,000 paid in 2019.

(5) Mr. Ede-Golightly was appointed as a member of our board of directors on April 25, 2019.

(6) Dr. Romano was appointed as a member of our board of directors on July 29, 2019.

(7) Dr. Parker ceased being a member of our board of directors on April 25, 2019. Dr. Parker’s base salary does not include settlement agreement payments totaling £10,000 paid in 2019.

(8) Dr. Richards ceased being a member of our board of directors on April 16, 2019.

In addition to the cash compensation described above, on October 6, 2019 we awarded Mr. Ross a total of 500,000 share options pursuant to two separate grants of 250,000 share options each under our Non-Employee LTIP (as defined below).  Each grant of 250,000 share options was made in two tranches of 125,000 share options each.  The share options vest in 13 sub-tranches of 9,615 options (9,620 in final sub-tranche) on a quarterly basis over 3.25 years commencing three months after the award date of October 6, 2019. Upon satisfaction of the performance conditions described below, the share options under the first and second grant may be exercised at a price of £0.60 and £1.90, respectively. In order to be exercised, the share options under each tranche are subject to satisfaction of the following performance conditions:

• First grant, first tranche: the options may only be exercised in the event that our shares or securities representing our shares are admitted to listing or trading on a stock exchange based in the United States;

• First grant, second tranche: the options may only be exercised in the event that i) our shares or securities representing our shares are admitted to listing or trading on a stock exchange based in the United States; and ii) a hurdle price of £2.85 is achieved and maintained for at least 30 continuous days from award date;

• Second grant, first tranche: none; and

• Second grant, second tranche: the options may only be exercised in the event that i) our shares or securities representing our shares are admitted to listing or trading on a stock exchange based in the United States; and ii) a hurdle price of £2.85 is achieved and maintained for at least 30 continuous days from award date.

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On May 20, 2020, we also awarded Mr. Ross options over 500,000 shares under the Employee LTIP, of which 350,000 options had an exercise price of £4.40 (such options vesting quarterly over three years) and 150,000 had an exercise price of £0.05 (of which 100,000 will vest on April 25, 2022, subject to our shares or securities representing our shares being admitted to listing or trading on a stock exchange based in the United States, and the remaining 50,000 options the options may only be exercised in the event that i) our shares or securities representing our shares are admitted to listing or trading on a stock exchange based in the United States; and ii) a hurdle price of £4.40 is achieved and maintained for at least 30 continuous days).

Executive Service Agreements

Service Agreement of Iain Ross

Iain Ross, our Executive Chairman, entered into an employment agreement with us on May 26, 2020 pursuant to which his employment commenced on June 1, 2020.  This agreement also governs the terms of his appointment as a director. The employment agreement is intended to cover the period up to, and shortly after, a new Chief Executive Officer is appointed. Following the appointment of a new Chief Executive Officer, it is intended that Mr. Ross will return to his role as Non-Executive Chairman with an annual base salary of £120,000 and six month notice period.

Pursuant to the terms of the employment agreement, Mr. Ross is entitled to an annual base salary, initially £360,000, which is subject to annual review. Under the terms of the employment agreement, Mr. Ross is also: (1) eligible to join any pension scheme we operate from time to time and, should he so join, we will make contributions to such pension scheme at a rate of 10% of Mr. Ross’s annual base salary each year (or make an equivalent cash payment in lieu of such contributions if Mr. Ross does not join such pension scheme provided Mr. Ross provides evidence that he already has pension savings at or in excess of the U.K. “Lifetime Allowance”); (2) entitled to a monthly reimbursement of £544.86 in respect of private medical insurance; (3) entitled to participate, at our expense, in our life insurance scheme; and (4) entitled to 30 days’ paid holiday per annum, plus holiday pay during the usual U.K. public holidays.  Mr. Ross is eligible to participate in our discretionary bonus plan.  In respect of the 2020 bonus year, Mr. Ross’s maximum bonus entitlement is 60% of his annual base salary.  In respect of the 2020 bonus year (only), Mr. Ross was paid £75,000 in May 2020 by way of an advance in respect of the bonus payment which would usually be paid in January 2021. On May 21, 2020, Mr. Ross was awarded options over 500,000 share under the Employee LTIP Plan, of which 350,000 options had an exercise price of £4.40 (such options vesting quarterly over three years) and 150,000 had an exercise price of £0.05 (of which 100,000 will vest on April 25, 2022, subject to our shares having been listed on a U.S. stock exchange, and the remaining 50,000 options will vest upon following such a listing provided that a share price of at least £4.40 is maintained over 30 days). If Mr. Ross continues in employment as a director through February 2021, our Remuneration Committee may exercise its discretion to grant him an option under the Employee LTIP over 250,000 of our shares at an exercise price of £4.40 per share, such option vesting in ten equal tranches at the end of each month in which Mr. Ross remains engaged by us as an officer.  

Mr. Ross’s employment is for an initial fixed term of 18 months, and shall terminate automatically on December 1, 2021.  We anticipate that the employment agreement will end much sooner than this (by mutual agreement with Mr. Ross), shortly after the appointment of a new Chief Executive Officer. If Mr. Ross’s employment is extended beyond the end of the initial fixed term, Mr. Ross’s employment is terminable by either party on not less than three months’ prior written notice. We may elect to terminate Mr. Ross’s employment at any time after December 1, 2020 by notifying him of such in writing and paying him his basic salary in lieu of the remaining period of notice. We may elect to make such payment in lieu of notice in equal monthly instalments over the period of unworked notice and, if we so elect, Mr. Ross is obliged to seek alternative income during this period and to notify us of any payments, insurance or benefits so received.  The remaining instalments due to Mr. Ross will then be reduced by the amount of such net income.  We may elect to put Mr. Ross on garden leave for all or part of any period of notice.

The employment agreement contains standard assignment provisions relating to the ownership of intellectual property. Mr. Ross is subject to confidentiality obligations which remain in place following termination of employment, and to non-solicitation, non-deal and non-compete restrictive covenants for a period of six months post-termination of his employment (less any time spent by Mr. Ross on garden leave).

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Service Agreement of Giles Campion

Giles Campion, our executive director, Chief Medical Officer and Head of R&D, entered into an employment agreement with us on May 26, 2020 (with an effective date of June 1, 2020).  This agreement also governs the terms of his appointment as a director.  Dr. Campion’s employment with us (under a prior agreement) commenced on June 1, 2019.  

Pursuant to the terms of the employment agreement, Dr. Campion is entitled to an annual base salary, initially £306,000, which is subject to annual review. Under the terms of the employment agreement, Dr. Campion is also: (1) entitled to employer pension contributions at a rate of twice the contributions made by Dr. Campion, up to a maximum employer contribution of 10% of Dr. Campion’s annual base salary each year (or to receive an equivalent cash payment in lieu of such contributions if Dr. Campion opts out of our pension scheme provided Dr. Campion provides evidence that he already has pension savings at or in excess of the U.K. “Lifetime Allowance”); (2) entitled to participate, at our expense, in our life and private medical insurance schemes; and (3) entitled to 25 days’ paid holiday per annum, plus holiday pay during the usual U.K. public holidays.  Dr. Campion is eligible to participate in our discretionary bonus plan.  Dr. Campion’s maximum annual bonus entitlement is 50% of his annual base salary.  If Dr. Campion’s employment is terminated prior to the end of any bonus year, he is eligible to be paid a pro-rata bonus in respect of the proportion of such year worked by him.  

Dr. Campion’s employment is terminable by either party on not less than six months’ prior written notice (increasing to twelve months’ following a change of control of the Company). We may elect to terminate Dr. Campion’s employment at any time by notifying him ofsuch in writing and paying him his basic salary, benefits, bonus and holiday pay in lieu of the remaining period of notice. We may elect to make such payment in lieu of notice in equal monthly instalments over the period of unworked notice and, if we so elect, Dr. Campion is obliged to seek alternative income during this period and to notify us of any payments, insurance or benefits so received.  The remaining instalments due to Dr. Campion will then be reduced by the amount of such net income.  We may elect to put Dr. Campion on garden leave for all or part of any period of notice.

The employment agreement contains standard assignment provisions relating to the ownership of intellectual property. Dr. Campion is subject to confidentiality obligations which remain in place following termination of employment, and to non-solicitation, non-deal and non-compete restrictive covenants for a period of 12 months post-termination of his employment (less any time spent by Dr. Campion on garden leave).

Service Agreement of Robert Quinn

Robert Quinn, our Chief Financial Officer, entered into an employment agreement with us on April 17, 2019.  Dr. Quinn’s employment with us (under a prior agreement) commenced on April 18, 2017 and he became our Chief Financial Officer on April 1, 2019 after serving as interim Chief Financial Officer since January 9, 2019.  

Pursuant to the terms of the employment agreement, Dr. Quinn is entitled to an annual base salary, initially £210,000, which is subject to annual review. Under the terms of the employment agreement, Dr. Quinn is also: (1) entitled to employer pension contributions at a rate of twice the contributions made by Dr. Quinn, up to a maximum employer contribution of 10% of Dr. Quinn’s annual base salary each year; (2) entitled to participate, at our expense, in our life and private medical insurance schemes; and (3) entitled to 25 days’ paid holiday per annum, plus holiday pay during the usual U.K. public holidays.  Dr. Quinn is eligible to participate in our discretionary bonus plan.  

Dr. Quinn’s employment is terminable by either party on not less than 6 months’ prior written notice. We may elect to terminate Dr. Quinn’s employment at any time by notifying him ofsuch in writing and paying him his basic salary in lieu of the remaining period of notice. We may elect to make such payment in lieu of notice in equal monthly instalments over the period of unworked notice and, if we so elect, Dr. Quinn is obliged to seek alternative income during this period and to notify us of any payments, insurance or benefits so received.  The remaining instalments due to Dr. Quinn will then be reduced by the amount of such net income.  We may elect to put Dr. Quinn on garden leave for all or part of any period of notice.

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The employment agreement contains standard assignment provisions relating to the ownership of intellectual property. Dr. Quinn is subject to confidentiality obligations which remain in place following termination of employment, and to non-solicitation, non-deal and non-compete restrictive covenants for a period of six months post-termination of his employment (less any time spent by Dr. Quinn on garden leave).

Service Agreement of Barbara Ruskin

Barbara Ruskin, our Senior Vice President, General Counsel and Chief Patent Officer, is employed pursuant to the terms of a letter agreement signed by us on March 1, 2020 and countersigned by Dr. Ruskin on March 3, 2020.  Dr. Ruskin’s employment with us commenced on March 2, 2020.  

Pursuant to the terms of the employment agreement, Dr. Ruskin is entitled to an annual base salary, initially $350,000, which is subject to review in accordance with our salary review policy for senior executive. Under the terms of the letter agreement, Dr. Ruskin is also: (1) eligible to participate in all our insurance, pension and other fringe benefits, including but not limited to, our medical, dental and life insurance plans and our retirement plan; (2) entitled to five weeks’ paid holiday per annum, plus holiday pay during the usual U.K. public holidays.  Dr. Ruskin is eligible to participate in our discretionary bonus plan.  Dr. Ruskin’s maximum annual bonus entitlement is 40% of her annual base salary.  

Dr. Ruskin is entitled to be granted options under the Employee LTIP over 450,000 of our shares at exercise prices as follows: (i) 90,000 shares at £0.05 per share; (ii) 180,000 shares at £1.90 per share; and (iii) 180,000 shares priced in accordance with certain third party investments into our shares.

Dr. Ruskin’s employment is terminable by either party on not less than six months’ prior written notice. If we elect to terminate Dr. Ruskin’s employment (other than for “Cause” (as defined in the letter agreement) or her incapacity or death), Dr. Ruskin is entitled to be paid her base salary for up to six months provided that she executes a release in favor of us and such release becomes irrevocable. Dr. Ruskin is obliged to seek alternative employment during this period. If such alternative employment is secured, 50% of the amount due to Dr. Ruskin in respect of any remaining portion of the six-month period shall be paid in a single lump sum and Dr. Ruskin shall have no further entitlement in respect thereof. Dr. Ruskin’s employment shall terminate immediately on her death, and may be terminated on 30 days’ written notice (such notice to expire at the end of the calendar month) in the event of her incapacity.

The employment agreement contains standard assignment provisions relating to the ownership of intellectual property. Dr. Ruskin is subject to confidentiality obligations which remain in place following termination of employment, as well as post-termination restrictions as to the solicitation of our employees, consultants, suppliers and vendors.

Non-executive Director Letters of Appointment

We have entered into letters of appointment with each of our non-executive directors. The appointment of our non-executive directorscan be terminated by either us or the director upon three calendar months’ written notice, or by us in our absolute discretion at any time with immediate effect on payment of money in lieu of notice.

Under the non-executive director appointment letters, we may also terminate each appointment with immediate effect if the non-executive director: (1) commits a material breach of his obligations under the letter of appointment; (2) commits a serious or repeated breach or non-observance of his obligations to us; (3) has been guilty of any fraud or dishonesty or acts in any manner which, in our opinion, brings or is likely to bring us into disrepute or is materially adverse to our interests; (4) is incompetent or guilty of gross misconduct and/or any serious or persistent negligence or misconduct in respect of his obligations under the letter of appointment; (5) failed or refused after a written warning to carry out the duties reasonably and properly required under the letter of appointment; (6) is convicted of an arrestable criminal offence other than a road traffic offence for which a fine or non-custodial penalty is imposed; (7) is declared bankrupt or makes an arrangement with or for the benefit of his creditors, or suffers comparable proceedings in another jurisdiction; (8) is disqualified from acting as a director in any jurisdiction; (9) accepts a position with another company, without our prior agreement, which in the reasonable opinion of the Board may give rise to a conflict of interest between his position as a director of our company and his interest in such other company; or (10) commits any offence under the U.K. Bribery Act 2010.

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Equity Incentive Plans

2018 Employee Long-Term Incentive Plan

On February 2, 2018, we adopted our 2018 Employee Long Term Incentive Plan, or the Employee LTIP. The Employee LTIP was subsequently amended on October 6, 2019 and on June 22, 2020 when the sub-plan for United States employees, or the Employee U.S. Sub-Plan, was adopted and the board of directors approved the restatement of the Employee LTIP to provide a new share reserve (subject to shareholder approval, which was obtained on July 23, 2020).  

Eligibility and Administration

Our employees and the employees of our subsidiaries from time to time may be granted awards under the Employee LTIP at the discretion of the board of directors. No awards may be granted after the tenth anniversary of the adoption of the Employee LTIP.

The Employee LTIP is administered by our board of directors, which may delegate its duties and responsibilities to one or more committees of our directors and/or officers (together, referred to in this summary as the board of directors).

Limits

Pursuant to the terms of the Employee LTIP, as restated and approved by our shareholders on July 23, 2020, we are permitted to grant awards over 8,700,000 of our ordinary shares, which reserve shall automatically increase on January 1st of each year, until 2028, in an amount equal to 5% of the total number of our outstanding ordinary shares on December 31st of the preceding calendar year. This cap covers awards granted under the Employee LTIP, the Employee U.S. Sub-Plan, the Non-Employee LTIP and the Non-Employee U.S. Sub-Plan (each as defined below), but excludes awards already satisfied by the issuance of shares prior to the date on which our shareholders approve such reserve. If an award expires, lapses or is terminated, exchanged for cash, surrendered, repurchased or cancelled without having been fully exercised, the unused shares in respect of such award return to the reserve.  

As of June 30, 2020, awards over 3,901,958 shares were outstanding under the Employee LTIP (all granted in the form of options).

Awards under the Employee LTIP may generally not be granted to an individual on or after October 1, 2019 if, when taken with any other awards granted to that individual on or after that date, the value of such awards normally vesting in a 12-month period would exceed 250% of that individual’s annual base salary.  If the board of directors determines that exceptional circumstances exist, awards in excess of this limit may be granted, subject to a higher limit of 300% of that individual’s annual remuneration.  

Awards

Awards under the Employee LTIP may be in the form of a conditional right to acquire shares, or a Conditional Share Award, an option (including a CSOP option, as described below) to acquire shares with an exercise price which will not normally be less than £0.05 (being the nominal value of a share), unless arrangements are in place for such nominal value to be paid up as at the date of issue of the relevant shares, or a right to acquire shares subject to forfeiture in certain circumstances, or Restricted Shares.

Awards in the form of CSOP options may be granted to our U.K. employees who meet the criteria under the Company Share Option Plan, or CSOP, regime.  Employees who have a material interest in our company cannot be granted CSOP options. A material interest is either beneficial ownership of, or the ability to control directly or indirectly, more than 30% of our ordinary share capital.  CSOP options can only be granted for so long as we continue to meet the criteria under the CSOP regime.

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Awards granted as CSOP options are subject to the limits in respect of such awards under the CSOP regime.

Terms Generally Applicable to Awards

No payment is required to be made by the employee when an award is granted.

An award price, payable prior to vesting or exercise (as applicable) or an award may be specified.  If such award price is lower than the nominal value of a share, there must be arrangements in place for such nominal value to be paid up as at the date of issue of the relevant shares.  Awards granted in the form of CSOP options must be granted with a market value exercise price.

Awards may be granted subject to objective performance conditions or other conditions set on or before the date the award is granted. Any such conditions may be substituted, varied or waived if an event occurs such that we consider such conditions to no longer be appropriate.  Such substitution, variation or waiver must be implemented in such a manner as is reasonable in the circumstances and, in the case of a substitution or variation, which produces a fairer measure of performance and is not materially less difficult to satisfy than if the event had not occurred. Awards have typically been granted in the form of options vesting according to performance conditions measured over at least three years.

Awards may be granted subject to a post-vesting holding period during which the shares acquired on vesting of such award may not be transferred, assigned or otherwise disposed of other than to fund participation in a rights issue or to cover any applicable withholding taxes. The award holder may be required to take certain steps, including depositing the shares with a third party, to aid the enforcement of any such holding period.

Awards are not capable of transfer other than on death to the employee’s personal representative.

The number of shares subject to awards, the description thereof and/or any award price may be adjusted in the event of a variation in the share capital of the company.  Any adjustment to awards granted in the form of CSOP options must be made in accordance with the CSOP regime.

Awards other than CSOP options may be granted on terms that include a right to receive an additional amount of shares or cash on or following vesting of the award equal in value to the dividends which would have been paid had the award holder held an equivalent number of shares to those vesting during the period from the date of grant to the date of vesting.

Awards other than CSOP options may, in the discretion of the board of directors, be settled in cash, or ‘net’ settled.

Awards in the form of options granted to U.S. taxpayers with an exercise price of less than 100% of the fair market value of a share on the date of grant, determined in accordance with Section 409A of the Internal Revenue Code must, if required for compliance with such Section, be exercised within 2.5 calendar months after the end of the relevant U.S. tax year (or, if later, the tax year of the entity engaging the U.S. taxpayer) in which the option first becomes exercisable.

Leavers

Leaver provisions apply to awards depending on whether the award is granted before October 1, 2019, or an Old Award, or on or after October 1, 2019 or a New Award.  

Old Awards generally continue to vest and may only be exercised while the award holder remains employed by us or one of our subsidiaries, and such awards generally lapse on cessation of such employment.  

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Where the holder of the Old Award is a Good Leaver (as defined below), awards generally continue to vest until the normal vesting date, to the extent any applicable performance conditions were met at the date of grant.  The board of directors may determine that the Old Award will instead vest immediately to an extent determined by the board of directors taking into account such factors as it considers relevant.  Any vested portion of the Old Award may be exercised within a period of 90 days following the later of the date of termination or the vesting date, or such other period as the board of directors may determine, and shall lapse thereafter.

“Good Leaver” is defined to include cessation of employment by reason of injury, ill health, disability, the employing company or undertaking in which the award holder works being sold out of our group or cessation of employment in any other circumstances if the board of directors so decides (other than summary dismissal).

Where the holder of an Old Award dies, the treatment as for Good Leavers described above will apply, save that the default exercise period is 12 months.

New Awards generally continue to vest while the award holder remains employed by us or one of our subsidiaries.  Where the New Award holder is a Good Leaver (as defined above), dies or is terminated by his or her employer for a reason other than other than summary dismissal or termination for “cause” (as defined in his or her employment agreement), New Awards may be exercised for a period of twelve months following such termination (or such shorter period not less than 90 days as the board of directors may specify) and shall lapse thereafter. In all other circumstances, New Awards lapse on cessation of employment.

If the holder of a CSOP option dies, his or her option must be exercised within 12 months thereafter, and lapses to the extent not so exercised.

The board of directors may also take steps to preserve the interests of an award holder who relocates to a new country.

Corporate Transactions

The board of directors may in its discretion determine that all or a proportion of unvested awards will vest in connection with a change of control (as defined in section 995 of the U.K. Income tax Act 2007) of the Company. An option that is already vested or which vests in these circumstances may be exercised within one month of the change of control or such longer period as determined by the board of directors and shall lapse at the end of such period.  Vesting of awards may similarly be accelerated in the discretion of the board of directors in connection with (i) a person becoming entitled or bound to acquire shares in the Company under sections 979 to 982 of the Companies Act; (ii)a person obtaining control of the Company in pursuance of a compromise or arrangement sanctioned by the court under section 899 of the Companies Act; (iii) notice being given for the voluntary winding-up of the Company; or (iv) a demerger, distribution (which is not an ordinary dividend) or other transaction in respect of the Company. The board of directors may also determine that awards will vest in advance of the occurrence of the aforementioned corporate events.

Notwithstanding the above, the board of directors may determine that awards shall instead be exchanged for equivalent awards over shares in an acquiring company in connection with certain corporate events (and the vesting of such awards shall not be accelerated).

The treatment of awards granted in the form of CSOP options is subject to certain additional restrictions under the CSOP regime.

Clawback

Awards granted to applicable employees, including the Executive Officers, may be subject to clawback in the period of two years after vesting (or such longer period as may be specified by the board of directors and notified to the applicable employee). Clawback may be applied in certain circumstances including where there has been a material misstatement of our financial results, an error in assessing the performance conditions to which an award is subject or the determination of the number of shares subject to an award, a breach of confidentiality obligations, or certain acts of negligence, fraud or serious misconduct.

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All awards are subject to adjustment (including a reduction in the number of shares under award to nil) prior to vesting in the same circumstances as in which clawback may be applied.

Amendment

The board of directors has the power to amend the Employee LTIP, including to adopt sub-plans for the benefit of employees located outside the United Kingdom. An amendment may not materially adversely affect the rights of existing award holders except to take account of legal or regulatory requirements or where all award holders affected by the amendment have been notified thereof and the majority of them have consented to it.

Employee U.S. Sub–Plan

On June 22, 2020, the board of directors adopted the Employee U.S. Sub-Plan under the Employee LTIP.  Our shareholders approved the Employee U.S. Sub-Plan on July 23, 2020. The Employee U.S. Sub-Plan permits the grant of awards to eligible participants under the Employee LTIP who are U.S. residents and U.S. taxpayers, including potentially tax efficient incentive stock options. Unless options granted under the Employee U.S. Sub-Plan are structured to be compliant with Section 409A of the Internal Revenue Code, the exercise price of options granted under the Employee U.S. Sub- Plan shall not be less than 100% of the fair market value of a share on the date of grant, determined in accordance with Section 409A of the Internal Revenue Code. Conditional share awards granted under the Employee U.S. Sub-Plan are termed Restricted Stock Units, or RSUs. The maximum number of shares that may be issued under the Employee U.S. Sub-Plan upon the exercise of incentive stock options is 26,100,000.

2018 Non-Employee Long-Term Incentive Plan

On February 2, 2018, we adopted our 2018 Non-Employee Long Term Incentive Plan, or the Non-Employee LTIP.  The Non-Employee LTIP was subsequently amended on October 6, 2019 and on June 22, 2020 when the sub-plan for United States non-employees, or the Non-Employee U.S. Sub-Plan, was adopted and the board of directors approved the restatement of the Non-Employee LTIP to provide a new share reserve (subject to shareholder approval, which was obtained on July 23, 2020).

The terms of the Non-Employee LTIP are similar to those of the Employee LTIP described above, except that only individuals, partnerships or companies who providing services to us or a subsidiary under a contract for the provision of services (including our non-executive directors) may participate. Awards have typically been granted to our non-executive directors as options to purchase our ordinary shares which vest subject to certain performance conditions being met.

As of June 30, 2020, awards over 510,000 shares were outstanding under the Non-Employee LTIP (all granted in the form of options).

Non-Employee U.S. Sub –Plan

In June 2020, the board of directors adopted the Non-Employee U.S. Sub-Plan under the Non-Employee LTIP. Our shareholders approved the Non-Employee U.S. Sub-Plan on July 23, 2020. The Non-Employee U.S. Sub-Plan permits the grant of awards to eligible participants under the Non-Employee LTIP who are U.S. residents and U.S. taxpayers. Unless options granted under the Employee U.S. Sub-Plan are structured to be compliant with Section 409A of the Internal Revenue Code, the exercise price of options granted under the Non-Employee U.S. Sub- Plan shall not be less than 100% of the fair market value of a share on the date of grant, determined in accordance with Section 409A of the Internal Revenue Code. Conditional share awards granted under the Non-Employee U.S. Sub-Plan are termed Restricted Stock Units, or RSUs.

Insurance and Indemnification

To the extent permitted by the Companies Act, we are empowered to indemnify our directors against any liability they incur by reason of their directorship. We maintain directors’ and officers’ insurance to insure such persons against certain liabilities. We have entered into a deed of indemnity with each of our directors and executive officers in connection with the listing of our ADSs on Nasdaq. Insofar as indemnification of liabilities arising under the Securities Act may be permitted to our board, executive officers or persons controlling us pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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RELATED PARTY TRANSACTIONS

Since January 1, 2017, we have engaged in the following transactions with our directors, executive officers or holders of more than 10% of our outstanding share capital and their affiliates, which we refer to as our related parties.

Agreements with Our Executive Officers and Directors

We have entered into service contracts with certain of our executive officers and appointment letters with our non-executive directors. These agreements contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the executive officers. However, the enforceability of the non-competition provisions may be limited under applicable law.

Indemnification Agreements

We have entered into a deed of indemnity with each of our directors and executive officers in connection with the listing of our ADSs on Nasdaq. The deeds of indemnity and our articles of association require us to indemnify our directors and executive officers to the fullest extent permitted by law. See “Management—Insurance and Indemnification.”

Related Party Transactions Policy

In connection with our listing on Nasdaq, we have adopted a related party transaction policy requiring that all related party transactions required to be disclosed by a foreign private issuer pursuant to the Exchange Act be approved by the audit committee or another independent body of our board of directors.

The related party transaction policy will also cover related party transactions under the AIM Rules for Companies published by the London Stock Exchange.  

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PRINCIPAL SHAREHOLDERS

The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of June 30, 2020 by:

• each person, or group of affiliated persons, that beneficially owns 5% or more of our outstanding ordinary shares;

• each of our directors and executive officers; and

• all of our directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares that can be acquired within 60 days of June 30, 2020. Percentage ownership calculations are based on 82,826,259 ordinary shares issued and outstanding as of June 30, 2020, plus, consistent with SEC rules on disclosure of beneficial ownership, ordinary shares that each security holder has the ability to acquire within 60 days of June 30, 2020.

Except as otherwise indicated, all of the ordinary shares reflected in the table are ordinary shares and all persons listed below have sole voting and investment power with respect to the ordinary shares beneficially owned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial ownership for any other purpose.

Except as otherwise indicated in the table below, addresses of the directors, executive officers and named beneficial owners are care of Silence Therapeutics plc, 72 Hammersmith Road, London W14 8TH, United Kingdom.

Name of Beneficial Owner	Number of Ordinary Shares Beneficially Owned		Percentage of Ordinary Shares Beneficially Owned
5% or Greater Shareholders:
Richard Griffiths		22,404,533		27.1	%
Robert Keith		12,310,924		14.9
Compagnie Odier SCA(1)		10,645,791		12.9
Robert Quested		8,290,279		10.0
Mallinckrodt plc and affiliated entities (2)		5,062,167		6.1
AstraZeneca UK Limited (3)		4,397,247		5.3
Executive Officers and Directors:
Iain Ross (4)		73,538	*
Giles Campion, M.D. (5)		67,207	*
Rob Quinn, Ph.D. (6)		16,292	*
Barbara Ruskin, Ph.D, J.D.		1,800	*
James Ede-Golightly		-	*
Alistair Gray		8,645	*
Dave Lemus		5,626	*
Steven Romano, M.D.		10,000	*
All current directors and executive officers as a group (8 persons)		183,108	*

* Represents beneficial ownership of less than one percent.

(1) Lombard Odier Asset Management (USA) Corp. is the investment adviser to this holder, and as such it and its portfolio managers Adam McConkey and Robert Giles have the power to vote or dispose of the ordinary shares held of record by this holder and may be deemed to beneficially own those securities. Each of Mr. McConkey and Mr. Giles disclaims beneficial ownership of such securities, except to the extent of his pecuniary interest therein. The address of Lombard Odier Asset Management (USA) Corp. is 452 Fifth Avenue, 25th Floor, New York, NY 10018.

(2) Shares are held of record by Cache Holdings, Limited, a wholly owned subsidiary of Mallinckrodt plc. The address of Cache Holdings, Limited is Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda.

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(3) Shares are held of record by AstraZeneca UK Limited, a private limited company incorporated in the United Kingdom. AstraZeneca UK Limited is a wholly-owned subsidiary of AstraZeneca PLC, a public limited company incorporated in England & Wales, which may be deemed to have sole voting and investment power. The registered office address of AstraZeneca UK Limited is 1 Francis Crick Avenue, Cambridge Biomedical Campus, Cambridge, United Kingdom, CB2 0AA.

(4) Consists of 44,693 ordinary shares held and 28,845 ordinary shares issuable upon the exercise of share options that will be vested and exercisable within 60 days of June 30, 2020.

(5) Consists of 10,000 ordinary shares held and 57,207 ordinary shares issuable upon the exercise of share options that will be vested and exercisable within 60 days of June 30, 2020.

(6) Consists solely of ordinary shares issuable upon the exercise of share options that will be vested and exercisable within 60 days of June 30, 2020.

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Registered Holders

The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of June 30, 2020 by each of our other shareholders who is a Registered Holder hereunder. Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares that can be acquired within 60 days of June 30, 2020. Percentage ownership calculations are based on 82,826,259 ordinary shares issued and outstanding as of June 30, 2020, plus, consistent with SEC rules on disclosure of beneficial ownership, ordinary shares that each security holder has the ability to acquire within 60 days of June 30, 2020, due to outstanding equity interests becoming vested or exercisable. Of the 82,826,259 ordinary shares issued and outstanding as of June 30, 2020, 53,732,291 shares are held by the Registered Holders hereunder, and the remaining 29,093,968 shares are held by non-registered holders. The percentage of ordinary shares beneficially owned shown on the table reflect these incremental ordinary shares that a security holder has the ability to acquire within the time frame noted. To the extent that any shareholder is a Registered Holder who sells ADSs representing its ordinary shares following registration pursuant to the registration statement of which this prospectus forms a part or otherwise, the shareholder's percentage ownership will decrease accordingly.

Except as otherwise indicated in the table below, addresses of the directors, executive officers and named beneficial owners are care of Silence Therapeutics plc, 72 Hammersmith Road, London W14 8TH, United Kingdom.

Name of Beneficial Owner	Number of Ordinary Shares Beneficially Owned	Percentage of Ordinary Shares Beneficially Owned		Number of Ordinary Shares Being Registered	Pro Forma Potential Number of Ordinary Shares Beneficially Owned Following the Offering(1)	Pro Forma Potential Percentage of Ordinary Shares Beneficially Owned Following the Offering(1)
Richard Griffiths	22,404,533	27.1	%	22,404,533	—	—
Robert Keith	12,310,924	14.9		12,310,924	—	—
Compagnie Odier SCA(2)	10,645,791	12.9		10,645,791	—	—
Robert Quested	8,290,279	10.0		8,290,279	—	—
Iain Ross	73,538	*		44,693	28,845	*
Giles Campion, M.D.	67,207	*		10,000	57,207	*
Barbara Ruskin, Ph.D, J.D.	1,800	*		1,800	—	—
Alistair Gray	8,645	*		8,645	—	—
Dave Lemus	5,626	*		5,626	—	—
Steven Romano, M.D.	10,000	*		10,000	—	—

* Represents beneficial ownership of less than one percent.

(1) Unlike an initial public offering, any disposition by the Registered Holders of the Registered Shares represented by ADSs is not being underwritten by any investment bank. The Registered Holders may or may not elect to dispose of Registered Shares represented by ADSs as and to the extent that they may individually determine. Such dispositions, if any, will be made through brokerage transactions on Nasdaq or other securities exchanges in the United States at prevailing market prices, and the post-offering ownership figures in these columns represent the lowest level of ownership that would exist if the Registered Holders sold 100% of the Registered Shares owned by them, which may or may not happen.

(2) Lombard Odier Asset Management (USA) Corp. is the investment adviser to this holder, and as such it and its portfolio managers Adam McConkey and Robert Giles have the power to vote or dispose of the ordinary shares held of record by this holder and may be deemed to beneficially own those securities. Each of Mr. McConkey and Mr. Giles disclaims beneficial ownership of such securities, except to the extent of his pecuniary interest therein. The address of Lombard Odier Asset Management (USA) Corp. is 452 Fifth Avenue, 25th Floor, New York, NY 10018.

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DESCRIPTION OF SHARE CAPITAL AND ARTICLES OF ASSOCIATION

Introduction

Set forth below is a summary of certain information concerning our share capital as well as a description of certain provisions of our articles of association, or the Articles, and relevant provisions of the Companies Act. The summary below contains only material information concerning our share capital and corporate status and does not purport to be complete and is qualified in its entirety by reference to the Articles, which are filed as an exhibit to the registration statement of which this prospectus forms a part. Further, please note that holders of our ADSs will not be treated as one of our shareholders and will not have any shareholder rights.

General

We were incorporated as a public limited company under the laws of England and Wales on November 18, 1994 under the name Stanford Rook Holdings plc with company number 2992058. On April 26, 2007, we changed our name to Silence Therapeutics plc. Our principal executive offices are located at 72 Hammersmith Road, London W14 8TH, United Kingdom and our telephone number is +44 (0)20-3457-6900.  Our registered office address is 27 Eastcastle Street, London, W1W 8DH.  Our ordinary shares are traded on AIM under the symbol “SLN”.  Our website address is www.silence-therapeutics.com.  The information contained on, or that can be accessed from, our website does not form part of this prospectus.  Our agent for service of process in the United States is Silence Therapeutics Inc., with a registered address at 434 West 33rd Street, Office 814, New York, New York 10001.  

The principal legislation under which we operate and under which our ordinary shares are issued is the Companies Act.

As of December 31, 2019, we had 78,370,265 ordinary shares issued and outstanding, with a nominal value of £0.05 per ordinary share. Each issued ordinary share is fully paid.

Ordinary Shares

In accordance with the Articles, the following summarizes the rights of holders of our ordinary shares:

• each holder of our ordinary shares is entitled to one vote per ordinary share on all matters to be voted on by shareholders generally;

• the holders of the ordinary shares shall be entitled to receive notice of, attend, speak and vote at our general meetings; and

• holders of our ordinary shares are entitled to receive such dividends as are recommended by our directors and declared by our shareholders.

Options

As at June 30, 2020, there were options to purchase 5,170,673 ordinary shares outstanding with a weighted average exercise price of £1.32 per ordinary share. The options generally lapse after 10 years from the date of the grant.

Share Register

We are required by the Companies Act to keep a register of our shareholders. Under the laws of England and Wales, the ordinary shares are deemed to be issued when the name of the shareholder is entered in our share register. The share register therefore is prima facie evidence of the identity of our shareholders, and the shares that they hold. The share register generally provides limited, or no, information regarding the ultimate beneficial owners of our ordinary shares. Our share register is maintained by our registrar, Link Asset Services.

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Holders of our ADSs will not be treated as one of our shareholders and their names will therefore not be entered in our share register. The depositary, the custodian or their nominees will be the holder of the ordinary shares underlying our ADSs. Holders of our ADSs have a right to receive the ordinary shares underlying their ADSs. For discussion on our ADSs and ADS holder rights see “Description of American Depositary Shares” in this prospectus.

Under the Companies Act, we must enter an allotment of shares in our share register as soon as practicable and in any event within two months of the allotment. We also are required by the Companies Act to register a transfer of shares (or give the transferee notice of and reasons for refusal) as soon as practicable and in any event within two months of receiving notice of the transfer.

We, any of our shareholders or any other affected person may apply to the court for rectification of the share register if:

• the name of any person, without sufficient cause, is wrongly entered in or omitted from our register of shareholders; or

• there is a default or unnecessary delay in entering on the register the fact of any person having ceased to be a shareholder or on which we have a lien, provided that such refusal does not prevent dealings in the shares taking place on an open and proper basis.

Preemptive Rights

The laws of England and Wales generally provide shareholders with preemptive rights when new shares are issued for cash; however, it is possible for the articles of association, or shareholders in a general meeting, to disapply preemptive rights. Such a disapplication of preemptive rights may be for a maximum period of up to five years from the date of adoption of the articles of association, if the disapplication is contained in the articles of association, or from the date of the shareholder resolution, if the disapplication is by shareholder resolution. In either case, this disapplication would need to be renewed by our shareholders upon its expiration (i.e., at least every five years).

On June 9, 2020, our shareholders approved the disapplication of preemptive rights until the earlier of our next annual general meeting or the date that is 15 months after such approval in respect of the allotment of up to a maximum amount of £827,962.59 of ordinary shares of £0.05 each.

Articles of Association

AsummaryofthetermsoftheArticles issetoutbelow.Thesummarybelowisnota completecopy ofthe termsofthe Articles. Please refer to the full version of the Articles, which is included as an exhibit to the registration statement of which this prospectus is a part.

Shares and Rights Attaching to Them

Objects

The objects of our company are unrestricted.

Share Rights

Subject to any special rights attaching to shares or class of shares already in issue, our shares may be issued with or have attached to them any preferred, deferred or other special rights or be subject to such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as we may by ordinary resolution of the shareholders determine or, in the absence of any such determination, as our board may determine.

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Voting Rights

Subject to any rights or restrictions attached to any shares from time to time, the voting rights attaching to our shares are as follows:

• on a show of hands, every shareholder present in person shall have one vote;

• on a show of hands, each proxy present in person has one vote for and one vote against a resolution if the proxy has been duly appointed by more than one shareholder and the proxy has been instructed by one or more of those shareholders to vote for the resolution and by one or more other of those shareholders to vote against it;

• on a show of hands, each proxy present in person has one vote for and one vote against a resolution if the proxy has been duly appointed by more than one shareholder entitled to vote on the resolution and either: (1) the proxy has been instructed by one or more of those shareholders to vote for the resolution and has been given any discretion by one or more other of those shareholders to vote and the proxy exercises that discretion to vote against it; or (2) the proxy has been instructed by one or more of those shareholders to vote against the resolution and has been given any discretion by one or more other of those shareholders to vote and the proxy exercises that discretion to vote for it;

• on a show of hands, each duly authorised corporate representative has one vote;

• on a poll every shareholder who is present in person or by proxy or by corporate representative shall have one vote for each share of which he or she is the holder or in respect of which their appointment as proxy or corporate representative is made; and

• in the case of joint holders of a share, the vote of the senior holder who votes shall be accepted to the exclusion of the votes of the other joint holders (and seniority shall be determined by the order in which the names stand in the register in respect of the share).

At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded. Subject to the provisions of the Companies Act, as described in "Differences in Corporate Law—Voting Rights" in this prospectus, a poll may be demanded by:

• the chairman of the meeting;

• at least five shareholders present in person or by proxy and entitled to vote on the resolution;

• any shareholder(s) present in person or by proxy and representing in the aggregate not less than one-tenth of the total voting rights of all shareholders having the right to attend and vote at the meeting (excluding the shares held in treasury); or

• any shareholder(s) present in person or by proxy and holding shares conferring a right to vote on the resolution at the meeting on which there have been paid up sums in the aggregate equal to not less than one-tenth of the total sums paid up on all shares conferring that right (excluding the shares held in treasury).

A resolution put to the vote at a general meeting held partly by means of electronic facility or facilities shall, unless the chairman of the meeting determines that it shall be decided on a show of hands, be decided on a poll.

Restrictions on Voting

No shareholder shall, unless the directors otherwise determine, be entitled to vote, either in person or by proxy, at any general meeting or at any separate class meeting in respect of any share held by such shareholder unless all calls or other sums payable by such shareholder in respect of that share have been paid.

The board may from time to time make calls upon the shareholders in respect of any money unpaid on their shares and each shareholder shall (subject to us serving on such shareholder at least 14 days' notice specifying the time or times and place of payment) pay at the time or times so specified the amount called on such holder’s shares.

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Dividends

We may by ordinary resolution of shareholders declare dividends out of profits available for distribution in accordance with the respective rights of shareholders but no such dividend shall exceed the amount recommended by the directors. The directors may from time to time pay shareholders such interim dividends as they think fit and may also pay the fixed dividends payable on any shares of the company half-yearly or otherwise on fixed dates. If the directors act in good faith, they shall not incur any liability to the holders of shares conferring preferred rights for any loss they may suffer in consequence of the payment of an interim dividend on any shares having non-preferred or deferred rights.

Subject to any special rights attaching to or the terms of issue of any share, all dividends shall be declared and paid according to the amounts paid up on the shares and shall be apportioned and paid proportionately according to the amounts paid up on the shares during any part or parts of the period in respect of which the dividend is paid.

Subject to any rights attaching to or the terms of issue of any shares, no dividend or other monies payable by us on or in respect of any share shall bear interest against us. Any dividend unclaimed after a period of 12 years from the date such dividend became due for payment shall be forfeited and shall revert to us.

Dividends may be declared or paid in any currency or currencies and the board may decide the rate of exchange for any currency conversions that may be required, and how any costs involved are to be met.

Any general meeting declaring a dividend may by ordinary resolution of shareholders, upon the recommendation of the board, direct payment or satisfaction of such dividend wholly or in part by the distribution of specific assets other than cash, and in particular of paid up shares or debentures of any other company. The directors may, if authorized by ordinary resolution of shareholders, offer any holders of ordinary shares the right to elect to receive in lieu of a dividend an allotment of ordinary shares credited as fully paid up, subject to such exclusions and other arrangements as the board may deem necessary or expedient to deal with legal or practical problems in respect of overseas shareholders or in respect of shares represented by depositary receipts.

Change of Control

There is no specific provision in the Articles that would have the effect of delaying, deferring or preventing a change of control.

Distributions on Winding Up

On a winding up, the liquidator may, with the sanction of a special resolution of shareholders and any other sanctions required by law, divide amongst the shareholders (excluding the company itself to the extent it is a shareholder by virtue only of its holding of shares as treasury shares) in specie or in kind the whole or any part of our assets (whether they shall consist of property of the same kind or not) and may set such values as he or she deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders or different classes of shareholder. The liquidator may, with the sanction of a special resolution of the shareholders and any other sanctions required by law, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the shareholders as the liquidator shall think fit, but no shareholder shall be compelled to accept any shares or other assets upon which there is any liability.

Variation of Rights

All or any of the rights and restrictions attached to any class of shares issued may be abrogated or varied with the consent in writing of the holders of at least three-quarters in nominal value of the issued shares of that class (excluding any shares held as treasury shares) or by special resolution passed at a separate general meeting of the holders of such class of shares, subject to the Companies Act and the terms of their issue. The Companies Act provides a right to object to the variation of the share capital by the shareholders who did not vote in favor of the variation. Should an aggregate of 15% of the shareholders of the issued shares in question apply to the court to have the variation cancelled, the variation shall have no effect unless and until it is confirmed by the court.

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Alteration to Share Capital

We may, by ordinary resolution of shareholders, consolidate all or any of our share capital into shares of larger nominal amount than our existing shares, or sub-divide our shares or any of them into shares of a smaller amount. We may, by special resolution of shareholders, confirmed by the court, reduce our share capital, any capital redemption reserve or any share premium account in any manner authorized by the Companies Act. We may redeem or purchase all or any of our shares as described in "—Other English Law Considerations—Purchase of Own Shares" in this prospectus.  

Preemption Rights

In certain circumstances, our shareholders may have statutory preemption rights under the Companies Act in respect of the allotment of new shares as described in "— Preemptive Rights" and "—Differences in Corporate Law—Preemptive Rights" in this prospectus.

Transfer of Shares

Any certificated shareholder may transfer all or any of his, her or its shares by an instrument of transfer in any usual or common form or in any other manner which is permitted by the Companies Act and approved by the board. Any written instrument of transfer shall be signed by or on behalf of the transferor and in the case of a partly paid share, the transferee.

All transfers of uncertificated shares shall be made in accordance with and subject to the provisions of the Uncertificated Securities Regulations 2001 and the facilities and requirements of its relevant system. The Uncertificated Securities Regulations 2001 permit shares to be issued and held in uncertificated form and transferred by means of a computer-based system.

The board may decline to register any transfer of any share:

• which is not a fully paid share, provided that such discretion may not be exercised in a way in which the U.K. Financial Conduct Authority, the London Stock Exchange or any other national regulator or stock exchange regards as preventing dealing in shares or other securities from taking place on an open and proper basis;

• unless any written instrument of transfer, duly stamped (if required), is deposited with us at our registered office or such other place as the board may from time to time determine, accompanied by the certificate for the shares to which it relates;

• unless there is provided such evidence as the board may reasonably require to show the right of the transferor to make the transfer and if the instrument of transfer is executed by some other person on his, her or its behalf, the authority of that person to do so;

• where the transfer is in respect of more than one class of share; and

• in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred exceeds four.

If the board declines to register a transfer of a certificated share it shall, as soon as practicable and in any event within two months after the date on which the transfer is lodged, send to the transferee notice of the refusal, together with reasons for the refusal or, in the case of uncertified shares, notify such persons as may be required by the Uncertified Securities Regulations 2001 and the requirements of the relevant system concerned.

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CREST

To be traded on AIM, securities must be able to be transferred and settled through the CREST system. CREST is a computerized paperless share transfer and settlement system which allows securities to be transferred by electronic means, without the need for a written instrument of transfer. The Articles are consistent with CREST membership and, amongst other things, allow for the holding, evidencing and transferring of shares through CREST in uncertificated form.

Shareholder Meetings

Annual General Meetings

In accordance with the Companies Act, we are required in each year to hold an annual general meeting in addition to any other general meetings in that year and to specify the meeting as such in the notice convening it. The annual general meeting shall be convened at such time and place and with such additional means of attendance and participation (including at such other place(s) and/or by means of an electronic facility or facilities) as the board sees fit, subject to the requirements of the Companies Act, as described in "— Differences in Corporate Law — Annual General Meeting" and "— Differences in Corporate Law — Notice of General Meetings" in this prospectus.

Notice of General Meetings

The arrangements for the calling of general meetings are described in "— Differences in Corporate Law — Notice of General Meetings" in this prospectus.

Quorum of General Meetings

No business shall be transacted at any general meeting unless a quorum is present. At least two shareholders present in person or by proxy and entitled to vote shall be a quorum.

Class Meetings

The provisions in the Articles relating to general meetings apply to every separate general meeting of the holders of a class of shares except that:

• the quorum for such class meeting shall be two holders in person or by proxy representing not less than one-third in nominal value of the issued shares of the class (excluding any shares held in treasury);

• at the class meeting, a holder of shares of the class present in person or by proxy may demand a poll and shall on a poll be entitled to one vote for every share of the class held by him or her; and

• if at any adjourned meeting of such holders a quorum is not present at the meeting, one holder of shares of the class present in person or by proxy at an adjourned meeting constitutes a quorum.

Directors

Number of Directors

Unless and until otherwise determined by an ordinary resolution of shareholders, we may not have less than two directors on the board of directors but are not subject to any maximum number of directors.

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Appointment of Directors

Subject to the provisions of the Articles, we may, by ordinary resolution of the shareholders, elect any person who is willing to act to be a director, either to fill a casual vacancy or as an addition to the existing board. However, any person that is not a director retiring from the existing board must be recommended by the board of directors, or be proposed by a shareholder not less than seven and not more than 42 days before the date appointed for the meeting in order to be eligible for election.

Without prejudice to the power to appoint any person to be a director by shareholder resolution, the board has power to appoint any person to be a director, either to fill a casual vacancy or as an addition to the existing board but so that the total number of directors does not exceed any maximum number fixed by or in accordance with the Articles.

Any director appointed by the board will hold office only until the following annual general meeting. Such a director is eligible for re-appointment at that meeting.

Rotation of Directors

At every annual general meeting, there shall retire from office any director who shall have been a director at each of the preceding two annual general meetings and who was not appointed or re-appointed by us in general meeting at, or since, either such meeting. A retiring director shall be eligible for re-appointment. A director retiring at a meeting shall, if he or she is not re-appointed at such meeting, retain office until the meeting appoints someone in his or her place, or if it does not do so, until the conclusion of such meeting.

Directors' Interests

The directors may authorize, to the fullest extent permitted by law, any matter proposed to them which would otherwise result in a director infringing his or her duty to avoid a situation in which he or she has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with our interests. A director shall not, save as otherwise agreed by him or her, be accountable to us for any benefit which he or she derives from any matter authorized by the directors and any contract, transaction or arrangement relating thereto shall not be liable to be avoided on the grounds of any such benefit.

Subject to the requirements under sections 175, 177 and 182 of the Companies Act, a director who is any way, whether directly or indirectly, interested in a proposed or existing transaction or arrangement with us shall declare the nature of his interest at a meeting of the directors.

A director shall not vote in respect of any contract, arrangement or transaction whatsoever in which he or she has an interest which is to his or her knowledge a material interest otherwise than by virtue of interests in shares or debentures or other securities of or otherwise in or through our company. A director shall not be counted in the quorum at a meeting in relation to any resolution on which he or she is debarred from voting.

A director shall be entitled to vote (and be counted in the quorum) in respect of any resolution concerning any of the following matters:

• the giving of any guarantee, security or indemnity in respect of money lent or obligations incurred by him or her or by any other person at the request of or for the benefit of our company or any of our subsidiary undertakings;

• the giving of any guarantee, security or indemnity in respect of a debt or obligation of our company or any of our subsidiary undertakings for which he or she has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security;

• any proposal concerning an offer of securities of or by our company or any of our subsidiary undertakings in which offer he or she is or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which he or she is to participate;

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• any contract, arrangement or transaction concerning any other body corporate in which he or she or any person connected with him or her (within the meaning of sections 252-5 of the Companies Act) is interested, directly or indirectly and whether as an officer or shareholder or otherwise howsoever, provided that he or she and any persons so connected with him or her do not to his or her knowledge hold an interest (within the meaning of sections 820 to 825 of the Companies Act) in one percent or more of any class of the equity share capital of such body corporate or of the voting rights available to members of the relevant body corporate;

• any contract, arrangement or transaction for the benefit of employees of our company or any of our subsidiary undertakings which does not accord to him or her any privilege or advantage not generally accorded to the employees to whom the scheme relates;

• any contract, arrangement or transaction concerning any insurance which our company is to purchase and/or maintain for, or for the benefit of, any directors or persons including directors;

• the giving of an indemnity in relation to another director; and

• the provision of funds to any director to meet, or the doing of anything to enable a director to avoid incurring, expenditure of the nature described in section 205(1) or 206 of the Companies Act.

If a question arises at a meeting of the board or of a committee of the board as to the right of a director to vote or be counted in the quorum, and such question is not resolved by his or her voluntarily agreeing to abstain from voting or not to be counted in the quorum, the question shall be determined by the chairman and his or her ruling in relation to any director other than himself or herself shall be final and conclusive except in a case where the nature or extent of the interest of the director concerned has not been fairly disclosed.

Directors' Fees and Remuneration

Each of the directors shall be paid a fee in such sums as may from time to time be determined by the directors provided that the aggregate of all such fees so paid to directors shall not exceed £500,000 per annum, or such higher amount as may from time to time be determined by ordinary resolution of shareholders.

Each director may be paid all his or her reasonable traveling, hotel and other expenses properly incurred in attending and returning from meetings of the directors or committees of the directors or general meetings of the company or separate meetings of the holders of any class of shares or debentures of the company or otherwise in connection with the business of our company.

Any director who is appointed to any executive office or who serves on any committee or who devotes special attention to the business of our company, or who otherwise performs services which in the opinion of the directors are outside the scope of the ordinary duties of a director, may be paid such extra remuneration by way of salary, percentage of profits or otherwise as the directors may determine.

Borrowing Powers

The board may exercise all the powers to borrow money and to mortgage or charge our undertaking, property and assets (present or future) and uncalled capital or any part thereof and to issue debentures, debenture stock and other securities, whether outright or as collateral security for any debt, liability or obligation of us or of any third party.

The board must restrict the borrowings of the Company and exercise all voting and other rights or powers of control exercisable by the Company in relation to its subsidiaries so as to secure that the aggregate amount remaining outstanding of all monies borrowed by the Company and its subsidiaries shall not at any time, without the previous sanction of an ordinary resolution of the shareholders, exceed a sum equal to five (5) times the aggregate of:

• the amount paid up on the issued share capital of the Company; and

• the total of the capital and revenue reserves of the Company and its subsidiaries (including any share premium account, capital redemption reserve and credit balance on the profit and loss or income account) in each case, whether or not such amounts are available for distribution;

all as shown in the latest audited consolidated balance sheet, subject to certain adjustments.

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Indemnity

Every director or other officer of our group may be indemnified against all costs, charges, expenses, losses and liabilities sustained or incurred by him or her in connection with the actual or purported execution and/or discharge of his or her duties (including those duties, powers and discretions in relation to any members of our group) including all costs, charges, expenses, losses and liabilities suffered or incurred in disputing, defending, investigating or providing evidence in connection with any actual or threatened claims or otherwise.  Every director or other officer of our group may also be provided with funds to meet, or do anything to enable a director or other officer of the Company to avoid incurring, expenditure of the nature described in sections 205(1) or 206 of the Companies Act.

Exclusive jurisdiction

The Articles will provide that, unless we consent in writing to the selection of an alternative forum in the United States of America, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.  Save in respect of any cause of action arising under the Securities Act, by subscribing for or acquiring shares, a shareholder submits all disputes between him or herself and us or our directors to the exclusive jurisdiction of the English courts.

Other English Law Considerations

Notification of Voting Rights

A shareholder in a public company incorporated in the United Kingdom whose shares are admitted to trading on AIM is required pursuant to Rule 5 of the Disclosure Guidance and Transparency Rules of the U.K. Financial Conduct Authority to notify us of the percentage of his, her or its voting rights if the percentage of voting rights which he, she or it holds as a shareholder or through his, her or its direct or indirect holding of financial instruments (or a combination of such holdings) reaches, exceeds or falls below 3%, 4%, 5%, and each 1% threshold thereafter up to 100% as a result of an acquisition or disposal of shares or financial instruments.

Mandatory Purchases and Acquisitions

Pursuant to Sections 979 to 991 of the Companies Act, where a takeover offer has been made for us and the offeror has acquired or unconditionally contracted to acquire not less than 90% in value of the shares to which the offer relates and not less than 90% of the voting rights carried by those shares, the offeror may give notice to the holder of any shares to which the offer relates which the offeror has not acquired or unconditionally contracted to acquire that he, she or it wishes to acquire, and is entitled to so acquire, those shares on the same terms as the general offer. The offeror would do so by sending a notice to the outstanding minority shareholders telling them that it will compulsorily acquire their shares.

Such notice must be sent within three months of the last day on which the offer can be accepted in the prescribed manner. The squeeze‑out of the minority shareholders can be completed at the end of six weeks from the date the notice has been given, subject to the minority shareholders failing to successfully lodge an application to the court to prevent such squeeze‑out any time prior to the end of those six weeks following which the offeror can execute a transfer of the outstanding shares in its favor and pay the consideration to us, which would hold the consideration on trust for the outstanding minority shareholders. The consideration offered to the outstanding minority shareholders whose shares are compulsorily acquired under the Companies Act must, in general, be the same as the consideration that was available under the takeover offer.

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Sell Out

The Companies Act also gives our minority shareholders a right to be bought out in certain circumstances by an offeror who has made a takeover offer for all of our shares. The holder of shares to which the offer relates, and who has not otherwise accepted the offer, may require the offeror to acquire his, her or its shares if, prior to the expiry of the acceptance period for such offer, (1) the offeror has acquired or unconditionally agreed to acquire not less than 90% in value of the voting shares, and (2) not less than 90% of the voting rights carried by those shares. The offeror may impose a time limit on the rights of minority shareholders to be bought out that is not less than three months after the end of the acceptance period. If a shareholder exercises his, her or its rights to be bought out, the offeror is required to acquire those shares on the terms of this offer or on such other terms as may be agreed.

Disclosure of Interest in Shares

Pursuant to Part 22 of the Companies Act, we are empowered by notice in writing to any person whom we know or have reasonable cause to believe to be interested in our shares, or at any time during the three years immediately preceding the date on which the notice is issued has been so interested, within a reasonable time to disclose to us particulars of that person’s interest and (so far as is within such person’s knowledge) particulars of any other interest that subsists or subsisted in those shares.

Under the Articles, if a person defaults in supplying us with the required particulars in relation to the shares in question, or default shares, within the prescribed period of 14 days from the date of the service of notice, the directors may by notice direct that:

• in respect of the default shares, the relevant shareholder shall not be entitled to vote (either in person or by proxy) at any general meeting or to exercise any other right conferred by a shareholding in relation to general meetings; and

• where the default shares represent at least 0.25% of their class, (a) any dividend or other money payable in respect of the default shares shall be retained by us without liability to pay interest and/or (b) no transfers by the relevant shareholder of any default shares may be registered (unless the shareholder is not in default and the shareholder provides a certificate, in a form satisfactory to the directors, to the effect that after due and careful enquiry the shareholder is satisfied that none of the shares to be transferred are default shares).

Purchase of Own Shares

Under the laws of England and Wales, a limited company may only purchase its own shares out of the distributable profits of the company or the proceeds of a fresh issue of shares made for the purpose of financing the purchase, provided that they are not restricted from doing so by their articles of association. A limited company may not purchase its own shares if, as a result of the purchase, there would no longer be any issued shares of the company other than redeemable shares or shares held as treasury shares. Shares must be fully paid in order to be repurchased.

Subject to the above, we may purchase our own shares in the manner prescribed below. We may make an “on-market” purchase of our own fully paid shares pursuant to an ordinary resolution of shareholders. The resolution authorizing an on-market purchase must:

• specify the maximum number of shares authorized to be acquired;

• determine the maximum and minimum prices that may be paid for the shares; and

• specify a date, not being later than five years after the passing of the resolution, on which the authority to purchase is to expire.

We may purchase our own fully paid shares in an “off-market” purchase otherwise than on a recognized investment exchange pursuant to a purchase contract authorized by resolution of shareholders before the purchase takes place. Any authority will not be effective if any shareholder from whom we propose to purchase shares votes on the resolution and the resolution would not have been passed if he, she or it had not done so. The resolution authorizing the purchase must specify a date, not being later than five years after the passing of the resolution, on which the authority to purchase is to expire.

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For these purposes, on-market purchases can only be made on AIM.  Any purchase of our ADSs through Nasdaq would be an off-market purchase.

Distributions and Dividends

Under the Companies Act, before a company can lawfully make a distribution or dividend, it must ensure that it has sufficient distributable reserves (on a non‑consolidated basis). The basic rule is that a company’s profits available for the purpose of making a distribution are its accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less its accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital duly made. The requirement to have sufficient distributable reserves before a distribution or dividend can be paid applies to us and to each of our subsidiaries that has been incorporated under the laws of England and Wales.

It is not sufficient that we, as a public company, have made a distributable profit for the purpose of making a distribution. An additional capital maintenance requirement is imposed on us to ensure that the net worth of the company is at least equal to the amount of its capital. A public company can only make a distribution:

• if, at the time that the distribution is made, the amount of its net assets (that is, the total excess of assets over liabilities) is not less than the total of its called up share capital and undistributable reserves; and

• if, and to the extent that, the distribution itself, at the time that it is made, does not reduce the amount of the net assets to less than that total.

City Code on Takeovers and Mergers

As a public company incorporated in England and Wales with our registered office in England and Wales which has shares admitted to AIM, we are subject to the U.K. City Code on Takeovers and Mergers, or the City Code, which is issued and administered by the U.K. Panel on Takeovers and Mergers, or the Panel. The City Code provides a framework within which takeovers of companies subject to it are conducted. In particular, the City Code contains certain rules in respect of mandatory offers. Under Rule 9 of the City Code, if a person:

• acquires an interest in our shares which, when taken together with shares in which he or she or persons acting in concert with him or her are interested, carries 30% or more of the voting rights of our shares; or

• who, together with persons acting in concert with him or her, is interested in shares that in the aggregate carry not less than 30% and not more than 50% of the voting rights of our shares, and such persons, or any person acting in concert with him or her, acquires additional interests in shares that increase the percentage of shares carrying voting rights in which that person is interested,

the acquirer and depending on the circumstances, its concert parties, would be required (except with the consent of the Panel) to make a cash offer for our outstanding shares at a price not less than the highest price paid for any interests in the shares by the acquirer or its concert parties during the previous twelve months.

Exchange Controls

There are no governmental laws, decrees, regulations or other legislation in the United Kingdom that may affect the import or export of capital, including the availability of cash and cash equivalents for use by us, or that may affect the remittance of dividends, interest, or other payments by us to non‑resident holders of our ordinary shares or ADSs representing our ordinary shares, other than withholding tax requirements. There is no limitation imposed by the laws of England and Wales or in the Articles on the right of non‑residents to hold or vote our shares.

Corporate Governance Code

The AIM Rules for Companies published by the London Stock Exchange require us to include on our website details of a recognized corporate governance code that our board of directors has decided to apply, how we comply with that code and, where we depart from our chosen corporate governance code, an explanation of the reasons for doing so.

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On July 19, 2018, our board of directors approved the application of The QCA Corporate Governance Code (2018 edition).  Our board of directors views this as an appropriate corporate governance framework for our company and consideration has been given to each of the ten principles set out in the code.

Differences in Corporate Law

The applicable provisions of the Companies Act differ from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain differences between the provisions of the Companies Act applicable to us and the General Corporation Law of the State of Delaware relating to shareholders’ rights and protections. This summary is not intended to be a complete discussion of shareholder rights under the laws of Delaware and the laws of England and Wales.

	England and Wales	Delaware
Number of Directors	Under the Companies Act, a public limited company must have at least two directors and the number of directors may be fixed by or in the manner provided in a company’s articles of association.	Under Delaware law, a corporation must have at least one director and the number of directors shall be fixed by or in the manner provided in the bylaws.
Removal of Directors	Under the Companies Act, shareholders may remove a director without cause by an ordinary resolution (which is passed by a simple majority of those voting in person or by proxy at a general meeting) irrespective of any provisions of any service contract the director has with the company, provided 28 clear days’ notice of the resolution has been given to the company and its shareholders. On receipt of notice of an intended resolution to remove a director, the company must forthwith send a copy of the notice to the director concerned. Certain other procedural requirements under the Companies Act must also be followed such as allowing the director to make representations against his or her removal either at the meeting or in writing.	Under Delaware law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except (a) unless the certificate of incorporation provides otherwise, in the case of a corporation whose board of directors is classified, shareholders may effect such removal only for cause, or (b) in the case of a corporation having cumulative voting, if less than the entire board of directors is to be removed, no director may be removed without cause if the votes cast against his or her removal would be sufficient to elect him or her if then cumulatively voted at an election of the entire board of directors, or, if there are classes of directors, at an election of the class of directors of which he or she is a part.

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	England and Wales	Delaware
Vacancies on the Board of Directors	Under the laws of England and Wales, the procedure by which directors, other than a company’s initial directors, are appointed is generally set out in a company’s articles of association, provided that where two or more persons are appointed as directors of a public limited company by resolution of the shareholders, resolutions appointing each director must be voted on individually.	Under Delaware law, vacancies and newly created directorships may be filled by a majority of the directors then in office (even though less than a quorum) or by a sole remaining director unless (a) otherwise provided in the certificate of incorporation or by-laws of the corporation or (b) the certificate of incorporation directs that a particular class of stock is to elect such director, in which case a majority of the other directors elected by such class, or a sole remaining director elected by such class, will fill such vacancy.
Annual General Meeting	Under the Companies Act, a public limited company must hold an annual general meeting in each six-month period following our annual accounting reference date.	Under Delaware law, the annual meeting of stockholders shall be held at such place, on such date and at such time as may be designated from time to time by the board of directors or as provided in the certificate of incorporation or by the bylaws.
General Meeting	Under the Companies Act, a general meeting of the shareholders of a public limited company may be called by the directors. Shareholders holding at least 5% of the paid-up capital of the company carrying voting rights at general meetings (excluding any paid up capital held as treasury shares) can require the directors to call a general meeting and, if the directors fail to do so within a certain period, may themselves convene a general meeting.	Under Delaware law, special meetings of the stockholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws.

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	England and Wales	Delaware
Notice of General Meetings	Under the Companies Act, 21 clear days’ notice must be given for an annual general meeting and any resolutions to be proposed at the meeting. Subject to a company’s articles of association providing for a longer period, at least 14 clear days’ notice is required for any other general meeting. In addition, certain matters, such as the removal of directors or auditors, require special notice, which is 28 clear days’ notice. The shareholders of a company may in all cases consent to a shorter notice period, the proportion of shareholders’ consent required being 100% of those entitled to attend and vote in the case of an annual general meeting and, in the case of any other general meeting, a majority in number of the members having a right to attend and vote at the meeting, being a majority who together hold not less than 95% in nominal value of the shares giving a right to attend and vote at the meeting.	Under Delaware law, unless otherwise provided in the certificate of incorporation or bylaws, written notice of any meeting of the stockholders must be given to each stockholder entitled to vote at the meeting not less than 10 nor more than 60 days before the date of the meeting and shall specify the place, date, hour, and purpose or purposes of the meeting.
Proxy	Under the Companies Act, at any meeting of shareholders, a shareholder may designate another person to attend, speak and vote at the meeting on their behalf by proxy.	Under Delaware law, at any meeting of stockholders, a stockholder may designate another person to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A director of a Delaware corporation may not issue a proxy representing the director’s voting rights as a director.
Preemptive Rights	Under the Companies Act, “equity securities,” being (1) shares in the company other than shares that, with respect to dividends and capital, carry a right to participate only up to a specified amount in a distribution, referred to as “ordinary shares,” or (2) rights to subscribe for, or to convert securities into, ordinary shares, proposed to be allotted for cash must be offered first to the existing equity shareholders in the company in proportion to the respective nominal value of their holdings, unless an exception applies or a special resolution to the contrary has been passed by shareholders in a general meeting or the articles of association provide otherwise in each case in accordance with the provisions of the Companies Act.	Under Delaware law, shareholders have no preemptive rights to subscribe to additional issues of stock or to any security convertible into such stock unless, and except to the extent that, such rights are expressly provided for in the certificate of incorporation.

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	England and Wales	Delaware
Authority to Allot	Under the Companies Act, the directors of a company must not allot shares or grant of rights to subscribe for or to convert any security into shares unless an exception applies or an ordinary resolution to the contrary has been passed by shareholders in a general meeting or the articles of association provide otherwise in each case in accordance with the provisions of the Companies Act.	Under Delaware law, if the corporation’s charter or certificate of incorporation so provides, the board of directors has the power to authorize the issuance of stock. It may authorize capital stock to be issued for consideration consisting of cash, any tangible or intangible property or any benefit to the corporation or any combination thereof. It may determine the amount of such consideration by approving a formula. In the absence of actual fraud in the transaction, the judgment of the directors as to the value of such consideration is conclusive.
Liability of Directors and Officers	Under the Companies Act, any provision, whether contained in a company’s articles of association or any contract or otherwise, that purports to exempt a director of a company, to any extent, from any liability that would otherwise attach to him or her in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void. Any provision by which a company directly or indirectly provides an indemnity, to any extent, for a director of the company or of an associated company against any liability attaching to him or her in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he or she is a director is also void except as permitted by the Companies Act, which provides exceptions for the company to (a) purchase and maintain insurance against such liability; (b) provide a “qualifying third party indemnity” (being an indemnity against liability incurred by the director to a person other than the company or an associated company or criminal proceedings in which he or she is convicted); and (c) provide a “qualifying pension scheme indemnity” (being an indemnity against liability incurred in connection with our activities as trustee of an occupational pension plan).	Under Delaware law, a corporation’s certificate of incorporation may include a provision eliminating or limiting the personal liability of a director to the corporation and its stockholders for damages arising from a breach of fiduciary duty as a director. However, no provision can limit the liability of a director for: •      any breach of the director’s duty of loyalty to the corporation or its stockholders;       •      acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; •      intentional or negligent payment of unlawful dividends or stock purchases or redemptions; or •      any transaction from which the director derives an improper personal benefit.

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	England and Wales	Delaware
Voting Rights	Under the laws of England and Wales, unless a poll is demanded by the shareholders of a company or is required by the chairman of the meeting or our articles of association, shareholders shall vote on all resolutions on a show of hands. Under the Companies Act, a poll may be demanded by (a) not fewer than five shareholders having the right to vote on the resolution; (b) any shareholder(s) representing not less than 10% of the total voting rights of all the shareholders having the right to vote on the resolution (excluding any voting rights attaching to treasury shares); or (c) any shareholder(s) holding shares in the company conferring a right to vote on the resolution (excluding any voting rights attaching to treasury shares) being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all the shares conferring that right. A company’s articles of association may provide more extensive rights for shareholders to call a poll. Under the laws of England and Wales, an ordinary resolution is passed on a show of hands if it is approved by a simple majority (more than 50%) of the votes cast by shareholders present (in person or by proxy) and entitled to vote. If a poll is demanded, an ordinary resolution is passed if it is approved by holders representing a simple majority of the total voting rights of shareholders present, in person or by proxy, who, being entitled to vote, vote on the resolution. Special resolutions require the affirmative vote of not less than 75% of the votes cast by shareholders present, in person or by proxy, at the meeting. If a poll is demanded, a special resolution is passed if it is approved by holders representing not less than 75% of the total voting rights of shareholders in person or by proxy who, being entitled to vote, vote on the resolution.	Delaware law provides that, unless otherwise provided in the certificate of incorporation, each stockholder is entitled to one vote for each share of capital stock held by such stockholder.

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	England and Wales	Delaware
Shareholder Vote on Certain Transactions	The Companies Act provides for schemes of arrangement, which are arrangements or compromises between a company and any class of shareholders or creditors and used in certain types of reconstructions, amalgamations, capital reorganizations, or takeovers. These arrangements require: •      the approval at a shareholders’ or creditors’ meeting convened by order of the court, of a majority in number of shareholders or creditors representing 75% in value of the capital held by, or debt owed to, the class of shareholders or creditors, or class thereof present and voting, either in person or by proxy; and •      the approval of the court.	Generally, under Delaware law, unless the certificate of incorporation provides for the vote of a larger portion of the stock, completion of a merger, consolidation, sale, lease or exchange of all or substantially all of a corporation’s assets or dissolution requires: •      the approval of the board of directors; and •      approval by the vote of the holders of a majority of the outstanding stock or, if the certificate of incorporation provides for more or less than one vote per share, a majority of the votes of the outstanding stock of a corporation entitled to vote on the matter.

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	England and Wales	Delaware
Standard of Conduct for Directors	Under the laws of England and Wales, a director owes various statutory and fiduciary duties to the company, including: •      to act in the way he or she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole; •      to avoid a situation in which he or she has, or can have, a direct or indirect interest that conflicts, or possibly conflicts, with the interests of the company; •      to act in accordance with our constitution and only exercise his or her powers for the purposes for which they are conferred; •      to exercise independent judgment; •      to exercise reasonable care, skill, and diligence; •      not to accept benefits from a third party conferred by reason of his or her being a director or doing, or not doing, anything as a director; and •      a duty to declare any interest that he or she has, whether directly or indirectly, in a proposed or existing transaction or arrangement with the company.	Delaware law does not contain specific provisions setting forth the standard of conduct of a director. The scope of the fiduciary duties of directors is generally determined by the courts of the State of Delaware. In general, directors have a duty to act without self-interest, on a well-informed basis and in a manner they reasonably believe to be in the best interest of the stockholders. Directors of a Delaware corporation owe fiduciary duties of care and loyalty to the corporation and to its shareholders. The duty of care generally requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself or herself of all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must not use his or her corporate position for personal gain or advantage. In general, but subject to certain exceptions, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Delaware courts have also imposed a heightened standard of conduct upon directors of a Delaware corporation who take any action designed to defeat a threatened change in control of the corporation. In addition, under Delaware law, when the board of directors of a Delaware corporation approves the sale or break-up of a corporation, the board of directors may, in certain circumstances, have a duty to obtain the highest value reasonably available to the shareholders.

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	England and Wales	Delaware
Stockholder Suits	Under the laws of England and Wales, generally, the company, rather than its shareholders, is the proper claimant in an action in respect of a wrong done to the company or where there is an irregularity in our internal management. Notwithstanding this general position, the Companies Act provides that (1) a court may allow a shareholder to bring a derivative claim (that is, an action in respect of and on behalf of the company) in respect of a cause of action arising from a director’s negligence, default, breach of duty or breach of trust and (2) a shareholder may bring a claim for a court order where our affairs have been or are being conducted in a manner that is unfairly prejudicial to some of its shareholders.	Under Delaware law, a stockholder may initiate a derivative action to enforce a right of a corporation if the corporation fails to enforce the right itself. The complaint must: •      state that the plaintiff was a stockholder at the time of the transaction of which the plaintiff complains or that the plaintiffs shares thereafter devolved on the plaintiff by operation of law; and •      allege with particularity the efforts made by the plaintiff to obtain the action the plaintiff desires from the directors and the reasons for the plaintiff’s failure to obtain the action; or •      state the reasons for not making the effort. Additionally, the plaintiff must remain a stockholder through the duration of the derivative suit. The action will not be dismissed or compromised without the approval of the Delaware Court of Chancery.

Stock Exchange Listing

We have applied to list our ADSs on the Nasdaq Capital Market under the symbol “SLN”. Our ordinary shares are currently traded on AIM, a market operated by the London Stock Exchange, under the ticker symbol “SLN”.

Registrar of Shares, Depositary for ADSs

Our share register is maintained by Link Asset Services. The share register reflects only registered holders of our ordinary shares. Holders of ADSs representing our ordinary shares will not be treated as our shareholders and their names will therefore not be entered in our share register.  The Bank of New York Mellon has agreed to act as the depositary for the ADSs representing our ordinary shares and the custodian for ordinary shares represented by ADSs is The Bank of New York Mellon, acting through an office located in England. Holders of ADSs representing our ordinary shares have a right to receive the ordinary shares underlying such ADSs. For discussion on ADSs representing our ordinary shares and rights of ADS holders, see the section entitled “Description of American Depositary Shares” in this prospectus.

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DESCRIPTION OF AMERICAN DEPOSITARY SHARES

American Depositary Shares

The Bank of New York Mellon, as depositary, will register and deliver American Depositary Shares, or ADSs. Each ADS will represent three ordinary shares (or a right to receive three ordinary shares) deposited with The Bank of New York Mellon, acting through an office located in England, as custodian. Each ADS will also represent any other securities, cash or other property that may be held by the depositary. The deposited ordinary shares together with any other securities, cash or other property held by the depositary are referred to as the deposited securities. The depositary’s office at which the ADSs will be administered and its principal executive office are located at 240 Greenwich Street, New York, New York 10286.

You may hold ADSs either (A) directly (i) by having an American Depositary Receipt, or ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (ii) by having uncertificated ADSs registered in your name, or (B) indirectly by holding a security entitlement in ADSs through your broker or other financial institution that is a direct or indirect participant in The Depository Trust Company, also called DTC. If you hold ADSs directly, you are a registered ADS holder, also referred to as an ADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.

Registered holders of uncertificated ADSs will receive statements from the depositary confirming their holdings.

As an ADS holder, we will not treat you as one of our shareholders and you will not have shareholder rights. Shareholder rights are governed by the laws of England and Wales. The depositary will be the holder of the ordinary shares underlying your ADSs. As a registered holder of ADSs, you will have ADS holder rights. A deposit agreement among us, the depositary, ADS holders and all other persons indirectly or beneficially holding ADSs sets out ADS holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADSs.

The following is a summary of the material provisions of the deposit agreement. For more complete information, you should read the entire deposit agreement and the form of ADR.  See “Where You Can Find Additional Information” elsewhere in the prospectus for directions on how to obtain copies of those documents.

Dividends and Other Distributions

How will you receive dividends and other distributions on the ordinary shares?

The depositary has agreed to pay or distribute to ADS holders the cash dividends or other distributions it or the custodian receives on ordinary shares or other deposited securities, upon payment or deduction of its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent.

Cash  

The depositary will convert any cash dividend or other cash distribution we pay on the ordinary shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any government approval is needed and cannot be obtained, the deposit agreement allows the depositary to distribute the foreign currency only to those ADS holders to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account of the ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest.

Before making a distribution, any withholding taxes, or other governmental charges that must be paid will be deducted. See “Material Income Tax Considerations.” The depositary will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, you may lose some of the value of the distribution.

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Ordinary Shares  

The depositary may distribute additional ADSs representing any ordinary shares we distribute as a dividend or free distribution. The depositary will only distribute whole ADSs. It will sell ordinary shares which would require it to deliver a fraction of an ADS (or ADSs representing those ordinary shares) and distribute the net proceeds in the same way as it does with cash. If the depositary does not distribute additional ADSs, the outstanding ADSs will also represent the new ordinary shares. The depositary may sell a portion of the distributed ordinary shares (or ADSs representing those ordinary shares) sufficient to pay its fees and expenses in connection with that distribution.

Rights to Purchase Additional Ordinary Shares.  

If we offer holders of our securities any rights to subscribe for additional ordinary shares or any other rights, the depositary may (i) exercise those rights on behalf of ADS holders, (ii) distribute those rights to ADS holders or (iii) sell those rights and distribute the net proceeds to ADS holders, in each case after deduction or upon payment of its fees and expenses. To the extent the depositary does not do any of those things, it will allow the rights to lapse. In that case, you will receive no value for them. The depositary will exercise or distribute rights only if we ask it to and provide satisfactory assurances to the depositary that it is legal to do so. If the depositary will exercise rights, it will purchase the securities to which the rights relate and distribute those securities or, in the case of ordinary shares, new ADSs representing the new ordinary shares, to subscribing ADS holders, but only if ADS holders have paid the exercise price to the depositary. U.S. securities laws may restrict the ability of the depositary to distribute rights or ADSs or other securities issued on exercise of rights to all or certain ADS holders, and the securities distributed may be subject to restrictions on transfer.  

Other Distributions

The depositary will send to ADS holders anything else we distribute on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, the depositary has a choice. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case ADSs will also represent the newly distributed property. However, the depositary is not required to distribute any securities (other than ADSs) to ADS holders unless it receives satisfactory evidence from us that it is legal to make that distribution. The depositary may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution. U.S. securities laws may restrict the ability of the depositary to distribute securities to all or certain ADS holders, and the securities distributed may be subject to restrictions on transfer.

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders. We have no obligation to register ADSs, ordinary shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to ADS holders. This means that you may not receive the distributions we make on our ordinary shares or any value for them if it is illegal or impractical for us to make them available to you.

Deposit, Withdrawal and Cancellation

How are ADSs issued?

The depositary will deliver ADSs if you or your broker deposits ordinary shares or evidence of rights to receive ordinary shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of ADSs in the names you request and will deliver the ADSs to or upon the order of the person or persons that made the deposit.

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How can ADS holders withdraw the deposited securities?

You may surrender your ADSs to the depositary for the purpose of withdrawal. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver the ordinary shares and any other deposited securities underlying the ADSs to the ADS holder or a person the ADS holder designates at the office of the custodian. Or, at your request, risk and expense, the depositary will deliver the deposited securities at its office, if feasible. However, the depositary is not required to accept surrender of ADSs to the extent it would require delivery of a fraction of a deposited share or other security. The depositary may charge you a fee and its expenses for instructing the custodian regarding delivery of deposited securities.

How do ADS holders interchange between certificated ADSs and uncertificated ADSs?

You may surrender your ADR to the depositary for the purpose of exchanging your ADR for uncertificated ADSs. The depositary will cancel that ADR and will send to the ADS holder a statement confirming that the ADS holder is the registered holder of uncertificated ADSs. Upon receipt by the depositary of a proper instruction from a registered holder of uncertificated ADSs requesting the exchange of uncertificated ADSs for certificated ADSs, the depositary will execute and deliver to the ADS holder an ADR evidencing those ADSs.

Voting Rights

How do you vote?

ADS holders may instruct the depositary how to vote the number of deposited shares their ADSs represent. If we request the depositary to solicit your voting instructions (and we are not required to do so), the depositary will notify you of a shareholders’ meeting and send or make voting materials available to you. Those materials will describe the matters to be voted on and explain how ADS holders may instruct the depositary how to vote. For instructions to be valid, they must reach the depositary by a date set by the depositary. The depositary will try, as far as practical, subject to the laws of England and Wales and the provisions of our articles of association or similar documents, to vote or to have its agents vote the ordinary shares or other deposited securities as instructed by ADS holders. If we do not request the depositary to solicit your voting instructions, you can still send voting instructions, and, in that case, the depositary may try to vote as you instruct, but it is not required to do so.

Except by instructing the depositary as described above, you will not be able to exercise voting rights unless you surrender your ADSs and withdraw theordinary shares. However, you may not know about the meeting enough in advance to withdraw the ordinary shares. In any event, the depositary will not exercise any discretion in voting deposited securities and it will only vote or attempt to vote as instructed.

We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your ordinary shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise voting rights and there may be nothing you can do if your ordinary shares are not voted as you requested.

In order to give you a reasonable opportunity to instruct the depositary as to the exercise of voting rights relating to Deposited Securities, if we request the Depositary to act, we agree to give the depositary notice of any such meeting and details concerning the matters to be voted upon at least 45 days in advance of the meeting date.

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Fees and Expenses

Persons depositing or withdrawing ordinary shares or ADS holders must pay:	For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	Issuance of ADSs, including issuances resulting from a distribution of ordinary shares or rights or other property Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
$.05 (or less) per ADS	Any cash distribution to ADS holders
A fee equivalent to the fee that would be payable if securities distributed to you had been ordinary shares and the ordinary shares had been deposited for issuance of ADSs	Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders
$.05 (or less) per ADS per calendar year	Depositary services
Registration or transfer fees	Transfer and registration of ordinary shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw ordinary shares
Expenses of the depositary	Cable (including SWIFT) and facsimile transmissions (when expressly provided in the deposit agreement) Converting foreign currency to U.S. dollars
Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or ordinary shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes	As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities	As necessary

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing ordinary shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable (or by selling a portion of securities or other property distributable) to ADS holders that are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

From time to time, the depositary may make payments to us to reimburse us for costs and expenses generally arising out of establishment and maintenance of the ADS program, waive fees and expenses for services provided to us by the depositary or share revenue from the fees collected from ADS holders. In performing its duties under the deposit agreement, the depositary may use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the depositary and that may earn or share fees, spreads or commissions.

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The depositary may convert currency itself or through any of its affiliates, or the custodian or we may convert currency and pay U.S. dollars to the depositary. Where the depositary converts currency itself or through any of its affiliates, the depositary acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the deposit agreement and the rate that the depositary or its affiliate receives when buying or selling foreign currency for its own account. The depositary makes no representation that the exchange rate used or obtained by it or its affiliate in any currency conversion under the deposit agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to ADS holders, subject to the depositary’s obligation to act without negligence or bad faith. The methodology used to determine exchange rates used in currency conversions made by the depositary is available upon request.

Where the custodian converts currency, the custodian has no obligation to obtain the most favorable rate that could be obtained at the time or to ensure that the method by which that rate will be determined will be the most favorable to ADS holders, and the depositary makes no representation that the rate is the most favorable rate and will not be liable for any direct or indirect losses associated with the rate. In certain instances, the depositary may receive dividends or other distributions from the us in U.S. dollars that represent the proceeds of a conversion of foreign currency or translation from foreign currency at a rate that was obtained or determined by us and, in such cases, the depositary will not engage in, or be responsible for, any foreign currency transactions and neither it nor we make any representation that the rate obtained or determined by us is the most favorable rate and neither it nor we will be liable for any direct or indirect losses associated with the rate.

Payment of Taxes

You will be responsible for any taxes or other governmental charges payable on your ADSs or on the deposited securities represented by any of your ADSs. The depositary may refuse to register any transfer of your ADSs or allow you to withdraw the deposited securities represented by your ADSs until those taxes or other charges are paid. It may apply payments owed to you or sell deposited securities represented by your ADSs to pay any taxes owed and you will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to ADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.

Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited Securities

The depositary will not tender deposited securities in any voluntary tender or exchange offer unless instructed to do so by an ADS holder surrendering ADSs and subject to any conditions or procedures the depositary may establish.

If deposited securities are redeemed for cash in a transaction that is mandatory for the depositary as a holder of deposited securities, the depositary will call for surrender of a corresponding number of ADSs and distribute the net redemption money to the holders of called ADSs upon surrender of those ADSs.

If there is any change in the deposited securities such as a sub-division, consolidation or other reclassification, or any merger, scheme of arrangement, recapitalization or reorganization affecting the issuer of deposited securities in which the depositary receives new securities in exchange for or in lieu of the old deposited securities, the depositary will hold those replacement securities as deposited securities under the deposit agreement. However, if the depositary decides it would not be lawful and practical to hold the replacement securities because those securities could not be distributed to ADS holders or for any other reason, the depositary may instead sell the replacement securities and distribute the net proceeds upon surrender of the ADSs.

If there is a replacement of the deposited securities and the depositary will continue to hold the replacement securities, the depositary may distribute new ADSs representing the new deposited securities or ask you to surrender your outstanding ADRs in exchange for new ADRs identifying the new deposited securities.

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If there are no deposited securities underlying ADSs, including if the deposited securities are cancelled, or if the deposited securities underlying ADSs have become apparently worthless, the depositary may call for surrender of those ADSs or cancel those ADSs upon notice to the ADS holders.

Amendment and Termination

How may the deposit agreement be amended?

We may agree with the depositary to amend the deposit agreement and the ADRs without your consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, or prejudices a substantial right of ADS holders, it will not become effective for outstanding ADSs until 30 days after the depositary notifies ADS holders of the amendment. At the time an amendment becomes effective, you are considered, by continuing to hold your ADSs, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended.

How may the deposit agreement be terminated?

The depositary will initiate termination of the deposit agreement if we instruct it to do so. The depositary may initiate termination of the deposit agreement if

• 60 days have passed since the depositary told us it wants to resign but a successor depositary has not been appointed and accepted its appointment;

• we delist the ADSs from an exchange in the United States on which they were listed and do not list the ADSs on another exchange in the United States or make arrangements for trading of ADSs on the U.S. over-the-counter market;

• we delist our ordinary shares from an exchange outside the United States on which they were listed and do not list the ordinary shares on another exchange outside the United States;

• the depositary has reason to believe the ADSs have become, or will become, ineligible for registration on Form F-6 under the Securities Act of 1933;

• we appear to be insolvent or enter insolvency proceedings;

• all or substantially all the value of the deposited securities has been distributed either in cash or in the form of securities;

• there are no deposited securities underlying the ADSs or the underlying deposited securities have become apparently worthless; or

• there has been a replacement of deposited securities.

If the deposit agreement will terminate, the depositary will notify ADS holders at least 90 days before the termination date. At any time after the termination date, the depositary may sell the deposited securities. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the deposit agreement, unsegregated and without liability for interest, for the pro rata benefit of the ADS holders that have not surrendered their ADSs. Normally, the depositary will sell as soon as practicable after the termination date.

After the termination date and before the depositary sells, ADS holders can still surrender their ADSs and receive delivery of deposited securities, except that the depositary may refuse to accept a surrender for the purpose of withdrawing deposited securities or reverse previously accepted surrenders of that kind that have not settled if it would interfere with the selling process. The depositary may refuse to accept a surrender for the purpose of withdrawing sale proceeds until all the deposited securities have been sold. The depositary will continue to collect distributions on deposited securities, but, after the termination date, the depositary is not required to register any transfer of ADSs or distribute any dividends or other distributions on deposited securities to the ADSs holder (until they surrender their ADSs) or give any notices or perform any other duties under the deposit agreement except as described in this paragraph.

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Limitations on Obligations and Liability

Limits on our Obligations and the Obligations of the Depositary; Limits on Liability to Holders of ADSs

The deposit agreement expressly limits our obligations and the obligations of the depositary. It also limits our liability and the liability of the depositary. We and the depositary:

• are only obligated to take the actions specifically set forth in the deposit agreement without negligence or bad faith, and the depositary will not be a fiduciary or have any fiduciary duty to holders of ADSs;

• are not liable if we are or it is prevented or delayed by law or by events or circumstances beyond our or its ability to prevent or counteract with reasonable care or effort from performing our or its obligations under the deposit agreement;

• are not liable if we or it exercises discretion permitted under the deposit agreement;

• are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the deposit agreement, or for any special, consequential or punitive damages for any breach of the terms of the deposit agreement;

• have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the deposit agreement on your behalf or on behalf of any other person;

• may rely upon any documents we believe or it believes in good faith to be genuine and to have been signed or presented by the proper person;

• are not liable for the acts or omissions of any securities depository, clearing agency or settlement system; and

• the depositary has no duty to make any determination or provide any information as to our tax status, or any liability for any tax consequences that may be incurred by ADS holders as a result of owning or holding ADSs or be liable for the inability or failure of an ADS holder to obtain the benefit of a foreign tax credit, reduced rate of withholding or refund of amounts withheld in respect of tax or any other tax benefit.

In the deposit agreement, we and the depositary agree to indemnify each other under certain circumstances.

Requirements for Depositary Actions

Before the depositary will deliver or register a transfer of ADSs, make a distribution on ADSs, or permit withdrawal of ordinary shares, the depositary may require: 

• payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any ordinary shares or other deposited securities;

• satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and

• compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents.

The depositary may refuse to deliver ADSs or register transfers of ADSs when the transfer books of the depositary or our transfer books are closed or at any time if the depositary or we think it advisable to do so.

Your Right to Receive the Ordinary Shares Underlying your ADSs

ADS holders have the right to cancel their ADSs and withdraw the underlying ordinary shares at any time except:

• when temporary delays arise because: (i) the depositary has closed its transfer books or we have closed our transfer books; (ii) the transfer of ordinary shares is blocked to permit voting at a shareholders' meeting; or (iii) we are paying a dividend on our ordinary shares;

• when you owe money to pay fees, taxes and similar charges; or

• when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of ordinary shares or other deposited securities.

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This right of withdrawal may not be limited by any other provision of the deposit agreement.

Direct Registration System

In the deposit agreement, all parties to the deposit agreement acknowledge that the Direct Registration System, also referred to as DRS, and Profile Modification System, also referred to as Profile, will apply to the ADSs. DRS is a system administered by DTC that facilitates interchange between registered holding of uncertificated ADSs and holding of security entitlements in ADSs through DTC and a DTC participant. Profile is a feature of DRS that allows a DTC participant, claiming to act on behalf of a registered holder of uncertificated ADSs, to direct the depositary to register a transfer of those ADSs to DTC or its nominee and to deliver those ADSs to the DTC account of that DTC participant without receipt by the depositary of prior authorization from the ADS holder to register that transfer.

In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties to the deposit agreement understand that the depositary will not determine whether the DTC participant that is claiming to be acting on behalf of an ADS holder in requesting registration of transfer and delivery as described in the paragraph above has the actual authority to act on behalf of the ADS holder (notwithstanding any requirements under the Uniform Commercial Code). In the deposit agreement, the parties agree that the depositary’s reliance on and compliance with instructions received by the depositary through the DRS/Profile system and in accordance with the deposit agreement will not constitute negligence or bad faith on the part of the depositary.

Shareholder Communications; Inspection of Register of Holders of ADSs

The depositary will make available for your inspection at its office all communications that it receives from us as a holder of deposited securities that we make generally available to holders of deposited securities. The depositary will send you copies of those communications or otherwise make those communications available to you if we ask it to. You have a right to inspect the register of holders of ADSs, but not for the purpose of contacting those holders about a matter unrelated to our business or the ADSs.

Jury Trial Waiver 

The deposit agreement provides that, to the extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our ordinary shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws. If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable in the facts and circumstances of that case in accordance with applicable case law.

You will not, by agreeing to the terms of the deposit agreement, be deemed to have waived our or the depositary’s compliance with U.S. federal securities laws or the rules and regulations promulgated thereunder.

Each holder of ADSs may be required from time to time to provide certain information, including proof of taxpayer status, residence and beneficial ownership (as applicable), from time to time and in a timely manner as we, the depositary or the custodian may deem necessary or proper to fulfill obligations under applicable law.

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ordinary SHARES AND ADSs ELIGIBLE FOR FUTURE SALE

Our ordinary shares are admitted to trading on AIM. However, prior to the date of this prospectus, there has been no public market for our ordinary shares or ADSs on any U.S. national securities exchange. Future sales of substantial amounts of ADSs representing our ordinary shares in the United States or of our ordinary shares in the United Kingdom, or the perception that such sales may occur, could adversely affect prevailing market prices of such ADSs and of our ordinary shares. As of June 30, 2020, we had in issue and outstanding 82,826,259 ordinary shares and no ADSs representing our ordinary shares. Upon the effectiveness of the registration statement of which this prospectus forms a part, holders of ordinary shares registered hereby are expected to be able to deposit such ordinary shares with the Depositary in exchange for ADSs representing such ordinary shares at the ratio referred to on the cover page of this prospectus, which ADSs will be freely tradeable. Holders of issued but unexercised options to purchase our ordinary shares not registered hereby will have to comply with one of the exceptions from U.S. registration requirements set forth below in order to exchange any ordinary shares issued upon exercise thereof.

Rule 144

In general, a person who has beneficially owned our unregistered ordinary shares for at least six months would be entitled to sell ADSs representing our ordinary shares pursuant to Rule 144 of the Securities Act, provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale and (2) we are subject to Exchange Act periodic reporting requirements for at least 90 days before the sale. Persons who are our affiliates at the time of, or any time during the 90 days preceding, a sale of ADSs representing such ordinary shares, are subject to additional restrictions. As long as we have been subject to the Exchange Act periodic reporting requirements for at least 90 days before the proposed sale, such person may sell within any three-month period only a number of ADSs representing our ordinary shares that does not exceed the greater of:

• 1% of the number of ADS representing our ordinary shares then outstanding (including any ordinary shares issuable upon withdrawal of ADSs), as if all such ordinary shares had been deposited in exchange for ADSs; or

• the average weekly trading volume of ADSs representing our ordinary shares on Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Any sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144 to the extent applicable.

Prior to the 90th day following the effective date of the registration statement of which this prospectus forms a part when we become subject to the Exchange Act periodic reporting requirements, non-affiliates who have not been affiliates of ours within the 90 days preceding the sale and who acquired their securities at least one year following their sale by us or our affiliates, may freely resell such securities under Rule 144.

Rule 701

In general, under Rule 701 under the Securities Act, any of our employees, board members, senior management, consultants or advisers who purchases ordinary shares from us in connection with a compensatory share or option plan or other written agreement before the effective date of the registration statement of which this prospectus forms a part, or the effective date, is entitled to resell such ordinary shares 90 days after the effective date in reliance on Rule 144, without having to comply with the holding period requirements or other restrictions contained in Rule 701. The SEC has indicated that Rule 701 will apply to typical share options granted by an issuer before it becomes subject to the reporting requirements of the Exchange Act, along with the ordinary shares acquired upon exercise of such options, including exercises after the date of this prospectus. Securities issued in reliance on Rule 701 are restricted securities and, beginning 90 days after the date of this prospectus, may be sold by persons other than “affiliates,” as defined in Rule 144, subject only to the manner of sale provisions of Rule 144 and by affiliates under Rule 144 without compliance with the holding period requirement.

Regulation S

Regulation S provides generally that sales made in offshore transactions, including on AIM, as well as the resale of any such securities issued by foreign private issuers such as us (including resales into the United States) are not subject to the registration or prospectus delivery requirements of the Securities Act.

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MATERIAL INCOME TAX CONSIDERATIONS

The following summary contains a description of material U.K. and U.S. federal income tax consequences of the acquisition, ownership and disposition of our ordinary shares or ADSs. This summary should not be considered a comprehensive description of all the tax considerations that may be relevant to the decision to acquire ADSs representing our ordinary shares.

Material U.S. Federal Income Tax Considerations for U.S. Holders

The following is a description of the material U.S. federal income tax consequences to the U.S. Holders described below of owning and disposing of our ordinary shares or ADSs. It is not a comprehensive description of all tax considerations that may be relevant to a particular person’s decision to acquire securities. This discussion applies only to a U.S. Holder that holds our ordinary shares or ADSs as a capital asset for tax purposes (generally, property held for investment). In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder’s particular circumstances, including state and local tax consequences, estate tax consequences, alternative minimum tax consequences, the potential application of the Medicare contribution tax, and tax consequences applicable to U.S. Holders subject to special rules, such as:

• banks, insurance companies, and certain other financial institutions;

• U.S. expatriates and certain former citizens or long-term residents of the United States;

• dealers or traders in securities who use a mark-to-market method of tax accounting;

• persons holding ordinary shares or ADSs as part of a hedging transaction, “straddle,” wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to ordinary shares or ADSs;

• persons whose “functional currency” for U.S. federal income tax purposes is not the U.S. dollar;

• brokers, dealers or traders in securities, commodities or currencies;

• tax-exempt entities or government organizations;

• S corporations, partnerships, or other entities or arrangements classified as partnerships for U.S. federal income tax purposes (and investors therein);

• regulated investment companies or real estate investment trusts;

• persons who acquired our ordinary shares or ADSs pursuant to the exercise of any employee stock option or otherwise as compensation;

• persons that own or are deemed to own ten percent or more of our shares (by vote or value); and

• persons holding our ordinary shares or ADSs in connection with a trade or business, permanent establishment, or fixed base outside the United States.

If an entity that is classified as a partnership for U.S. federal income tax purposes holds ordinary shares or ADSs, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding ordinary shares or ADSs and partners in such partnerships are encouraged to consult their tax advisers as to the particular U.S. federal income tax consequences of holding and disposing of ordinary shares or ADSs.

The discussion is based on the Code, administrative pronouncements, judicial decisions, final, temporary and proposed Treasury Regulations, and the income tax treaty between the United Kingdom and the United States, or the Treaty, all as of the date hereof, changes to any of which may affect the tax consequences described herein — possibly with retroactive effect.

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A “U.S. Holder” is a holder who, for U.S. federal income tax purposes, is a beneficial owner of ordinary shares or ADSs who is eligible for the benefits of the Treaty and is:

(1) a citizen or individual resident of the United States;

(2) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia;

(3) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

(4) a trust if (a) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust or (b) the trust has a valid election to be treated as a U.S. person under applicable U.S. Treasury Regulations.

U.S. Holders are encouraged to consult their tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of our ordinary shares or ADSs in their particular circumstances.

The discussion below assumes that the representations contained in the deposit agreement are true and that the obligations in the deposit agreement and any related agreement will be complied with in accordance with their terms. Generally, a holder of an ADS should be treated for U.S. federal income tax purposes as holding the ordinary shares represented by the ADS. Accordingly, no gain or loss will be recognized upon an exchange of ADSs for ordinary shares.

Passive Foreign Investment Company Rules

A non-U.S. corporation will be classified as a PFIC for any taxable year in which, after applying certain look-through rules, either:

• at least 75% of its gross income is passive income (such as interest income); or

• at least 50% of its gross assets (determined on the basis of a quarterly average) is attributable to assets that produce passive income or are held for the production of passive income (including cash).

For purposes of this test, we will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation, the equity of which we own, directly or indirectly, 25% or more (by value).

We do not believe we were a PFIC for our taxable year ended December 31, 2019. However, no assurances regarding our PFIC status can be provided for any past, current or future taxable year. The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation. In particular, the characterization of our assets as active or passive may depend in part on our current and intended future business plans, which are subject to change. In addition, for our current and future taxable years, the total value of our assets for PFIC testing purposes may be determined in part by reference to the market price of our ordinary shares or ADSs from time to time, which may fluctuate considerably. Under the income test, our status as a PFIC depends on the composition of our income which will depend on a variety of factors that are subject to uncertainty, including the characterization of certain intercompany payments and payments from tax authorities, transactions we enter into in the future and our corporate structure. Even if we determine that we are not a PFIC for a taxable year, there can be no assurance that the IRS would not successfully challenge our position. Accordingly, our U.S. counsel expresses no opinion with respect to our PFIC status for any prior, current or future taxable year.

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If we are classified as a PFIC in any year with respect to which a U.S. Holder owns the ordinary shares or ADSs, we will continue to be treated as a PFIC with respect to such U.S. Holder in all succeeding years during which the U.S. Holder owns the ordinary shares or ADSs, regardless of whether we continue to meet the tests described above unless we cease to be a PFIC and the U.S. Holder has made a “deemed sale” election under the PFIC rules. If such a deemed sale is made, a U.S. Holder will be deemed to have sold the ordinary shares or ADSs the U.S. Holder holds at their fair market value and any gain from such deemed sale would be subject to the rules described below. After the deemed sale election, so long as we do not become a PFIC in a subsequent taxable year, the U.S. Holder’s ordinary shares or ADSs with respect to which such election was made will not be treated as shares in a PFIC and the U.S. Holder will not be subject to the rules described below with respect to any “excess distribution” the U.S. Holder receives from us or any gain from an actual sale or other disposition of the ordinary shares or ADSs. U.S. Holders should consult their tax advisers as to the possibility and consequences of making a deemed sale election if we cease to be a PFIC and such election becomes available.

For each taxable year we are treated as a PFIC with respect to U.S. Holders, U.S. Holders will be subject to special tax rules with respect to any “excess distribution” such U.S. Holder receives and any gain such U.S. Holder recognizes from a sale or other disposition (including a pledge) of ordinary shares or ADSs, unless (1) such U.S. Holder makes a “qualified electing fund” election, or QEF Election, with respect to all taxable years during such U.S. Holder’s holding period in which we are a PFIC, or (2) our ordinary shares or ADSs constitute “marketable stock” and such U.S. Holder makes a mark-to-market election (as discussed below). Distributions a U.S. Holder receives in a taxable year that are greater than 125% of the average annual distributions a U.S. Holder received during the shorter of the three preceding taxable years or the U.S. Holder’s holding period for the ordinary shares or ADSs will be treated as an excess distribution. Under these special tax rules:

• the excess distribution or gain will be allocated ratably over a U.S. Holder’s holding period for the ordinary shares or ADSs;

• the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary income; and

• the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the ordinary shares or ADSs cannot be treated as capital gains, even if a U.S. Holder holds the ordinary shares or ADSs as capital assets.

If we are a PFIC, a U.S. Holder will generally be subject to similar rules with respect to distributions we receive from, and our dispositions of the stock of, any of our direct or indirect subsidiaries that also are PFICs, as if such distributions were indirectly received by, and/or dispositions were indirectly carried out by, such U.S. Holder. U.S. Holders should consult their tax advisers regarding the application of the PFIC rules to our subsidiaries.

If a U.S. Holder makes an effective QEF Election, the U.S. Holder will be required to include in gross income each year, whether or not we make distributions, as capital gains, such U.S. Holder’s pro rata share of our net capital gains and, as ordinary income, such U.S. Holder’s pro rata share of our earnings in excess of our net capital gains. However, a U.S. Holder can only make a QEF Election with respect to ordinary shares or ADSs in a PFIC if such company agrees to furnish such U.S. Holder with certain tax information annually. We do not currently expect to provide such information in the event that we are classified as a PFIC.

U.S. Holders can avoid the interest charge on excess distributions or gain relating to our ordinary shares or ADSs by making a mark-to-market election with respect to the ordinary shares or ADSs, provided that the ordinary shares or ADSs are “marketable stock.” Ordinary shares or ADSs will be marketable stock if they are “regularly traded” on certain U.S. stock exchanges or on a non-U.S. stock exchange that meets certain conditions. For these purposes, the ordinary shares or ADSs will be considered regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded. We have applied to list our ADSs on Nasdaq, which is a qualified exchange for these purposes. Consequently, if our ADSs are listed on Nasdaq and are regularly traded,

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and you are a holder of ADSs, we expect the mark-to-market election would be available to U.S. Holders if we are a PFIC. Each U.S. Holder should consult its tax advisor as to the whether a mark-to-market election is available or advisable with respect to the ordinary shares or ADSs.

A U.S. Holder that makes a mark-to-market election must include in ordinary income for each year an amount equal to the excess, if any, of the fair market value of our ordinary shares or ADSs at the close of the taxable year over the U.S. Holder’s adjusted tax basis in the ordinary shares or ADSs. An electing holder may also claim an ordinary loss deduction for the excess, if any, of the U.S. Holder’s adjusted basis in the ordinary shares or ADSs over the fair market value of the ordinary shares or ADSs at the close of the taxable year, but this deduction is allowable only to the extent of any net mark-to-market gains for prior years. Gains from an actual sale or other disposition of the ordinary shares or ADSs will be treated as ordinary income, and any losses incurred on a sale or other disposition of the shares will be treated as an ordinary loss to the extent of any net mark-to-market gains for prior years. Once made, the election cannot be revoked without the consent of the IRS unless the ordinary shares or ADSs cease to be marketable stock.

However, a mark-to-market election generally cannot be made for equity interests in any lower-tier PFICs that we own, unless shares of such lower-tier PFIC are themselves “marketable stock.” As a result, even if a U.S. Holder validly makes a mark-to-market election with respect to our ordinary shares or ADSs, the U.S. Holder may continue to be subject to the PFIC rules (described above) with respect to its indirect interest in any of our investments that are treated as an equity interest in a PFIC for U.S. federal income tax purposes. U.S. Holders should consult their tax advisers as to the availability and desirability of a mark-to-market election, as well as the impact of such election on interests in any lower-tier PFICs.

Unless otherwise provided by the U.S. Treasury, each U.S. shareholder of a PFIC is required to file an annual report containing such information as the U.S. Treasury may require. A U.S. Holder’s failure to file the annual report will cause the statute of limitations for such U.S. Holder’s U.S. federal income tax return to remain open with regard to the items required to be included in such report until three years after the U.S. Holder files the annual report, and, unless such failure is due to reasonable cause and not willful neglect, the statute of limitations for the U.S. Holder’s entire U.S. federal income tax return will remain open during such period. U.S. Holders should consult their tax advisers regarding the requirements of filing such information returns under these rules.

Taxation of Distributions

Subject to the discussion above under “Passive Foreign Investment Company Rules,” distributions paid on ordinary shares or ADSs, other than certain pro rata distributions of ordinary shares or ADSs, will generally be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we may not calculate our earnings and profits under U.S. federal income tax principles, we expect that distributions generally will be reported to U.S. Holders as dividends. Subject to applicable limitations, dividends paid to certain non-corporate U.S. Holders may be taxable at preferential rates applicable to “qualified dividend income.” However, the qualified dividend income treatment may not apply if we are treated as a PFIC with respect to the U.S. Holder. The amount of the dividend will be treated as foreign-source dividend income to U.S. Holders and will not be eligible for the dividends-received deduction generally available to U.S. corporations under the Code. Dividends will generally be included in a U.S. Holder’s income on the date of the U.S. Holder’s receipt of the dividend. The amount of any dividend income paid in foreign currency will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S. dollars. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt. Such gain or loss would generally be treated as U.S.-source ordinary income or loss. The amount of any distribution of property other than cash (and other than certain pro rata distributions of ordinary shares or ADSs or rights to acquire ordinary shares or ADSs) will be the fair market value of such property on the date of distribution. For foreign tax credit purposes, our dividends will generally be treated as passive category income.

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Sale or Other Taxable Disposition of Ordinary Shares and ADSs

Subject to the discussion above under “Passive Foreign Investment Company Rules,” gain or loss realized on the sale or other taxable disposition of ordinary shares or ADSs will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the ordinary shares or ADSs for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the ordinary shares or ADSs disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. This gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. The deductibility of capital losses is subject to limitations.

If the consideration received by a U.S. Holder is not paid in U.S. dollars, the amount realized will be the U.S. dollar value of the payment received determined by reference to the spot rate of exchange on the date of the sale or other disposition. However, if the ordinary shares or ADSs are treated as traded on an “established securities market” and you are either a cash basis taxpayer or an accrual basis taxpayer that has made a special election (which must be applied consistently from year to year and cannot be changed without the consent of the IRS), you will determine the U.S. dollar value of the amount realized in a non-U.S. dollar currency by translating the amount received at the spot rate of exchange on the settlement date of the sale. If you are an accrual basis taxpayer that is not eligible to or does not elect to determine the amount realized using the spot rate on the settlement date, you will recognize foreign currency gain or loss to the extent of any difference between the U.S. dollar amount realized on the date of sale or disposition and the U.S. dollar value of the currency received at the spot rate on the settlement date.

WE STRONGLY URGE YOU TO CONSULT YOUR TAX ADVISOR REGARDING THE IMPACT OF OUR PFIC STATUS ON YOUR INVESTMENT IN THE ORDINARY SHARES OR ADSs AS WELL AS THE APPLICATION OF THE PFIC RULES TO YOUR INVESTMENT IN THE ORDINARY SHARES OR ADSs.

Information Reporting and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.

Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the holder’s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the IRS.

Information with Respect to Foreign Financial Assets

Certain U.S. Holders who are individuals (and, under proposed regulations, certain entities) may be required to report information relating to the ordinary shares or ADSs, subject to certain exceptions (including an exception for ordinary shares or ADSs held in accounts maintained by certain U.S. financial institutions). U.S. Holders should consult their tax advisers regarding their reporting obligations with respect to their ownership and disposition of the ordinary shares or ADSs.

United Kingdom Taxation

The following is intended as a general guide to current U.K. tax law and HM Revenue & Customs, or HMRC, practice applying as at the date of this prospectus (both of which are subject to change at any time, possibly with retrospective effect) relating to the holding of ADSs. It does not constitute legal or tax advice and does not purport to be a complete analysis of all U.K. tax considerations relating to the holding of ADSs, or all of the circumstances in which holders of ADSs may benefit from an exemption or relief from U.K. taxation. It is written on the basis that the company does not (and will not) directly or indirectly derive 75% or more of its qualifying asset value from U.K. land, and that the company is and remains solely resident in the United Kingdom for tax purposes and will therefore be subject to the U.K. tax regime and not the U.S. tax regime save as set out above under “Material U.S. Federal Income Tax Considerations for U.S. Holders”.

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Except to the extent that the position of non-U.K. resident persons is expressly referred to, this guide relates only to persons who are resident (and, in the case of individuals, domiciled or deemed domiciled) for tax purposes solely in the United Kingdom and do not have a permanent establishment or fixed base in any other jurisdiction with which the holding of the ADSs is connected, or U.K. Holders, who are absolute beneficial owners of the ADSs (where the ADSs are not held through an Individual Savings Account or a Self-Invested Personal Pension) and who hold the ADSs as investments.

This guide may not relate to certain classes of U.K. Holders, such as (but not limited to):

• persons who are connected with thecompany;

• financial institutions;

• insurance companies;

• charities or tax-exempt organizations;

• collective investment schemes;

• pension schemes;

• market makers, intermediaries, brokers or dealers in securities;

• persons who have (or are deemed to have) acquired their ADSs by virtue of an office or employment or who are or have been officers or employees of the company or any of its affiliates; and

• individuals who are subject to U.K. taxation on a remittance basis.

The decision of the First-tier Tribunal (Tax Chamber) in HSBC Holdings PLC and The Bank of New York Mellon Corporation v HMRC (2012) cast some doubt on whether a holder of a depositary receipt is the beneficial owner of the underlying shares. However, based on published HMRC guidance we would expect that HMRC will regard a holder of ADSs as holding the beneficial interest in the underlying shares and therefore these paragraphs assume that a holder of ADSs is the beneficial owner of the underlying ordinary shares and any dividends paid in respect of the underlying ordinary shares (where the dividends are regarded for U.K. purposes as that person’s own income) for U.K. direct tax purposes.

THESE PARAGRAPHS ARE A SUMMARY OF CERTAIN U.K. TAX CONSIDERATIONS AND ARE INTENDED AS A GENERAL GUIDE ONLY. IT IS RECOMMENDED THAT ALL HOLDERS OF ADSs OBTAIN ADVICE AS TO THE CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSAL OF THE ADSs IN THEIR OWN SPECIFIC CIRCUMSTANCES FROM THEIR OWN TAX ADVISERS. IN PARTICULAR, NON-U.K. RESIDENT OR DOMICILED PERSONS ARE ADVISED TO CONSIDER THE POTENTIAL IMPACT OF ANY RELEVANT DOUBLE TAXATION AGREEMENTS.

Dividends

Withholding Tax

Dividends paid by the company will not be subject to any withholding or deduction for or on account of U.K. tax.

Income Tax

An individual U.K. Holder may, depending on his or her particular circumstances, be subject to U.K. tax on dividends received from the company. An individual holder of ADSs who is not resident for tax purposes in the United Kingdom should not be chargeable to U.K. income tax on dividends received from the company unless he or she carries on (whether solely or in partnership) a trade, profession or vocation in the United Kingdom through a branch or agency to which the ADSs are attributable. There are certain exceptions for trading in the United Kingdom through independent agents, such as for some brokers and investment managers.

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All dividends received by an individual U.K. Holder from us or from other sources will form part of that U.K. Holder’s total income for income tax purposes and will constitute the top slice of that income. A nil rate of income tax will apply to the first £2,000 of taxable dividend income received by the individual U.K. Holder in a tax year. Income within the nil rate band will be taken into account in determining whether income in excess of the £2,000 tax-free allowance falls within the basic rate, higher rate or additional rate tax bands. Dividend income in excess of the tax-free allowance will (subject to the availability of any income tax personal allowance) be taxed at 7.5% to the extent that the excess amount falls within the basic rate tax band, 32.5% to the extent that the excess amount falls within the higher rate tax band and 38.1% to the extent that the excess amount falls within the additional rate tax band.

Corporation Tax

A corporate holder of ADSs who is not resident for tax purposes in the United Kingdom should not be chargeable to U.K. corporation tax on dividends received from the company unless it carries on (whether solely or in partnership) a trade in the United Kingdom through a permanent establishment to which the ADSs are attributable.

Corporate U.K. Holders should not be subject to U.K. corporation tax on any dividend received from the company so long as the dividends qualify for exemption, which should be the case, although certain conditions must be met. If the conditions for the exemption are not satisfied, or such U.K. Holder elects for an otherwise exempt dividend to be taxable, U.K. corporation tax will be chargeable on the amount of any dividends (at the current rate of 19%).

Chargeable Gains

A disposal or deemed disposal of ADSs by a U.K. Holder may, depending on the U.K. Holder’s circumstances and subject to any available exemptions or reliefs (such as the annual exemption), give rise to a chargeable gain or an allowable loss for the purposes of U.K. capital gains tax and corporation tax on chargeable gains.

If an individual U.K. Holder who is subject to U.K. income tax at either the higher or the additional rate is liable to U.K. capital gains tax on the disposal of ADSs, the current applicable rate will be 20%. For an individual U.K. Holder who is subject to U.K. income tax at the basic rate and liable to U.K. capital gains tax on such disposal, the current applicable rate would be 10%, save to the extent that any capital gains when aggregated with the U.K. Holder’s other taxable income and gains in the relevant tax year exceed the unused basic rate tax band. In that case, the rate currently applicable to the excess would be 20%.

If a corporate U.K. Holder becomes liable to U.K. corporation tax on the disposal (or deemed disposal) of ADSs, the main rate of U.K. corporation tax (currently 19%) would apply.

A holder of ADSs which is not resident for tax purposes in the United Kingdom should not normally be liable to U.K. capital gains tax or corporation tax on chargeable gains on a disposal (or deemed disposal) of ADSs unless the person is carrying on (whether solely or in partnership) a trade, profession or vocation in the United Kingdom through a branch or agency (or, in the case of a corporate holder of ADSs, through a permanent establishment) to which the ADSs are attributable. However, an individual holder of ADSs who has ceased to be resident for tax purposes in the United Kingdom for a period of less than five years and who disposes of ADSs during that period may be liable on his or her return to the United Kingdom to U.K. tax on any capital gain realized (subject to any available exemption or relief).

Stamp Duty and Stamp Duty Reserve Tax

The discussion below relates to the holders of our ordinary shares or ADSs wherever resident, however it should be noted that special rules may apply to certain persons such as market makers, brokers, dealers or intermediaries.

Issue of Shares

No U.K. stamp duty or stamp duty reserve tax, or SDRT, is payable on the issue of the underlying ordinary shares in the company.

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Transfers of Shares

Neither U.K. stamp duty nor SDRT should arise on transfers of the underlying ordinary shares (including instruments transferring ordinary shares and agreements to transfer ordinary shares) on the basis that the ordinary shares are admitted to trading on AIM, provided the following requirements are (and continue to be) met:

• the ordinary shares are admitted to trading on AIM, but are not listed on any market (with the term “listed” being construed in accordance with section 99A of the Finance Act 1986), and this has been certified to Euroclear; and

• AIM continues to be accepted as a “recognized growth market” as construed in accordance with section 99A of the Finance Act 1986).

In the event that either of the above requirements is not met, stamp duty or SDRT will generally apply to transfers of, or agreements to transfer, ordinary shares. Where applicable, the purchaser normally pays the stamp duty or SDRT, other than where the transfer is to a clearance service or depositary receipt issuer (where in practice it will generally be paid by the participants).

Issue or Transfers of ADRs

No U.K. stamp duty or SDRT should be required to be paid on the issue or transfer of (including an agreement to transfer) ADRs in the Company.

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Plan of Distribution

The registration statement of which this prospectus forms a part has been filed with respect to an aggregate of 53,732,291 ordinary shares held by certain of our shareholders, which are referred to collectively herein as the Registered Shares, and the holders of all such ordinary shares are identified in this prospectus as the Registered Holders. Any Registered Shares offered and sold in the United States by the Registered Holders will be in the form of ADSs. The Registered Holders are also permitted to sell ordinary shares not represented by ADSs in private or offshore transactions, including on AIM, which resales are not covered by this prospectus. Unlike an initial public offering, any resale by the Registered Holders of the Registered Shares represented by ADSs is not being underwritten by any investment bank. The Registered Holders may, or may not, elect to sell Registered Shares represented by ADSs as and to the extent that they may individually determine. Such sales, if any, will be made through brokerage transactions on Nasdaq or other securities exchange in the United States at prevailing market prices.

The Registered Holders may dispose of all or a portion of the Registered Shares from time to time directly or through one or more underwriters, broker-dealers or agents. If ADSs representing our ordinary shares are sold through underwriters or broker-dealers, the Registered Holders will be responsible for any applicable underwriting discounts or commissions or agent’s commissions. ADSs representing our ordinary shares may be sold by the Registered Holders on Nasdaq or any other national securities exchange or quotation service on which the securities may be listed or quoted at the time of disposition, in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over-the-counter market and in one or more transactions at fixed prices, at prevailing market prices at the time of the disposition, at varying prices determined at the time of disposition, or at negotiated prices. These dispositions may be effected in transactions, which may involve crosses or block transactions. The Registered Holders may use any one or more of the following methods when disposing of ordinary shares:

• ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

• block trades in which the broker-dealer will attempt to sell the ordinary shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

• purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

• an exchange distribution in accordance with the rules of the applicable exchange;

• privately negotiated transactions and offshore transactions;

• settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;

• broker-dealers may agree with the Registered Holders to sell a specified number of such ordinary shares at a stipulated price per share;

• through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise;

• a combination of any such methods of disposition; and

• any other method permitted pursuant to applicable law.

The Registered Holders also may resell all or a portion of the Registered Shares in offshore transactions or open market transactions in reliance upon Rule 144 under the Securities Act, as permitted by that rule, or Section 4(a)(1) under the Securities Act, if available, rather than under this prospectus, provided that they meet the criteria and conform to the requirements of those provisions.

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Broker-dealers engaged by the Registered Holders may arrange for other broker-dealers to participate in dispositions. If the Registered Holders effect such transactions by selling ADSs representing our ordinary shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive applicable commissions in the form of discounts, concessions or commissions from the Registered Holders or commissions from purchasers of ADSs representing our ordinary shares for whom they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction will not be in excess of a customary brokerage commission in compliance with FINRA Rule 2121 and Supplementary Material .01 and Supplementary Material .02 thereto.

In connection with dispositions of ADSs representing Registered Shares, the Registered Holders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of ADSs representing Registered Shares in the course of hedging in positions they assume. The Registered Holders may also sell ADSs representing Registered Shares short and, if such short sale shall take place after the date that the registration statement of which this prospectus forms a part is declared effective, the Registered Holders may deliver ADSs representing Registered Shares to close out short positions and to return borrowed ordinary shares in connection with such short sales. The Registered Holders may also loan or pledge ADSs representing Registered Shares to broker-dealers that in turn may sell such ordinary shares, to the extent permitted by applicable law. The Registered Holders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of Registered Shares, which ordinary shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). Notwithstanding the foregoing, the Registered Holders have been advised that they may not use Registered Shares to cover short sales of our ordinary shares (or ADSs representing ordinary shares) made prior to the date the registration statement of which this prospectus forms a part has been declared effective by the SEC.

The Registered Holders may, from time to time, pledge or grant a security interest in some or all of the warrants or ADSs representing Registered Shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the ADSs representing Registered Shares from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, amending, if necessary, the list of Registered Holders to include the pledgee, transferee or other successors in interest as Registered Holders under this prospectus. The Registered Holders also may transfer and donate the ADSs representing Registered Shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The Registered Holders and any broker-dealer or agents participating in the distribution of the ADSs representing Registered Shares may be deemed to be “underwriters” within the meaning of Section 2(a)(11) of the Securities Act in connection with such dispositions. In such event, any commissions paid, or any discounts or concessions allowed to, any such broker-dealer or agent and any profit on the resale of the ADSs representing our Registered Shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Registered Holders who are “underwriters” within the meaning of Section 2(a)(11) of the Securities Act will be subject to the applicable prospectus delivery requirements of the Securities Act including Rule 172 thereunder and may be subject to certain statutory liabilities of, including but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Upon our being notified in writing by a Registered Holder that any material arrangement has been entered into with a broker-dealer for the sale of ADSs representing Registered Shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such Registered Holder and of the participating broker-dealer(s), (ii) the number of ADSs representing Registered Shares involved, (iii) the price at which such ADSs representing Registered Shares were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction.

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Each Registered Holder and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of ADSs representing Registered Shares by the Registered Holder and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the ADSs representing Registered Shares to engage in market-making activities with respect thereto. All of the foregoing may affect the marketability of ADSs representing Registered Shares and the ability of any person or entity to engage in market-making activities with respect thereto.

We will pay the SEC filing fees in connection with the registration of ADSs representing our ordinary shares. Each Registered Holder will pay any underwriting discounts or selling commissions incurred by such Registered Holder in connection with the disposition of Registered Shares.

We are not party to any arrangement with any Registered Holder or any broker-dealer with respect to disposition of ADSs or Registered Shares. Therefore, we will not have any input if, when and how any Registered Holder elects to dispose of ADSs representing such Registered Holder’s Registered Shares or the price or prices at which any such disposition may occur, and there can be no assurance that any Registered Holder will exchange its Registered Shares for ADSs or dispose of any or all of the ADSs representing such ordinary shares even if so exchanged pursuant to the deposit agreement. We will not receive proceeds from any disposition of Registered Shares in the form of ADSs by the Registered Holders.

To date, there has not been a public market for ADSs representing our ordinary shares. We offer no assurances that an active trading market for ADSs representing our ordinary shares will develop or, if developed, be maintained.

148

EXPENSES OF THIS OFFERING

Set forth below is an itemization of the total expenses which are expected to be incurred in connection with the registration of the ordinary shares registered hereby. With the exception of the registration fee payable to the SEC and the Nasdaq initial listing fee, all amounts are estimates.

Expense	Amount
SEC registration fee	$	40,870
Nasdaq listing fee	75,000
Printing expenses	50,000
Legal fees and expenses	500,000
Accounting fees and expenses	350,000
Miscellaneous	84,130
Total	$	1,100,000

149

LEGAL MATTERS

The validity of the ordinary shares registered hereby and certain other matters of the laws of England and Wales will be passed upon for us by Cooley (UK) LLP, London, England and certain matters of U.S. law will be passed upon for us by Cooley LLP, New York, New York.

EXPERTS

The consolidated financial statements as of and for the years ended December 31, 2019 and 2018 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES

We are incorporated and currently existing under the laws of England and Wales. In addition, certain of our directors and officers reside outside of the United States and most of the assets of our non-U.S. subsidiaries are located outside of the United States. As a result, it may be difficult for investors to effect service of process on us or those persons in the United States or to enforce in the United States judgments obtained in U.S. courts against us or those persons based on the civil liability or other provisions of the U.S. securities laws or other laws.

In addition, uncertainty exists as to whether the courts of England and Wales would:

• recognize or enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the civil liabilities provisions of the securities laws of the United States or any state in the United States; or

• entertain original actions brought in England and Wales against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

We have been advised by Cooley LLP and Cooley (UK) LLP that there is currently no treaty between (i) the United States and (ii) England and Wales providing for reciprocal recognition and enforcement of judgments of U.S. courts in civil and commercial matters (although the United States and the United Kingdom are both parties to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards) and that a final judgment for the payment of money rendered by any general or state court in the United States based on civil liability, whether or not predicated solely upon the United States securities laws, would not be automatically enforceable in England and Wales. We have also been advised by Cooley (UK) LLP that any final and conclusive monetary judgment for a definite sum obtained against us in United States courts would be treated by the courts of England and Wales as a cause of action in itself and sued upon as a debt at common law so that no retrial of the issues would be necessary, provided that:

• the relevant U.S. court had jurisdiction over the original proceedings according to English conflicts of laws principles at the time when proceedings were initiated;

• England and Wales courts had jurisdiction over the matter on enforcement and we either submitted to such jurisdiction or were resident or carrying on business within such jurisdiction and were duly served with process;

• the U.S. judgment was final and conclusive on the merits in the sense of being final and unalterable in the court that pronounced it and being for a definite sum of money;

• the judgment given by the courts was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations (or otherwise based on a U.S. law that an English court considers to relate to a penal, revenue or other public law);

• the judgment was not procured by fraud;

• the judgment was not obtained following a breach of a jurisdictional or arbitrational clause, unless with the agreement of the defendant or the defendant’s subsequent submission to the jurisdiction of the court;

150

• recognition or enforcement of the judgment in England and Wales would not be contrary to public policy or the Human Rights Act 1998;

• the proceedings pursuant to which judgment was obtained were not contrary to natural justice;

• the U.S. judgment was not arrived at by doubling, trebling or otherwise multiplying a sum assessed as compensation for the loss or damages sustained and not being otherwise in breach of Section 5 of the U.K. Protection of Trading Interests Act 1980, or is a judgment based on measures designated by the Secretary of State under Section 1 of that Act;

• there is not a prior decision of an English court or the court of another jurisdiction on the issues in question between the same parties; and

• the English enforcement proceedings were commenced within the limitation period.

Whether these requirements are met in respect of a judgment based upon the civil liability provisions of the United States securities laws, including whether the award of monetary damages under such laws would constitute a penalty, is an issue for the court making such decision.

Subject to the foregoing, investors may be able to enforce in England and Wales judgments in civil and commercial matters that have been obtained from U.S. federal or state courts. Nevertheless, we cannot assure you that those judgments will be recognized or enforceable in England and Wales.

If an English court gives judgment for the sum payable under a U.S. judgment, the English judgment will be enforceable by methods generally available for this purpose. These methods generally permit the English court discretion to prescribe the manner of enforcement. In addition, it may not be possible to obtain an English judgment or to enforce that judgment if the judgment debtor is or becomes subject to any insolvency or similar proceedings, or if the judgment debtor has any set-off or counterclaim against the judgment creditor. Also note that, in any enforcement proceedings, the judgment debtor may raise any counterclaim that could have been brought if the action had been originally brought in England unless the subject of the counterclaim was in issue and denied in the U.S. proceedings.

151

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form F-1 under the Securities Act. A related registration statement on Form F-6 has been filed with the SEC to register the ADSs representing our ordinary shares. This prospectus, which forms a part of the registration statement on Form F-1, does not contain all of the information that is included in such registration statement and the exhibits and schedules thereto. Certain information is omitted and you should refer to such registration statement and its exhibits and schedules for that information. If a document has been filed as an exhibit to such registration statement, we refer you to the copy of the document that has been filed. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit.

You may review a copy of our registration statement on Form F-1 as well as the registration statement on Form F-6, including exhibits thereto and any schedules filed therewith, and obtain copies of such materials at the SEC’s website (www.sec.gov), which contains reports and other information regarding issuers like us that file electronically with the SEC.

Upon the effectiveness of the registration statement of which this prospectus forms a part, we will become subject to the information reporting requirements of the Exchange Act applicable to foreign private issuers. Accordingly, we will be required to file reports and other information with the SEC, including annual reports on Form 20-F and periodic reports on Form 6-K. Those reports may be obtained at the website described above. As a foreign private issuer, we will be exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of such act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered thereunder.

We maintain a corporate website at www.silence-therapeutics.com. Information contained in, or that can be accessed through, our website is not a part of, and shall not be incorporated by reference into, this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

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Index to Financial Statements

Audited Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Income Statements and Statements of Comprehensive Income for the years ended December 31, 2019 and 2018	F-3
Consolidated Balance Sheets as of December 31, 2019 and 2018	F-4
Consolidated Statements of Changes in Equity for the years ended December 31, 2019 and 2018	F-5
Consolidated Cash Flow Statements for the years ended December 31, 2019 and 2018	F-6
Notes to the Consolidated Financial Statements	F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Silence Therapeutics plc

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Silence Therapeutics plc and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated income statements, consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated cash flow statements for the years then ended, including 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 as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements 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 consolidated 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 consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Cambridge, United Kingdom

June 22, 2020

We have served as the Company’s auditor since 2014, which includes periods before the Company became subject to SEC reporting requirements.

F-2

Consolidated income statements

(in thousands, except for loss per share)

		Year ended December 31,
	Note	2019			2018
Revenue	3	£	244		£	–
Research and development costs			(13,336	)		(9,743	)
Administrative expenses			(9,642	)		(10,828	)
Operating loss	5		(22,734	)		(20,571	)
Finance and other expenses	7		(163	)	–
Finance and other income	8		27			45
Loss for the year before taxation			(22,870	)		(20,526	)
Taxation	9		3,288			2,115
Loss for the year after taxation		£	(19,582	)	£	(18,411	)
Loss per ordinary equity share (basic and diluted)	10	£	(0.26	)	£	(0.26	)

Consolidated statements of comprehensive income

(in thousands)

			Year ended December 31,
	Note		2019				2018
Loss for the year after taxation		£		(19,582	)	£		(18,411	)
Other comprehensive (expense)/income, net of tax:
Items that may subsequently be reclassified to profit and loss:
Foreign exchange differences arising on consolidation of foreign operations				(411	)			94
Total other comprehensive (expense)/income for the year				(411	)			94
Total comprehensive expense for the year		£		(19,993	)	£		(18,317	)

The accompanying accounting policies and notes form an integral part of these financial statements.

F-3

Consolidated balance sheets

(in thousands)

		December 31,
	Note	2019			2018
Non-current assets
Property, plant and equipment	11	£	611		£	921
Goodwill	12		7,692			8,127
Other intangible assets	13		34			64
Financial assets at amortized cost	16		275			275
			8,612			9,387
Current assets
Cash and cash equivalents	15		13,515			21,494
Financial assets at amortized cost – term deposit	16		20,000			5,000
Financial asset at amortized cost – other	16		1			43
R&D tax credit receivable			3,060			2,080
Other current assets	17		885			881
Trade and other receivables	18		4		–
			37,465			29,498
Non-current liabilities
Contract liabilities	21		(15,515	)	–
			(15,515	)	–
Current liabilities
Contract liabilities	21		(2,478	)	–
Trade and other payables	19		(6,888	)		(3,830	)
Lease liability	20		(287	)	–
			(9,653	)		(3,830	)
Total assets less liabilities			20,909			35,055
Net assets		£	20,909		£	35,055
Capital and reserves attributable to the owners of the parent
Share capital	23		3,919			3,554
Capital reserves	25		167,243			163,121
Translation reserve			1,746			2,157
Accumulated losses			(151,999	)		(133,777	)
Total equity		£	20,909		£	35,055

The accompanying accounting policies and notes form an integral part of these financial statements.

F-4

Consolidated statements of changes in equity

(in thousands)

	Share capital		Capital reserves			Translation reserve			Accumulated losses			Total equity
At January 1, 2018	£	3,500	£	163,215		£	2,063		£	(116,428	)	£	52,350
Recognition of share-based payments	–			681		–			–				681
Lapse of vested options in the year	–			(297	)	–				297		–
Options exercised in the year	–			(765	)	–				765		–
Proceeds from shares issued		54		287		–			–				341
Transactions with owners recognized directly in equity		54		(94	)	–				1,062			1,022
Loss for year	–		–			–				(18,411	)		(18,411	)
Other comprehensive income
Foreign exchange differences arising on consolidation of foreign operations	–		–				94		–				94
Total comprehensive expense for the year	–		–				94			(18,411	)		(18,317	)
At December 31, 2018 as previously stated		3,554		163,121			2,157			(133,777	)		35,055
Adoption of IFRS 16	–		–			–				(10	)		(10	)
At January 1, 2019 adjusted	£	3,554	£	163,121		£	2,157		£	(133,787	)	£	35,045
Recognition of share-based payments	–			584		–			–				584
Lapse of vested options in the year	–		–			–			–			–
Options exercised in the year	–			(1,370	)	–				1,370		–
Proceeds from shares issued		365		4,908		–			–				5,273
Transactions with owners recognized directly in equity		365		4,122		–				1,370			5,857
Loss for year	–		–			–				(19,582	)		(19,582	)
Other comprehensive (expense)/income
Foreign exchange differences arising on consolidation of foreign operations	–		–				(411	)	–				(411	)
Total comprehensive expense for the year	–		–				(411	)		(19,582	)		(19,993	)
At December 31, 2019	£	3,919	£	167,243		£	1,746		£	(151,999	)	£	20,909

The accompanying accounting policies and notes form an integral part of these financial statements.

F-5

Consolidated cash flow statements

(in thousands)

	Year ended December 31,
	2019			2018
Cash flow from operating activities
Loss before tax	£	(22,870	)	£	(20,526	)
Depreciation charges		452			379
Amortization charges		30			20
Charge for the year in respect of share-based payments		584			681
Finance and other expense/(income)		136			(45	)
Loss on disposal of property, plant and equipment		2			6
Increase/(decrease) in trade and other receivables		(4	)		691
Increase in other current assets		(4	)		(881	)
Decrease/(increase) in current financial assets at amortized cost – other		42			(43	)
Increase in trade and other payables		3,058			1,146
Increase in contract liabilities		17,993		–
Cash spent on operations		(581	)		(18,572	)
R&D tax credits received		2,308			1,812
Net cash inflow/(outflow) from operating activities	£	1,727		£	(16,760	)
Cash flow from investing activities
Disposal of financial assets available for sale	£	–		£	319
Purchase of financial asset at amortized cost – term deposit		(15,000	)		(5,000	)
Repayment of leasing liabilities	–			–
Interest (paid)/received		(6	)		39
Purchase of property, plant and equipment		(9	)		(130	)
Purchase of intangible assets	–				(58	)
Net cash outflow from investing activities	£	(15,015	)	£	(4,830	)
Cash flow from financing activities
Proceeds from issue of share capital	£	5,273		£	341
Net cash inflow from financing activities	£	5,273		£	341
Decrease in cash and cash equivalents		(8,015	)		(21,249	)
Cash and cash equivalents at start of year		21,494			42,745
Net decrease in the year		(8,015	)		(21,249	)
Effect of exchange rate fluctuations on cash and cash equivalents held		36			(2	)
Cash and cash equivalents at end of year	£	13,515		£	21,494

The accompanying accounting policies and notes form an integral part of these financial statements.

F-6

Notes to the consolidated financial statements

1.General information

1.1Group

Silence Therapeutics plc and its subsidiaries (together the “Group”) are primarily involved in the discovery, delivery and development of RNA therapeutics. Silence Therapeutics plc, a Public Limited Company incorporated and domiciled in the United Kingdom (“Silence”), is the Group’s ultimate parent company. The address of Silence’s registered office is 27 Eastcastle Street, London W1W 8DH and the principal place of business is 72 Hammersmith Road, London W14 8TH.

2.Principal accounting policies

2.1Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and IFRS Interpretations Committee (“IFRS IC”) interpretations as issued by the International Accounting Standards Board ("IASB"). The consolidated financial statements have been prepared under the historical cost convention. The accounting policies set out below have, unless otherwise stated, been prepared consistently for all periods presented in these consolidated financial statements. The financial statements are prepared in pounds sterling and presented to the nearest thousand pounds. These consolidated financial statements were authorized by the Board of Directors on June 22, 2020.

The principal accounting policies adopted are set out below.

• IFRS 15 Revenue from Contracts with Customers was issued in May 2014 and was implemented using the modified retrospective method by the Group from January 1, 2018. IFRS 15 provides a single, principles-based approach to the recognition of revenue from all contracts with customers. It focuses on the identification of performance obligations in a contract and requires revenue to be recognized when or as those performance obligations are satisfied. The requirements of IFRS 15 have been considered for each revenue-generating contract from January 1, 2018; however, in the year ended December 31, 2018, no revenue was generated and the implementation of IFRS 15 therefore had no impact. As such, the year ended December 31, 2019 is the first year that IFRS 15 had an impact on the financial statements. The most relevant impacts of the application of this standard during the year ended December 31, 2019 were:

• The Group began to recognize royalty income from Alnylam Pharmaceuticals Inc. (“Alnylam”) on the net sales of ONPATTRO™ in the European Union under a settlement and license agreement between the two parties. Invoicing for these royalties takes place quarterly in arrears based on sales data for that quarter as reported by Alnylam. Alnylam is obliged to provide this sales data no later than 75 days after the end of the period in question. Revenue totaling £73,000 was recognized during the year.

• In July 2019 the Group entered into a license and collaboration agreement with Mallinckrodt Pharma IP Trading DAC, a wholly owned subsidiary of Mallinckrodt plc (“Mallinckrodt”) to develop and commercialize RNAi therapeutics for complement-mediated diseases. Under the agreement, Mallinckrodt obtained an exclusive worldwide license for an early stage RNAi program targeting C3 in the complement cascade (known as SLN500), with options to license additional complement-mediated disease targets. Mallinckrodt made an upfront payment of $20 million to the Group as part of the agreement, with further amounts payable on subsequent completion of contractual milestones. The Group is responsible for preclinical activities, and for executing the development program of each asset until the end of Phase 1 clinical trials, after which Mallinckrodt will assume clinical development and responsibility for global commercialization. Certain costs are recharged by the Group to Mallinckrodt. For the year end December 31, 2019, total revenue recognized by the Group under this contract was £171,000.

• These changes in business activity significantly impact the primary financial statements with both royalty income and income from contracts with customers being recognized on the face of the income statement for

F-7

the first time. Further detail regarding accounting treatment is disclosed in note 2.5 below and further detail regarding amounts recognized is disclosed in note 3 below.

• IFRS 16 Leases was issued in January 2016 and was implemented by the Group from January 1, 2019. IFRS 16 replaces IAS 17 and requires lease liabilities and right-of-use assets to be recognized on the balance sheet for applicable leases. The adoption methodology of IFRS 16 is the simplified approach with the cumulative effect of adopting IFRS 16 being recognized in equity as an adjustment to the opening balance of retained earnings for the current period. Prior periods have not been restated.

On transition, for leases previously accounted for as operating leases with a remaining lease term of less than 12 months and for leases of low-value assets, the Group has applied the optional exemptions to not recognize right-of-use assets but to account for the lease expense on a straight line basis over the remaining lease term.

On transition to IFRS 16, the weighted average incremental borrowing rate applied to lease liabilities recognized under IFRS 16 was 18.5%.

The most relevant impacts of the application of IFRS 16 for the year ended December 31, 2019 were as follows:

• Only a single lease has been considered to fall within the scope of IFRS 16 (when taking into consideration the practical expedients referred to above), this being the lease for the Group’s London offices.

• The Group has elected not to present the right-of-use asset separately on the face of the balance sheet. However, the right-of-use asset must be presented in the same line item that would be used if the underlying asset were owned. As the right-of-use asset relates to property, the applicable line item is property, plant and equipment. The total amount recognized following the simplified approach was £160,000. Depreciation on this right-of-use asset is included in the operating loss figure in the income statement, consistent with the presentation of depreciation for other property, plant and equipment. For the year ended December 31, 2019 this depreciation was £96,000 (see note 11 for more information).

• A lease liability is recognized on the face of the balance sheet. At January 1, 2019, a liability of £254,000 was recognized. As of December 31, 2019, the liability was £287,000.

• Interest expense in respect of the lease liability is recognized in the income statement within finance and other income. For the year ended December 31, 2019, the interest expense was £33,000 (see note 7).

• This interest expense and repayment of the principal portion of the lease liability are both presented in the cash flow statement, classified as financing activities. The repayment of the principal portion of the lease liability for the year ended December 31, 2019 was zero.

• An adjustment for the adoption of IFRS 16 is recognized in the statement of changes in equity. This one-time adoption adjustment amounted to a £10,000 increase in accumulated losses.

New Standards, amendments and interpretations not yet adopted

At the date of these financial statements there were no standards and interpretations in issue but not yet implemented.

2.2Basis of consolidation

The Group financial statements consolidate those of Silence Therapeutics plc and its controlled subsidiaries as of December 31, 2019. The Group controls an entity when the Group is expected to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where necessary, adjustments are made to the financial statements of subsidiaries to bring accounting policies into line with those used for reporting the operations of the Group. All intra-Group transactions, balances, income and expenses are eliminated on consolidation.

Please refer to note 14 for a full list of Group controlled entities.

F-8

2.3Going concern

The Group expects to incur significant expenses and operating losses for the foreseeable future as it advances its product candidates into clinical development, and seeks regulatory approval and pursues commercialization of its product candidates, if they are approved. In addition, if the Group obtains regulatory approval for its product candidates, it expects to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. In addition, the Group may incur expenses in connection with the in-license or acquisition of additional product candidates and the potential clinical development of any such product candidates. Furthermore, the Group expects to incur additional costs associated with operating as a foreign private issuer listed on Nasdaq, including significant legal, accounting, investor relations and other expenses that it did not previously incur.

As a result of these anticipated expenditures, the Group will need additional financing to support its continuing operations. Until such time as the Group can generate significant revenue from product sales, if ever, it expects to finance its operations through a combination of public or private equity or debt financings or other sources, which may include collaborations with third parties, such as those described below with AstraZeneca and Mallinckrodt. Adequate additional financing may not be available to the Group on acceptable terms, or at all. The Group’s inability to raise capital as and when needed would have a negative impact on its financial condition and its ability to pursue its business strategy. The Group will need to generate significant revenue to achieve profitability, and it may never do so.

However, based on the Group’s current forecasts and plans and, considering the cash, cash equivalents and term deposit at December 31, 2019 together with cash receipts pertaining to the AstraZeneca strategic collaboration of $40 million received in May 2020 (and a further $40 million still to be received in 2021), the Group has sufficient funding for the foreseeable future and at least one year from the date of approval of the financial statements.

For this reason, the Group continues to adopt the going concern basis in preparing these financial statements.

2.4Research and development

The Group recognizes expenditure incurred in carrying out its research and development activities in line with management’s best estimation of the stage of completion of each separately contracted study or activity. This includes the calculation of research and development accruals at each period to account for expenditure that has been incurred. This requires estimations of the full costs to complete each study or activity and also estimation of the current stage of completion. In all cases, the full cost of each study or activity is expensed by the time the final report or, where applicable, product, has been received. Further details on research and development can be found in note 2.11.

2.5Revenue recognition

The Group’s revenue for the year ended December 31, 2019 consists of royalty income and revenue from collaboration agreements.

Royalty income

The Group’s royalty income is generated by a settlement and license agreement with Alnylam. Under this contract, Alnylam is obliged to pay royalties to the Group on the net sales of ONPATTRO™ in the European Union in a manner commensurate with the contractual terms. Invoices are raised in arrears on a quarterly basis based on sales information provided by Alnylam no later than 75 days after the quarter end.

The royalty exemption under IFRS 15 requires sales-based data. Royalty revenue is recognized based on the level of sales when the related sales occur.

Revenue from collaboration agreements

Revenue from collaboration agreements for the year ended December 31, 2019 relates to the license and collaboration agreement the Group entered into with Mallinckrodt in July 2019. Under the contract, Mallinckrodt obtained an

F-9

exclusive worldwide license for an early stage RNAi program, known as SLN500, targeting C3 in the complement cascade with options to license additional complement-mediated disease targets.

The license of the intellectual property (“IP”) and the research and development (“R&D”) services are not distinct, as Mallinckrodt cannot benefit from the licensed IP absent the R&D services, as those R&D services are used to discover and develop a drug candidate and enhance the value in the underlying IP indicating that the two are highly interrelated. On this basis, it has been concluded that there is only one single performance obligation covering both the R&D services and license of the IP in respect of each target (i.e., one for the initial target and one for each additional optioned complement-mediated disease targets which represent material rights). Revenue is recognized over the duration of the contract based on an input method based on cost to cost.

The contract has four elements of consideration, namely:

• Upfront payment of $20 million (fixed);

o Up to $10 million in research milestone payments for each target (variable); and

o Potential additional development and regulatory milestone payments of up to an aggregate of up to $100 million for the initial C3 target and up to $140 million for each of the two optioned complement-mediated disease targets, including upon the initiation of specified clinical trials in specified jurisdictions, and upon the receipt of regulatory approvals by specified authorities, in each case for multiple indications, as well as potential commercial milestone payments of up to $562.5 million upon the achievement of specified levels of annual net sales of licensed products for each target (variable);

• FTE costs (variable); and

• Funding for Phase 1 clinical development and certain preparatory activities, including GMP manufacturing (variable).

Mallinckrodt paid the Group $20 million upfront under the contract, which was considered to be the initial transaction price. This $20 million has been allocated evenly over SLN500 and the optioned complement-mediated disease targets, because the compounds are at similar stages of development, on the basis of a benchmarking exercise considering the standalone selling price per target of past deals announced to the market by comparable companies. This amount will be recognized in line with the time period over which services are envisaged to be provided.

Separately, Mallinckrodt subscribed for a total of 5,062,167 new ordinary shares in Silence at an issue price of £0.79 per share, through a separate equity subscription agreement and is not considered part of the transaction price.

A $2 million research milestone payment, which is part of the $10 million in research milestone payments for the C3 target described above, was received in respect of SLN500 during the year ended December 31, 2019 upon the initiation of work under our work plan. This amount was duly added to the transaction price apportioned to this target.

The Group’s effort under the contract continues throughout its entire duration. On this basis and given that there is only one single performance obligation per target, revenue for each element of consideration is recognized over the contract period based on a cost to cost method (as the best available measure of the Group’s effort across the contract). The total cost estimate for the contract includes costs expected to be incurred during a Phase 1 clinical trial for which the Group will be reimbursed. Other variable elements of consideration should only begin to be recognized when the amounts are considered probable.

Revenue has been calculated on the following ongoing basis for the year ended December 31, 2019:

• Actual costs for the year ended December 31, 2019 and forecast costs for the remainder of the contract are determined.

• Total contract costs across contract term are calculated.

• Costs incurred to date are calculated as a percentage of total contract costs.

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• This percentage is then multiplied by the consideration deemed probable, thus calculating the cumulative revenue to be recognized. When variable consideration increases due to a further milestone becoming probable a catch-up in revenue is recorded to reflect efforts already expended by the Group up to that point.

Further details of the revenue amounts recognized in the year ended December 31, 2019 can be found in note 3.

2.6Foreign currency translation

The Group’s consolidated financial statements are presented in pounds sterling (£). The individual financial statements of each Group entity are prepared in the currency of the primary economic environment in which the entity operates (its functional currency).

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the income statement for the year. When a gain or loss on a non-monetary item is recognized directly in equity, any exchange component of that gain or loss is also recognized directly in equity. When a gain or loss on a non-monetary item is recognized in the income statement, any exchange component of that gain or loss is also recognized in the income statement.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) are expressed in pounds sterling using exchange rates prevailing on the balance sheet date. Income and expense items (including comparatives) are translated at the average exchange rates for the year. Exchange differences arising, if any, are recognized in equity. Cumulative translation differences are recognized in profit or loss in the year in which the foreign operation is disposed of.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

2.7Defined contribution pension funds

The contributions are recognized as an expense when they fall due.

2.8Business combinations

There were no business combinations as defined by IFRS 3 (revised) during 2018 or 2019.

Business combinations which occurred in 2010 were accounted for by applying the acquisition method described in IFRS 3 (revised) as at the acquisition date, which is the date on which control is transferred to the Group. In arriving at the cost of acquisition, the fair value of the shares issued by the Group is taken to be the bid price of those shares at the date of the issue. Where this figure exceeds the nominal value of the shares, the excess amount is treated as an addition to the merger reserve.

For acquisitions which occurred before January 1, 2010, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the recognized amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with business combinations were capitalized as part of the cost of the acquisition.

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2.9Property, plant and equipment

The Group holds no property assets other than leased property assets classified as right-of-use assets. See note 2.15 for further details.

All equipment and furniture is stated in the financial statements at its cost of acquisition less a provision for depreciation.

Depreciation is charged to write off the cost less estimated residual values of furniture and equipment on a straight line basis over their estimated useful lives. All equipment and furniture is estimated to have a useful economic life of between three and ten years. Estimated useful economic lives and residual values are reviewed each year and amended if necessary.

2.10Goodwill

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is not amortized but is tested for impairment annually, or sooner when an indication of impairment has been identified.

Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

2.11Other intangible assets

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortization and less accumulated impairment losses.

Amortization

Amortization is charged to the income statement on a straight line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Goodwill is systematically tested for impairment at each balance sheet date. Other intangible assets are amortized from the date they are available for use. The estimated useful lives are as follows:

Licenses, software and internally generated patents:10 – 15 years.

Intellectual property rights

Other intangible assets include both acquired and internally developed intellectual property used in research and operations. These assets are stated at cost less amortization.

Acquired intellectual property rights are capitalized on the basis of the costs incurred to acquire the specific rights.

Amortization is applied to write off the cost of the intangible assets on a straight line basis over their estimated useful life. The principal rates used are 6.7% and 10% per annum. Amortization is included within research and development costs.

Capitalization of research and development costs

Costs associated with research activities are treated as an expense in the period in which they are incurred.

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Costs that are directly attributable to the development phase of an internal project will only be recognized as intangible assets provided they meet the following requirements:

• an asset is created that can be separately identified;

• the technical feasibility exists to complete the intangible asset so that it will be available for sale or use and the Group has the intention and ability to do so;

• it is probable that the asset created will generate future economic benefits either through internal use or sale;

• sufficient technical, financial and other resources are available for completion of the asset; and

• the expenditure attributable to the intangible asset during its development can be reliably measured.

Careful judgement by the Group’s management is applied when deciding whether recognition requirements for development costs have been met. This is necessary as the economic success of any product development is uncertain and may be subject to future technical problems at the time of recognition. Judgements are based on the information available at each balance sheet date.

To date, no development costs have been capitalized in respect of the internal projects on the grounds that the costs to date are either for the research phase of the projects or, if relating to the development phase, then the work so far does not meet the recognition criteria set out above.

2.12Impairment testing of goodwill, other intangible assets and property, plant and equipment

At each balance sheet date, the Group assesses any impairment event and whether there is any indication that the carrying value of any asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. Goodwill is subject to annual impairment review.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Goodwill is allocated to those cash generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group at which management controls the related cash flows.

An impairment loss is recognized for the amount by which the asset’s or cash generating unit’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use. Impairment losses recognized for cash generating units to which goodwill has been allocated are credited initially to the carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash generating unit.

2.13Financial instruments

Financial assets and financial liabilities are recognized on the balance sheet when the Group becomes a party to the contractual provisions of the instrument.

For the periods presented in these financial statements, the Group classified financial assets in the following categories: loans and receivables, and financial assets at amortized cost. Currently other categories of financial asset are not used. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

The de-recognition of financial instruments occurs when the rights to receive cash flows from investments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least at each balance sheet date whether or not there is objective evidence that a financial asset or a group of financial assets is impaired.

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Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money directly to a debtor with no intention of trading the receivables. Loans receivable are measured at initial recognition at fair value plus, if appropriate, directly attributable transaction costs and are subsequently measured at amortized cost using the effective interest method, less provision for impairment. Any change in their value is recognized in the income statement. Any impairment is assessed using the Expected Credit Losses (ECLs) model.

Financial assets at amortized cost

Financial assets at amortized cost include a term deposit held to collect solely payment of the principal and interest, and deposits on property operating leases and for the procurement of materials. These are measured at initial recognition at fair value plus, if appropriate, directly attributable transaction costs and are subsequently measured at amortized cost using the effective interest method, less provision for impairment. Any change in the value is recognized in the income statement.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits with original maturities of three months or less that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Financial liabilities and equity

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. A financial liability is a contractual obligation to either deliver cash or another financial asset to another entity or to exchange a financial asset or financial liability with another entity, including obligations which may be settled by the Group using its equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out below.

Financial liabilities

At initial recognition, financial liabilities are measured at their fair value minus, if appropriate, any transaction costs that are directly attributable to the issue of the financial liability. After initial recognition, all financial liabilities are measured at amortized cost using the effective interest method.

2.14Leased assets

For any new contracts entered into on or after January 1, 2019, the Group considers whether a contract is, or contains a lease. A lease is defined as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. To apply this definition, the Group assesses whether the contract meets two key evaluations, which are whether:

• the contract contains an identifiable asset; and

• the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use.

Measurement and recognition

At lease commencement date, the Group recognizes a right-of-use asset (as part of the appropriate underlying class of assets in property, plant and equipment) and a lease liability on the balance sheet.

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The right-of-use asset is measured at cost. The Group depreciates the right-of-use assets on a straight line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.

At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the Group’s incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest.

The Group has elected to account for short-term leases (leases with a duration of less than 12 months) and leases of low-value assets using the practical expedients. Instead of recognizing a right-of-use asset and lease liability, the payments in relation to these are recognized as an expense in profit or loss on a straight-line basis over the lease term.

Lease break clauses and extension options

When the Group has the option to extend a lease, management uses its judgement to determine whether or not an option would be reasonably certain to be exercised. Management considers all facts and circumstances including past practice and any cost that will be incurred to change the asset if an option to extend is not taken, to help determine the lease term.

Similarly, when a break clause exists in the lease agreement, management must consider the likelihood of this option to curtail the lease being exercised. In respect to the Group’s leased Berlin facility, £150,000 of potential lease payments have been excluded from the lease liabilities as it was assessed at January 1, 2019 that the break clause pertaining to the lease could reasonably be exercised at any point (as remains the case) – thus allowing continued exemption using the practical expedients referred to above.

2.15Share-based payments

Historically the Group has issued equity settled share-based payments to certain employees (see note 24). Equity settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value so determined is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of the number of shares that will eventually vest, and is adjusted for the effect of non-market-based vesting conditions. The value of the charge is adjusted to reflect expected and actual levels of award vesting, except where failure to vest is as a result of not meeting a market condition. Cancellations of equity instruments are treated as an acceleration of the vesting period and any outstanding charge is recognized in full immediately. Fair value is measured using a binomial pricing model or Monte Carlo model. The key assumptions used in the model have been adjusted, based on management’s best estimate, for the effects of non‑transferability, exercise restrictions and behavioural considerations. Any payment made to a counterparty on the cancellation or settlement of a grant of equity instruments (even if this occurs after the vesting date) should be accounted for as a repurchase of an equity interest (that is, as a deduction from equity). But, if the payment exceeds the fair value of the equity instruments repurchased (measured at the repurchase date), any such excess should be recognized as an expense.

2.16Equity

Share capital is determined using the nominal value of shares that have been issued.

The share premium account includes any premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from the share premium account, net of any related income tax benefits.

The merger reserve represents the difference between the nominal value and the market value at the date of issue of shares issued in connection with the acquisition by the Group of an interest in over 90% of the share capital of another company.

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Equity settled share-based payments are credited to a share-based payment reserve as a component of equity until related options or warrants are exercised.

Foreign currency translation differences are included in the translation reserve.

Profit and loss account (deficit) includes all current and prior period results as disclosed in the income statement.

2.17Taxation

Current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. Current tax liabilities are calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Tax receivable arises from the U.K. legislation regarding the treatment of certain qualifying research and development costs, allowing for the surrender of tax losses attributable to such costs in return for a tax rebate. Research and development tax credits are recognized when the receipt is probable.

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized.

Such assets and liabilities are not recognized if the temporary difference arises from initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realized. Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

2.18Critical accounting judgements and key sources of estimation uncertainty

In the process of applying the entity’s accounting policies, management makes estimates and judgements that have an effect on the amounts recognized in the financial statements. Although these estimates are based on management’s best knowledge of current events and actions, actual results may ultimately differ from those estimates.

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The key judgments concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are those relating to the following:

• the application of IFRS 15 in determining revenue from contracts with customers specifically:

• the determination of the number of performance obligations (judgment) - Judgment was required in determining whether the license and the R&D activities are distinct performance obligations or not.  It is considered that the license of the IP and the R&D are not distinct as the R&D services are essential to discover and develop a drug candidate and enhance the value in the underlying IP. In addition, the gene targets are highly specialized such that only the Group has the specialist knowledge to apply the IP to the specific target.  On this basis, it has been concluded that there is only one single performance obligation covering both the R&D services and license of the IP in respect of each target; and

• the allocation of the $20 million upfront payment between the performance obligations (judgment) - Mallinckrodt paid the Group $20 million upfront under the contract, which is considered to be the initial transaction price. Judgment was required in determining how this $20 million should be allocated across SLN500 and the additional optioned complement-mediated disease targets.  It was concluded that because the compounds are at similar stages of development, the $20 million amount should be allocated evenly, on the basis of a benchmarking exercise considering the standalone selling price per target of past deals announced to the market by comparable companies;

• the estimate of the future costs to be incurred; and

• estimated future recoverability of goodwill.

Goodwill is carried in the financial statements at a value of £7.7 million and £8.1 million at December 31, 2019 and 2018, respectively. In accordance with IAS 36 Impairment of Assets, the carrying value of goodwill has been assessed by comparing its carrying value to its recoverable amount. The recoverable amount is considered to be the higher of fair value less cost of disposal and value in use. The key assumptions used in the valuation models to determine the value in use have been set out in note 12.

2.19Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker (“CODM”), who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group’s Executive Chairman Iain Ross. The Group has a single reportable segment (see note 4).

3.Revenue

Revenue in 2019 was £244,000, compared to zero in 2018. Revenue in 2019 comprised £73,000 of royalty income and £171,000 of Research collaboration income. Disaggregation of Revenue from Contracts with Customers is as follows (in thousands):

	Year ended December 31,
	2019		2018
Revenue from Contracts with Customers
Research collaboration – Mallinckrodt		£     171	£       –
Royalties		73	–
Total revenue from contracts with customers		£       244	£       –

The research collaboration revenue related to the license and R&D services for SLN500. See note 2 for further details regarding the methodology underlying the recognition of these revenue components.

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4.Segment reporting

In 2019, the Group operated in the specific technology field of RNA therapeutics.

Business segments

The Group has identified the Executive Chairman as the CODM. For the year ended December 31, 2019 and 2018, the CODM determined that the Group had one business segment, the development of RNAi-based medicines. This is in line with reporting to senior management. The information used internally by the CODM is the same as that disclosed in the financial statements.

An analysis of the group’s assets and revenues by location is shown below (in thousands):

	U.K.		Germany
Non current assets
As at December 31, 2019		£     557	£     8,055
As at December 31, 2018		£      651	£     8,736
Revenue analysis for the year ended December 31, 2019	U.K.		Germany
Research collaboration		£     145	£      26
Royalties	–		73
Total revenue from contract with customers		£      145	£      99

The revenue in 2019 was £244,000, all of which was billed and received in U.S. dollars. There was no revenue in 2018.

5.Operating loss

This is stated after charging (in thousands):

	Year ended December 31,
	2019	2018
Depreciation of property, plant and equipment	£     452	£    379
Amortization of intangibles	30	20
Share-based payments charge	584	681
Loss on disposal of property, plant and equipment	2	6
Operating lease payments on premises	374	416

6.Directors and staff costs

Staff costs, including Directors’ remuneration, during the years presented for the Group were as follows (in thousands):

	Year ended December 31,
	2019	2018
Wages and salaries	£    5,060	£    4,246
Social security costs	1,391	237
Charge in respect of share-based payments	584	681
Other pension costs	163	131
	£    7,198	£    5,295

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The monthly average number of employees, including Executive Directors, was 46 and 45 during the years ended December 31, 2019 and 2018, respectively. Of these, the monthly average number of employees working in research and development was 30 and 26, respectively, and in administration was 16 and 19, respectively.

The net expense recognized for Executive Directors’ share-based payments is presented below (in thousands):

	Year ended December 31,
	2019			2018
Ali Mortazavi	£         –			£      217
Iain Ross	146			–
David Ellam1	68			127
Dr. David Horn Solomon2		(93	)	93
Total	£      121			£      437

1 Share option charge of £96,000 net of a £28,000 reversal of share option charges relating to outstanding options brought forward at January 1, 2019 but forfeited during the year.

2 Comprises entirely the reversal of share options charges relating to outstanding options brought forward at January 1, 2019 but forfeited during the year.

The expense recognized for Non-Executive Directors’ restricted share units (“RSUs”) is presented below (in thousands):

	Year ended December 31,
	2019	2018
Dr. Stephen Parker	£      –	£       3
Alistair Gray	–	3
Dr. Andy Richards CBE	–	3
Dave Lemus	–	1
Total	£       –	£      10

The Directors of the Group plus the CFO and Head of R&D, who on May 19, 2020 was appointed as a Director of the Group, are considered by the Board to be the key management of the Group, for which the remuneration in the years ended December 31, 2019 and 2018 totalled £2.5 million and £1.8 million, respectively, comprising: £1.3 million and £1.1 million, respectively, for short-term employee benefits; £501,000 and £180,000, respectively, for termination benefits; £57,000 and £37,000, respectively, for employer pension contributions; and £636,000 and £447,000, respectively, for share-based payments (including RSUs).

7.Finance and other expense

Finance and other expenses comprises (in thousands):

	Year ended December 31,
	2019			2018
Lease liability interest expense		£     (33	)	£     –
Net foreign exchange losses		(130	)	–
Finance and other expenses		£     (163	)	£    –

Net foreign exchange losses include exchange gains (losses) on foreign currency denominated bank accounts of £(93,000) and £4,000, respectively.

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8.Finance and other income

Finance and other income comprises (in thousands):

	Year ended December 31,
	2019	2018
Bank interest receivable	£     27	£     39
Net foreign exchange gains	–	6
Finance and other income	£      27	£      45

9.Taxation

The deferred tax charge in each of 2019 and 2018 was zero. Reconciliation of current tax credit at standard rate of U.K. corporation tax to the current tax credit is as follows (in thousands):

	Year ended December 31,
	2019			2018
Loss before tax		£    (22,870	)		£     (20,526	)
Tax credit at the standard rate of U.K. corporation tax of 19%		4,345			3,900
Effect of overseas tax rate		5			10
Impact of unrelieved tax losses not recognized		(4,350	)		(3,937	)
Adjustment in respect of prior year		228			62
Research and development tax credit in respect of current year		3,060			2,080
		£     3,288			£       2,115

Estimated tax losses of £112.6 million and £102.6 million as of December 31, 2019 and 2018, respectively, were available for relief against future profits.

The deferred tax asset not recognized in these financial statements on the estimated losses and the treatment of the equity settled share-based payments, net of any other temporary timing differences, is detailed in note 22. The Group had accrued £3.1 million and £2.1 million as of December 31, 2019 and 2018, respectively, recognising a current tax asset in respect of research and development tax credits.

The corporation tax main rate during 2019 and 2018 was 19%.

10.Loss per ordinary equity share (basic and diluted)

The calculation of the loss per share is based on the losses for the financial year ended December 31, 2019 and 2018 after taxation of £19.6 million and £18.4 million, respectively, and on the weighted average number of ordinary shares in issue of 75,126,869 shares and 70,312,880 shares during the years ended December 31, 2019 and 2018, respectively.

The options outstanding at December 31, 2019 and 2018 are considered to be anti-dilutive as the Group is loss-making.

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11.Property, plant and equipment

(in thousands)	Equipment and furniture			Right-of-use asset		Total
Cost
At January 1, 2018		£       4,834		£        –			£     4,834
Additions		130		–			130
Disposals		(1,436	)	–			(1,436	)
Translation adjustment		34		–			34
At December 31, 2018		3,562		–			3,562
Change in accounting policy	–				160		160
At January 1, 2019		£     3,562			£       160		£    3,722
Additions		9		–			9
Disposals		(15	)	–			(15	)
Translation adjustment		(153	)	–			(153	)
At December 31, 2019		£     3,403			£       160		£      3,563
Accumulated depreciation
At January 1, 2018		£      3,664		£            –			£        3,664
Charge for the year		379		–			379
Eliminated on disposal		(1,430	)	–			(1,430	)
Translation adjustment		28		–			28
At December 31, 2018		£      2,641		£           –			£        2,641
Charge for the year		356			96		452
Eliminated on disposal		(13	)	–			(13	)
Translation adjustment		(128	)	–			(128	)
At December 31, 2019		£      2,856			£       96		£      2,952
Net book value
As at December 31, 2018		£          921		£           –			£         921
As at December 31, 2019		£          547			£         64		£        611

12.Goodwill

	Year ended December 31,
(in thousands)	2019			2018
Balance at start of year		£      8,127		£      8,029
Translation adjustment		(435	)	98
Balance at end of year		£       7,692		£       8,127

The carrying amount of goodwill is attributable to the acquisition of Silence Therapeutics GmbH (formerly Atugen AG) in 2005 and forms part of the Group’s RNA therapeutics cash generating unit (“CGU”), being the Group’s only CGU. In accordance with IAS 36 Impairment of Assets, the carrying value of goodwill has been assessed by comparing its carrying value to its recoverable amount.

The recoverable amount is based on fair value less cost of disposal.

The key assumptions used in the valuation models to determine the fair value less cost of disposal are as follows:

• Fair value has been determined as Silence’s market capitalization (share price times number of shares in issue) at December 31, 2019; and

• Disposal costs have been estimated to be minimal.

Management has assessed that the headroom in the valuation model used demonstrates that there is no reasonably possible change to a key assumption used in determining fair value less cost of disposal that would cause the CGU’s

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carrying amount to exceed its recoverable amount. Silence’s market capitalization at December 31, 2019 was approximately £274 million, with its share price not dropping significantly below its December 31, 2019 value at any point so far in 2020; therefore, a sensitivity analysis has not been presented. Notwithstanding the foregoing, market capitalization is predicated on share price which is subject to fluctuation, and any significant, unexpected movements could result in an impairment in goodwill.

13.Other intangible assets

(in thousands)	Licenses & software			Internally generated patents			Total
Cost
At January 1, 2018		£      2,354			£      884			£      3,238
Additions		58		–				58
Disposals		(2,311	)		(884	)		(3,195	)
Translation adjustment		3		–				3
At December 31, 2018		£         104		£          –				£         104
Additions	–			–			–
Disposals	–			–			–
Translation adjustment		(2	)	–				(2	)
At December 31, 2019		£         102		£          –				£        102
Accumulated amortization
At January 1, 2018		£       2,326			£       884			£      3,210
Charge for the year		20		–				20
Eliminated on disposal		(2,309	)		(884	)		(3,193	)
Translation adjustment		3		–				3
At December 31, 2018		£          40		£          –				£         40
Charge for the year		30		–				30
Eliminated on disposal	–			–			–
Translation adjustment		(2	)	–				(2	)
At December 31, 2019		£          68		£         –				£        68
Net book value
As at December 31, 2018		£          64		£            –				£          64
As at December 31, 2019		£          34		£            –				£         34

The intangible assets included above have finite useful lives estimated to be of 10–15 years from the date of acquisition, over which period they are amortized or written down if they are considered to be impaired. Internally generated patent costs are only recorded where they are expected to lead directly to near-term revenues. These costs are amortized on a straight line basis over 10–15 years, commencing from the date that the asset is available for use. The charge for amortization is included in the research and development costs in the income statement.

14.Group companies

A full list of subsidiaries and the address of the registered offices as of December 31, 2019 is set forth below.

All subsidiaries are wholly owned.

Name	Registered address
Silence Therapeutics GmbH	Robert-Rössle-Strasse 10, 13125 Berlin, Germany
Silence Therapeutics (London) Ltd	27 Eastcastle Street, London W1W 8DH, England
Innopeg Ltd	27 Eastcastle Street, London W1W 8DH, England

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15.Cash and cash equivalents

Cash at bank comprises balances held by the Group in current and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates to their fair value.  Balances as of December 31, 2019 and 2018 were as follows (in thousands):

	2019	2018
Cash and cash equivalents	£  13,515	£   21,494

16.Financial assets at amortized cost

Non-current financial assets at amortized cost primarily relate to deposits for properties held on operating leases.

Current financial assets at amortized cost include fixed interest six-month term deposits of £20.0 million at December 31, 2019 and £5.0 million as of December 31, 2018). The other current financial asset at amortized cost is an advance payment for the Group’s former CEO, which was subsequently deducted from his remuneration upon his departure.  Total financial assets as of December 31, 2019 and 2018 were as follows (in thousands):

	December 31,
	2019	2018
Current financial assets at amortized cost – term deposit	£   20,000	£   5,000
Current financial assets at amortized cost – other	1	43
Total current financial assets at amortized cost	20,001	5,043
Non-current financial assets at amortized cost	275	275
Total financial assets at amortized cost	£    20,276	£    5,318

17.Other current assets

	December 31,
(in thousands)	2019	2018
Prepayments	£     431	£    515
VAT receivable	454	366
Total other current assets	£      885	£    881

18.Trade and other receivables

(in thousands)	December 31,
	2019	2018
Trade receivables	£    4	£     –
Total trade and other receivables	£     4	£     –

The carrying amounts of trade and other receivables approximate their fair values. Trade and other current receivables were all payable within 90 days. Fair values have been calculated by discounting cash flows at prevailing interest rates.

No interest is charged on outstanding receivables. There were no material balances overdue but not impaired.

F-23

19.Trade and other payables

(in thousands)	December 31,
	2019	2018
Trade payables	£    1,790	£    1,147
Amount payable to subsidiary undertaking	–	–
Social security and other taxes	362	162
Current tax payable	–	27
Accruals and other payables	4,736	2,494
Total trade and other payables	£     6,888	£     3,830

Trade payables principally comprise amounts outstanding for trade purchases and continuing operating costs. Accruals and other payables primarily represent accrued expenses where an invoice has not been received yet. The carrying amounts of trade and other payables approximate their fair values.

20.Lease liability

(in thousands)	December 31,
	2019	2018
Lease liability	£     287	£     –
Total lease liability	£     287	£     –

Lease liability recognized on the face of the balance sheet comprises only a single lease for the Group’s London offices. The repayment of the principal portion of the lease liability for the years ended December 31, 2019  and 2018 was zero.

21.Contract liabilities

Contract liabilities comprise entirely deferred revenue in respect of the Mallinckrodt collaboration and were as follows (in thousands):

	December 31,
	2019	2018
Contract liabilities – current	£     2,478	£      –
Contract liabilities – non-current	15,515	–
Total contract liabilities	£     17,993	£      –

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22.Deferred tax

The following are the major deferred tax liabilities and assets in respect of trading losses recognized by the Group (in thousands):

	December 31,
	2019			2018
Deferred tax liability:
•        in respect of intangible assets		£       24		£      13
Less: offset of deferred tax asset below		(24	)	(13	)
Liability	–			–
Deferred tax asset:
•        in respect of available tax losses		£     20,238		£    24,411
•        in respect of share-based payments		2,024		167
Less: offset against deferred tax liability		(24	)	(13	)
		22,238		24,565
•        provision against asset		(22,238	)	(24,565	)
Asset	–			–

Due to the uncertainty of future profits, a deferred tax asset in respect of trading losses was not recognized at December 31, 2019 or 2018.

The following are the deferred tax assets in respect of capital losses recognized by the Group (in thousands):

	December 31,
	2019			2018
Deferred tax asset in respect of capital losses		£      2,874			£     1,333
Capital gains tax realized in the year	–				(31	)
		2,874			1,302
Provision against asset		(2,874	)		(1,302	)
Asset	–			–

Deferred tax assets are recognized where it is probable that future taxable profit will be available to utilise losses. Due to the uncertainty of future capital gains, a deferred tax asset in respect of capital losses was not recognized at December 31, 2019 or 2018.

23.Share capital

(in thousands)	December 31,
	2019		2018
Allotted, called up and fully paid ordinary shares, par value £0.05		£     3,919		£     3,554
Number of shares in issue		78,370,265		71,069,933

The Group has only one class of shares. All ordinary shares have equal voting rights and rank pari passu for the distribution of dividends.

F-25

Details of the shares issued by the Group during the current and previous year are as follows:

Number of shares in issue at January 1, 2018		69,991,624
Shares issued during the year	–
Options exercised at £0.25		1,000,000
Options exercised at £1.17		30,000
Options exercised at £1.15		48,309
Number of shares in issue at December 31, 2018		71,069,933
Shares issued during the year		5,062,167
Options exercised at £0.05		581,101
Options exercised at £0.25		728,078
Options exercised at £1.00		40,000
Options exercised at £1.06		23,986
Options exercised at £1.10		200,000
Options exercised at £1.12		5,000
Options exercised at £1.17		500,000
Options exercised at £1.25		160,000
Number of shares in issue at December 31, 2019		78,370,265

At December 31, 2019 and 2018, there were options outstanding over 4,302,617 and 4,718,302 unissued ordinary shares, respectively. Details of the options outstanding as of December 31, 2019 are as follows:

Exercisable from	Exercisable until		Number	Of Ordinary Shares	Exercise price
7/16/2016	7/15/2023	10,000			£	1.06
6/15/2017	6/16/2024	12,000			£	1.06
8/31/2017	1/31/2021	9,000			£	1.06
7/5/2018	7/6/2025	10,000			£	1.06
7/6/2018	1/6/2021	480,000			£	0.05
7/6/2018	6/7/2020	60,000			£	1.00
11/15/2018	11/16/2025	6,000			£	1.06
1/5/2019	1/5/2026	10,736			£	1.63
4/4/2019	4/4/2026	13,672			£	1.28
5/23/2019	5/23/2026	8,839			£	1.12
7/2/2019	7/2/2026	16,968			£	1.04
9/1/2019	9/1/2026	10,000			£	1.06
1/6/2020	10/6/2029	8,333			£	0.05
1/6/2020	10/6/2029	64,584			£	0.60
1/6/2020	10/6/2029	115,959			£	1.90
4/6/2020	10/6/2029	8,333			£	0.05
4/6/2020	10/6/2029	64,584			£	0.60
4/6/2020	10/6/2029	115,959			£	1.90
4/18/2020	4/18/2027	56,470			£	0.85
7/3/2020	7/3/2027	27,500			£	0.94
7/6/2020	10/6/2029	8,334			£	0.05
7/6/2020	10/6/2029	64,584			£	0.60
7/6/2020	10/6/2029	115,959			£	1.90
9/18/2020	9/18/2027	24,000			£	1.47
10/6/2020	10/6/2029	8,333			£	0.05
10/6/2020	10/6/2029	64,583			£	0.60
10/6/2020	10/6/2029	115,959			£	1.90

F-26

Exercisable from	Exercisable until		Number	Of Ordinary Shares	Exercise price
11/13/2020	11/13/2027	50,000			£	2.05
12/1/2020	12/1/2027	70,000			£	1.99
1/6/2021	10/6/2029	8,333			£	0.05
1/6/2021	10/6/2029	64,584			£	0.60
1/6/2021	10/6/2029	115,959			£	1.90
2/1/2021	2/1/2028	148,458			£	0.05
4/6/2021	10/6/2029	8,334			£	0.05
4/6/2021	10/6/2029	64,584			£	0.60
4/6/2021	10/6/2029	115,959			£	1.90
7/6/2021	10/6/2029	8,333			£	0.05
7/6/2021	10/6/2029	64,584			£	0.60
7/6/2021	10/6/2029	115,959			£	1.90
7/22/2021	7/22/2028	19,000			£	0.05
8/12/2021	8/12/2028	8,200			£	0.05
9/2/2021	9/2/2028	19,000			£	0.05
9/30/2021	9/30/2028	22,068			£	0.05
10/6/2021	10/6/2029	8,333			£	0.05
10/6/2021	10/6/2029	64,583			£	0.60
10/6/2021	10/6/2029	115,959			£	1.90
10/14/2021	10/14/2028	14,800			£	0.05
10/31/2021	10/31/2028	23,625			£	0.05
1/2/2022	1/2/2029	9,075			£	0.05
1/6/2022	10/6/2029	8,334			£	0.05
1/6/2022	10/6/2029	64,584			£	0.60
1/6/2022	10/6/2029	115,959			£	1.90
1/13/2022	1/13/2029	10,206			£	0.05
4/6/2022	10/6/2029	8,333			£	0.05
4/6/2022	10/6/2029	64,584			£	0.60
4/6/2022	10/6/2029	115,959			£	1.90
4/16/2022	4/16/2029	100,000			£	0.05
6/2/2022	6/2/2029	200,000			£	0.05
7/6/2022	10/6/2029	8,333			£	0.05
7/6/2022	10/6/2029	64,584			£	0.60
7/6/2022	10/6/2029	115,959			£	1.90
9/3/2022	9/3/2029	30,000			£	0.05
9/30/2022	9/30/2029	150,000			£	0.05
10/6/2022	10/6/2029	8,334			£	0.05
10/6/2022	10/6/2029	64,588			£	0.60
10/6/2022	10/6/2029	75,000			£	1.83
10/6/2022	10/6/2029	385,961			£	1.90
11/3/2022	11/3/2029	23,000			£	0.05
1/6/2023	10/6/2029	19,240			£	0.60
1/6/2023	10/6/2029	19,240			£	1.90
Total options outstanding		4,302,617

The market price of Silence’s shares was £3.50 and £0.52 as of December 31, 2019 and 2018, respectively. The minimum and maximum prices were £0.41 and £6.10, respectively, in 2019 and £0.51 and £2.06, respectively, in 2018.

F-27

24.Equity-settled share-based payments

The Group has issued share options under the 2018 Long Term Incentive Plan (LTIP), 2018 Non-Employee Long Term Incentive Plan (Non-Employee LTIP), and individual share option contracts, open to all employees of the Group, as well as EMI shares (none of which remain outstanding at December 31, 2019). Under the LTIP, the Non-Employee LTIP, and the individual contracts and schemes available, the options vest at dates set by the Group at the time the option is granted. The options usually lapse after one year following the employee leaving the Group.  Option activity during 2019 and 2018 was as follows:

	2019				2018
	Number of Shares		Weighted Average Exercise price		Number Of Shares		Weighted Average Exercise price
Options
Outstanding at the beginning of the year		4,718,302		£   0.70		6,101,764	£    0.83
Granted during the year		4,722,281		£   1.29		1,036,523	£    0.05
Lapsed or forfeited during the year		(2,899,801)		£   1.05		(1,341,676)	£    1.10
Exercised during the year		(2,238,165)		£   0.58		(1,078,309)	£    0.32
Outstanding at the year-end		4,302,617		£   1.02		4,718,302	£    0.70
Exercisable at the year-end		647,215		£   0.32		2,689,300	£    0.82

The options outstanding at the year-end had a weighted average remaining contractual life of 7.2 years and 5.5 years at December 31, 2019 and 2018, respectively. The weighted average share price at the time of exercise during the years was £1.26 during 2019 and £1.41 during 2018.

The Group granted options to purchase 4,722,281 shares and 1,036,523 shares during the years ended December 31, 2019 and 2018, respectively. The fair value of options granted were calculated using a Binomial or Monte Carlo model and inputs into the model were as follows:

Inputs and assumptions for options granted in the year	2019	2018
Weighted average fair value at grant	£    1.19	£   1.47
Weighted average share price	£    1.76	£   1.72
Weighted average hurdle price	£    2.19	£   1.87
Expected volatility	50%-72%	48%-51%
Risk free rate	0.41%-1.32%	1.37%-1.62%
Expected dividend yield	—	—

The Group recognized total charges of £584,000 and £681,000 during 2019 and 2018, respectively, related to equity settled share-based payment transactions during the year.

F-28

25.Capital reserves

(in thousands)	Share Premium account		Merger reserve		Share-based Payment reserve			Capital redemption reserve		Total
At January 1, 2018		£  132,955		£   22,248		£   2,818			£   5,194		£   163,215
On options in issue during the year		287	–			681		–			968
On vested options lapsed during the year	–		–			(297	)	–			(297	)
On options exercised during the year	–		–			(765	)	–			(765	)
Movement in the year		287	–			(381	)	–			(94	)
At December 31, 2018		£  133,242		£  22,248		£   2,437			£   5,194		£  163,121
Shares issued		3,767	–		–			–			3,767
On options in issue during the year		1,141	–			584		–			1,725
On vested options lapsed during the year	–		–		–			–		–
Options exercised in the year	–		–			(1,370	)	–			(1,370	)
Movement in the year		4,908	–			(786	)	–			4,122
At December 31, 2019		£  138,150		£  22,248		£   1,651			£    5,194		£   167,243

The share premium account reflects the premium to nominal value paid on issuing shares less costs related to the issue. The merger reserve was created on issuance of shares relating to the acquisition of Silence Therapeutics GmbH (formerly Atugen AG).

The share-based payments reserve reflects the cost to issue share-based compensation, primarily employee share options.

26.Capital commitments and contingent liabilities

There were no capital commitments at December 31, 2019 or 2018.

A contingent liability exists in respect of VAT amounts included in invoices payable to one of the Group’s suppliers which the Group does not consider to be payable. There is sufficient uncertainty regarding the VAT treatment of these invoices such that, whilst not considered probable, there is a possibility the amounts will need to be paid. The total value of the VAT on these invoices was £303,000 as of December 31, 2019.

27.Commitments under operating leases

At each of December 31, 2019 and 2018, the Group had a gross commitment on its office rental and service charge at Robert-Rössle-Strasse 10, 13125 Berlin equal to £0.1 million in the next year. No amounts are payable after more than one year.

In addition, the Group enters into contracts in the normal course of business with contract research organizations to assist in the performance of research and development activities and other services and products for operating purposes. These contracts generally provide for termination on notice, and therefore are cancellable contracts and not reflected in the disclosure above.

28.Financial instruments and risk management

The Group’s financial instruments comprise primarily cash and other financial assets and various items such as receivables and trade payables which arise directly from its operations. The main purpose of these financial instruments is to provide working capital for the Group’s operations. The Group assesses counterparty risk on a regular basis. Board approval is required for adoption of any new financial instrument or counterparty. The primary focus of the treasury function is preservation of capital.

The carrying amount of these financial instruments approximates to their fair value.

F-29

Financial assets by category

The categories of financial assets included in the balance sheet and the heading in which they are included are as follows:

	December 31,
(in thousands)	2019	2018
Trade and other receivables	£    4	£    –
Cash and cash equivalents	13,515	21,494
Loans to subsidiary undertakings – non-current	–	–
Total	£    13,519	£   21,494

All amounts are current, except for loans to subsidiaries which are non-current in their entirety.

	December 31,
(in thousands)	2019	2018
Non-current	£    275	£    275
Term deposit	20,000	5,000
Current – other	1	43
Total	£   20,276	£    5,318

Financial liabilities by category

(in thousands)	December 31,
	2019	2018
Trade and other payables	£   6,526	£    3,641

All amounts are short-term.

(in thousands)	December 31,
	2019	2018
Contract liabilities	£    17,993	£     –

Credit quality of financial assets (loans and receivables)

The maximum exposure to credit risk at the reporting date by class of financial asset was (in thousands):

	December 31,
	2019	2018
Loans and receivables	£     –	£    –
Financial assets at amortized cost – non-current	275	275
Financial assets at amortized cost – current	1	43
Total	£   276	£    318

Cash and cash equivalents and term deposits are not considered to be exposed to credit risk due to the fact they are with banks with top credit ratings. The Group considers the possibility of significant loss in the event of non-performance by a financial counterparty to be unlikely.

Capital management

The Group considers its capital to be equal to the sum of its total equity. The Group monitors its capital using a number of measures including cash flow projections, working capital ratios, the cost to achieve preclinical and clinical milestones and potential revenue from existing collaborations and ongoing licensing activities. The Group’s objective when managing its capital is to ensure it obtains sufficient funding for continuing as a going concern. The Group funds

F-30

its capital requirements through the issue of new shares to investors, milestone and research support payments received from existing licensing partners and potential new licensees.

Interest rate risk

The nature of the Group’s activities and the basis of funding are such that the Group has significant liquid resources. The Group uses these resources to meet the cost of future research and development activities. Consequently, it seeks to minimize risk in the holding of its bank deposits while maintaining a reasonable rate of interest. The Group is not financially dependent on the income earned on these resources and therefore the risk of interest rate fluctuations is not significant to the business. Nonetheless, the Directors take steps to secure rates of interest which generate a return for the Group.

Credit and liquidity risk

Credit risk is managed on a Group basis. Funds are deposited with financial institutions with a credit rating equivalent to, or above, the main U.K. clearing banks. The Group’s liquid resources are invested having regard to the timing of payments to be made in the ordinary course of the Group’s activities. All financial liabilities are payable in the short term (between zero and three months) and the Group maintains adequate bank balances in either instant access or short-term deposits to meet those liabilities as they fall due. The Group considers the credit risk relating to trade receivables to be zero as of December 31, 2019 and 2018.

Currency risk

The Group operates in a global market with income possibly arising in a number of different currencies, principally in U.S. dollars, sterling or euros. The majority of the operating costs are incurred in sterling with the rest predominantly in euros. Additionally, to a lesser extent, a number of operating costs are incurred in U.S. dollars. The Group does not hedge potential future income since the existence, quantum and timing of such income cannot be accurately predicted.

Financial assets and liabilities denominated in euros and translated into sterling at the closing rate were (in thousands):

	December 31,
	2019	2018
Financial assets	£    2,032	£    1,481
Financial liabilities	(2,672)	(1,043)
Net financial (liabilities)/assets	£      (640)	£      438

Financial assets and liabilities denominated in U.S. dollars and translated into sterling at the closing rate were (in thousands):

	December 31,
	2019	2018
Financial assets	£  1,691	£    711
Financial liabilities	(94)	(86)
Net financial assets	£   1,597	£    625

The following table illustrates the sensitivity of the net result for the year and the reported financial assets of the Group in regard to the exchange rate for sterling against the euro.

F-31

During the year sterling rose by 6% against the euro. The table shows the impact of an additional weakening or strengthening of sterling against the euro by 20%.

(in thousands)			If sterling		If sterling
	As reported		rose 20%		fell 20%
2019
Group result for the year	£    (19,582	)	£    (18,465	)	£     (21,257	)
Euro denominated net financial liabilities	(640	)	(533	)	(800	)
Total equity at December 31, 2019	£     20,909		£      18,879		£     23,995

(in thousands)			If sterling		If sterling
	As reported		rose 20%		fell 20%
2018
Group result for the year	£    (18,411	)	£     (17,259	)	£     (20,140	)
Euro denominated net financial assets	438		364		546
Total equity at December 31, 2018	£     35,055		£      32,667		£      38,637

The following table illustrates the sensitivity of the net result for the year and the reported financial assets of the Group in regards to the exchange rate for sterling against the U.S. dollar.

During the year sterling rose by 4% against the U.S. dollar. The table shows the impact of an additional weakening or strengthening of sterling against the U.S. dollar by 20%.

(in thousands)				If sterling			If sterling
	As reported			rose 20%			fell 20%
2019
Group result for the year		£     (19,582	)		£     (19,337	)		£     (19,950	)
U.S. dollar denominated net financial assets		1,597			1,330			1,996
Total equity at December 31, 2019		£      20,909			£       20,643			£    21,308

(in thousands)				If sterling			If sterling
	As reported			rose 20%			fell 20%
2018
Group result for the year		£     (18,411	)		£     (18,203	)		£     (18,723	)
U.S. dollar denominated net financial assets		625			522			782
Total equity at December 31, 2018		£       35,055			£       34,951			£      35,211

29. Post balance sheet events

On January 7, 2020, the Group announced a Technology Evaluation Agreement with Takeda to explore the potential of utilising the Group’s platform to generate siRNA molecules against a novel, undisclosed target controlled by Takeda.

During January 2020, the Group established a U.S. subsidiary, Silence Therapeutics Inc., to support the Group’s increased focus on the United States.

On March 25, 2020, the Group announced a strategic collaboration with AstraZeneca to discover, develop and commercialize siRNA therapeutics for the treatment of cardiovascular, renal, metabolic and respiratory diseases. AstraZeneca made an equity investment in Silence subscribing for 4,276,580 ordinary shares for an aggregate purchase price of $20 million, with a further upfront amount of $60 million payable under the collaboration agreement, of which $20 million was received in May 2020 with the remaining unconditional amount of $40 million expected in the first half of 2021.

F-32

During March 2020, the coronavirus (COVID-19) pandemic became increasingly prevalent in Europe and the United States where the Group’s principal operations are conducted. Significant restrictions have now been imposed by the governments of those countries where the Group has operations, as well as the countries of external parties with which the Group conducts its business. In compliance with these restrictions, the Group and its employees have adapted to new working arrangements to ensure business continuity as far as is reasonably practicable in the short to medium term. This has so far proven to be effective, with the Group’s management maintaining a strong line of communication with all employees during this period.

The main risk posed to the Group by the pandemic is the potential slowing of research and development activities including possible knock-on delays in clinical trial data and sustained fixed costs during periods of relative inactivity. Whilst this would result in a lengthening of the Group’s cash runway in the medium term, in the longer term these factors could limit the Group’s ability to meet its corporate objectives. This risk is mitigated by the receipt, in March and May 2020, of investment and unconditional upfront payments in respect of the AstraZeneca collaboration, significantly increasing the Group’s baseline cash runway.

F-33

Through and including           , 2020 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus.

53,732,291 Ordinary Shares

Represented by 17,910,764 American Depositary Shares

SILENCE THERAPEUTICS PLC

               , 2020

PART II

Information Not Required in Prospectus

Item 6.  Indemnification of Directors and Officers.

Members of the registrant’s board of directors and its officers have the benefit of the following indemnification provisions in the registrant’s articles of association:

Current and former members of the registrant’s board of directors or officers shall be:

• indemnified against all costs, charges, expenses, losses or liabilities which he or she may sustain or incur in or about his or her actual or purported execution or discharge of his or her duties in relation to the registrant, including any liability incurred in disputing, defending, investigating or providing evidence in connection with any actual or threatened or alleged claims, demands, investigations or proceedings, whether civil, criminal or regulatory or in connection with any application under section 661(3) or (4) or section 1157 of the Companies Act; and

• provided with funds to meet, or do anything to enable a director or other officer of the Company to avoid incurring, expenditure of the nature described in sections 205(1) or 206 of the Companies Act.  

In the case of current or former members of the registrant’s board of directors, in compliance with the Companies Act, there shall be no entitlement to indemnification or funding as referred to above for (i) any liability incurred to the registrant or any associated company, (ii) the payment of a fine imposed in any criminal proceeding or a penalty imposed by a regulatory authority for non-compliance with any requirement of a regulatory nature, (iii) the defense of any criminal proceeding if the member of the registrant’s board of directors is convicted, (iv) the defense of any civil proceeding brought by the registrant or an associated company in which judgment is given against the director, and (v) any application for relief under the statutes of the United Kingdom and any other statutes that concern and affect the registrant as a company in which the court refuses to grant relief to the director.

In addition, members of the registrant’s board of directors and its officers who have received payment from the registrant under these indemnification provisions must repay the amount they received in accordance with the Companies Act or in any other circumstances that the registrant may prescribe or where the registrant has reserved the right to require repayment.

Item 7.  Recent Sales of Unregistered Securities.

Set forth below is information regarding share capital issued by us since January 1, 2017. None of the below described transactions involved any underwriters, underwriting discounts or commissions, or any public offering.  

In March 2020, we issued 4,276,580 ordinary shares to AstraZeneca UK Limited, an affiliate of AstraZeneca plc, for an aggregate subscription price of $20.0 million.

In July 2019, we issued 5,062,167 ordinary shares to Cache Holdings Limited, a wholly owned subsidiary of Mallinckrodt plc, for an aggregate subscription price of $5.0 million.

Since January 1, 2017, we have issued an aggregate of 8,416,170 options to purchase ordinary shares under our equity incentive plans. Of these options:

• options to purchase 2,951,097 ordinary shares have been canceled without being exercised;

• options to purchase 680,515 ordinary shares have been exercised at a weighted average exercise price of £0.24 per share; and

• options to purchase a total of 4,784,558 ordinary shares are currently outstanding, at a weighted average exercise price of £1.40 per share.

II-1

The offers, sales and issuances of the securities described in the preceding paragraphs were exempt from registration either (1) under Section 4(a)(2) of the Securities Act in that the transactions did not involve any public offering within the meaning of Section 4(a)(2), (2) under Rule 701 promulgated under the Securities Act in that the transactions were under compensatory benefit plans and contracts relating to compensation or (3) under Regulation S promulgated under the Securities Act in that offers, sales and issuances were not made to persons in the United States and no directed selling efforts were made in the United States.

Item 8.  Exhibits and Financial Statement Schedules

Exhibits

The exhibits to this registration statement are listed in the exhibit index attached hereto and are incorporated by reference herein.

Financial Statement Schedules

None. All schedules have been omitted because the information required to be set forth therein is not applicable or has been included in the consolidated financial statements and notes thereto.

Item 9.  Undertakings.

The undersigned Registrant hereby undertakes:

(1)  To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)  To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii)  To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;

(iii)  To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2)  That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)  To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)  To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements.

(5)  That, for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of the registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement as of the time it was declared effective.

II-2

(6)  That, for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-3

EXHIBIT INDEX

Exhibit Number	Description of Exhibit
3.1	Amended and Restated Articles of Association of Silence Therapeutics plc
4.1	Form of Deposit Agreement
4.2	Form of American Depositary Receipt (included in exhibit 4.1)
5.1	Opinion of Cooley (UK) LLP
10.1	Silence Therapeutics plc 2018 Long-Term Incentive Plan
10.2	Silence Therapeutics plc 2018 Non-Employee Long-Term Incentive Plan
10.3	Employee U.S. Sub-Plan under the 2018 Employee Long-Term Incentive Plan
10.4	Non-Employee U.S. Sub-Plan under the 2018 Non-Employee Long-Term Incentive Plan
10.5†+	License and Collaboration Agreement, by and between the registrant and Mallinckrodt Pharma IP Trading DAC, dated July 18, 2019
10.6†+	Research Collaboration, Option and License Agreement, by and between the registrant and AstraZeneca AB, dated March 24, 2020
10.7	Form of Deed of Indemnity between the registrant and its directors
10.8	Form of Deed of Indemnity between the registrant and its executive officers
21.1	Subsidiaries of the registrant
23.1	Consent of PricewaterhouseCoopers LLP, the registrant’s independent registered public accounting firm
23.2	Consent of Cooley (UK) LLP (included in Exhibit 5.1)
24.1	Power of Attorney (included on signature page to this registration statement)

† Portions of this exhibit (indicated by asterisks) have been omitted because the registrant has determined they are not material and would likely cause competitive harm to the registrant if publicly disclosed.

+ Certain schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule upon request by the SEC.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of London, United Kingdom, on August 20, 2020.

SILENCE THERAPEUTICS PLC
By:	/s/ Iain Ross
Name:	Iain Ross
Title:	Executive Chairman

KNOW ALL BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Iain Ross and Rob Quinn, Ph.D., and each of them, his true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for and in his name, place and stead, in any and all capacities, to (1) act on, sign and file with the Securities and Exchange Commission any and all amendments (including post-effective amendments) to this Registration Statement together with all schedules and exhibits thereto and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, together with all schedules and exhibits thereto, (2) act on, sign and file such certificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith, (3) act on and file any supplement to any prospectus included in this Registration Statement or any such amendment or any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and (4) take any and all actions which may be necessary or appropriate to be done, as fully for all intents and purposes as he might or could do in person, hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of his substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Iain Ross Iain Ross	Executive Chairman (Principal Executive Officer)	August 20, 2020
/s/ Rob Quinn, Ph.D. Rob Quinn, Ph.D.	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	August 20, 2020
/s/ Giles Campion, M D. Giles Campion, M D.	Head of R&D, Chief Medical Officer and Executive Director	August 20, 2020
/s/ James Ede-Golightly James Ede-Golightly	Director	August 20, 2020
/s/ Alistair Gray Alistair Gray	Director	August 20, 2020
/s/ Dave Lemus Dave Lemus	Director	August 20, 2020
/s/ Steven Romano, M.D. Steven Romano, M.D.	Director	August 20, 2020

SIGNATURE OF AUTHORIZED U.S. REPRESENTATIVE OF THE REGISTRANT

Pursuant to the Securities Act of 1933, the undersigned, the duly authorized representative in the UnitedStates of the registrant has signed this registration statement or amendment thereto on August 20,2020.

SILENCE THERAPEUTICS INC.
By:	/s/ David Lemus
Name:	David Lemus
Title:	Chairman
Authorized Representative in the United States

EX-3

EXHIBIT 3.1

Company No. 2992058

The Companies Act 2006

Articles of Association of

Silence Therapeutics plc

Adopted by the Company on 23 July 2020

Public Company Limited by Shares (Incorporated on 18 November 1994)

Cooley (UK) LLP, Dashwood, 69 Old Broad Street, London EC2M 1QS, UK
T: +44 (0) 20 7583 4055  F: +44 (0) 20 7785 9355 www.cooley.com

CONTENTS

ARTICLE		PAGE
1.	Exclusion of Model Articles and Table A	1
2.	Definitions andinterpretation	1
3.	Rights attaching toshares and limitation of liability	4
4.	Redemption ofshares	4
5.	Purchase ofshares	4
6.	Financialassistance	4
7.	Allotment at adiscount	4
8.	Payment of commission andbrokerage	5
9.	Unissuedshares	5
10.	Recognition oftrusts	5
11.	[PROVISION DELETED]	5
12.	Uncertificatedshares	5
13.	Share certificates and right to sharecertificates	6
14.	Share certificate of jointholders	7
15.	Replacement of sharecertificates	7
16.	Payment for sharecertificates	7
17.	Variation of classrights	7
18.	Separate generalmeetings	7
19.	Issues of furthershares	8
20.	Calls	8
21.	Timing and payment ofcalls	8
22.	Liability of jointholders	8
23.	Interest due on non-payment ofcalls	8
24.	Deemedcalls	8
25.	Power to differentiate betweenholders	9
26.	Payment of calls inadvance	9
27.	Notice if call or instalment notpaid	9
28.	Form ofnotice	9
29.	Forfeiture fornon-compliance	9
30.	Notice afterforfeiture	9
31.	Disposal of forfeitedshares	10
32.	Annulment offorfeiture	10
33.	Continuingliability	10
34.	Lien on partly-paidshares	10
35.	Enforcement of lien bysale	11
36.	Application of saleproceeds	11
37.	Statutorydeclaration	11
38.	Transfers of uncertificatedshares	11
39.	Form oftransfer	11
40.	Right to declineregistration	12
41.	Further rights to declineregistration	12
42.	Notice of refusal toregister	12
43.	Retention of instruments oftransfer	12
44.	No fee forregistration	12
45.	Destruction ofdocuments	13

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46.	Transmission ondeath	14
47.	Person entitled bytransmission	14
48.	Restrictions onelection	14
49.	Rights of persons entitled bytransmission	14
50.	Power to sellshares	15
51.	Power to sell furthershares	15
52.	Authority to effectsale	15
53.	Notrust	16
54.	Authority to cease sendingcheques	16
55.	Consolidation and sub-division	16
56.	Fractions ofshares and rounding up to exact multiples	16
57.	Reduction of sharecapital	17
58.	Annual generalmeeting	17
59.	[PROVISION DELETED]	17
60.	Convening and format of generalmeetings	17
61.	Length and form ofnotice	20
62.	Shortnotice	20
63.	Omission or non-receipt of notice of resolution or meeting orproxy	20
64.	Postponement of generalmeetings	21
65.	[PROVISION DELETED]	21
66.	Quorum and procedure if quorum notpresent	21
67.	Security and orderlyconduct	21
68.	Chairman of generalmeetings	22
69.	Adjournments	22
70.	Directors' right to attend andspeak	23
71.	Amendments toresolutions	23
72.	Method of voting and demand for apoll	23
73.	Timing and procedure for apoll	24
74.	Votes of Members and of jointholders	24
75.	Voting on behalf of incapableMember	25
76.	Suspension of rights for non-payment of calls and non-disclosure ofinterests	25
77.	Objections to and errors invoting	28
78.	Voting on apoll	28
79.	Execution ofproxies	28
80.	Appointment ofproxies	28
81.	Delivery ofproxies	29
82.	Validity ofproxies	30
83.	Authority of proxies to call for apoll	30
84.	Cancellation of proxy'sauthority	30
85.	Corporaterepresentatives	31
86.	Powers of corporaterepresentatives	31
87.	Number ofDirectors	31
88.	Directors' shareholdingqualification	31
89.	Age ofDirectors	32
90.	Other interests ofDirectors	32
91.	Directors'fees	32
92.	Directorsexpenses	32
93.	Additionalremuneration	32

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94.	AlternateDirectors	33
95.	Directors' borrowing powers and restrictions onborrowing	34
96.	Powers of Company vested in theDirectors	37
97.	Pensions, insurance and gratuities for Directors andothers	37
98.	Localboards	38
99.	Attorneys	38
100.	Officialseal	38
101.	Overseas branchregister	38
102.	Directors' permitted interests and entitlement tovote	39
103.	Exercise of Company's votingpowers	42
104.	Signing of chequesetc.	42
105.	Minutes	43
106.	Vacation of a Director'soffice	43
107.	Regular submission of Directors forre-election	44
108.	Appointment of Directors by separateresolution	44
109.	Persons eligible forappointment	44
110.	Casual vacancies and additional Directors - powers ofCompany	44
111.	Casual vacancies and additional Directors - powers ofDirectors	44
112.	Power of removal by ordinaryresolution	44
113.	Appointment of replacementDirector	45
114.	Board meetings andparticipation	45
115.	Quorum at boardmeetings	45
116.	Voting at boardmeetings	45
117.	Notice of boardmeetings	45
118.	Directors belowminimum	46
119.	Appointment of chairman and deputy chairman ofmeetings	46
120.	Delegation of Directors' powers tocommittees	46
121.	Validity of Directors'acts	46
122.	Written resolution ofDirectors	47
123.	Appointment of executiveDirectors	47
124.	Remuneration of executiveDirectors	47
125.	Powers of executiveDirectors	47
126.	Appointment and removal ofSecretary	48
127.	Use ofSeal	48
128.	Establishment ofreserve	48
129.	Declarations of dividends byCompany	48
130.	Payment of interim and fixed dividends byDirectors	48
131.	Restrictions ondividends	49
132.	Calculation and currency ofdividends	49
133.	Deductions of amounts due on shares and waiver ofdividends	49
134.	Dividends other than incash	49
135.	Paymentprocedure	50
136.	Interest	51
137.	Forfeiture ofdividends	51
138.	Power tocapitalise	51
139.	Authorityrequired	52
140.	Provision for fractionsetc.	52
141.	Accounting records to bekept	52

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142.	Location of accountingrecords	52
143.	Inspection of accountingrecords	52
144.	Power to extend inspection toMembers	53
145.	Limit on Members' right toinspect	53
146.	Appointment ofauditors	53
147.	Service of notice and curtailment of postalservice	53
148.	Members residentabroad	54
149.	Notice deemedserved	54
150.	Notice to jointholders	55
151.	Service of notice on persons entitled bytransmission	56
152.	ElectronicCommunication	56
153.	Provision foremployees	56
154.	Distribution ofassets	57
155.	Indemnity ofofficers	57
156.	Funding of expenditure in defendingproceedings	57
157.	Exclusive jurisdiction	58
158.	Disputes	58

iv

PRELIMINARY

1. Exclusion of Model Articles and Table A

The regulations contained in the Model Articles of Association applicable to the Company under or pursuant to the 2006 Act, or in Table A in the schedule to The Companies (Tables A to F) Regulations 1985 and in any Table A applicable to the Company under any former enactment relating to companies shall not apply to the Company except in so far as they are repeated or contained in these Articles.

2. Definitions andinterpretation

2.1 In these Articles, unless the context otherwiserequires:

the “2006 Act" means the Companies Act 2006 including any modification or re-enactment thereof for the time being in force;

"address" shall, in any case where electronic form is permitted by or pursuant to these Articles or the 2006 Act, include a number or address used for the purpose of sending or receiving notices, documents or information by electronic means but, in any other case, shall not include any number or address used for such purpose;

“AIM” means AIM, a market operated by the London Stock Exchange;

"Articles" means these articles of association as altered from time to time;

"Auditors" means the auditors for the time being of the Company;

“certificated share” means a share in the capital of the Company which is not an uncertificated share and references to a share being held in certificated form shall be construed accordingly;

"clear days' notice" means that the notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given or on which it is to takeeffect;

"Company" means Silence Therapeutics plc;

“Depositary” means the holder of a share for the time being held on behalf of another person on the terms of a depositary agreement or a depositary receipt or a similar document;

"Directors" means the directors for the time being of the Company, or, as the case may be, the board of directors for the time being of the Company or the persons present at a duly convened meeting of the board of directors or any duly authorised committee thereof at which a quorum is present;

"dividend" includes bonus;

"electronic form" and "electronic means" shall, where the context so admits, have the meanings given to them in Section 1168 of the 2006Act;

“FCA” means the Financial Conduct Authority;

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231000833 v1

"London Stock Exchange" means London Stock Exchange plc;

"Member" means a member of the Company;

"month" means calendar month;

"Office" means the registered office for the time being of the Company;

"paid up" includes credited as paid up;

"properly authenticated dematerialised instruction" shall have the same meaning as in the Regulations;

"Register" means the register of members of the Company required to be kept by the Statutes;

"Regulations" means the Uncertificated Securities Regulations 2001 including any modification or re-enactment thereof for the time being in force;

"relevant system" shall have the same meaning as in the Regulations;

"Seal" means the common seal of the Company or any official or securities seal that the Company may have or be permitted to have under the Statutes;

"Secretary" includes a joint, deputy or assistant secretary, and any person appointed by the Directors to perform the duties of the secretary of the Company;

"Statutes" means the Companies Acts as defined by section 2 of the 2006 Act, and includes the Regulations, and every other statute (including orders, regulations or other subordinate legislation made under them) for the time being in force concerning companies and affecting the Company;

"treasury shares" means shares held by the Company under section 724(3)(a) of the 2006 Act;

“uncertificated share” means a share in the capital of the Company of a class title to which is permitted to be transferred by means of a relevant system and is recorded on the Register as being held in uncertificated form and references to a share being held in uncertificated form shall be construed accordingly;

"United Kingdom" means Great Britain and Northern Ireland; and

"in writing" and "written" includes printing, lithography, typewriting, photography and other modes of representing or reproducing words in visible form, whether sent or supplied in electronic form, made available on a website or otherwise.

2.2 Words importing the singular number only shall include the plural, and viceversa.

2.3 Words importing the masculine gender only shall include all other genders and references to “he”, “him” or “his” shall be construed as including references to any single person or entity as the context shall require.

2

2.4 Words importing individuals and words importing persons shall include bodies corporate and unincorporatedassociations.

2.5 Any reference herein to the provisions of any statute or of any subordinate legislation shall include any amendment or re-enactment (with or without amendment) thereof for the time being inforce.

2.6 Subject as aforesaid, and unless the context otherwise requires, words and expressions defined in the Statutes, or the Regulations, shall bear the same meanings in these Articles.

2.7 A special resolution shall be effective for any purpose for which an ordinary resolution is expressed to be required under any provision of theseArticles.

2.8 Headings to these Articles are for convenience only and shall not affectconstruction.

2.9 Nothing in these Articles shall preclude the holding and conducting of a meeting in such a way that persons who are not present together at the same place may by electronic means attend and speak and vote at it.

2.10 Any person shall be considered able to attend and participate in the business of a general meeting if that person can exercise his, her, their or its rights to (including, in the case of a corporation, through a duly appointed representative), as relevant, hear, speak, vote and be represented by a proxy at the meeting and “participate”, “participation” and “participating” shall be construed accordingly.

2.11 A person is able to:

(a) exercise the right to speak at a general meeting for the purpose of these Articles when the chairman of the meeting is satisfied that arrangements are in place, including through any electronic facility, so as to enable that person to communicate to all those attending the meeting, during the meeting, any information or opinions that that person has on the business of the meeting; and

(b) hear persons attending a general meeting when the chairman of the meeting is satisfied that arrangements are in place, including through any electronic facility, so as to enable all those attending the meeting, during the meeting, to communicate to that person any information or opinions that such attendees have on the business of the meeting.

2.12 A person is able to exercise the right to vote at a general meeting when:

(a) that person is able to vote, during the meeting (or, in the case of a poll, within the time period specified by the chairman of the meeting) on resolutions put to the vote at the meeting; and

(b) that person's vote can be taken into account in determining whether or not such resolutions are passed at the same time as the votes of all the other persons attending the meeting.

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2.13 References to a “meeting” mean a meeting convened and held in any manner permitted by these Articles, including without limitation a general meeting at which some (but not all) of those persons entitled to be present attend and participate by electronic facility, and such persons shall be deemed to be present at that meeting for all purposes of the Statutes and these Articles, and “present”, “attend”, “participate”, “being present”, “attending”, “participating”, “presence”, “attendance” and “participation” shall be construed accordingly.

2.14 References to “electronic facility” mean a device, system, procedure, method or facility providing an electronic means of attendance at or participation in (or both attendance at and participation in) a general meeting as determined by the Directors pursuant to Article 60.4.

SHARES

3. Rights attaching toshares and limitation of liability

3.1 Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, any share in the Company may be issued with such rights (including preferred, deferred or other special rights) or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as the Company may from time to time by ordinary resolution determine (or, in the absence of any such determination, as the Directors maydetermine).

3.2 The liability of the Members is limited to the amount, if any, unpaid on the shares in the Company respectively held by them.

4. Redemption ofshares

Subject to the provisions of the Statutes, any shares may be issued which are to be redeemed or are liable to be redeemed at the option of the Company or the shareholder. The terms and conditions and manner of redemption may be determined by the Directors provided that this is done before the shares are allotted.

5. Purchase ofshares

Subject to the provisions of the Statutes, the Company may from time to time purchase any of its own shares (including any redeemable shares) in any manner authorised by the 2006 Act (including, but not limited to, by way of purchase, redemption or gift) and may hold any shares purchased for consideration as treasury shares provided that the number of shares held as treasury shares shall not at any time exceed any limit set out in the 2006 Act.

6. Financialassistance

The Company shall not give any financial assistance for the acquisition of shares in the Company except and in so far as permitted by the Statutes.

7. Allotment at adiscount

The shares of the Company shall not be allotted at a discount and save as permitted by the Statutes shall not be allotted except as paid up at least as to one-quarter of their nominal value and the whole of any premiumthereon.

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8. Payment of commission andbrokerage

The Company may, in connection with the issue of any shares or sale for cash of treasury shares, exercise the powers of paying commissions conferred by the Statutes to the full extent thereby permitted. Such commission may be satisfied by the payment of cash or the allotment of fully or partly paid shares or partly in one way and partly in the other. The Company may also on any issue of shares pay such brokerage as may be lawful.

9. Unissuedshares

Save as otherwise provided in the Statutes or in these Articles, the Directors may allot (with or without conferring a right of renunciation), grant options over, offer or otherwise deal with or dispose of shares in the Company to such persons at such times and generally on such terms and conditions as they may determine. The Directors may at any time after the allotment of any share but before any person has been entered in the Register as the holder, recognise a renunciation thereof by the allottee in favour of some other person and may accord to any allottee of a share a right to effect such renunciation upon and subject to such terms and conditions as the Directors may think fit toimpose.

10. Recognition oftrusts

Except as required by law or pursuant to the provisions of these Articles, no person shall be recognised by the Company as holding any share upon any trust, and (except only as by these Articles or by law otherwise provided or under an order of a court of competent jurisdiction) the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share or any interest in any fractional part of a share or any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder. Neither the Company nor the relevant system shall be bound to register more than four persons as the joint holders of a share (except in the case of executors or trustees of a deceased Member).

11. [PROVISION DELETED]

SHARE CERTIFICATES

12. Uncertificatedshares

12.1 Unless otherwise determined by the Directors and permitted by the Regulations, no person shall be entitled to receive a certificate in respect of any share for so long as the title to that share is evidenced otherwise than by a certificate and for so long as transfers of that share may be made otherwise than by a written instrument by virtue of the Regulations. Notwithstanding any provisions of these Articles, the Directors shall have power to implement any arrangements they may, in their absolute discretion, think fit in relation to the evidencing of title to and transfer of an uncertificated share (subject always to the Regulations and the facilities and requirements of the relevant system concerned). No provision of these Articles shall apply or have effect to the extent that it is in any respect inconsistent with the holding of shares in uncertificatedform.

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12.2 The Directors are authorised:

(a) to issue any securities of the Company which may be held, evidenced and transferred through a relevant system in uncertificated form; and

(b) to convert any securities of the Company held in certificated form into securities held in uncertificated form, and vice versa, in accordance with the Statutes and the Regulations and the facilities and requirements of the relevant system concerned and otherwise in such manner as the Directors may, in their absolute discretion, think fit.

12.3 The Company shall enter on the Register how many shares are held by each Member in uncertificated form and in certificated form and shall maintain the Register in each case as required by the Regulations and the relevant system concerned. Unless the Directors otherwise determine, holdings of the same holder or joint holders in certificated form and uncertificated form shall be treated as separateholdings.

12.4 A class of share shall not be treated as two classes by virtue only of that class comprising both certificated shares and uncertificated shares or as a result of any provision of these Articles or the Regulations which applies only in respect of certificated or uncertificated shares.

12.5 The Company shall be entitled, in accordance with regulation 32(2)(c) of the Regulations, to require the conversion of an uncertificated share into certificated form to enable it to deal with that share in accordance with any provision in these Articles, including in particular, Articles 50 to 54, 56 and 76.

12.6 The provisions of Articles 13 to 16 inclusive shall not apply to uncertificatedshares.

13. Share certificates and right to sharecertificates

13.1 Every share certificate shall be executed under seal or in such other manner as the Directors may authorise, and shall specify the number and class and the distinguishing number (if any) of the shares to which it relates and the amount paid up thereon. No certificate shall be issued relating to shares of more than oneclass. The Directors may by resolution decide, either generally or in any particular case or cases, that any signatures on any share certificates need not be autographic but may be applied to the certificates by some mechanical or electronic or other means or may be printed on them or that the certificates need not be signed by any person.

13.2 Subject to Article 12, every person (other than a recognised clearing house (within the meaning of the Financial Services and Markets Act 2000) or a nominee of a recognised clearing house or of a recognised investment exchange (within the meaning of the Financial Services and Markets Act 2000) in respect of whom the Company is not by law required to complete and have ready for delivery a certificate) upon becoming the holder of a certificated share and whose name is entered as a Member on the Register shall be entitled without payment to receive within two months after allotment or lodgement of transfer of shares duly stamped (or adjudicated as exempt from stamp duty) to or by him (if required) (or within such other period as the conditions of issue shall provide) one certificate for all the certificated shares registered in his name or, in the case of shares of more than one class being registered in his name, a separate certificate for each class of certificated share so registered, and where a Member (except such a clearing house or nominee) transfers part of the shares of any class registered

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in his name he shall be entitled without payment to one certificate for the balance of certificated shares of that class retained by him. If a Member shall require additional certificates he shall pay for each additional certificate such reasonable sum (if any) as the Directors maydetermine.

14. Share certificate of jointholders

In respect of certificated shares of one class held jointly by more than one person the Company shall not be bound to issue more than one certificate, and delivery of a certificate for such shares to one of the joint holders of such shares shall be sufficient delivery to all such holders.

15. Replacement of sharecertificates

If any certificate be defaced then upon delivery thereof to the Directors they may order the same to be cancelled and may issue a new certificate in lieu thereof; and if any certificate be worn out, lost or destroyed, then upon proof thereof to the satisfaction of the Directors and on such indemnity with or without security as the Directors deem adequate being given, a new certificate in lieu thereof shall be given to the party entitled to such worn out, lost or destroyedcertificate.

16. Payment for sharecertificates

Every certificate issued under the last preceding Article shall be issued without payment, but there shall be paid to the Company such exceptional out-of-pocket expenses of the Company in connection with the request (including, without limiting the generality of the foregoing, the investigation of such request and the preparation and execution of any such indemnity or security) as the Directors thinkfit.

VARIATION OF RIGHTS

17. Variation of classrights

If at any time the share capital is divided into different classes of shares, the rights attached to any class of shares or any of such rights may, subject to the provisions of the Statutes, whether or not the Company is being wound up, be abrogated or varied with the consent in writing of the holders of at least three-quarters in nominal value of the issued shares of that class (excluding any shares of that class held as treasury shares), or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class.

18. Separate generalmeetings

To every such separate general meeting the provisions of chapter 3 of part 13 of the 2006 Act (save as stated in section 334(2) to (3)) and the provisions of these Articles relating to general meetings shall, mutatis mutandis, so far as applicable apply, subject to the following provisions, namely:

18.1 the necessary quorum at any such meeting, other than an adjourned meeting, shall be two persons present holding at least one-third in nominal value of the issued shares of the class in question (excluding any shares of that class held as treasury shares) and at an adjournedmeetingonepersonpresentholdingsharesoftheclassinquestion;and

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18.2 any holder of shares of the class in question present in person or by proxy may demand a poll.

For the purposes of Article 18.1 above, where a person is present by proxy or proxies, he is treated as holding only the shares in respect of which those proxies are authorised to exercise voting rights.

19. Issues of furthershares

The rights attached to any class of shares shall, unless otherwise expressly provided by the terms of issue of the shares of that class or by the terms upon which such shares are for the time being held, be deemed not to be abrogated or varied by the creation or issue of further shares ranking pari passutherewith.

CALLS ON SHARES

20. Calls

The Directors may, subject to the terms of allotment thereof, from time to time make such calls upon the Members as they think fit in respect of any monies unpaid on their shares (whether on account of the nominal value of the shares or by way of premium) and each Member shall (subject to the Company serving on him at least 14 days' notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares. A call may be revoked or postponed, in whole or in part, as the Directors may determine. A person upon whom a call is made shall remain liable for all calls made upon him notwithstanding the subsequent transfer of the shares in respect of which the call wasmade.

21. Timing and payment ofcalls

A call shall be deemed to have been made at the time when the resolution of the Directors authorising the call was passed and may be required to be paid by instalments.

22. Liability of jointholders

The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.

23. Interest due on non-payment ofcalls

If a sum payable in respect of any call or instalment is not paid on or before the day appointed for payment thereof, the person from whom it is due shall pay interest on the sum at such rate, not exceeding 15 per cent. per annum, as the Directors may determine from the day appointed for the payment thereof until the actual payment thereof, and all expenses that may have been incurred by the Company by reason of such non-payment; but the Directors may, if they shall think fit, waive the payment of such interest and expenses or any part thereof.

24. Deemedcalls

Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed date, whether on account of the nominal value of the share or by way of premium, shall for the purposes of these Articles be deemed to be a call duly made and payable on the date on which by the terms of issue the same becomes payable, and in case of non-paymentalltherelevantprovisionsoftheseArticlesastopaymentofinterestand expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

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25. Power to differentiate betweenholders

The Directors may, on the issue of shares, differentiate between the holders of such shares as regards the amounts of calls to be paid and the times of payment of suchcalls.

26. Payment of calls inadvance

The Directors may, if they think fit, receive from any Member willing to advance the same all or any part of the monies, whether on account of the nominal value of the shares or by way of premium, uncalled and unpaid upon any shares held by him; and upon all or any of the monies so paid in advance the Directors may (until the same would, but for such advance, become presently payable) pay interest at such rate not exceeding (unless the Company in general meeting shall otherwise direct) 12 per cent. per annum, as may be agreeduponbetweentheDirectorsandtheMemberpayingsuchmoniesinadvance.

FORFEITURE AND LIEN

27. Notice if call or instalment notpaid

If any Member fails to pay any call or instalment in full on or before the day appointed for payment thereof, the Directors may, at any time thereafter, serve a notice on him requiring him to pay so much of the call or instalment as is unpaid, together with any interest which may have accrued and any expenses incurred by the Company by reason of such non-payment.

28. Form ofnotice

The notice shall name a further day (not earlier than the expiration of 14 days from the date of service of the notice) on or before which, and the place where, such call or instalment and such interest and expenses as aforesaid are to be paid. The notice shall also state that in the event of non-payment at or before the time and at the place appointed, the shares in respect of which such call or instalment is payable will be liable to beforfeited.

29. Forfeiture fornon-compliance

If the requirements of any such notice as aforesaid are not complied with, any share in respect of which such notice has been given may at any time after the day specified in such notice, before the payment required by the notice has been made, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall extend to all dividends declared and other monies payable in respect of the shares so forfeited and not actually paid before such forfeiture. Forfeiture shall be deemed to occur at the time of the passing of the said resolution of the Directors. The Directors may accept a surrender of any share liable to be forfeited hereunder upon such terms and conditions as they think fit.

30. Notice afterforfeiture

When any share has been forfeited notice of the forfeiture shall be served upon the person who was before forfeiture the holder of the share, or any person entitled to the share by transmission, and an entry of the forfeiture or surrender, with the date thereof, shall forthwith be made in the Register, but no forfeiture or surrender shall be invalidated by any failure to give such notice or make such entry asaforesaid.

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31. Disposal of forfeitedshares

A share so forfeited or surrendered shall be deemed to be the property of the Company, and may be sold, re-allotted or otherwise disposed of either to the person who was, before forfeiture, the holder or to any other person in such manner, either subject to or discharged from all calls made or instalments due prior to the forfeiture or surrender, as the Directors think fit: Provided that the Company shall not exercise any voting rights in respect of such share and any such share not disposed of in accordance with the foregoing within a period of three years from the date of its forfeiture or surrender shall thereupon be cancelled in accordance with the provisions of the Statutes. For the purpose of giving effect to any such sale or other disposition the Directors may authorise some person to transfer the share so sold or otherwise disposed of to, or in accordance with the directions of, the buyer thereof or other person becoming entitledthereto.

32. Annulment offorfeiture

The Directors may, at any time before any share so forfeited or surrendered shall have been cancelled or sold, re-allotted or otherwise disposed of, annul the forfeiture or surrender upon such terms as they think fit.

33. Continuingliability

33.1 Any person whose shares have been forfeited or surrendered shall cease to be a Member in respect of those shares and shall surrender to the Company for cancellation the certificate for the forfeited or surrendered shares, but shall, notwithstanding such forfeiture or surrender, remain liable to pay to the Company all monies which, at the date of the forfeiture or surrender, were payable by him to the Company in respect of the shares, together with interest thereon at such rate, not exceeding 15 per cent. per annum, as the Directors may determine from the time of forfeiture or surrender until the time of payment, but his liability shall cease if and when the Company shall have received payment in full of all such monies in respect of the shares, together with interest as aforesaid. The Directors may, if they shall think fit, waive the payment of such interest or any part thereof. The Company may enforce payment of such monies without being under any obligation to make any allowance for the value of the shares forfeited or surrendered or for any consideration received on theirdisposal.

33.2 The forfeiture or surrender of a share shall involve the extinction at the time of the forfeiture or surrender of all interest in and all claims and demands against the Company in respect of the share and all other rights and liabilities incidental to the share as between the Member whose share is forfeited or surrendered and the Company, except only such of those rights and liabilities as are by the Articles expressly saved, or as are by the Statutes given or imposed in the case of past Members.

34. Lien on partly-paidshares

The Company shall have a first and paramount lien on every share (not being a fully-paid share) for all monies (whether presently payable or not) called or payable at a fixed time in respect of such share; but the Directors may at any time waive any lien which has arisen and may declare any share to be wholly or in part exempt from the provisions of this Article. The Company's lien, if any, on a share shall extend to all amounts payable in respect of it, including all dividends from time to time declared in respect of every such share and any interest payable on such share.

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35. Enforcement of lien bysale

The Company may sell, in such manner as the Directors think fit, any share on which the Company has a lien, but no sale shall be made unless a sum in respect of which the lien exists is presently payable, nor until the expiration of 14 days after a notice in writing (i) stating, and demanding payment of, the sum presently payable, and (ii) giving notice of intention to sell in default of such payment, has been given to the registered holder for the time being of the share, or the person entitled thereto by reason of his death or bankruptcy or otherwise by operation oflaw.

36. Application of saleproceeds

The net proceeds of such sale, after payment of the costs thereof, shall be applied in or towards satisfaction of such part of the amount in respect of which the lien exists as is presently payable. The residue, if any, shall (subject to a like lien for sums not presently payable as existed upon the shares before the sale) be paid to the person entitled to the shares at the date of sale. For giving effect to any such sale the Directors may authorise some person to transfer the shares sold to, or in accordance with the directions of, the buyer.

37. Statutorydeclaration

A statutory declaration in writing that the declarant is a Director or the Secretary of the Company, and that a share has been duly forfeited or surrendered or sold to satisfy a lien of the Company on a date stated in the declaration, shall be conclusive evidence of the facts stated therein against all persons claiming to be entitled to the share. Such declaration and the receipt of the Company for the consideration (if any) given for the share on the sale, re-allotment or disposal thereof, together with, in the case of certificated shares, the share certificate delivered to a buyer or allottee thereof, shall (subject to the execution of a transfer if the same be required) constitute a good title to the share and the person to whom the share is sold, re-allotted or disposed of shall be registered as the holder of the share and shall not be bound to see to the application of the purchase money (if any) nor shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the forfeiture, surrender, sale, re-allotment or disposal of theshare.

TRANSFER OF SHARES

38. Transfers of uncertificatedshares

All transfers of uncertificated shares shall be made in accordance with and be subject to the provisions of the Regulations and the facilities and requirements of the relevant system and, subject thereto, in accordance with any arrangements made by the Directors pursuant to Article 12.1.

39. Form oftransfer

39.1 All transfers of certificated shares shall be effected by instrument in writing in any usual or common form or any other form which the Directors may approve or in any other manner which is permitted by the Statutes and approved by the Directors.

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39.2 The instrument of transfer of any certificated share in the Company shall be signed by or on behalf of the transferor (and, in the case of a share which is not fully paid, shall also be signed by or on behalf of the transferee). In relation to the transfer of any share (whether a certificated or an uncertificated share) the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register in respectthereof.

40. Right to declineregistration

Subject to Article 76, the Directors may, in their absolute discretion and without assigning any reason therefor, refuse to register any transfer of any share which is not a fully-paid share (whether certificated or uncertificated) provided that, where any such shares are admitted to the Official List of the FCA or admitted to AIM or where shares or any other securities of the Company are listed on any other stock exchange, such discretion may not be exercised in a way which the FCA or the London Stock Exchange or any other relevant regulator or stock exchange regards as preventing dealings in the shares of the relevant class or classes of shares or relevant securities from taking place on an open and proper basis. The Directors may likewise refuse to register any transfer of a share (whether certificated or uncertificated), whether fully-paid or not, in favour of more than four persons jointly.

41. Further rights to declineregistration

In relation to a certificated share, the Directors may decline to recognise any instrument of transfer unless:

41.1 the instrument of transfer is duly stamped (if required) and deposited at the Office, or at such other place as the Directors may from time to time determine, accompanied by the certificate(s) of the shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer (and, if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do);and

41.2 the instrument of transfer is in respect of only one class ofshare.

42. Notice of refusal toregister

If the Directors refuse to register a transfer they shall, in the case of certificated shares, as soon as practicable and in any event within two months after the date on which the transfer was lodged with the Company, send to the transferee notice of the refusal and (except in the case of fraud) return to him the instrument of transfer or, in the case of uncertificated shares, notify such person as may be required by the Regulations and the requirements of the relevant system concerned.

43. Retention of instruments oftransfer

All instruments of transfer which are registered may be retained by the Company.

44. No fee forregistration

No fee shall be charged by the Company on the registration of any instrument of transfer, probate, letters of administration, certificate of death or marriage, power of attorney, renunciation of a renounceable letter of allotment, stop notice or other document or instruction relating to or affecting the title to any shares or otherwise for making any entry in the Register affecting the title to anyshares.

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45. Destruction ofdocuments

The Company shall be entitled to destroy:

45.1 any instrument of transfer (which phrase, together with references to documents, shall for the purposes of this Article 45 include electronically generated or stored communications in relation to the transfer of uncertificated shares and any electronic or tangible copies of the same) or other document which has been registered, or on the basis of which registration was made, at any time after the expiration of six years from the date of registrationthereof;

45.2 any dividend mandate or any variation or cancellation thereof or any notification of change of name or address (which shall include, in relation to communications in electronic form, any number or address used for the purposes of such communications), at any time after the expiration of two years from the date of recording thereof;

45.3 any share certificate which has been cancelled, at any time after the expiration of one year from the date of suchcancellation; and

45.4 any proxy form, after one year from the date it was used if it was used for a poll, or after one month from the end of the meeting to which it relates if it was not used for a poll;

and it shall conclusively be presumed in favour of the Company that every entry in the Register purporting to have been made on the basis of an instrument of transfer or other document so destroyed was duly and properly made, that every instrument of transfer so destroyed was a valid and effective instrument duly and properly registered, that every share certificate so destroyed was a valid certificate duly and properly cancelled and that every other document destroyed hereunder was a valid and effective document in accordance with the recorded particulars thereof in the books or records of the Company, provided always that:

(a) the provisions aforesaid shall apply only to the destruction of a document in good faith and without express notice to the Company that the preservation of such document was relevant to any claim (regardless of the partiesthereto);

(b) nothing contained in this Article shall be construed as imposing upon the Company any liability in respect of the destruction of any such document earlier than as aforesaid or in any case where the conditions of proviso (a) above are notfulfilled;

(c) references in this Article to instruments of transfer shall include, in relation to uncertificated shares, instructions and/or notifications made in accordance with the relevant system concerned relating to the transfer of suchshares;

(d) references in this Article to the destruction of any document include references to its disposal in any manner;and

(e) in relation to uncertificated shares, the provisions of this Article shall apply only to the extent the same are consistent with theRegulations.

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TRANSMISSION OF SHARES

46. Transmission ondeath

In case of the death of a Member, the survivor or survivors where the deceased was a joint holder, and the legal personal representatives of the deceased where he was a sole or only surviving holder, shall be the only persons recognised by the Company as having any title to his interest in the shares; but nothing herein contained shall release the estate of a deceased Member from any liability in respect of any share which had been solely or jointly held byhim.

47. Person entitled bytransmission

Any person becoming entitled to a share in consequence of the death or bankruptcy of a Member or otherwise by operation of law may, upon such evidence being produced as may from time to time properly be required by the Directors and subject as hereinafter provided, elect either to be registered himself as holder of the share or to have some person nominated by him registered as the transferee thereof, but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by the Member registered as the holder of any such share before his death or bankruptcy or other event, as the case maybe.

48. Restrictions onelection

If the person so becoming entitled shall elect to be registered himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. If he shall elect to have another person registered he shall testify his election by executing to that person a transfer of the share. All the limitations, restrictions and provisions of these Articles relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as aforesaid as if the death or bankruptcy of the Member or other event had not occurred and the notice or transfer were a transfer signed by the Member registered as the holder of any suchshare.

49. Rights of persons entitled bytransmission

A person becoming entitled to a share by reason of the death or bankruptcy of the holder or otherwise by operation of law shall, upon supplying to the Company such evidence as the Directors may reasonably require to show his title to the share, be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a Member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company (including meetings of the holders of any class of shares in the Company), provided always that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share, and, if the notice is not complied with within 60 days, the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the share until the requirements of the notice have been compliedwith.

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UNTRACED SHAREHOLDERS

50. Power to sellshares

The Company shall be entitled to sell, at the best price reasonably obtainable at the time of sale, any share of a Member or any share to which a person is entitled by transmission if and providedthat:

50.1 for a period of 12 years no cheque, warrant or order sent by the Company in the manner authorised by these Articles in respect of the share in question has been cashed and no communication has been received by the Company from the Member or the person entitled by transmission; provided that, in such period of 12 years, at least three dividends whether interim or final on or in respect of the share in question have become payable and no such dividend during that period has been claimed;and

50.2 the Company has, on or after expiration of the said period of 12 years, by advertisement in both a national newspaper and a newspaper circulating in the area in which the last known address of the Member or the address at which service of notices may be effected in the manner authorised in accordance with the provisions of these Articles is located, given notice of its intention to sell such share (but so that such advertisements need not refertothenamesoftheholder(s)oftheshareoridentifytheshareinquestion);and

50.3 the Company has not, during the further period of three months after the publication of such advertisements and prior to the exercise of the power of sale, received any communication from the Member or person entitled by transmission;and

50.4 if the shares are admitted to the Official List of the FCA or admitted to AIM, the Company has given notice to a Regulatory Information Service (as defined in the FCA’s Disclosure Guidance and Transparency Rules) of its intention to sell such shares.

51. Power to sell furthershares

If, during any 12 year period or three month period referred to in Articles 50.1 and 50.3 of the preceding Article, further shares have been issued in respect of those held at the beginning of such 12 year period or of any subsequently issued during such periods and all the other requirements of such Article have been satisfied in respect of the further shares, the Company may also sell such furthershares.

52. Authority to effectsale

To give effect to any sale pursuant to the previous two Articles, the Directors may authorise any person to execute as transferor an instrument of transfer of the said share and such instrument of transfer shall be as effective as if it had been executed by the registered holder of, or person entitled by transmission to, such share. The transferee shall not be bound to see to the application of the purchase monies and the title of the transferee shall not be affected by any irregularity or invalidity in the proceedings relating thereto. The net proceeds of sale shall belong to the Company which shall be obliged to account to the former Member or other person previously entitled as aforesaid for an amount equal to such proceeds and shall enter the name of such former Member or other person in the books of the Company as a creditor for suchamount.

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53. Notrust

No trust shall be created in respect of the debt, no interest shall be payable in respect of the same and the Company shall not be required to account for any money earned on the net proceeds, which may be employed in the business of the Company or invested in such investments (other than shares of the Company or its holding company (if any)) as the Directors may from time to time think fit.

54. Authority to cease sendingcheques

If either (i) on two consecutive occasions cheques, warrants or orders in payment of dividends or other monies payable in respect of any share have been sent through the post or otherwise in accordance with the provisions of these Articles but have been returned undelivered or left uncashed during the periods for which the same are valid or any transfer by bank or other funds transfer system has not been satisfied; or (ii) following one such occasion reasonable enquiries have failed to establish any new postal address of the registered holder; the Company need not thereafter despatch further cheques, warrants or orders and need not thereafter transfer any sum (as the case may be) in payment of dividends or other monies payable in respect of the share in question until the Member or other person entitled thereto shall have communicated with the Company and supplied in writing to the Office an address for thepurpose.

ALTERATION OF CAPITAL

55. Consolidation and sub-division

The Company may, subject to the passing of a resolution authorising it to do so in accordance with the 2006 Act:

55.1 consolidate and divide all or any of its share capital into shares of a larger nominal amount than its existingshares;

55.2 sub-divide its shares or any of them into shares of smaller nominal amount, provided that:

(a) in the sub-division, consolidation or division, the proportion between the amount paid and the amount, if any, unpaid on each resulting share shall be the same as it was in the case of the share from which that share is derived;and

(b) the resolution pursuant to which any share is sub-divided may determine that as between the resulting shares one or more of such shares may be given any preference or advantage or be subject to any restriction as regards dividend, capital, voting or otherwise over the others or any other of such shares.

56. Fractions ofshares and rounding up to exact multiples

56.1 Subject to any direction by the Company in general meeting, whenever as the result of any consolidation or division of shares Members of the Company are entitled to any issued shares of the Company in fractions, the Directors may deal with such fractions as they shall determine and in particular may sell the shares to which Members are so entitled in fractions to any person (including, subject to the provisions of the Statutes, the Company) and pay and distribute to

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and amongst the Members entitled to such shares in due proportions the net proceeds of the sales thereof save for individual entitlements (net of expenses) not exceeding £3 which may be retained for the benefit of the Company. For the purpose of giving effect to any such sale the Directors may, in respect of certificated shares, nominate some person to execute a transfer of the shares sold on behalf of the Members so entitled to, or, in respect of uncertificated shares, nominate any person to transfer such shares in accordance with the facilities and requirements of the relevant system concerned or make such other arrangements as are compatible with the relevant system concerned or, in either case, in accordance with the directions of the buyer thereof and may cause the name of the transferee(s) to be entered in the Register as the holder(s) of the shares comprised in any such transfer, and such transferee(s) shall not be bound to see to the application of the purchase money nor shall such transferee's(s') title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale. For the purposes of this Article, any shares representing fractional entitlements to which any Member would, but for this Article, become entitled may be issued in certificated form or uncertificatedform.

56.2 The Board may, without prejudice to Article 55 and 56.1 and subject to the Statutes, in each case where the number of shares held by the holder is not an exact multiple of the number of shares to be consolidated into a single share, issue to such holder credited as fully paid by way of capitalisation the minimum number of shares required to round up his holdings to a multiple (such issue being deemed to have been effected immediately prior to consolidation) and the amount required to pay up such shares shall be appropriated at its discretion from any sums standing to the credit of any of the Company’s reserve accounts (including, subject to the 2006 Act, share premium account and capital redemption reserve) or to the credit of profit and loss account and capitalised by applying the same in paying up such shares.

57. Reduction of sharecapital

Subject to the provisions of the Statutes, the Company may by special resolution reduce its share capital, any capital redemption reserve, any share premium account and any redenomination reserve in any way.

GENERAL MEETINGS

58. Annual generalmeeting

The Company shall in accordance with the Statutes, hold a general meeting as its annual general meeting. The annual general meeting shall be held at such time and place and with such additional means of attendance and participation (including at such other place(s) and/or by means of such electronic facility or facilities) as the Directors shall appoint.

59. [PROVISION DELETED]

60. Convening and format of generalmeetings

60.1 The Directors may, whenever they think fit, convene a general meeting, and general meetings shall also be convened on such requisition, or, in default, may be convened by such requisitionists, as provided by the Statutes. In the case of a general meeting called pursuant to a requisition under the 2006 Act, unless such meeting shall have been called by the Directors, no business other than that stated in the requisition as the object of the meeting shall be discussed.

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60.2 The Directors may make whatever arrangements they consider fit to allow those entitled to do so to attend and participate in any general meeting. The Directors shall determine in relation to each general meeting the means of attendance at and participation in the general meeting, including whether the persons entitled to attend and participate in the general meeting shall be enabled to do so:

(a) by simultaneous attendance and participation at a satellite place or places pursuant to Article 60.3; and/or

(b) by means of electronic facility or facilities pursuant to Article 60.4

(and for the avoidance of doubt, the Directors shall be under no obligation to offer or provide such satellite place or places or such electronic facility or facilities).

60.3 In the case of any general meeting, the Directors or the chairman of the meeting may make arrangements for simultaneous attendance at and participation in the general meeting in more than one physical place by persons entitled to attend the meeting. The Members present in person or by proxy at a satellite place shall be counted in the quorum for, and entitled to vote at, the general meeting in question. The general meeting shall be duly constituted and its proceedings valid if the chairman of the general meeting is satisfied that adequate facilities are available throughout the meeting to ensure that Members attending at the principal place and any satellite place(s) are able to:

(a) participate in the business for which the meeting has been convened; and

(b) see, and be seen by, persons attending at the principal place and any other satellite place(s) at which the meeting is convened.

The general meeting shall be deemed to take place at the place where the chairman of the general meeting presides (the “principal place”, with any other location where that meeting takes place being referred in these Articles as a “satellite place”). The powers of the chairman shall apply equally to each satellite place, including his power to adjourn the meeting as referred to in Article 69.

60.4 The Directors may determine in relation to any general meeting (including any general meeting that is being held at more than one physical place) to enable persons entitled to attend and participate to do so by simultaneous attendance and participation by means of electronic facility or facilities (any such general meeting being a “Hybrid Meeting”). The Members present in person, by proxy, or by means of electronic facility or facilities shall be counted in the quorum for, and entitled to participate in, the general meeting in question. A Hybrid Meeting shall be duly constituted and its proceedings valid if the chairman of the meeting is satisfied that adequate facilities are available throughout the meeting to ensure that Members attending the meeting by all means (including by means of electronic facility or facilities) are able to participate in the business for which the meeting has been convened.

For the purposes of all other provisions of these Articles any such meeting shall be treated as being held and taking place at the principal place.

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60.5 If a general meeting is held partly by means of electronic facility or facilities, the Directors (and, at a general meeting, the chairman) may (subject to the requirements of Statutes) make any arrangement and impose any requirement or restriction in connection with participation by such facility or facilities, including any arrangement, requirement or restriction that is:

(a) necessary to ensure the identification of those taking part and the security of the electronic facility; and

(b) proportionate to the achievement of those objectives.

60.6 If, after the sending of notice of a general meeting but before the meeting is held, or after the adjournment of a general meeting but before the adjourned meeting is held (whether or not notice of the adjourned meeting is required), the Directors decide that it is impracticable or unreasonable to hold the meeting at the time specified in the notice of meeting and/or using the means of electronic facility or facilities stated in the notice of meeting or made available prior to the meeting, they may change the meeting to remove the ability for persons entitled to attend and participate to do so by simultaneous attendance and participation by means of electronic facility or facilities (such that the meeting is no longer a Hybrid Meeting and the general meeting is to be held by way of physical attendance at the principal place or any satellite place only), or change the means of electronic facility or facilities to be used for such general meeting and/or postpone the time at which the meeting is to be held. If such a decision is made, the Directors may then change again the electronic facility or facilities and/or postpone the time if they decide that it is reasonable to do so. In any case:

(a) no new notice of the meeting need be sent, but the Directors shall take reasonable steps to publicise the date and time of the meeting, and the means of attendance and participation (including any place and/or electronic facility) for the meeting and shall take reasonable steps to ensure that notice of the change or removal of the electronic facility or facilities for participation in the meeting (if any), and/or postponement, shall appear at the original place or places and/or on the original electronic facility or facilities, in each case at the original time;

(b) if the general meeting is postponed in accordance with this Article 60.6 the appointment of a proxy will be valid if it is received as required by these Articles not less than 48 hours before the postponed time appointed for holding the meeting, provided that the Directors may at their discretion determine that, in calculating the period of 48 hours, no account shall be taken of any part of a day that is not a working day; and

(c) this Article 60.6 does not apply to a meeting convened in accordance with a Members' requisition under the 2006 Act or any other meeting that is not called by a resolution of the Directors.

60.7 In no circumstances shall the inability of one or more Members to access, or to continue to access, the electronic facility or facilities for participation in the meeting for all or part of the meeting affect the validity of the meeting or any business conducted at the meeting, provided that sufficient Members are able to participate in the meeting as are required to constitute a quorum under Article 66.

60.8 If at any time there are not within the United Kingdom sufficient Directors capable of acting to form a quorum, the Directors in the United Kingdom capable of acting may convene a general meeting in the same manner as nearly as possible as that in which meetings may be convened by the Directors.

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NOTICE OF GENERAL MEETINGS

61. Length and form ofnotice

An annual general meeting shall be called by not less than 21 clear days' notice, and a meeting of the Company other than an annual general meeting shall be called by not less than 14 clear days' notice. The notice shall state the principal place, the date and the time of meeting and the general nature of that business. The notice may also identify any satellite places determined in accordance with Article 60. It shall be given, in the manner hereinafter mentioned or in such other manner, if any, as may be prescribed by the Statutes or by the Company in general meeting, to such persons as are entitled to receive such notices from the Company and shall comply with the provisions of the Statutes as to informing Members of their right to appoint proxies. If the Directors determine that a general meeting shall be held partly by electronic facility or facilities, the notice shall specify details of such electronic facility or facilities, including any related access, identification and security arrangements, or shall state where such details will be made available by the Company prior to the meeting. If on two consecutive occasions any notice, document or other information have been sent or supplied (whether through the post or in electronic form) to any Member at his registered address or his address for the service of notices but have been returned undelivered (in the case of an item sent or supplied in electronic form, it will be treated as undelivered if the Company receives notification that it was not delivered to the address to which it was sent), such Member shall not thereafter be entitled to receive notices, documents or information from the Company until he shall have communicated with the Company and supplied in writing to the Office a new registered address or address within the United Kingdom for the service of notices, documents and information. A notice calling an annual general meeting shall state that the meeting is an annual general meeting and a notice convening a meeting to pass a special resolution shall specify the intention to propose the resolution as such and shall include the text of theresolution.

62. Shortnotice

A meeting of the Company shall, notwithstanding that it is called by shorter notice than that specified in the last preceding Article, be deemed to have been duly called if it is so agreed:

62.1 in the case of a meeting called as the annual general meeting, by all the Members entitled to attend and vote thereat;and

62.2 in the case of any other meeting, by a majority in number of the Members having a right to attend and vote at the meeting, being a majority together holding not less than 95 per cent. in nominal value of the shares giving that right (excluding any shares in the Company held as treasuryshares).

63. Omission or non-receipt of notice of resolution or meeting orproxy

The accidental failure to give notice of a meeting, or of a resolution intended to be moved at a meeting, or to issue an invitation to appoint a proxy with a notice where required by these Articles, to any one or more persons entitled to receive notice, or the non-receipt of notice of a meeting or of such a resolution or of an invitation to appoint a proxy by any such persons, shall be disregarded for the purpose of determining whether notice of the meeting or of any resolution to be moved at the meeting is duly given.

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64. Postponement of generalmeetings

If the Directors, in their absolute discretion, consider that it is impractical or unreasonable for any reason to hold a general meeting on the date or at the time or place specified in the notice calling the general meeting, they may postpone the general meeting to another date, time and/or place. When a meeting is so postponed, notice of the date, time and place of the postponed meeting shall be placed in at least two national newspapers in the United Kingdom. Notice of the business to be transacted at such postponed meeting shall not be required.

PROCEEDINGS AT GENERAL MEETINGS

65. [PROVISION DELETED]

66. Quorum and procedure if quorum notpresent

66.1 No business shall be transacted at any general meeting unless a quorum is present at the time when the meeting proceeds to business; save as herein otherwise provided, two Members present in person or by proxy and entitled to vote shall be a quorum. The appointment of a chairman of the meeting in accordance with the provisions of these Articles shall not be treated as part of the business of themeeting.

66.2 If within 15 minutes (or such longer time as the chairman of the meeting may decide) from the time appointed for the meeting a quorum is not present, the meeting, if convened by or upon the requisition of Members, shall be dissolved. In any other case it shall stand adjourned to such day, time and place, with such additional means of attendance and participation (including at such place(s) and/or by such electronic facility or facilities), as the chairman of the meeting shall specify. If at such adjourned meeting a quorum is not present within 15 minutes from the time appointed therefor, the Member or Members present in person or by proxy and entitled to vote shall have power to decide upon all matters which could properly have been disposed of at the meeting from which the adjournment tookplace.

67. Security and orderlyconduct

67.1 The Directors may, for the purpose of facilitating the organisation and administration of any general meeting to which such arrangements apply, from time to time make arrangements, whether involving the use of electronic voting, the issue of tickets (on a basis intended to afford to all Members and proxies and others entitled to attend the meeting an equal opportunity of being admitted to the principal place) or the imposition of some random means of selection or such additional means of participation (including at such a place and/or by such means of electronic facility or facilities) as they shall in their absolute discretion consider to be appropriate, and may from time to time vary any such arrangements or make new arrangements in their place. The entitlement of any Member or proxy or other person entitled to attend a general meeting at the principal place shall be subject to such arrangements as may for the time being be in force whether stated in the notice of the general meeting to apply to that Meeting or notified to the Members concerned subsequent to the provision of the notice of the generalmeeting.

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67.2 The Directors or the chairman of the meeting or any person authorised by the Directors may direct that Members, proxies or corporate representatives wishing to attend any general meeting or anyone else permitted by the chairman of the meeting to attend should submit to such searches or other security arrangements or restrictions (including, without limitation, restrictions on items of personal property which may be taken into the meeting) as the Directors or the chairman of the meeting or such person authorised by the Directors shall consider appropriate in the circumstances. Such persons shall be entitled in their absolute discretion to refuse entry to, or to eject from, such general meeting any such person who fails to submit to such searches or otherwise to comply with such security arrangements orrestrictions.

67.3 The Directors or the chairman of the meeting or any person authorised by the Directors may, at any meeting, take such action as is thought fit to secure the safety of the people attending the meeting and to promote the orderly conduct of the business of the meeting as laid down in the notice of the meeting and the chairman of the meeting's decision on matters of procedure or matters arising incidentally from the business of the meeting shall be final, as shall be his determination as to whether any matter is of such anature.

68. Chairman of generalmeetings

68.1 The chairman, if any, of the board of Directors shall preside as chairman of every general meeting of the Company. If there is no such chairman, or if at any general meeting he shall not be present within five minutes after the time appointed for holding the meeting or is unwilling to act as chairman, the Directors present shall select one of their number to be chairman of the meeting; or if no Director is present and willing to take the chairthe Members present and entitled to vote shall choose one of their number to be chairman of the meeting.

68.2 In the case of an equality of votes, whether on a show of hands or a poll, the chairman of the meeting shall not be entitled to a second or casting vote.

69. Adjournments

69.1 The chairman of the meeting may, at any time without the consent of the meeting, adjourn any meeting (whether or not it has commenced or has already been adjourned or a quorum is present) either without specifying another time or place or to another specified time or place, with such additional means of attendance and participation (including at such place(s) and/or by means of such electronic facility or facilities) determined by the chairman in his absolute discretion, where it appears to him that (i) the Members wishing to attend cannot be conveniently accommodated in the place appointed for the meeting, (ii) the conduct of any persons prevents or is likely to prevent the orderly continuation of business; (iii) the facilities at the principal place or any satellite place have become inadequate for the purposes referred to in Article 60.3; (iv) an electronic facility provided by or on behalf of the Company has become inadequate for the purposes referred to in Article 60.4; or (v) an adjournment is otherwise necessary so that the business of the meeting may be properlyconducted.

69.2 The chairman of the meeting may, with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place, with such additional means of attendance and participation (including at such place(s) and/or by means of such electronic facility or facilities) determined by the chairman in his absolute discretion; but no business shall be transacted at any adjourned meeting other than

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the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for 30 days or more, not less than seven clear days' notice of the adjourned meeting shall be given specifying the day, the place and the time of the meeting, with such additional means of attendance and participation (including at such place(s) and/or by such means of electronic facility or facilities) as in the case of an original meeting, but it shall not be necessary to specify in such notice the nature of the business to be transacted at the adjourned meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment.

70. Directors' right to attend andspeak

Each Director shall be entitled to attend and speak at any general meeting of the Company and at any separate general meeting of the holders of any class of shares in the Company. The chairman of the meeting may invite any person to attend and speak at any general meeting of the Company whom the chairman of the meeting considers to be equipped by knowledge or experience of the Company's business to assist in the deliberations of themeeting.

71. Amendments toresolutions

If an amendment shall be proposed to any resolution under consideration but shall in good faith be ruled out of order by the chairman of the meeting the proceedings on the substantive resolution shall not be invalidated by any error in such ruling. In the case of a resolution duly proposed as a special resolution no amendment thereto (other than an amendment to correct a patent error) may in any event be considered or votedupon.

72. Method of voting and demand for apoll

72.1 Subject to Article 72.2 at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands)demanded:

(a) by the chairman of the meeting;or

(b) by at least five Members present in person or by proxy and having the right to vote on the resolution;or

(c) by any Member or Members present in person or by proxy and representing not less than one-tenth of the total voting rights of all the Members having the rightto vote on the resolution (excluding any voting rights attached to any shares in the Company held as treasury shares); or

(d) by a Member or Members present in person or by proxy holding shares in the Company conferring a right to vote on the resolution being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right (excluding any shares in the Company conferring a right to vote on the resolution which are held as treasuryshares).

72.2 A resolution put to the vote at a general meeting held partly by means of electronic facility or facilities shall, unless the chairman of the meeting determines that it shall be decided on a show of hands, be decided on a poll.

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72.3 Unless a poll is so demanded (and the demand is not subsequently withdrawn), a declaration by the chairman of the meeting that a resolution has on a show of hands been passed or passed unanimously, or with a particular majority, or lost, or an entry to that effect in the minutes of the meeting of the Company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against suchresolution.

72.4 Except as provided in Article 73, if a poll is duly demanded it shall be taken in such manner (including the use of ballot or voting papers or tickets, with such additional means of attendance and participation (including at such place(s) and/or by means of such electronic facility or facilities) as the chairman of the meeting directs and he may appoint scrutineers, who need not be Members, and fix a time and place for declaring the result of the poll. The result of the poll shall be deemed to be the resolution of the meeting at which the poll wasdemanded.

73. Timing and procedure for apoll

A poll demanded on the election of the chairman of the meeting or on the question of an adjournment shall be taken forthwith. A poll demanded on any other question shall be taken either immediately or at such subsequent time (not being more than 30 clear days after the date of the meeting or adjourned meeting at which the poll is demanded) and place, and by such additional means of attendance and participation (including at such place and/or by means of such electronic facility or facilities) as the chairman of the meeting may direct. No notice need be given of a poll not taken immediately. Any business other than that upon which a poll has been demanded may be proceeded with pending the taking of the poll. The demand for a poll may be withdrawn with the consent of the chairman of the meeting at any time before the close of the meeting or the taking of the poll, whichever is the earlier, and in that event shall not invalidate the result of a show of hands declared before the demand was made.

VOTES OF MEMBERS

74. Votes of Members and of jointholders

74.1 Subject to any rights or restrictions for the time being attached to any class or classes of shares and to any other provisions of these Articles or the Statutes:

(a) on a show of hands:

(i) each Member present in person has one vote;

(ii) except as provided in (iii) and (iv) below, each proxy present in person who has been duly appointed by one or more Members entitled to vote on a resolution has one vote;

(iii) each proxy present in person has one vote for and one vote against a resolution if the proxy has been duly appointed by more than one Member entitled to vote on the resolution and the proxy has been instructed by one or more of those Members to vote for the resolution and by one or more other of those Members to vote against it;

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(iv) each proxy present in person has one vote for and one vote against a resolution if the proxy has been duly appointed by more than one Member entitled to vote on the resolution and either:

(A) the proxy has been instructed by one or more of those Members to vote for the resolution and has been given any discretion by one or more other of those Members to vote and the proxy exercises that discretion to vote against it; or

(B) the proxy has been instructed by one or more other of those Members to vote against the resolution and has been given any discretion by one or more other of those Members to vote and the proxy exercises that discretion to vote for it; and

(v) each duly authorised representative present in person of a Member that is a corporation has one vote;

(b) on a poll, every Member present in person or by proxy or corporate representative has one vote for every share of which he is the holder or in respect of which his appointment as proxy or corporate representative has been made; and

(c) for votes on a show of hands or a poll, any Member, proxy or corporate representative entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses the same way.

74.2 In the case of joint holders of a share, the vote of the senior holder who votes, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders; and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of theshare.

75. Voting on behalf of incapableMember

A Member in respect of whom an order has been made by any court or official having jurisdiction (in theUnitedKingdomorelsewhere)inmattersconcerningmentaldisordermayvote, whether on a show of hands or on a poll, by his receiver, curator bonis or other person authorised on his behalf by that court or official, and such receiver, curator bonis or other person may vote by proxy, provided that evidence to the satisfaction of the Directors of the authority of the person claiming to exercise the right to vote has been delivered at the Office (or at such other place as may be specified in accordance with these Articles for the delivery of appointments of proxy) not later than the last time at which an appointment of a proxy should have been delivered in order to be valid for use at that meeting or on the holding of thatpoll.

76. Suspension of rights for non-payment of calls and non-disclosure ofinterests

76.1 No Member shall, unless the Directors otherwise determine, be entitled, in respect of any share in the capital of the Company held by him, to be present or to vote on any question, either in person or by proxy, at any general meeting, or separate general meeting of the holders of any class of shares of the Company, or to be reckoned in a quorum, if any call or other sum presently payable by him to the Company in respect of such share remains unpaid.

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76.2 If any Member, or any other person appearing to the Directors to be interested in any shares in the capital of the Company held by such Member, has been duly served with a notice under section 793 of the 2006 Act and is in default for the period of 14 days from the date of service of the notice under the said section 793 in supplying to the Company the information thereby required, then the Company may (at the absolute discretion of the Directors) at any time thereafter by notice (a "restriction notice") to such Member direct that, in respect of the shares in relation to which the default occurred and any other shares held at the date of the restriction notice by the Member, or such of them as the Directors may determine from time to time (the "restricted shares" which expression shall include any further shares which are issued in respect of any restricted shares), the Member shall not, nor shall any transferee to which any of such shares are transferred other than pursuant to a permitted transfer or pursuant to Article 76.3(c) below, be entitled to be present or to vote on any question, either in person or by proxy, at any general meeting of the Company or separate general meeting of the holders of any class of shares of the Company, or to be reckoned in aquorum.

76.3 Where the restricted shares represent at least 0.25 per cent. (in nominal value) of the issued shares of the same class as the restricted shares (excluding any shares of that class held as treasury shares), then the restriction notice may also directthat:

(a) any dividend or any part thereof or other monies which would otherwise be payable on or in respect of the restricted shares shall be withheld by the Company; shall not bear interest against the Company; and shall be payable (when the restriction notice ceases to have effect) to the person who would but for the restriction notice have been entitled to them;and/or

(b) where an offer of the right to elect to receive shares of the Company instead of cash in respect of any dividend or part thereof is or has been made by the Company, any election made thereunder by such Member in respect of such restricted shares shall not be effective;and/or

(c) no transfer of any of the shares held by such Member shall be recognised or registeredbytheDirectorsunlessthetransferisapermittedtransfer;or:

(i) the Member is not himself in default as regards supplying the information required;and

(ii) the transfer is of part only of the Member's holding and, when presented for registration, is accompanied by a certificate by the Member in a form satisfactory to the Directors to the effect that after due and careful enquiry the Member is satisfied that none of the shares the subject of the transfer are restrictedshares; and/or

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(d) any shares held by such Member in uncertificated form shall forthwith be converted into certificated form (and the Directors shall be entitled to direct the operator of the relevant system applicable to those shares to effect that conversion immediately) and that Member shall not after that be entitled to convert all or any shares held by him into uncertificated form (except with the authority of the Directors) unless:

(i) the Member is not himself in default as regards supplying the information required; and

(ii) the Member proves to the satisfaction of the Directors that after due and careful enquiry the Member is satisfied that none of the shares he is proposing to convert into uncertificated form are default shares.

Upon the giving of a restriction notice its terms shall apply accordingly.

76.4 The Company shall send a copy of the restriction notice to each other person appearing to be interested in the shares the subject of such notice, but the failure or omission by the Company to do so shall not invalidate suchnotice.

76.5 Any restriction notice shall have effect in accordance with its terms until not more than seven days after the Directors are satisfied that the default in respect of which the restriction notice was issued no longer continues but shall cease to have effect in relation to any shares which are transferred by such Member by means of a permitted transfer or in accordance with Article 76.3(c) above on receipt by the Company of notice that a transfer as aforesaid has been made. The Company may (at the absolute discretion of the Directors) at any time give notice to the Member cancelling, or suspending for a stated period the operation of, a restriction notice in whole or inpart.

76.6 For the purposes of this Article 76:

(a) a person shall be treated as appearing to be interested in any shares if the Member holding such shares has given to the Company a notification whether following service of a notice under the said section 793 or otherwise whicheither:

(i) names such person as being so interested;or

(ii) (after taking into account the said notification and any other relevant information in the possession of the Company) the Company knows or has reasonable cause to believe that the person in question is or may be interested in the shares;and

(b) a transfer of shares is a permitted transfer if but onlyif:

(i) it is a transfer by way of, or in pursuance of, acceptance of a takeover offer for the Company (as defined in section 974 of the 2006 Act); or

(ii) the Directors are satisfied that the transfer is made pursuant to a bona fide sale of the whole of the beneficial ownership of the shares to a third party unconnected with the transferring Member or with any other person appearing to the Directors to be interested in such shares (and for the purposes of this

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Article 76.6(b)(ii) any associate (as that term is defined in section 435 of the Insolvency Act 1986) of the Member or of any other person appearing to the Directors to be interested in any of the restricted sharesshallbedeemedtobeconnectedwiththetransferringMember);or

(iii) the transfer results from a sale made on or through a market operated by the London Stock Exchange or on or through any stock exchange outside the United Kingdom on which the Company's shares of the same class as the restricted shares, or securities representing such shares, are normally dealtin.

76.7 The provisions of this Article 76 are in addition and without prejudice to the provisions of theStatutes.

77. Objections to and errors invoting

No objection shall be raised to the qualification of any voter or to the counting of, or failure to count, a vote except at the meeting or adjourned meeting at which the vote objected to is given or tendered (or at which the error occurs), and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the chairman of the meeting, whose decision shall be final andconclusive. Whether a proxy or corporate representative has voted in accordance with any instructions given by the Member who has appointed such proxy or corporate representative need not be verified by the Company or any other person and any vote (whether on a show of hands or on a poll) given by such proxy or corporate representative will be valid for all purposes notwithstanding any failure to follow such instructions.

78. Voting on apoll

On a poll votes may be given personally or by proxy and a Member entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way.

79. Execution ofproxies

The appointment of a proxy shall be in any usual or common form, or in any other form which the Directors may approve and shall be:

(a) under the hand of the appointor or of his attorney duly authorised in writing;or

(b) if the appointor is a corporation, either under seal, or under the hand of an officer or attorney or other person duly authorised;or

(c) if permitted by the Directors, in electronic form in the manner and form and subject to such terms and conditions as the Directors maydecide.

The signature, if any, on such appointment need not be witnessed.

80. Appointment ofproxies

A proxy need not be a Member of the Company. A Member may appoint more than one proxy to attend and to speak and to vote on the same occasion, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by the Member. The appointment of a proxy shall not preclude a Member from attending and voting in person at the meeting or any adjournment thereof.

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81. Delivery ofproxies

81.1 The appointment of a proxyshall:

(a) (in the case of an appointment not sent in electronic form) be deposited at the Office or at such other place or one of such places (if any) within the United Kingdom as is or are specified for that purpose in or by way of note to the notice convening the meeting or any document accompanying such notice;or

(b) (in the case of an appointment sent in electronic form) where an address has been specified for the purpose by the Company (generally or specifically), be received at suchaddress,

not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the appointment proposes to vote or by such later time as is specified in the notice or instrument or, in the case of a poll taken otherwise than at or on the same day as the meeting or adjourned meeting, not less than 24 hours before the time appointed for the taking of the poll at which it is tobe used or by such later time as is specified in the notice or instrument, and in default the appointment of a proxy shall not be treated as valid. Failing previous registration with the Company, the power of attorney or other authority, if any, under which the appointment of a proxy is executed, or a notarially certified copy or a copy certified in accordance with the Powers of Attorney Act 1971 of that power or authority,oracopyinsomeotherwayapprovedbytheDirectors,shall(whether(a)or (b) above shall apply) also be deposited or received at the Office or at such other place specified in accordance with (a) above, or (if the Directors so agree) at the address or by the means provided in accordance with (b) above, not later than the time by which the appointment of a proxy is required to be deposited or (as the case may be) received in accordance with this Article. When calculating any periods mentioned in this Article, the Directors may specify that no account shall be taken of any part of a day that is not a working day.

Without limiting the foregoing, in relation to any shares which are held in uncertificated form, the Directors may from time to time permit appointments of a proxy to be made by an Uncertificated Proxy Instruction, (that is, a properly authenticated dematerialised instruction, and/or other instruction or notification, which is sent by means of the relevant system concerned and received by such participant in that system acting on behalf of the Company as the Directors may prescribe, in such form and subject to such terms and conditions as may from time to time be prescribed by the Directors (subject always to the facilities and requirements of the relevant system concerned)); and may in a similar manner permit supplements to, or amendments or revocations of, any such Uncertificated Proxy Instruction to be made by like means. Notwithstanding any other provision of these Articles, the Directors may in addition prescribe the method of determining the time at which any such properly authenticated dematerialised instruction (and/or other instruction or notification) is to be treated as received by the Company or such participant. The Directors may treat any such Uncertificated Proxy Instruction which purports to be or is expressed to be sent on behalf of a holder of a share as sufficient evidence of the authority of the person sending that instruction to send it on behalf of that holder.

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81.2 An appointment of a proxy and any other document referred to in the last sentence of the first paragraph of Article 81.1shall be deemed to have been validly deposited or received in accordance with Article 81.1if the appointment is received at the Office or at such other place specified in accordance with Article 81.1(a) by facsimile transmission within the period of time specified by Article 81.1provided that the original appointment in the same form as the appointment received by facsimile transmission and any other such document is deposited at the place at which the facsimile transmission was received not less than 24 hours before the time appointed for the meeting or adjourned meeting or the holding of a poll subsequently at which the vote is to beused or by such later time as is specified in the notice or instrument.

81.3 If two or more valid but differing appointments of a proxy are delivered or (in the case of appointments in electronic form) received in accordance with Article 81.1 in respect of the same share for use at the same meeting, the one which is last delivered or, as the case may be, received as aforesaid (regardless of its date, its date of sending or the date of its execution) shall be treated as replacing and revoking the others as regards that share. If the Company is unable to determine which was delivered or received last, none of them shall be treated as valid in respect of thatshare.

82. Validity ofproxies

An appointment of a proxy shall, unless the contrary is stated thereon, be valid as well for any adjournment of the meeting to which it relates. No appointment of a proxy shall be valid after the expiration of 12 months from the date of its deposit or receipt in accordance with Article 81.1 except at an adjourned meeting or on a poll demanded at a meeting or adjourned meeting in cases where the meeting was originally held within 12 months from that date.

83. Authority of proxies to call for apoll

The appointment of a proxy to vote on a matter at a meeting of the Company shall be deemed to confer authority on the proxy to demand or join in demanding a poll on that matter.

84. Cancellation of proxy'sauthority

84.1 The termination of the authority of a person to act as proxy must be notified to the Company in writing.

84.2 The termination of the authority of a person to act as proxy does not affect:

(a) whether that person counts in deciding whether there is a quorum at a meeting, the validity of anything that person does as chairman of a meeting or the validity of a poll demanded by that person at a meeting unless the Company receives notice of termination before the commencement of the meeting; and

(b) the validity of a vote given by that person unless the Company receives notice of termination before the commencement of the meeting or adjourned meeting at which the vote is given or, in the case of a poll taken more than 48 hours after it is demanded, before the time appointed for taking the poll.

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84.3 The notice of the termination must be received at an address that is specified in the form of proxy or, where the appointment of the proxy was sent by electronic means, at an address that is specified or deemed to be specified in such form of proxy or, in either case, in the notice convening the meeting or any document sent therewith.

84.4 A vote given or poll demanded in accordance with the terms of an appointment of a proxy or by the duly authorised representative of a corporation shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or determination of the authority of the person voting or demanding a poll, provided that no intimation in writing of such death, insanity, revocation or determination shall have been received by the Company at the Office or such other place (if any) as is specified in the form of proxy for depositing the appointment of proxy or, where the appointment of the proxy was sent by electronic means, at an address that is specified or deemed to be specified in such form of proxy, or in either case, in the notice convening the meeting or any document sent therewith, in each case in accordance with Article 81.1, before the time for holding the meeting or adjourned meeting or the time appointed for taking a poll subsequently thereto at which such vote is given.

85. Corporaterepresentatives

Any corporation which is a Member of the Company may by resolution of its directors or other governing body authorise a person or persons to act as its representative or representatives at any meeting of the Company or of any class of Members of the Company. A director, the Secretary or other person authorised for the purpose by the Secretary may require a representative to produce a certified copy of the resolution of authorisation before permitting him to exercise his powers.

86. Powers of corporaterepresentatives

Any person so authorised shall be entitled to exercise on behalf of the corporation which he represents the same powers as that corporation could exercise if it were an individual Member of the Company and such corporation shall for the purposes of these Articles be deemed to be present in person at any such meeting if a person so authorised is present thereat. Where the corporation authorises more than one person, the provisions of section 323(3) and (4) of the 2006 Act shall apply.

DIRECTORS

87. Number ofDirectors

Unless and until the Company in general meeting shall otherwise determine, the number of Directors shall not be less than two, but shall not be subject to any maximum number.

88. Directors' shareholdingqualification

A Director shall not be required to hold any shares in the capital of the Company. A Director who is not a Member shall nevertheless be entitled to receive notice of and attend and speak at all general meetings of the Company and all separate general meetings of the holders of any class of shares in the capital of theCompany.

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89. Age ofDirectors

There shall not be an age limit for Directors.

90. Other interests ofDirectors

Subject to the provisions of the Statutes, a Director of the Company may be or continue as or become a director or other officer, employee or member of, or a party to any contract, transaction or arrangement with, or otherwise interested in, any body corporate in which the Company may be (directly or indirectly) interested as shareholder or otherwise or any parent undertaking or subsidiary undertaking of any parent undertaking of the Company, and no such Director shall, by reason of his office, be accountable to the Company for any remuneration or other benefits which derive from any such office or employment or from any contract, transaction or arrangement with, or from his membership or interest in, such other body corporate or undertaking. No such office, employment, contract, transaction or arrangement or interest shall be liable to be avoided on the ground of any such interest orbenefit.

91. Directors'fees

The Directors shall be paid out of the funds of the Company by way of fees for their services as Directors such sums (if any) as the Directors may from time to time determine (not exceeding in the aggregate an annual sum (excluding amounts payable under any other provision of these Articles) of £500,000 or such larger amount as the Company may by ordinary resolution determine) and such remuneration shall be divided among them in such proportions and manner as the Directors determine and, in default of a determination within a reasonable period, equally, except that any Director holding office for less than a year or other period for which remuneration is paid shall rank in the division in proportion to the fraction of the year or other period during which he has held office. Such remuneration shall be deemed to accrue from day today.

92. Directorsexpenses

The Directors may also be paid all reasonable travelling, hotel and other expenses properly incurred by them in attending and returning from meetings of the Directors or any committee of the Directors or general meetings of the Company or of the holders of any class of shares or debentures of the Company or otherwise in connection with the business of theCompany.

93. Additionalremuneration

Any Director who is appointed to any executive office or who serves on any committee or who devotes special attention to the business of the Company, or who otherwise performs services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director, may be paid such extra remuneration by way of salary, percentage of profits or otherwise as the Directors may determine.

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ALTERNATE DIRECTORS

94. AlternateDirectors

94.1 Each Director shall have the power at any time to appoint as an alternate Directoreither: (i) another Director or (ii) any other person approved for that purpose by a resolution of the Directors, and, at any time, to terminate such appointment. Every appointment and removal of an alternate Director shall be in writing signed by the appointor and (subject to any approval required) shall (unless the Directors agree otherwise) only take effect upon receipt of such written appointment or removal at the Office or at a meeting of the Directors or in the case of an appointment or removal in electronic form, at such address (if any) specified by the Company for that purpose. An alternate Director shall not be required to hold any shares in the capital of the Company and shall not be counted in reckoning the maximum and minimum numbers of Directors allowed or required by Article 87.

94.2 An alternate Director so appointed shall not be entitled as such to receive any remuneration from the Company except only such part (if any) of the remuneration otherwise payable to his appointor as such appointor may by notice in writing to the Company from time to time direct, but shall otherwise be subject to the provisions of these Articles with respect to Directors. An alternate Director shall during his appointment be an officer of the Company and shall alone be responsible to the Company for his own acts and defaults and shall not be deemed to be an agent of hisappointor.

94.3 An alternate Director shall be entitled (subject to his giving to the Company either an address within the United Kingdom or an address for the purpose of sending or receiving documents or information by electronic means at which notices may be served upon him) to receive notices of all meetings of the Directors and of any committee of the Directors of which his appointor is a Member, and shall be entitled to attend and vote as a Director at any such meeting at which his appointor is not personally present and generally in the absence of his appointor to perform and exercise all functions, rights, powers and duties as Director of hisappointor.

94.4 The appointment of an alternate Director shall automatically determine on the happening of any event which, if he were a Director, would cause him to vacate such office or if his appointor shall cease for any reason to be a Director otherwise than by retiring and being re-appointed at the samemeeting.

94.5 A Director or any other person may act as alternate Director to represent more than one Director and an alternate Director shall be entitled at meetings of the Directors or any committee of the Directors to one vote for every Director whom he represents in addition to his own vote (if any) as a Director, but he shall count as only one for the purpose of determining whether a quorum ispresent.

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BORROWING POWERS

95. Directors' borrowing powers and restrictions onborrowing

95.1 Subject as hereinafter provided the Directors may exercise all the powers of the Company to borrow money, and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital, or any part thereof, and, subject to the provisions of the Statutes to issue debentures, debenture stock, and other securities whether outright or as security for any debt, liability or obligation of the Company or of any thirdparty.

95.2 The Directors shall restrict the borrowings of the Company and exercise all voting and other rights or powers of control exercisable by the Company in relation to its subsidiary undertakings (if any) so as to secure (so far, as regards subsidiary undertakings, as by such exercise they can secure) that the aggregate amount for the time being remaining outstanding of all monies borrowed by the Group (which expression in this Article means the Company and its subsidiary undertakings for the time being) and for the time being: owing to persons outside the Group shall not at any time, without the previous sanction of an ordinary resolution of the Company in general meeting, exceed a sum equal to 5 times the aggregateof:

(a) the amount paid up on the issued share capital of the Company;and

(b) the total of the capital and revenue reserves of the Group (including any share premium account, capital redemption reserve and credit balance on the profit and loss or income account) in each case, whether or not such amounts are available fordistribution;

all as shown in the latest audited consolidated balance sheet of the Group but after:

(i) making such adjustments as may be appropriate in respect of any variation in such amount paid up on the issued share capital or share premium account or capital redemption reserve or merger reserve since the date of such latest audited consolidated balance sheet and so that for this purpose if any issue or proposed issue of shares for cash or otherwise has been underwritten or otherwise agreed to be subscribed (for cash or otherwise) then, at any time when the underwriting of such shares or other agreement as aforesaid shall be unconditional, such shares shall be deemed to have been issued and the amount (including any premium) payable (or which would be credited as payable) in respect thereof (not being monies payable later than six months after the date of allotment) shall be deemed to have been paid up to the extent that the underwriters or other persons are liable therefor;

(ii) deducting (to the extent included) any amounts distributed or proposed to be distributed (but not provided in such latest audited consolidated balance sheet) other than distributions attributable to the Company or any subsidiaryundertaking;

(iii) deducting (to the extent included) any amounts attributable to goodwill (other than goodwill arising on consolidation) which, as at the date of the relevant calculation, remain within the Company and its subsidiary undertakings and which have been written off against reserves either by direct charge or by charge through the profit and loss or incomeaccount;

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(iv) excluding any amounts attributable to outside shareholders in subsidiary undertakings of theCompany;

(v) deducting any debit balance on the profit and loss or incomeaccount;

(vi) adding back an amount equal to amounts charged in respect of any deferred tax liabilities, any deficit relating to pensions and other post employment benefits and any asset or liability which has been re-valued under the provisions of IAS 32, 39, 40 or 41 or the corresponding UK standard, whether charged to profit and loss account or to fair value reserve (in each case) substituting the relevant amounts that would have been recognised had the accounts been prepared in accordance with the relevant accounting standards applicable to the Group's accounts for the year ended 31 December 2004 under UK generally accepted accounting principles insofar as they relate to the matters dealt with by IAS 32 and IAS 39, 40, 41; and deducting from reserves amounts credited in respect of any deferred tax assets and any surpluses relating to pensions and other post employment benefits or any asset or liability which has been re-valued under the provisions of IAS 32, 39, 40 or 41 or the corresponding UK standard, whetherincludedinprofitandlossaccountorinthefairvaluereserve(in each case) substituting the relevant amounts that would have been recognised had the accounts been prepared in accordance with the relevant accounting standards applicable to the Group's accounts for the year ended 31 December 2004 under UK generally accepted accounting principles insofar as they relate to the matters dealt with by IAS 32 and IAS 39, 40, 41.

References in this paragraph to IAS are to those International Accounting Standards as from time to time amended, and any standards, principles, practice or rules that may from time to time, directly or indirectly, supplement or replace those standards or any part of them; and

(vii) making such adjustments (if any) as the Auditors may considerappropriate.

95.3 For the purpose of the foregoing limit, "monies borrowed" shall be deemed to include the following except in so far as otherwise taken into account (together in each case with any fixed or minimum premium payable on final redemption orrepayment):

(a) the principal amount for the time being owing (other than to a member of the Group) in respect of any loan capital, whether secured or unsecured, issued by a member of the Group in whole or in part for cash orotherwise;

(b) the principal amount raised by any member of the Group by acceptances or under any acceptance credit opened on its behalf by any bank or accepting house other than acceptances relating to the purchase of goods in the ordinary course of trading and outstanding for not more than 90days;

(c) the nominal amount of any issued share capital, and the principal amount of any monies borrowed or other indebtedness, the redemption or repayment of which is guaranteed or secured or is the subject of an indemnity given by any member of the Group and the beneficial interest in the redemption or repayment of which is not owned within the Group;and

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(d) the nominal amount of any issued share capital (not being equity share capital which as regards capital has rights no more favourable than those attached to its ordinary share capital) of any subsidiary undertaking of the Company owned otherwise than by other members of theGroup, but "monies borrowed" shall not include and shall be deemed not to include:

(i) amounts borrowed for the purpose of repaying the whole or any part (with or without premium) of any monies borrowed by any member of the Group then outstanding and so to be applied within six months of being so borrowed, pending their application for such purpose within such period; and

(ii) the proportion of the excess outside borrowing of a partly owned subsidiary undertaking which corresponds to the proportion of its equity share capital which is not directly or indirectly attributable to the Company and so that, for this purpose, the expression "excess outside borrowing" shall mean so much of the monies borrowed by such partly owned subsidiary undertaking otherwise than from members of the Group as exceeds the monies borrowed (if any) from and owing to it by other members of the Group.

When the aggregate amount of monies borrowed required to be taken into account for the purposes of this Article on any particular day is being ascertained, any of such monies denominated or repayable (or repayable at the option of any person other than the Company or any subsidiary undertaking) in a currency other than sterling shall be translated, for the purpose of calculating the sterling equivalent, at the rate(s) of exchange prevailing on that day in London, or on the last business day six months before such day if thereby such aggregate amount would be less (and so that for this purpose the rate of exchange prevailing shall be taken as the spot rate in London quoted at or about 11.00 a.m. on the day in question by a London clearing bank, approved by the Directors, as being the rate for the purchase by the Company of the currency and amount in question forsterling).

95.4 A certificate or report by the Auditors as to the amount of the limit in Article 95.2 or the aggregate amount of monies borrowed falling to be taken into account under Article 95.3 or to the effect that the limit imposed by this Article has not been or will not be exceeded at any particular time or times or during any period shall be conclusive evidence of such amount or fact for the purposes of thisArticle.

95.5 No lender or other person dealing with the Company or any of its subsidiary undertakings shall be concerned to see or inquire whether the said limit is observed, and no debt incurred or security given in excess of such limit shall be invalid or ineffectual, except in the case of express notice to the lender or the recipient of the security at the time when the debt was incurred or security given that the said limit has been or would thereby be exceeded.

95.6 In this Article "subsidiary undertaking" means a subsidiary undertaking of the Company which is required by the Statutes to be included in consolidated groupaccounts.

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POWERS AND DUTIES OF DIRECTORS

96. Powers of Company vested in theDirectors

The business of the Company shall be managed by the Directors, who may exercise all the powers of the Company subject, nevertheless, to the provisions of these Articles and of the Statutes, and to such directions as may be given by the Company in general meeting by special resolution, provided that no alteration of these Articles and no such direction shall invalidate any prior act of the Directors which would have been valid if such alteration had not been made or such direction had not been given. The general powers conferred upon the Directors by this Article shall not be deemed to be abridged or restricted by any specific power conferred upon the Directors by any otherArticle.

97. Pensions, insurance and gratuities for Directors andothers

97.1 The Directors may exercise all the powers of the Company to give or award pensions, annuities, gratuities or other retirement, superannuation, death or disability allowances or benefits (whether or not similar to the foregoing) to (or to any person in respect of) any persons who are or have at any time been Directors of or employed by or in the service of the Company or of any body corporate which is or was a subsidiary undertaking or a parent undertaking of the Company or another subsidiary undertaking of a parent undertaking of the Company or otherwise associated with the Company or any such body corporate, or a predecessor in business of the Company or any such body corporate, and to the spouses, civil partners, former spouses, former civil partners, children and other relatives and dependants of any such persons and may establish, maintain, support, subscribe to and contribute to all kinds ofschemes, trusts and funds (whether contributory or non-contributory) for the benefit of such persons as are hereinbefore referred to or any of them or any class of them, and so that any Director or former Director shall be entitled to receive and retain for his own benefit any such pension, annuity, gratuity, allowance or other benefit (whether under any such trust, fund or scheme or otherwise).

97.2 Without prejudice to any other provisions of these Articles, the Directors may exercise all the powers of the Company to purchase and maintain insurance for or for the benefit of any persons who are or were at any time directors, officers, employees or auditors of the Company, or of any other body (whether or not incorporated) which is or was its parent undertaking or subsidiary undertaking or another subsidiary undertaking of any such parent undertaking (together "Group Companies") or otherwise associated with the Company or any Group Company or in which the Company or any such Group Company has or had any interest, whether direct or indirect, or of any predecessor in business of any of the foregoing, or who are or were at any time trustees of (or directors of trustees of) any pension, superannuation or similar fund, trust or scheme or any employees' share scheme or other scheme or arrangement in which any employees of the Company or of any such other body are interested, including (without prejudice to the generality of the foregoing) insurance against any costs, charges, expenses, losses or liabilities suffered or incurred by such persons in respect of any act or omission in the actual or purported execution and/or discharge of their duties and/or the actual or purported exercise of their powers and discretions and/or otherwise in relation to or in connection with their duties, powers or offices in relation to the Company or any such other body, fund, trust, scheme orarrangement.

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97.3 Without prejudice to any other provisions of these Articles, the Directors may exercise all the powers of the Company to establish, maintain, and contribute to any scheme for encouraging or facilitating the holding of shares in the Company or in any subsidiary or subsidiary undertaking of the Company by or for the benefit of current or former directors of the Company or any subsidiary or subsidiary undertaking of the Company or any company otherwise allied or associated with the Company or subsidiary or subsidiary undertaking of the Company or the spouses, civil partners, former spouses, former civil partners, families, connections or dependants of any such person and, in connection with any such scheme, to establish, maintain and contribute to a trust for the purpose of acquiring and holding shares in the Company or any subsidiary or subsidiary undertaking of the Company and to lend money to the trustees of any such trust or to any individual referred to above.

98. Localboards

The Directors may make such arrangements as they think fit for the management and transaction of the Company's affairs in the United Kingdom and elsewhere and may from time to time and at any time establish any local boards or agencies for managing any of the affairs of the Company in any specified locality, and may appoint any persons to be members of such local board, or any managers or agents, and may fix their remuneration. The Directors from time to time, and at any time, may delegate to any person so appointed any of the powers, authorities, and discretions for the time being vested in the Directors (other than the powers of borrowing and of making calls), with power to sub-delegate, and may authorise the members for the time being of any such local board, or any of them, to fill up any vacancies therein, and to act notwithstanding vacancies; and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit, and the Directors may at any time remove any person so appointed, and may annul or vary any such delegation.

99. Attorneys

The Directors may from time to time and at any time by power of attorney or otherwise appoint any body corporate, firm or person or body of persons to be the attorney or attorneys or agent or agents of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other appointments may contain such provisions for the protection and convenience of persons dealing with any such attorney or agent as the Directors may think fit and may also authorise any such attorney or agent to sub-delegate all or any of the powers, authorities and discretions vested inhim.

100. Officialseal

The Company may exercise the powers conferred by the Statutes with regard to having an official seal for use abroad and the powers conferred by the Statutes with regard to having an official seal for sealing securities and for sealing documents creating and/or evidencing securities, and such powers shall be vested in theDirectors.

101. Overseas branchregister

The Company may exercise the powers conferred upon the Company by the Statutes with regard to the keeping of an overseas branch register, and the Directors may (subject to the provisions of the Statutes) make and vary such regulations as they may think fit concerning the keeping of any such register.

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102. Directors' permitted interests and entitlement tovote

102.1 Subject to the provisions of the Statutes, a Director may hold any other office or place of profit with the Company, except that of Auditor, in conjunction with the office of Director and may act by himself or through his firm in a professional capacity for the Company (otherwise than as Auditor), and in any such case on such terms as to remuneration and otherwise as the Directors may decide. Any such remuneration shall be in addition to any remuneration provided for by any other Article. No Director or intending Director shall be disqualified by his office from entering into, or being otherwise interested in, any of the foregoing, or any other contract, transaction or arrangement with the Company or in which the Company has a (direct or indirect) interest. Subject to the provisions of the Statutes and save as therein provided no such contract, transaction or arrangement shall be liable to be avoided on the grounds of the Director's interest, nor shall any Director be liable to account to the Company for any remuneration or other benefit which derives from any such contract, transaction or arrangement or interest by reason of such Director holding that office or of the fiduciary relationship thereby established, but he shall declare the nature of his interest in accordance with theStatutes.

102.2 Save as herein provided, a Director shall not vote at a meeting of the Directors in respect of any contract, arrangement or transaction whatsoever in which he has an interest which is to his knowledge a material interest otherwise than by virtue of interests in shares or debentures or other securities of or otherwise in or through the Company. A Director shall not be counted in the quorum at a meeting in relation to any resolution on which he is debarred fromvoting.

102.3 A Director shall (in the absence of some other material interest than is indicated below) be entitled to vote (and be counted in the quorum) in respect of any resolution concerning any of the following matters,namely:

(a) the giving of any guarantee, security or indemnity in respect of money lent or obligations incurred by him or by any other person at the request of or for the benefit of the Company or any of its subsidiaryundertakings;

(b) the giving of any guarantee, security or indemnity in respect of a debt or obligation of the Company or any of its subsidiary undertakings for which he himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving ofsecurity;

(c) any proposal concerning an offer of securities of or by the Company or any of its subsidiaryundertakingsinwhichofferheisormaybeentitledtoparticipateasa holder of securities or in the underwriting or sub-underwriting of which he is to participate;

(d) any contract, arrangement or transaction concerning any other body corporate in which he or any person connected with him (within the meaning of sections 252 to 255 of the 2006 Act) is interested, directly or indirectly and whether as an officer or shareholder or otherwise howsoever, provided that he and any persons so connected with him do not to his knowledge hold an interest (within the meaning of sections 820 to 825 of the 2006 Act) in one per cent. or more of any class of the equity share capital of such body corporate or of the voting rights available to members of the relevant body corporate;

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(e) any contract, arrangement or transaction for the benefit of employees of the Company or any of its subsidiary undertakings which does not accord to him any privilege or advantage not generally accorded to the employees to whom the schemerelates;

(f) any contract, arrangement or transaction concerning any insurance which the Company is to purchase and/or maintain for, or for the benefit of, any Directors or persons includingDirectors;

(g) the giving of an indemnity pursuant to Article 155;and

(h) the provision of funds to any Director to meet, or the doing of anything to enable a Director to avoid incurring, expenditure of the nature described in section 205(1) or 206 of the 2006 Act.

102.4 A Director shall not vote or be counted in the quorum on any resolution at any meeting of the Directors concerning his own appointment as the holder of any office or place of profit with the Company or any company in which the Company is interested including fixing or varying the terms of his appointment or the terminationthereof.

102.5 Where proposals are under consideration concerning the appointment (including fixing or varying the terms of appointment) of two or more Directors to offices or employments with the Company or any body corporate in which the Company is interested, such proposals may be divided and considered in relation to each Director separately and in such cases each of the Directors concerned (if not debarred from voting under paragraph 102.3(d) of this Article) shall be entitled to vote (and be counted in the quorum) in respect of each resolution except that concerning his ownappointment.

102.6 If any question shall arise at any meeting of the Directors as to an interest or as to the entitlement of any Director to vote and such question is not resolved by his voluntarily agreeing to abstain from voting, such question shall be referred to the chairman of the meeting and his ruling in relation to any Director other than himself shall be final and conclusive except in a case where the nature or extent of the interests of the Director concerned have not been fairly disclosed.

102.7 Subject to the provisions of the Statutes the Company may by ordinary resolution suspend or relax the provisions of this Article to any extent or ratify any contract, arrangement or transaction not duly authorised by reason of a contravention of this Article.

102.8

(a) For the purposes of section 175 of the 2006 Act, the Directors may authorise any matter proposed to them in accordance with these Articles which would, if not so authorised, constitute or give rise to an infringement of duty by a Director under thatSection.

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(b) Authorisation of a matter under sub paragraph (a) of this paragraph of this Article shall be effective only if-

(i) the matter in question shall have been proposed by any person for consideration at a meeting of the Directors, in accordance with the Directors procedures, if any, for the time being relating to matters for consideration by the Directors or in such other manner as the Directors may approve;

(ii) any requirement as to the quorum at the meeting of the Directors at which the matter is considered is met without counting the Director in question and any other interested Director (together the "Interested Directors");and

(iii) the matter was agreed to without the Interested Directors voting or would have been agreed to if the votes of the Interested Directors had not beencounted.

(c) Any authorisation of a matter pursuant to sub paragraph (a) of this paragraph of this Article shall extend to any actual or potential conflict of interest which may reasonably be expected to arise out of the matter soauthorised.

(d) Any authorisation of a matter under sub paragraph (a) of this paragraph of this Article shall be subject to such conditions or limitations as the Directors may specify, whether at the time such authorisation is given or subsequently, and may be terminated or varied by the Directors at any time. A Director shall comply with any obligations imposed on him by the Directors pursuant to any suchauthorisation.

(e) A Director shall not, by reason of his office or the fiduciary relationship thereby established, be accountable to the Company for any remuneration or other benefit which derives from any matter authorised by the Directors under sub-paragraph (a) of this paragraph of this Article and any contract, transaction or arrangement relating thereto shall not be liable to be avoided on the grounds of any such remuneration or other benefit or on the ground of the Director having any interest as referred to in the said section175.

(f) A Director shall be under no duty to the Company with respect to any information which he obtains or has obtained otherwise than as a director or officer or employee of the Company and in respect of which he owes a duty of confidentiality to another person. However, to the extent that his connection with that other person conflicts, or possibly may conflict, with the interests of the Company, this sub-paragraph (f) of this paragraph of this Article applies only if the existence of that connection has been authorised by the Directors under sub-paragraph (a) of this paragraph of this Article. In particular, the Director shall not be in breach of the general duties he owes to the Company by virtue of sections 171 to 177 of the 2006 Act because he fails-

(i) to disclose any such information to the Directors or to any Director or other officer or employee of the Company;and/or

(ii) to use any such information in performing his duties as a Director or officer or employee of the Company.

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(g) Where the existence of a Director's connection with another person has been authorised by the Directors under sub-paragraph (a) of this paragraph of this Article and his connection with that person conflicts, or possibly may conflict, with the interests of the Company, the Director shallnot be in breach of the general duties he owes to the Company by virtue of sections 171 to 177 of the 2006 Act because he -

(i) absents himself from meetings of the Directors or any committee thereof at which any matter relating to the conflict of interest or possible conflict of interest will or may be discussed or from the discussion of any such matter at a meeting or otherwise;and/or

(ii) makes arrangements not to receive documents and information relating to any matter which gives rise to the conflict of interest or possible conflict of interest sent or supplied by the Company and/or for such documents and information to be received and read by a professional adviser,

for so long as he reasonably believes such conflict of interest (or possible conflict of interest) subsists.

(h) The provisions of sub-paragraphs (f) and (g) of this paragraph of this Article are without prejudice to any equitable principle or rule of law which may excuse the Director from-

(i) disclosing information, in circumstances where disclosure would otherwise be required under these Articles or otherwise;or

(ii) attending meetings or discussions or receiving documents and information as referred to in sub-paragraph (g) of this paragraph of this Article, in circumstances where such attendance or receivingsuchdocumentsandinformationwouldotherwiseberequiredundertheseArticles.

(i) For the purposes of this Article, a conflict of interest includes a conflict of interest and duty and a conflict ofduties.

103. Exercise of Company's votingpowers

The Directors may exercise or procure the exercise of the voting rights conferred by the shares in any other body corporate held or owned by the Company or any power of appointment in relation to any other body corporate, and may exercise any voting rights or power of appointment to which they are entitled as directors of such other body corporate, in such manner as they shall in their absolute discretion think fit, including the exercise thereof in favour of appointing themselves or any of them as directors, officers or servants of such other body corporate, and fixing their remuneration as such, and may vote as Directors of the Company in connection with any of the mattersaforesaid.

104. Signing of chequesetc.

All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments, and all receipts for monies paid to the Company, shall be signed, drawn, accepted, endorsed, or otherwise executed, as the case may be, in such manner as the Directors shall from time to time determine.

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105. Minutes

105.1 The Directors shall cause minutes to berecorded:

(a) of all appointments of officers made by theDirectors;

(b) of the names of the Directors present at each meeting of the Directors and of any committee of theDirectors;

(c) of all resolutions and proceedings at all meetings of the Company, and of the Directors, and of committees ofDirectors.

105.2 It shall not be necessary for Directors present at any meeting of Directors or committee of Directors to sign their names in any minute book or other book kept for recording attendance. Minutes recorded as aforesaid, if purporting to be signed by the chairman of the meeting, or by the chairman of the next succeeding such meeting, shall be receivable as evidence of the matters stated in suchminutes.

DISQUALIFICATION OF DIRECTORS

106. Vacation of a Director'soffice

The office of a Director shall be vacated in any of the following events, namely:

106.1 if a bankruptcy order is made against him or he makes any arrangement or composition with his creditorsgenerally;

106.2 if he ceases to be a Director by virtue of any provision of the Statutes, is removed from office pursuant to these Articles or the Statutes or becomes prohibited by law or (if applicable) the rules of any stock exchange from acting as a Director;

106.3 if, in England or elsewhere, an order is made by any court claiming jurisdiction in that behalf on the ground (however formulated) of mental disorder for his detention or for the appointment of a guardian or receiver or other person to exercise powers with respect to his property oraffairs;

106.4 if he resigns his office by notice to the Company or offers to resign and the Directors resolve to accept suchoffer;

106.5 if, not having leave of absence from the Directors, he and his alternate (if any) fail to attend the meetings of the Directors for six successive months, unless prevented by illness, unavoidable accident or other cause which may seem to the Directors to be sufficient, and the Directors resolve that his office bevacated;

106.6 if, by notice in writing delivered to or received at the Office or, in the case of a notice in electronic form, at such address (if any) specified by the Directors for that purpose or tendered at a meeting of the Directors, his resignation is requested by all of the other Directors (but so that this shall be without prejudice to any claim such Director may have for damages for breach of any contract of service between him and theCompany).

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RETIREMENT AND SUBMISSION FOR RE-ELECTION OF DIRECTORS

107. Regular submission of Directors forre-election

At every annual general meeting, there shall retire from office any Director who shall have been a Director at each of the preceding two annual general meetings and who was not appointed or re-appointed by the Company in general meeting at, or since, either such meeting. A retiring Director shall be eligible for re-appointment. A Director retiring at a meeting shall, if he is not re-appointed at such meeting, retain office until the meeting appoints someone in his place, or if it does not do so, until the conclusion of such meeting.

108. Appointment of Directors by separateresolution

A single resolution for the appointment of two or more persons as Directors shall not be put at any general meeting, unless an ordinary resolution that it should be so put has first been agreed to by the meeting without any vote being given against it.

109. Persons eligible forappointment

No person other than a Director retiring at the meeting shall, unless recommended by the Directors, be eligible for appointment to the office of Director at any general meeting unless not less than seven nor more than 42 days before the date appointed for the meeting there shall have been left at the Office notice in writing, signed by a Member duly qualified to attend and vote at such meeting, of his intention to propose such person for appointment, and also notice in writing signed by that person of his willingness to be appointed.

110. Casual vacancies and additional Directors - powers ofCompany

Subject as aforesaid, the Company may from time to time by ordinary resolution appoint a person who is willing to act to be a Director either to fill a casual vacancy or as an additionalDirector.

111. Casual vacancies and additional Directors - powers ofDirectors

The Directors shall have power at any time, and from time to time, to appoint any person to be a Director of the Company, either to fill a casual vacancy or as an addition to the existing Directors, but so that the total number of Directors shall not at any time exceed the maximum number, if any, fixed by or pursuant to these Articles. Any Director so appointed shall hold office only until the next following annual general meeting, and shall then be eligible for reappointment. If not reappointed at such meeting, he shall vacate office at the conclusion thereof.

112. Power of removal by ordinaryresolution

The Company may by ordinary resolution, of which special notice has been given in accordance with the provisions of the Statutes, remove any Director before the expiration of his period of office notwithstanding anything in these Articles or in any agreement between the Company and such Director. Such removal shall be without prejudice to any claim such Director may have for damages for breach of any contract of service between him and the Company.

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113. Appointment of replacementDirector

Subject to Article 108, the Company may by ordinary resolution appoint another person in place of a Director removed from office under the immediately preceding Article.

PROCEEDINGS OF DIRECTORS

114. Board meetings andparticipation

The Directors may meet for the despatch of business, adjourn and otherwise regulate their meetings as they think fit. Without prejudice to the foregoing, all or any of the Directors or of the members of any committee of the Directors may participate in a meeting of the Directors or of that committee by electronic means, including by means of a conference telephone or any communicationequipmentwhichallowsallpersonsparticipatinginthemeetingtohear each other and to address each other. A person so participating shall be deemed to be present in person at the meeting and shall be entitled to vote and be counted in the quorum accordingly. Such a meeting shall be deemed to take place where the largest group of those participating is assembled, or, if there is no such group, where the chairman of the meeting is then present. The word "meeting" in these Articles shall be construed accordingly.

115. Quorum at boardmeetings

The Directors may determine the quorum necessary for the transaction of business. Until otherwise determined two Directors shall constitute a quorum.

116. Voting at boardmeetings

Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes, the chairman of the meeting shall have a second or casting vote. A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors. Any Director may waive notice of any meeting and any such waiver may beretrospective.

117. Notice of boardmeetings

Notice of a meeting of the Directors shall be deemed to be duly given to a Director if it is given to him personally or by word of mouth or sent in writing to him at his last known address or any other address given by him to the Company for this purpose or sent in electronic form to such address (if any) for the time being specified by him or on his behalf to the Company for that purpose. A Director absent or intending to be absent from the United Kingdom may request the Directors that notices of meetings of the Directors shall during his absence be sent in writing to him at his last known address or any other address given by him to the Company for this purpose, whether or not out of the United Kingdom, or be sent by electronic means to such address (if any) for the time being notified by him to the Company for that purpose. If no such request is made to the Directors, it shall not be necessary to send notice of a meeting of the Directors to any Director who is for the time being absent from the UnitedKingdom.

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118. Directors belowminimum

The continuing Directors or sole continuing Director may act notwithstanding any vacancy in their body, but, if and so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors or Director may act for the purpose of increasing the number of Directors to that number, or of summoning a general meeting of the Company, but for no other purpose.

119. Appointment of chairman and deputy chairman ofmeetings

The Directors may elect one of their number as a chairman of their meetings, and one of their number to be the deputy chairman of their meetings and may at any time remove either of them from such office; but if no such chairman or deputy chairman is elected, or if at any meeting neither the chairman nor the deputy chairman is present within five minutes after the time appointed for holding the meeting and willing to act, the Directors present shall choose one of their number to be chairman of such meeting.

120. Delegation of Directors' powers tocommittees

The Directors may delegate any of their powers or discretions (including without prejudice to the generality of the foregoing all powers and discretions whose exercise involves or may involve any payment to or the conferring of any other benefit on all or any of the Directors) to committees consisting of one or more members of their body and (if thought fit) one or more other persons co-opted as hereinafter provided. Insofar as any such power or discretion is delegated to a committee any reference in these Articles to the exercise by the Directors of such power or discretion shall be read and construed as if it were a reference to the exercise of such power or discretion by such committee. Any committee so formed shall in the exercise of the powers and discretions so delegated conform to any regulations that may from time to time be imposed by the Directors in default of which the meetings and proceedings of a committee consisting of more than one member shall be governed mutatis mutandis by the provisions of these Articles regulating the proceedings and meetings of the Directors. Any such regulations may provide for or authorise the co-option to the committee of persons other than Directors and for such co-opted members to have voting rights as members of thecommittee.

Any such delegation shall, in the absence of express provision to the contrary in the terms of delegation, be deemed to include authority to sub-delegate to one or more Directors (whether or not acting as a committee) or to any employee or agent of the Company all or any of the powers and discretions delegated and may be made subject to such conditions as the Directors may specify, and may be revoked or altered.

121. Validity of Directors'acts

All acts done by any meeting of the Directors or of a committee of the Directors or by any person acting as a Director or as a member of a committee shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment or continuance in office of any of the persons acting as aforesaid, or that any of such persons were disqualified from holding office or not entitled to vote on the matter in question, or had in any way vacated office, be as valid as if every such person had been duly appointed or had duly continued in office and was qualified and had continued to be a Director or member of the committee and was entitled tovote.

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122. Written resolution ofDirectors

A resolution in writing, signed or otherwise agreed to by all the Directors for the time being entitled to receive notice of a meeting of the Directors or by all the members of a committee for the time being entitled to receive notice of a committee meeting (in each case who would have been entitled to vote on the resolutions at a meeting of the Directors or of such committee), shall be as valid and effective for all purposes as a resolution passed at a meeting duly convened and held, and may consist of two or more documents in like form each signed or agreed to by one or more of such Directors or members of such committee provided that all those signing or agreeing to the resolution would have formed a quorum at such meeting. Such a resolution in writing need not be signed or agreed to by an alternate Director if it is signed or agreed to by the Director who appointedhim.

MANAGING AND EXECUTIVE DIRECTORS

123. Appointment of executiveDirectors

Subject to the provisions of the Statutes, the Directors may from time to time appoint one or more of their body to the office of Managing Director or to hold such other executive office in relation to the management of the business of the Company as they may decide, for such period and on such terms as they think fit, and, subject to the terms of any service contract entered into in any particular case and without prejudice to any claim for damages such Director may have for breach of any such service contract, may revoke such appointment. Without prejudice to any claim for damages such Director may have for breach of any service contract between him and the Company, his appointment shall be automatically determined if he ceases from any cause to be aDirector.

124. Remuneration of executiveDirectors

The salary or remuneration of any Managing Director or other executive Director of the Company shall, subject as provided in any contract, be such as the Directors may from time to time determine, and may either be a fixed sum of money, or may altogether or in part be governed by the business done or profits made, and may include the making of provisions for the payment to him, his widow or other dependants, of a pension on retirement from the office or employment to which he is appointed and for the participation in pension and life assurance and other benefits, or may be upon such other terms as the Directorsdetermine.

125. Powers of executiveDirectors

The Directors may entrust to and confer upon a Managing Director or other executive Director any of the powers and discretions exercisable by them upon such terms and conditions and with such restrictions as they may think fit, and either collaterally with or to the exclusion of their own powers and discretions and may from time to time revoke, withdraw, alter or vary all or any of such powers ordiscretions. Any such delegation shall, in the absence of express provision to the contrary in the terms of the delegation, be deemed to include authority to sub-delegate to one or more Directors (whether or not acting as a committee) or to any employee or agent of the Company all or any of the powers and discretions delegated and may be made subject to such conditions as the Directors may specify and may be revoked or altered.

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SECRETARY

126. Appointment and removal ofSecretary

Subject to the provisions of the Statutes, the Secretary shall be appointed by the Directors for such term, at such remuneration and upon such conditions as they think fit and any Secretary may be removed by them.

THE SEAL

127. Use ofSeal

The Directors shall provide for the safe custody of the Seal and any official seal kept under section 50 of the 2006 Act, and neither shall be used without the authority of the Directors or of a committee of the Directors authorised by the Directors in that behalf. Every instrument to which either shall be affixed shall be signed autographically by one Director and the Secretary or by two Directors or as otherwise determined by the Directors, save that as regards any certificates for shares or debentures or other securities of the Company to which the official seal is applied, the Directors may by resolution determine that such signatures or either of them shall be dispensed with or affixed by some mechanical or electronic or other means or may be printed on them.

RESERVE

128. Establishment ofreserve

The Directors may from time to time set aside out of the profits of the Company such sumsastheythinkproperasareserveorreserveswhichshall,atthediscretionofthe Directors, be applicable for any purpose to which the profits of the Company may be properly applied, and pending such application may, at the like discretion, either be employed in the business of the Company or be invested in such investments as the Directors think fit. The Directors may divide the reserve into such special funds as they think fit, and may consolidate into one fund any special funds or any parts of any special funds into which the reserve may have been divided as they think fit. The Directors may also without placing the same to reserve carry forward any profits which they may think prudent not to divide.

DIVIDENDS

129. Declarations of dividends byCompany

The Company may by ordinary resolution declare dividends, but no dividend shall exceed the amount recommended by the Directors.

130. Payment of interim and fixed dividends byDirectors

Subject to the provisions of the Statutes, the Directors:

(a) may from time to time pay such interim dividends as they thinkfit;

(b) may also pay the fixed dividends payable on any shares of the Company half-yearly or otherwise on fixeddates.

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If the Directors act in good faith, they shall not incur any liability to the holders of shares conferring preferred rights for any loss they may suffer in consequence of the payment of an interim dividend on any shares having non-preferred or deferred rights.

131. Restrictions ondividends

No dividend or interim dividend shall be paid otherwise than in accordance with the provisions of the Statutes.

132. Calculation and currency ofdividends

Subject to the Statutes, and to the rights of persons, if any, entitled to shares with any priority, preference or special rights as to dividend, all dividends:

(a) shall be declared and paid according to the amounts paid up on the shares in respect whereof the dividend is paid, but no amount paid up on a share in advance of calls shall be treated for the purpose of this Article as paid up on the share;

(b) shall be apportioned and paid proportionately to the amounts paid up on the shares during any portion or portions of the period in respect of which the dividend is paid, but if any share is issued on terms providing that it shall rank for dividend as if paid up in full or in part from a particular date, whether past or future, such share shall rank for dividendaccordingly; and

(c) may be declared in any currency or currencies, and paid in the same currency or currencies or in any other currency or currencies. The Directors may decide the rate of exchange for any currency conversions that may be required and how any costs involved are to be met, in relation to the currency of any dividend.

133. Deductions of amounts due on shares and waiver ofdividends

133.1 The Directors may deduct from any dividend or other monies payable to any Member on or in respect of a share all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in relation to shares of theCompany. The Board may retain any dividend or other moneys payable on or in respect of a share on which the Company has a lien, and may apply them in or towards satisfaction of the debts, liabilities or engagements in respect of which the lien exists.

133.2 The waiver in whole or in part of any dividend on any share by any document (whether or not under seal) shall be effective only if such document is signed by the shareholder (or the person entitled to the share in consequence of the death or bankruptcy of the holder or otherwise by operation of law) and delivered to the Company and if or to the extent that the same is accepted as such or acted upon by theCompany.

134. Dividends other than incash

Any general meeting declaring a dividend may, upon the recommendation of the Directors, direct payment of such dividend wholly or in part by the distribution of specific assets and in particular of paid up shares or debentures of any other body corporate, and the Directors shall give effect to such direction. Where any difficulty arises in regard to such distribution, the

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Directors may settle the same as they think expedient, and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the footing of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in trustees as may seem expedient to theDirectors.

135. Paymentprocedure

135.1 All dividends and other distributions shall be paid (subject to any lien of the Company) to those Members whose names shall be on the Register at the date at which such dividend shall be declared or at such other time and/or date as the Company by ordinary resolution or the Directors maydetermine. The Directors may retain the dividends payable upon shares in respect of which any person is under the provisions as to the transmission of shares contained in these Articles entitled to become a Member, or which any person is under these provisions entitled to transfer, until that person shall become a Member in respect of these shares or shall transfer them.

135.2 The Company may pay any dividend, interest or other monies payable in respect of shares in cash or by direct debit, bank or other funds transfer system, cheque, dividend warrant, or money order or by any other method, including by electronic means, as the Directors consider appropriate. For uncertificated shares, any payment may be made by means of the relevant system (subject always to the facilities and requirements of the relevant system concerned) and such payment may be made by the Company or any person on its behalf by sending an instruction to the operator of the relevant system to credit the cash memorandum account of the joint holders of such shares or, if permitted by the Company, of such person as holder or joint holders may in writing direct.

135.3 The Company may send such payment by post or other delivery service (or by such means offered by the Company as the holder or person entitled to it may agree in writing) to the registered address of the holder or person entitled thereto (or, in the case of joint holders or of two or more persons entitled to it because of the death or bankruptcy of the holder or otherwise by operation of law, to the registered address of the person whose name stands first in the Register), or to such person and to such address as the holder or joint holders or person or persons may in writing direct.

135.4 Every cheque, warrant, order or other form of payment is sent at the risk of the person entitled to the money represented by it, and shall be made payable to the person or persons entitled, or to such other person as the person or persons entitled may direct in writing. Payment of the cheque, warrant, order or other form of payment (including transmission of funds through a bank transfer or other funds transfer system or by such other electronic means as permitted by these Articles or in accordance with the facilities and requirements of the relevant system concerned) shall be good discharge to the Company. The Company shall not be responsible if any such cheque, warrant, order or other form of payment has or shall be alleged to have been lost, stolen or destroyed.

135.5 Any one of two or more joint holders of any share, or any one of two or more persons entitled jointly to a share in consequence of the death or bankruptcy of the holder or otherwise by operation of law, may give effectual receipts for any dividends or other monies payable or property distributable on or in respect of theshare.

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135.6 If a holder (or joint holder) does not specify an address, or does not specify an account or such other details and in each case that information is necessary in order to make a payment of a dividend, interest or other monies by the means by which in accordance with this Article the Directors have decided that a payment is to be made or by which the holder (or joint holder) has validly elected to receive payment or the payment cannot be made by the Company using the details provided by the holder (or joint holders), the dividend or other monies shall be treated as unclaimed for the purposes of these Articles.

135.7 In respect of the payment of any dividend or other monies payable in respect of shares, the Directors may decide, and notify the holder or person entitled to it that: (i) one or more of the means described in Article 135.1 will be used for payment and a holder or person entitled to payment may elect to receive the payment by one of the means so notified in the manner prescribed by the Directors; (ii) one or more of such means will be used for the payment unless a holder or person entitled to payment elects otherwise in the manner prescribed by the Directors; or (iii) one or more of such means will be used for the payment and that the holder or other person entitled to payment will not be able to elect otherwise.

136. Interest

Subject to the rights attaching to, or the terms of issue of, any shares, no dividend or other monies payable on or in respect of a share shall bear interest against the Company.

137. Forfeiture ofdividends

All dividends or other sums payable on or in respect of any share which remain unclaimed may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed. All dividends unclaimed for a period of 12 years or more after becoming due for payment shall be forfeited and shall revert to the Company. The payment of any unclaimed dividend or other sum payable by the Company on or in respect of any share into a separate account shall not constitute the Company a trustee thereof.

CAPITALISATION OF PROFITS AND SCRIP DIVIDENDS

138. Power tocapitalise

Subject to the provisions of Article 139, the Directors may capitalise any part of the amount for the time being standing to the credit of any of the Company's reserve accounts (including any share premium account, capital redemption reserve and redenomination reserve) or to the credit of the profit and loss or retained earnings account (in each case, whether or not such amounts are available for distribution), and appropriate the sum resolved to be capitalisedeither:

138.1 to the holders of ordinary shares (on the Register at such time and on such date as may be specified in, or determined as provided in, the resolution of the general meeting granting authority for such capitalisation) who would have been entitled thereto if distributed by way of dividend and in the same proportions (including, for this purpose, any shares in the Company held as treasury shares, as if the restriction on payment of dividends in the Statutes did not apply); and the Directors shall apply such sum on their behalf either in or towards paying up any amounts, if any, for the time being unpaid on any shares held by such holders of ordinary shares respectively or in paying up in full at par new shares or debentures of the Company to be allotted credited as fully paid up to such holders of ordinary shares in the proportions aforesaid, or partly in the one way and partly in the other;or

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138.2 to such holders of ordinary shares who may, in relation to any dividend or dividends, validly accept an offer or offers on such terms and conditions as the Directors may determine (and subject to such exclusions or other arrangements as the Directors may consider necessary or expedient to deal with legal or practical problems in respect of overseas shareholders or in respect of shares represented by depository receipts) to receive new ordinary shares, credited as fully paid up, in lieu of the whole or any part of any such dividend or dividends (any such offer being called a "Scrip Dividend Offer"); and the Directors shall apply such sum on their behalf in paying up in full at par new shares (in accordance with the terms, conditions and exclusions or other arrangements of the Scrip Dividend Offer) to be allotted credited as fully paid up to such holders respectively.

139. Authorityrequired

139.1 The authority of the Company in general meeting shall be required before the Directors implement any Scrip Dividend Offer (which authority may extend to one or moreoffers).

139.2 The authority of the Company in general meeting shall be required for any capitalisation pursuant to Article 138.1above.

139.3 A share premium account, a capital redemption reserve and a redenomination reserve and any other amounts which are not available for distribution may only be applied in the paying up of new shares to be allotted to holders of ordinary shares of the Company credited as fully paidup.

140. Provision for fractionsetc.

Whenever a capitalisation requires to be effected, the Directors may do all acts and things which they may consider necessary or expedient to give effect thereto, with full power to the Directors to make such provision as they think fit for the case of shares or debentures becoming distributable in fractions (including provisions whereby fractional entitlements are disregarded or the benefit thereof accrues to the Company rather than to the Members concerned) and also to authorise any person to enter on behalf of all Members concerned into an agreement with the Company providing for any such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on allconcerned.

ACCOUNTING RECORDS

141. Accounting records to bekept

The Directors shall cause accounting records to be kept in accordance with the provisions of the Statutes.

142. Location of accountingrecords

The accounting records shall be kept at the Office or, subject to the provisions of the Statutes, at such other place or places as the Directors think fit.

143. Inspection of accountingrecords

The accounting records shall always be open to the inspection of the officers of the Company.

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144. Power to extend inspection toMembers

The Directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounting records of the Company or any of them shall be open to the inspection of Members, and no Member (not being a Director) shall have any right to inspect any account or book or document of the Company, except as conferred by the Statutes or authorised by the Directors or by a resolution of the Company in general meeting or under an order of a court of competent jurisdiction.

145. Limit on Members' right toinspect

No Member (not being a Director) shall have any right of inspecting any account or book or document or information of the Company except as conferred by statute or authorised by the Directors or by the Company in generalmeeting.

AUDIT

146. Appointment ofauditors

Auditors shall be appointed and their duties regulated in accordance with the provisions of the Statutes.

NOTICES

147. Service of notice and curtailment of postalservice

A notice or other document (including a share certificate) or information may be given, sent, supplied, delivered or provided by the Company to any Member in accordance with the 2006 Act, subject to these Articles. The Company may at any time and in its sole discretion chose to give, send, supply, deliver or provide any notice, document or information in hard copy form alone to some or all of its Members.

147.1 Subject to the Statutes, if at any time by reason of the suspension or any curtailment of postal services in the United Kingdom or any part of the United Kingdom or of services for delivery by electronic means, the Company is unable in the opinion of the Directors effectively to convene a general meeting by notices sent through the post (or by notification by post as to the availability of the notice of meeting on a website) or (in the case of those Members in respect of whom an address has for the time being been notified to the Company, in a manner specified by the Directors, for the purpose of giving notices by electronic means) by electronic means, the Directors may decide that the only persons to whom notice of the affected general meeting must be sent are:

(a) the Directors;

(b) the Company’s auditors;

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(c) those Members to whom notice to convene the general meeting can validly be sent by electronic means; and

(d) those Members to whom notice to convene the general meeting can validly be sent by means of a website and to whom notification as to the availability of the notice of meeting on a website can validly be sent by electronic means.

In any such case the Company shall:

(i) send confirmatory copies of the notice (or a confirmatory notification as to the availability of the notice on the Company’s website in the case of those Members to whom notice to convene the general meeting can validly be sent by means of a website but to whom notification as of the availability of the notice of meeting on a website cannot validly be sent by electronic means) by post or (as the case may be) by electronic means if, at least seven days prior to the date of the general meeting, the posting of notices to addresses throughout the United Kingdom or (as the case may be) the sending of notices by electronic means again becomes, in the opinion of the Directors,practicable;

(ii) advertise the notice of meeting in at least one national newspaper; and

(iii) make the notice of meeting available on its website from the day the notice was sent until the conclusion of the meeting or any adjournment thereof.

148. Members residentabroad

148.1 A Member who has no registered address within the United Kingdom, and has not supplied to the Company an address (not being an address for communication by electronic means) within the United Kingdom at which notices or other documents or information may be given to him, shall not be entitled to receive any notice or other documents or information from the Company except to the extent that the Directors decide to send a document, information or a notice to that Member or custodian at the Depositary by electronic means and that Member or custodian at the Depositary has consented (or is deemed to have consented) to the sending of that document, information or notice by electronic means and he has, where necessary, notified the Company of an address for that purpose.

149. Notice deemedserved

149.1 Where a notice or other document or information is given, sent, supplied, delivered or provided by the Company by post, service of the notice or other document or information shall be deemed to be effected by properly addressing, prepaying, and posting it, or a letter containing the notice or other document or information, and to have been effected at the latest at the expiration of 24 hours after posting if first-class post was used and at the latest at the expiration of 48 hours after posting if first-class post was not used. In proving such service it shall be sufficient to prove that the notice, document or information or the letter containing the same, was properly addressed and put in thepost with postage paid.

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149.2 Where a notice or other document or information is given, sent, supplied, delivered or provided by the Company by electronic means, service of the notice or other document or information shall be deemed to be effected by sending it by electronic means to an address for the time being notified to the person giving the notice or other document or information or as otherwise permitted by the Statutes for that purpose, and to have been effected at the latest at the expiration of 24 hours from when it was sent (even if the Company subsequently sends a hard copy of such notice, document or information by post). In proving such service by electronic means it shall be sufficient to prove that the notice or other document or information was properly addressed subject to the provisions of section 1147(4) of the 2006 Act as to deemed delivery of documents or information by means of awebsite.

149.3 Any notice, document or other information delivered or sent by post to or left at the registered address of any Member or sent or delivered by electronic means to any Member in pursuance of these Articles shall, notwithstanding that such Member be then dead or bankrupt, and whether or not the Company have notice of his death or bankruptcy be deemed to have been duly served in respect of any share registered in the name of such Member as sole or joint holder, unless his name shall, at the time of the service of the notice or document, have been removed from the Register as the holder of the share and such service shall for all purposes be deemed a sufficient service of such notice or document on all persons interested (whether jointly with or as claiming through or under him) in the share. Save where expressly provided, any document, information or notice sent by post to, left at or sent or supplied using electronic means to the address of any Member in pursuant of these Articles shall, even if the Member is then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to have been duly sent or supplied in respect of any share registered in the name of such Member as sole or first-named joint-holder.

149.4 Without prejudice to any other Articles, the accidental failure to send any document, notice or information to or the non-receipt of any document, notice or information relating to any meeting or other proceeding shall not invalidate the relevant meeting or other proceeding.

149.5 A Member present either in person or by proxy, or in the case of a corporate Member by duly authorised representative, at any meeting of the Company or holders of any class of shares shall be deemed to have received notice of the meeting and, where requisite, of the purpose for which is was called.

150. Notice to jointholders

A notice or other document or information may be given, sent, supplied, delivered or provided by the Company to the joint holders of a share by giving, sending, supplying, delivering or providing the notice or other document or information to the joint holder first named in the Register in respect of the share.

Anything to be agreed or specified by joint holders of a share may be agreed or specified by any of the joint holders (and any such agreement or specification shall be deemed for all purposes to be agreed or specified by all the joint holders) unless the Directors require it to be agreed or specified by all the joint holders or by the joint holder first named in the Register in respect of the share.

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151. Service of notice on persons entitled bytransmission

A notice or other document or information may be given, sent, supplied, delivered or provided by the Company to the persons entitled to a share in consequence of the death or bankruptcy of a Member or otherwise by operation of law by giving, sending, supplying, delivering or providing it addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description, to the address, if any, within the United Kingdom supplied for the purpose by the persons claiming to be so entitled or (until such an address has been so supplied) by giving, sending, supplying, delivering or providing the notice or other document or information in any manner in which the same might have been given, sent, supplied, delivered or provided if the death or bankruptcy or other event had notoccurred.

ELECTRONIC COMMUNICATION

152. ElectronicCommunication

Notwithstanding anything in these Articles to the contrary:

152.1 Any document or information to be given, sent, supplied, delivered or provided to any person by the Company, whether pursuant to these Articles, the Statutes or otherwise, is also to be treated as given, sent, supplied, delivered or provided where it is made available on a website, or is sent in electronic form, in the manner provided by the 2006 Act for the purposes of, inter alia, the 2006 Act (subject to the provisions of these Articles).

For the purposes of paragraph 10(2)(b) of schedule 5 to the 2006 Act, the Company may give, send, supply, deliver or provide documents or information to Members by making them available on a website.

For the purposes of paragraph 6.1.8R(1) of the FCA’s Disclosure Guidance and Transparency Rules, the Company may use electronic means (as defined therein) to convey information or documents to Members or holders of debt securities (as defined therein).

152.2 The Directors may from time to time make such arrangements or regulations (if any) as they may from time to time in their absolute discretion think fit in relation to the giving of notices or other documents or information by electronic means by or to the Company and otherwise for the purpose of implementing and/or supplementing the provisions of these Articles and the Statutes in relation to electronic means; and such arrangements and regulations (as the case may be) shall have the same effect as if set out in thisArticle.

PROVISION FOR EMPLOYEES

153. Provision foremployees

The power conferred by section 247 of the 2006 Act to make provision for the benefit of persons employed or formerly employed by the Company or any of its subsidiaries, in connection with the cessation or the transfer to any person of the whole or part of the undertaking of the Company or any subsidiary shall only be exercised by the Company with the prior sanction of a special resolution. If at any time the capital of the Company is divided into different classes of shares, the exercise of such power as aforesaid shall be deemed to be a variation of the rights attached to each class of shares in issue and shall accordingly require either (i) the prior consent in writing of the holders of at least three-quarters of the nominal value of the issued shares or (ii) the prior sanction of a special resolution passed at a separate general meeting of the holders of the shares of each class, in accordance with the provisions of Article 17.

56

WINDING UP

154. Distribution ofassets

If the Company shall be wound up the liquidator may, subject to the Statutes, with the sanction of a special resolution of the Company and any other sanction required by the Statutes, divide amongst the Members (excluding the Company itself to the extent it is a Member by virtue only of its holding of shares as treasury shares) in specie or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any shares or other securities or other assets whereon there is anyliability.

INDEMNITY

155. Indemnity ofofficers

Subject to the provisions of the Statutes (but so that this Article does not extend to any matter insofar as it would cause this Article or any part of it to be void under the Statutes) but without prejudice to any indemnity to which the person concerned may otherwise be entitled, every person who is or was at any time a director or other officer of the Company or any Group Company (as defined in Article 97.2) excluding the Auditors may be indemnified out of the assets of the Company against all costs, charges, expenses, losses or liabilities (together "Liabilities") which he may sustain or incur in or about the actual or purported execution and/or discharge of his duties (including those duties, powers and discretions in relation to any Group Company (as defined in Article 97.2) or any company that is a trustee of an occupational pension scheme (as defined in section 235(6) of the 2006 Act)) and/or the actual or purported exercise of his powers or discretions and/or otherwise in relation thereto or in connection therewith, including (without prejudice to the generality of the foregoing) any Liability suffered or incurred by him in disputing, defending, investigating or providing evidence in connection with any actual or threatened or alleged claims, demands, investigations, or proceedings, whether civil, criminal, or regulatory or in connection with any application under section 661(3) or (4) or section 1157 of the 2006 Act.

156. Funding of expenditure in defendingproceedings

The Company may also provide funds to any director or other officer of the Company or of any Group Company (as defined in Article 97.2) (excluding the Auditors) to meet, or do anything to enable a director or other officer of the Company or any Group Company (as defined in Article 97.2) to avoid incurring expenditure to the extent permitted by the Statutes.

57

JURISDICTION AND DISPUTES

157. Exclusive jurisdiction

Unless the Company consents in writing to the selection of an alternative forum in the United States of America, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the U.S. Securities Act of 1933, as amended (the Securities Act).

158. Disputes

Save in respect of any cause of action arising under the Securities Act, by subscribing for or acquiring shares, the Member submits all disputes between himself and the Company or the Directors to the exclusive jurisdiction of the English courts.

58

EX-4

Exhibit 4.1

SILENCE THERAPEUTICS PLC

AND

THE BANK OF NEW YORK MELLON

As Depositary

AND

OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES

Deposit Agreement

__________, 2020

TABLE OF CONTENTS

ARTICLE 1.	DEFINITIONS	1
SECTION 1.1.	American Depositary Shares.	1
SECTION 1.2.	CREST.	2
SECTION 1.3.	Commission.	2
SECTION 1.4.	Company.	2
SECTION 1.5.	Custodian.	2
SECTION 1.6.	Deliver; Surrender.	2
SECTION 1.7.	Deposit Agreement.	3
SECTION 1.8.	Depositary; Depositary’s Office.	3
SECTION 1.9.	Deposited Securities.	3
SECTION 1.10.	Disseminate.	4
SECTION 1.11.	Dollars.	4
SECTION 1.12.	DTC.	4
SECTION 1.13.	Foreign Registrar.	4
SECTION 1.14.	Holder.	4
SECTION 1.15.	Owner.	4
SECTION 1.16.	Receipts.	5
SECTION 1.17.	Registrar.	5
SECTION 1.18.	Replacement.	5
SECTION 1.19.	Restricted Securities.	5
SECTION 1.20.	Securities Act of 1933.	5
SECTION 1.21.	Shares.	5
SECTION 1.22.	SWIFT.	6
SECTION 1.23.	Termination Option Event.	6
ARTICLE 2.	FORM OF RECEIPTS, DEPOSIT OF SHARES, DELIVERY, TRANSFER AND SURRENDER OF AMERICAN DEPOSITARY SHARES	7
SECTION 2.1.	Form of Receipts; Registration and Transferability of American Depositary Shares.	7
SECTION 2.2.	Deposit of Shares.	8
SECTION 2.3.	Delivery of American Depositary Shares.	9
SECTION 2.4.	Registration of Transfer of American Depositary Shares; Combination and Split-up of Receipts; Interchange of Certificated and Uncertificated American Depositary Shares.	10
SECTION 2.5.	Surrender of American Depositary Shares and Withdrawal of Deposited Securities.	11
SECTION 2.6.	Limitations on Delivery, Registration of Transfer and Surrender of American Depositary Shares.	12
SECTION 2.7.	Lost Receipts, etc.	13
SECTION 2.8.	Cancellation and Destruction of Surrendered Receipts.	13

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SECTION 2.9.	DTC Direct Registration System and Profile Modification System.	13
ARTICLE 3.	CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES	14
SECTION 3.1.	Filing Proofs, Certificates and Other Information.	14
SECTION 3.2.	Liability of Owner for Taxes.	14
SECTION 3.3.	Warranties on Deposit of Shares.	15
SECTION 3.4.	Disclosure of Interests.	15
ARTICLE 4.	THE DEPOSITED SECURITIES	16
SECTION 4.1.	Cash Distributions.	16
SECTION 4.2.	Distributions Other Than Cash, Shares or Rights.	17
SECTION 4.3.	Distributions in Shares.	18
SECTION 4.4.	Rights.	18
SECTION 4.5.	Conversion of Foreign Currency.	20
SECTION 4.6.	Fixing of Record Date.	21
SECTION 4.7.	Voting of Deposited Shares.	22
SECTION 4.8.	Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited Securities.	23
SECTION 4.9.	Reports.	24
SECTION 4.10.	Lists of Owners.	24
SECTION 4.11.	Withholding.	25
ARTICLE 5.	THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY	25
SECTION 5.1.	Maintenance of Office and Register by the Depositary.	25
SECTION 5.2.	Prevention or Delay of Performance by the Company or the Depositary.	26
SECTION 5.3.	Obligations of the Depositary and the Company.	27
SECTION 5.4.	Resignation and Removal of the Depositary.	28
SECTION 5.5.	The Custodians.	29
SECTION 5.6.	Notices and Reports.	29
SECTION 5.7.	Distribution of Additional Shares, Rights, etc.	30
SECTION 5.8.	Indemnification.	30
SECTION 5.9.	Charges of Depositary.	32
SECTION 5.10.	Retention of Depositary Documents.	33
SECTION 5.11.	Exclusivity.	33
SECTION 5.12.	Information for Regulatory and Tax Compliance.	33
ARTICLE 6.	AMENDMENT AND TERMINATION	33
SECTION 6.1.	Amendment.	33
SECTION 6.2.	Termination.	34

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ARTICLE 7.	MISCELLANEOUS	35
SECTION 7.1.	Counterparts; Signatures; Delivery.	35
SECTION 7.2.	No Third Party Beneficiaries.	35
SECTION 7.3.	Severability.	36
SECTION 7.4.	Owners and Holders as Parties; Binding Effect.	36
SECTION 7.5.	Notices.	36
SECTION 7.6.	Appointment of Agent for Service of Process; Submission to Jurisdiction; Jury Trial Waiver.	37
SECTION 7.7.	Waiver of Immunities.	38
SECTION 7.8.	Governing Law.	38

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DEPOSIT AGREEMENT

DEPOSIT AGREEMENT dated as of __________, 2020 among SILENCE THERAPEUTICS PLC, a company incorporated under the laws of England and Wales (herein called the Company), THE BANK OF NEW YORK MELLON, a New York banking corporation (herein called the Depositary), and all Owners and Holders (each as hereinafter defined) from time to time of American Depositary Shares issued hereunder.

W I T N E S S E T H:

WHEREAS, the Company desires to provide, as set forth in this Deposit Agreement, for the deposit of Shares (as hereinafter defined) of the Company from time to time with the Depositary or with the Custodian (as hereinafter defined) under this Deposit Agreement, for the creation of American Depositary Shares representing the Shares so deposited and for the execution and delivery of American Depositary Receipts evidencing the American Depositary Shares; and

WHEREAS, the American Depositary Receipts are to be substantially in the form of Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as set forth in this Deposit Agreement;

NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties hereto as follows:

ARTICLE 1.DEFINITIONS

The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Deposit Agreement:

SECTION 1.1.American Depositary Shares.

The term “American Depositary Shares” shall mean the securities created under this Deposit Agreement representing rights with respect to and beneficial ownership interests in the Deposited Securities.  American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities.  The form of Receipt annexed as Exhibit A to this Deposit Agreement shall be the prospectus required under the Securities Act of 1933 for sales of both certificated and uncertificated American Depositary Shares.  Except for those provisions of this Deposit Agreement that refer specifically to Receipts, all the provisions of this Deposit Agreement shall apply to both certificated and uncertificated American Depositary Shares.  

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Each American Depositary Share shall represent the number of Shares specified in Exhibit A to this Deposit Agreement, except that, if there is a distribution upon Deposited Securities covered by Section 4.3, a change in Deposited Securities covered by Section 4.8 with respect to which additional American Depositary Shares are not delivered or a sale of Deposited Securities under Section 3.2 or 4.8, each American Depositary Share shall thereafter represent the amount of Shares or other Deposited Securities that are then on deposit per American Depositary Share after giving effect to that distribution, change or sale.

SECTION 1.2.CREST.

The term “CREST” shall mean the CREST system for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear UK & Ireland Limited.

SECTION 1.3.Commission.

The term “Commission” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.

SECTION 1.4.Company.

The term “Company” shall mean Silence Therapeutics plc, a company incorporated under the laws of England and Wales, and its successors.

SECTION 1.5.Custodian.

The term “Custodian” shall mean The Bank of New York Mellon, acting through an office located in the United Kingdom, as custodian for the Depositary for the purposes of this Deposit Agreement, and any other firm or corporation the Depositary appoints under Section 5.5 as a substitute or additional custodian under this Deposit Agreement, and shall also mean all of them collectively.

SECTION 1.6.Deliver; Surrender.

(a)    The term “deliver”, or its noun form, when used with respect to Shares or other Deposited Securities, shall mean (i) book-entry transfer of those Shares or other Deposited Securities to an account maintained by an institution authorized under applicable law to effect transfers of such securities (including in CREST) designated by the person entitled to that delivery or (ii) physical delivery of certificates evidencing those Shares or other Deposited Securities registered in the name of, or duly endorsed or accompanied by proper instruments of transfer to, the person entitled to that delivery.

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(b)The term “deliver”, or its noun form, when used with respect to American Depositary Shares, shall mean (i) registration of those American Depositary Shares in the name of DTC or its nominee and book-entry transfer of those American Depositary Shares to an account at DTC designated by the person entitled to that delivery, (ii) registration of those American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to that delivery and mailing to that person of a statement confirming that registration or (iii) if requested by the person entitled to that delivery, execution and delivery at the Depositary’s Office to the person entitled to that delivery of one or more Receipts evidencing those American Depositary Shares registered in the name requested by that person.

(c)    The term “surrender”, when used with respect to American Depositary Shares, shall mean (i) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (ii) delivery to the Depositary at its Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (iii) surrender to the Depositary at its Office of one or more Receipts evidencing American Depositary Shares.

SECTION 1.7.Deposit Agreement.

The term “Deposit Agreement” shall mean this Deposit Agreement, as it may be amended from time to time in accordance with the provisions of this Deposit Agreement.

SECTION 1.8.Depositary; Depositary’s Office.

The term “Depositary” shall mean The Bank of New York Mellon, a New York banking corporation, and any successor as depositary under this Deposit Agreement.  The term “Office”, when used with respect to the Depositary, shall mean the office at which its depositary receipts business is administered, which, at the date of this Deposit Agreement, is located at 240 Greenwich Street, New York, New York 10286.

SECTION 1.9.Deposited Securities.

The term “Deposited Securities” as of any time shall mean Shares at such time deposited or deemed to be deposited under this Deposit Agreement, including without limitation, Shares that have not been successfully delivered upon surrender of American Depositary Shares, and any and all other securities, property and cash received by the Depositary or the Custodian in respect of Deposited Securities and at that time held under this Deposit Agreement.

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SECTION 1.10.Disseminate.

The term “Disseminate,” when referring to a notice or other information to be sent by the Depositary to Owners, shall mean (i) sending that information to Owners in paper form by mail or another means or (ii) with the consent of Owners, another procedure that has the effect of making the information available to Owners, which may include (A) sending the information by electronic mail or electronic messaging or (B) sending in paper form or by electronic mail or messaging a statement that the information is available and may be accessed by the Owner on an Internet website and that it will be sent in paper form upon request by the Owner, when that information is so available and is sent in paper form as promptly as practicable upon request.

SECTION 1.11.Dollars.

The term “Dollars” shall mean United States dollars.

SECTION 1.12.DTC.

The term “DTC” shall mean The Depository Trust Company or its successor.

SECTION 1.13.Foreign Registrar.

The term “Foreign Registrar” shall mean the entity that carries out the duties of registrar for the Shares and any other agent of the Company for the transfer and registration of Shares, including, without limitation, any securities depository for the Shares.

SECTION 1.14.Holder.

The term “Holder” shall mean any person holding a Receipt or a security entitlement or other interest in American Depositary Shares, whether for its own account or for the account of another person, but that is not the Owner of that Receipt or those American Depositary Shares.

SECTION 1.15.Owner.

The term “Owner” shall mean the person in whose name American Depositary Shares are registered on the books of the Depositary maintained for that purpose.

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SECTION 1.16.Receipts.

The term “Receipts” shall mean the American Depositary Receipts issued under this Deposit Agreement evidencing certificated American Depositary Shares, as the same may be amended from time to time in accordance with the provisions of this Deposit Agreement.

SECTION 1.17.Registrar.

The term “Registrar” shall mean any corporation or other entity that is appointed by the Depositary to register American Depositary Shares and transfers of American Depositary Shares as provided in this Deposit Agreement.

SECTION 1.18.Replacement.

The term “Replacement” shall have the meaning assigned to it in Section 4.8.

SECTION 1.19.Restricted Securities.

The term “Restricted Securities” shall mean Shares that (i) are “restricted securities,” as defined in Rule 144 under the Securities Act of 1933, except for Shares that could be resold in reliance on Rule 144 without any conditions, (ii) are beneficially owned by an officer, director (or person performing similar functions) or other affiliate of the Company, (iii) otherwise would require registration under the Securities Act of 1933 in connection with the public offer and sale thereof in the United States or (iv) are subject to other restrictions on sale or deposit under the laws of England and Wales, a shareholder agreement or the articles of association or similar document of the Company.

SECTION 1.20.Securities Act of 1933.

The term “Securities Act of 1933” shall mean the United States Securities Act of 1933, as from time to time amended.

SECTION 1.21.Shares.

The term “Shares” shall mean ordinary shares of the Company that are validly issued and outstanding, fully paid and nonassessable (i.e., not subject to call for payment of further capital) and that were not issued in violation of any pre-emptive or similar rights of the holders of outstanding securities of the Company; provided, however, that, if there shall occur any change in nominal value, a sub-division or consolidation or any other reclassification or, upon the occurrence of an event described in Section 4.8, an exchange or conversion in respect of the Shares of the Company, the term “Shares” shall thereafter also mean the successor securities resulting from such change in nominal value, sub-division or consolidation or such other reclassification or such exchange or conversion.

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SECTION 1.22.SWIFT.

The term “SWIFT” shall mean the financial messaging network operated by the Society for Worldwide Interbank Financial Telecommunication, or its successor.

SECTION 1.23.Termination Option Event.

The term “Termination Option Event” shall mean any of the following events or conditions:

(i)    the Company institutes proceedings to be adjudicated as bankrupt or insolvent, consents to the institution of bankruptcy or insolvency proceedings against it, files a petition or answer or consent seeking reorganization or relief under any applicable law in respect of bankruptcy or insolvency, consents to the filing of any petition of that kind or to the appointment of a receiver, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of it or any substantial part of its property or makes an assignment for the benefit of creditors, or if information becomes publicly available indicating that unsecured claims against the Company are not expected to be paid;

(ii)    the Shares are delisted, or the Company announces its intention to delist the Shares, from a stock exchange outside the United States, and the Company has not applied to list the Shares on any other stock exchange outside the United States;

(iii)    the American Depositary Shares are delisted from a stock exchange in the United States on which the American Depositary Shares were listed and, 30 days after that delisting, the American Depositary Shares have not been listed on another stock exchange in the United States, nor is there a symbol available for over-the-counter trading of the American Depositary Shares in the United States;

(iv)    the Depositary has received notice of facts that indicate, or otherwise has reason to believe, that the American Depositary Shares have become, or with the passage of time will become, ineligible for registration on Form F-6 under the Securities Act of 1933; or

(v)    an event or condition that is defined as a Termination Option Event in Section 4.1, 4.2 or 4.8.

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ARTICLE 2. FORM OF RECEIPTS, DEPOSIT OF SHARES, DELIVERY, TRANSFER AND SURRENDER OF AMERICAN DEPOSITARY SHARES

SECTION 2.1.Form of Receipts; Registration and Transferability of American Depositary Shares.

Definitive Receipts shall be substantially in the form set forth in Exhibit A to this Deposit Agreement, with appropriate insertions, modifications and omissions, as permitted under this Deposit Agreement.  No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless that Receipt has been (i) executed by the Depositary by the manual signature of a duly authorized officer of the Depositary or (ii) executed by the facsimile signature of a duly authorized officer of the Depositary and countersigned by the manual signature of a duly authorized signatory of the Depositary or the Registrar or a co-registrar.  The Depositary shall maintain books on which (x) each Receipt so executed and delivered as provided in this Deposit Agreement and each transfer of that Receipt and (y) all American Depositary Shares delivered as provided in this Deposit Agreement and all registrations of transfer of American Depositary Shares, shall be registered.  A Receipt bearing the facsimile signature of a person that was at the time of signing a proper officer of the Depositary shall, subject to the other provisions of this paragraph, bind the Depositary, even if that person was not a proper officer of the Depositary on the date of issuance of that Receipt.  

The Receipts and statements confirming registration of American Depositary Shares may, following consultation with the Company to the extent practicable, have incorporated in or attached to them such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be reasonably required by the Depositary or required to comply with any applicable law or regulations thereunder or with the rules and regulations of any securities exchange upon which American Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts and American Depositary Shares are subject by reason of the date of issuance of the underlying Deposited Securities or otherwise.

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American Depositary Shares evidenced by a Receipt, when the Receipt is properly endorsed or accompanied by proper instruments of transfer, shall be transferable as certificated registered securities under the laws of the State of New York.  American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York.  The Depositary, notwithstanding any notice to the contrary, may treat the Owner of American Depositary Shares as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes, and neither the Depositary nor the Company shall have any obligation or be subject to any liability under this Deposit Agreement to any Holder of American Depositary Shares (but only to the Owner of those American Depositary Shares).

SECTION 2.2.Deposit of Shares.

Subject to the terms and conditions of this Deposit Agreement, Shares or evidence of rights to receive Shares may be deposited under this Deposit Agreement by delivery thereof to any Custodian, accompanied by any appropriate instruments or instructions for transfer, or endorsement, in form satisfactory to the Custodian.

As conditions of accepting Shares for deposit, the Depositary may require (i) any certification reasonably required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement, (ii) a written order directing the Depositary to deliver to, or upon the written order of, the person or persons stated in that order American Depositary Shares representing those deposited Shares, (iii) evidence satisfactory to the Depositary that those Shares have been re-registered in the books of the Company or the Foreign Registrar (or of CREST, if applicable) in the name of the Depositary, a Custodian or a nominee of the Depositary or a Custodian, (iv) evidence satisfactory to the Depositary that any necessary approval for the transfer or deposit has been granted by any governmental body in each applicable jurisdiction and (v) an agreement or assignment, or other instrument satisfactory to the Depositary, that provides for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Shares or to receive other property, that any person in whose name those Shares are or have been recorded may thereafter receive upon or in respect of those Shares, or, in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.

The Depositary will refuse to accept Shares for deposit if the Depositary has received a written notice from the Company that deposit of such Shares would violate applicable laws or regulations, any shareholder agreement or the articles of association or similar organizational document of the Company.

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At the request and risk and expense of a person proposing to deposit Shares, and for the account of that person, the Depositary may receive certificates for Shares to be deposited in certificated form, together with the other instruments specified in this Section, for the purpose of forwarding those Share certificates to the Custodian for deposit under this Deposit Agreement.

The Depositary shall instruct each Custodian that, upon each delivery to a Custodian of a certificate or certificates for Shares to be deposited under this Deposit Agreement in certificated form, together with the other documents specified in this Section, that Custodian shall, as soon as transfer and recordation can be accomplished, present that certificate or those certificates to the Company or the Foreign Registrar, if applicable, for transfer and recordation of the Shares being deposited in the name of the Depositary or its nominee or that Custodian or its nominee.

Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or at such other place or places as the Depositary shall determine. The Depositary shall, as soon as practicable, provide written notice to the Company if Deposited Securities will be held other than by the Depositary or a Custodian.

SECTION 2.3.Delivery of American Depositary Shares.

The Depositary shall instruct each Custodian that, upon receipt by that Custodian of any deposit pursuant to Section 2.2, together with the other documents  or evidence required under that Section, that Custodian shall notify the Depositary of that deposit and the person or persons to whom or upon whose written order American Depositary Shares are deliverable in respect thereof.  Upon receiving a notice of a deposit from a Custodian, or upon the receipt of Shares or evidence of the right to receive Shares by the Depositary, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall deliver, to or upon the order of the person or persons entitled thereto, the number of American Depositary Shares issuable in respect of that deposit, but only upon payment to the Depositary of the fees and expenses of the Depositary for the delivery of those American Depositary Shares as provided in Section 5.9, and of all taxes and governmental charges and fees payable in connection with that deposit and the transfer of the deposited Shares.  However, the Depositary shall deliver only whole numbers of American Depositary Shares.

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SECTION 2.4.Registration of Transfer of American Depositary Shares; Combination and Split-up of Receipts; Interchange of Certificated and Uncertificated American Depositary Shares.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall register a transfer of American Depositary Shares on its transfer books upon (i) in the case of certificated American Depositary Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer or (ii) in the case of uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.9), and, in either case, duly stamped as may be required by the laws of the State of New York and of the United States of America. Upon registration of a transfer, the Depositary shall deliver the transferred American Depositary Shares to or upon the order of the person entitled thereto.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute and deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.

The Depositary, upon surrender of certificated American Depositary Shares for the purpose of exchanging for uncertificated American Depositary Shares, shall cancel the Receipt evidencing those certificated American Depositary Shares and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares.  The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.9) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for certificated American Depositary Shares, shall cancel those uncertificated American Depositary Shares and register and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

The Depositary may appoint one or more co-transfer agents for the purpose of effecting registration of transfers of American Depositary Shares and combinations and split-ups of Receipts at designated transfer offices on behalf of the Depositary.  In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Owners or persons entitled to American Depositary Shares and will be entitled to protection and indemnity to the same extent as the Depositary.

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SECTION 2.5.Surrender of American Depositary Shares and Withdrawal of Deposited Securities.

Upon surrender of American Depositary Shares for the purpose of withdrawal of the Deposited Securities represented thereby and payment of the fee of the Depositary for the surrender of American Depositary Shares as provided in Section 5.9 and payment of all taxes and governmental charges payable in connection with that surrender and withdrawal of the Deposited Securities, and subject to the terms and conditions of this Deposit Agreement, the Owner of those American Depositary Shares shall be entitled to delivery (to the extent delivery can then be lawfully and practicably made), to or as instructed by that Owner, of the amount of Deposited Securities at the time represented by those American Depositary Shares, but not any money or other property as to which a record date for distribution to Owners has passed (since money or other property of that kind will be delivered or paid on the scheduled payment date to the Owner as of that record date), and except that the Depositary shall not be required to accept surrender of American Depositary Shares for the purpose of withdrawal to the extent it would require delivery of a fraction of a Deposited Security.  That delivery shall be made, as provided in this Section, without unreasonable delay.

As a condition of accepting a surrender of American Depositary Shares for the purpose of withdrawal of Deposited Securities, the Depositary may require (i) that each surrendered Receipt be properly endorsed in blank or accompanied by proper instruments of transfer in blank and (ii) that the surrendering Owner execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be delivered to or upon the written order of a person or persons designated in that order.

Upon satisfaction of the conditions set forth in this section 2.5, the Depositary shall direct the Custodian to deliver, subject to Sections 2.6, 3.1 and 3.2, the other terms and conditions of this Deposit Agreement and local market rules and practices, to the surrendering Owner or to or upon the written order of the person or persons designated in the order delivered to the Depositary as above provided, the amount of Deposited Securities represented by the surrendered American Depositary Shares, and the Depositary may charge the surrendering Owner a fee and its expenses for giving that direction by cable (including SWIFT) or facsimile transmission.

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If Deposited Securities are delivered physically upon surrender ofAmerican Depositary Shares for the purpose of withdrawal, that delivery will be made atthe Custodian’s office, except that, at the request, risk and expense of an Owner surrendering American Depositary Shares for withdrawal of Deposited Securities, and for the account of that Owner, the Depositary shall direct the Custodian to forward any cash or other property comprising, and forward a certificate or certificates, if applicable, and other proper documents of title, if any, for, the Deposited Securities represented by the surrendered American Depositary Shares to the Depositary for delivery at the Depositary’s Office or to another address specified in the order received from the surrendering Owner.

SECTION 2.6.Limitations on Delivery, Registration of Transfer and Surrender of American Depositary Shares.

As a condition precedent to the delivery, registration of transfer or surrender of any American Depositary Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, Custodian or Registrar may require payment from the depositor of Shares or the presenter of the Receipt or instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee required to be paid by the Depositary or the Custodian with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees as provided in this Deposit Agreement, may require the production of proof satisfactory to it as to the identity and genuineness of any signature and may also require compliance with any regulations the Depositary may establish consistent with the provisions of this Deposit Agreement, including, without limitation, this Section 2.6.

The Depositary may refuse to accept deposits of Shares for delivery of American Depositary Shares or to register transfers of American Depositary Shares in particular instances, or may suspend deposits of Shares or registration of transfer generally, whenever it or the Company considers it necessary or advisable to do so.  The Depositary may refuse surrenders of American Depositary Shares for the purpose of withdrawal of Deposited Securities in particular instances, or may suspend surrenders for the purpose of withdrawal generally, but, notwithstanding anything to the contrary in this Deposit Agreement, only for (i) temporary delays caused by closing of the Depositary’s register or the register of holders of Shares maintained by the Company or the Foreign Registrar, or the deposit of Shares, in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the American Depositary Shares or to the withdrawal of the Deposited Securities or (iv) any other reason that, at the time, is permitted under paragraph I(A)(1) of the General Instructions to Form F-6 under the Securities Act of 1993 or any successor to that provision.  

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The Depositary shall not knowingly accept for deposit under this Deposit Agreement any Shares that, at the time of deposit, are Restricted Securities.

SECTION 2.7.Lost Receipts, etc.

If a Receipt is mutilated, destroyed, lost or stolen, the Depositary shall deliver to the Owner the American Depositary Shares evidenced by that Receipt in uncertificated form or, if requested by the Owner, execute and deliver a new Receipt of like tenor in exchange and substitution for such mutilated Receipt, upon surrender and cancellation of that mutilated Receipt, or in lieu of and in substitution for that destroyed, lost or stolen Receipt.  However, before the Depositary will deliver American Depositary Shares in uncertificated form or execute and deliver a new Receipt, in substitution for a destroyed, lost or stolen Receipt, the Owner must (a) file with the Depositary (i) a request for that replacement before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond and (b) satisfy any other reasonable requirements imposed by the Depositary.

SECTION 2.8.Cancellation and Destruction of Surrendered Receipts.

The Depositary shall cancel all Receipts surrendered to it and is authorized to destroy Receipts so cancelled.

SECTION 2.9.DTC Direct Registration System and Profile Modification System.

(a)    Notwithstanding the provisions of Section 2.4, the parties acknowledge that DTC’s Direct Registration System (“DRS”) and Profile Modification System (“Profile”) apply to the American Depositary Shares upon acceptance thereof to DRS by DTC.  DRS is the system administered by DTC that facilitates interchange between registered holding of uncertificated securities and holding of security entitlements in those securities through DTC and a DTC participant.  Profile is a required feature of DRS that allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register that transfer.

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(b)In connection with DRS/Profile, the parties acknowledge that the Depositary will not determine whether the DTC participant that is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in paragraph (a) above has the actual authority to act on behalf of that Owner (notwithstanding any requirements under the Uniform Commercial Code).  For the avoidance of doubt, the provisions of Sections 5.3 and 5.8 apply to the matters arising from the use of the DRS/Profile.  The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile system and otherwise in accordance with this Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES

SECTION 3.1.Filing Proofs, Certificates and Other Information.

Any person presenting Shares for deposit or any Owner or Holder may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper.  The Depositary may withhold the delivery or registration of transfer of American Depositary Shares, the distribution of any dividend or other distribution or of the proceeds thereof or the delivery of any Deposited Securities until that proof or other information is filed or those certificates are executed or those representations and warranties are made. If requested in writing by the Company, the Depositary will provide the Company, as promptly as reasonably practicable and at the Company’s expense, with copies of any such proofs, certificates or other information that it receives pursuant to this Section 3.1, to the extent that disclosure is permitted under applicable law.

SECTION 3.2.Liability of Owner for Taxes.

If any tax or other governmental charge shall become payable by the Custodian or the Depositary with respect to or in connection with any American Depositary Shares or any Deposited Securities represented by any American Depositary Shares or in connection with a transaction to which Section 4.8 applies, that tax or other governmental charge shall be payable by the Owner of those American Depositary Shares to the Depositary. The Depositary may refuse to register any transfer of those American Depositary Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until that payment is made, and may withhold any dividends or other distributions or the proceeds thereof, or may sell for the account of the Owner any part or all of the Deposited Securities represented by those American Depositary Shares and apply those dividends or other distributions or the net proceeds of any sale of that kind in payment of that tax or other governmental charge but, even after a sale of that kind, the Owner of those American Depositary Shares shall remain liable for any deficiency.  The

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Depositary shall distribute any net proceeds of a sale made under this Section that are not used to pay taxes or governmental charges to the Owners entitled to them in accordance with Section 4.1.  If the number of Shares represented by each American Depositary Share decreases as a result of a sale of Deposited Securities under this Section, the Depositary may call for surrender of the American Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares and may sell American Depositary Shares to the extent necessary to avoid distributing fractions of American Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them.

SECTION 3.3.Warranties on Deposit of Shares.

Every person depositing Shares under this Deposit Agreement shall be deemed thereby to represent and warrant that those Shares and each certificate therefor, if applicable, are validly issued, fully paid and nonassessable (i.e., not subject to call for payment of further capital) and were not issued in violation of any preemptive or similar rights of the holders of outstanding securities of the Company and that the person making that deposit is duly authorized so to do.  Every depositing person shall also be deemed to represent that the Shares, at the time of deposit, are not Restricted Securities. All representations and warranties deemed made under this Section shall survive the deposit of Shares and delivery of American Depositary Shares.

SECTION 3.4.Disclosure of Interests.

When required in order to comply with applicable laws and regulations (including the rules and requirements of any stock exchange on which the Shares or the American Depositary Shares are, or will be traded or listed or the rules and requirements of any clearing system through which transactions in the Shares or the American Depositary Shares may be settled)or the articles of association or similar document of the Company as in effect from time to time, the Company may from time to time request each Owner and Holder to provide to the Depositary information relating to: (a) the capacity in which it holds American Depositary Shares, (b) the identity of any Holders or other persons or entities then or previously interested in those American Depositary Shares and the nature of those interests and (c) any other matter where disclosure of such matter is required for that compliance.   Each Owner and Holder agrees to provide all information known to it in response to a request made pursuant to this Section.  Each Holder consents to the disclosure by the Depositary and the Owner or any other Holder through which it holds American Depositary Shares, directly or indirectly, of all information responsive to a request made pursuant to this Section relating to that Holder that is known to that Owner or other Holder.  The Depositary agrees to use reasonable efforts to comply with written instructions requesting that the Depositary forward any request authorized under this Section to the Owners and to forward to the Company any responses it receives in response to that request.  The Depositary may charge the Company a fee and its expenses for complying with requests under this Section 3.4.

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Each Owner and Holder of American Depositary Shares further agrees to comply with the laws and regulation of the United Kingdom (if and to the extent applicable) with respect to disclosure requirements regarding ownership or potential for ownership of Shares, all as if the those American Depositary Shares were the Shares they represent, including, inter alia, requirements to make notifications and filings within the required timeframes to the Company and any applicable authorities in the United Kingdom.

ARTICLE 4.THE DEPOSITED SECURITIES

SECTION 4.1.Cash Distributions.

Whenever the Depositary receives any cash dividend or other cash distribution on Deposited Securities, the Depositary shall, subject to the provisions of Section 4.5, convert that dividend or other distribution into Dollars and distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.9) to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing those Deposited Securities held by them respectively; provided, however, that if the Custodian, the Depositary shall be required to withhold and does withhold from that cash dividend or other cash distribution an amount on account of taxes or other governmental charges, the amount distributed to the Owners of the American Depositary Shares representing those Deposited Securities shall be reduced accordingly.  However, the Depositary will not pay any Owner a fraction of one cent, but will round each Owner’s entitlement to the nearest whole cent.

The Company or its agent will remit to the appropriate governmental agency in each applicable jurisdiction all amounts withheld by it and owing to such agency.  The Depositary or its agent will remit (or procure that the Custodian or its agent will remit) to the appropriate governmental agency in each applicable jurisdiction all amounts withheld by it (or by the Custodian, as the case may be) and owing to such agency.

If a cash distribution would represent a return of all or substantially all the value of the Deposited Securities underlying American Depositary Shares, the Depositary may:

(i)  require payment of or deduct the fee for surrender of American Depositary Shares (whether or not it is also requiring surrender of American Depositary Shares) as a condition of making that cash distribution; or

(ii)  sell all Deposited Securities other than the subject cash distribution and add any net cash proceeds of that sale to the cash distribution, call for surrender of all those American Depositary Shares and require that surrender as a condition of making that cash distribution.

If the Depositary acts under this paragraph, that action shall also be a Termination Option Event.  

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SECTION 4.2.Distributions Other Than Cash, Shares or Rights.

Subject to the provisions of Sections 4.11 and 5.9, whenever the Depositary receives any distribution other than a distribution described in Section 4.1, 4.3 or 4.4 on Deposited Securities (but not in exchange for or in conversion or in lieu of Deposited Securities), the Depositary shall cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary and any taxes or other governmental charges, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, in any manner that the Depositary deems equitable and practicable for accomplishing that distribution (which may be a distribution of depositary shares representing the securities received); provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners entitled thereto, or if for any other reason (including, but not limited to, any requirement that the Company or the Depositary withhold an amount on account of taxes or other governmental charges or that securities received must be registered under the Securities Act of 1933 in order to be distributed to Owners or Holders) the Depositary deems such distribution not to be lawful and feasible, the Depositary may adopt such other method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and distribution of the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.9) to the Owners entitled thereto, all in the manner and subject to the conditions set forth in Section 4.1.  The Depositary may withhold any distribution of securities under this Section 4.2 if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act of 1933.  The Depositary may sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this Section 4.2 that is sufficient to pay its fees and expenses in respect of that distribution.

If a distribution to be made under this Section 4.2 would represent a return of all or substantially all the value of the Deposited Securities underlying American Depositary Shares, the Depositary may:

(i)  require payment of or deduct the fee for surrender of American Depositary Shares (whether or not it is also requiring surrender of American Depositary Shares) as a condition of making that distribution; or

(ii)  sell all Deposited Securities other than the subject distribution and add any net cash proceeds of that sale to the distribution, call for surrender of all those American Depositary Shares and require that surrender as a condition of making that distribution.

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If the Depositary acts under this paragraph, that action shall also be a Termination Option Event.  

SECTION 4.3.Distributions in Shares.

Whenever the Depositary receives any distribution on Deposited Securities consisting of a dividend in, or free distribution of, Shares, the Depositary may deliver to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing those Deposited Securities held by them respectively, an aggregate number of American Depositary Shares representing the amount of Shares received as that dividend or free distribution, subject to the terms and conditions of this Deposit Agreement with respect to the deposit of Shares and issuance of American Depositary Shares, including withholding of any tax or governmental charge as provided in Section 4.11 and payment of the fees and expenses of the Depositary as provided in Section 5.9 (and the Depositary may sell, by public or private sale, an amount of the Shares received (or American Depositary Shares representing those Shares) sufficient to pay its fees and expenses in respect of that distribution).  In lieu of delivering fractional American Depositary Shares, the Depositary may sell the amount of Shares represented by the aggregate of those fractions (or American Depositary Shares representing those Shares) and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.1.  If and to the extent that additional American Depositary Shares are not delivered and Shares or American Depositary Shares are not sold, each American Depositary Share shall thenceforth also represent the additional Shares distributed on the Deposited Securities represented thereby.

If the Company declares a distribution in which holders of Deposited Securities have a right to elect whether to receive cash, Shares or other securities or a combination of those things, or a right to elect to have a distribution sold on their behalf, the Depositary may, after consultation with the Company, make that right of election available for exercise by Owners in any manner the Depositary considers to be lawful and practical.  As a condition of making a distribution election right available to Owners, the Depositary may require satisfactory assurances from the Company that doing so does not require registration of any securities under the Securities Act of 1933 that has not been effected.

SECTION 4.4.Rights.

(a)    If rights are granted to the Depositary in respect of deposited Shares to purchase additional Shares or other securities, the Company and the Depositary shall endeavor to consult as to the actions, if any, the Depositary should take in connection with that grant of rights.  The Depositary may, to the extent deemed by it to be lawful and practical (i) if requested in writing by the Company, grant to all or certain Owners rights to instruct the Depositary to purchase the securities to which the rights relate and deliver those securities or American Depositary Shares representing those securities to Owners, (ii) if requested in writing by the Company, deliver the rights to or to the order of certain

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Owners, or (iii) sell the rights to the extent practicable and distribute the net proceeds of that sale to Owners entitled to those proceeds.  To the extent rights are not exercised, delivered or disposed of under (i), (ii) or (iii) above, the Depositary shall permit the rights to lapse unexercised.

(b)    If the Depositary will act under (a)(i) above, the Company and the Depositary will enter into a separate agreement setting forth the conditions and procedures applicable to the particular offering.  Upon instruction from an applicable Owner in the form the Depositary specified and upon payment by that Owner to the Depositary of an amount equal to the purchase price of the securities to be received upon the exercise of the rights, the Depositary shall, on behalf of that Owner, exercise the rights and purchase the securities.  The purchased securities shall be delivered to, or as instructed by, the Depositary.  The Depositary shall (i) deposit the purchased Shares under this Deposit Agreement and deliver American Depositary Shares representing those Shares to that Owner or (ii) deliver or cause the purchased Shares or other securities to be delivered to or to the order of that Owner.  The Depositary will not act under (a)(i) above unless the offer and sale of the securities to which the rights relate are registered under the Securities Act of 1933 or the Depositary has received an opinion of United States counsel that is satisfactory to it to the effect that those securities may be sold and delivered to the applicable Owners without registration under the Securities Act of 1933,provided that nothing in this Deposit Agreement shall create any obligation on the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such registration statement declared effective.

(c)    If the Depositary will act under (a)(ii) above, the Company and the Depositary will enter into a separate agreement setting forth the conditions and procedures applicable to the particular offering.  Upon (i) the request of an applicable Owner to deliver the rights allocable to the American Depositary Shares of that Owner to an account specified by that Owner to which the rights can be delivered and (ii) receipt of such documents as the Company and the Depositary agreed to require to comply with applicable law, the Depositary will deliver those rights as requested by that Owner.

(d)    If the Depositary will act under (a)(iii) above, the Depositary will use reasonable efforts to sell the rights in proportion to the number of American Depositary Shares held by the  applicable Owners and pay the net proceeds to the Owners otherwise entitled to the rights that were sold, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any American Depositary Shares or otherwise.

(e)    Payment or deduction of the fees of the Depositary as provided in Section 5.9 and payment or deduction of the expenses of the Depositary and any applicable taxes or other governmental charges shall be conditions of any delivery of securities or payment of cash proceeds under this Section 4.4.

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(f)The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to make rights available to or exercise rights on behalf of Owners in general or any Owner in particular, or to sell rights.

SECTION 4.5.Conversion of Foreign Currency.

Whenever the Depositary or the Custodian receives foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary or one of its agents or affiliates or the Custodian shall convert or cause to be converted by sale or in any other manner that it may determine on a commercially reasonable basis that foreign currency into Dollars, and those Dollars shall be distributed to the Owners entitled thereto.  A cash distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners based on exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.9.

If a conversion of foreign currency or the repatriation or distribution of Dollars can be effected only with the approval or license of any government or agency thereof, the Depositary may, but will not be required to, file an application for that approval or license.

If the Depositary determines that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof that is required for such conversion is not filed or sought by the Depositary or is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

If any conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make that conversion and distribution in Dollars to the extent practicable and permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold that balance uninvested and without liability for interest thereon for the account of, the Owners entitled thereto.

The Depositary may convert currency itself or through any of its affiliates, or the Custodian or the Company may convert currency and pay Dollars to the Depositary.  Where the Depositary converts currency itself or through any of its affiliates, the Depositary acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation,

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transaction spreads, that it will retain for its own account.  The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under this Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account.  The Depositary makes no representation that the exchange rate used or obtained by it or its affiliate in any currency conversion under this Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.3.  The methodology used to determine exchange rates used in currency conversions made by the Depositary is available upon request.  Where the Custodian converts currency, the Custodian has no obligation to obtain the most favorable rate that could be obtained at the time or to ensure that the method by which that rate will be determined will be the most favorable to Owners, and the Depositary makes no representation that the rate is the most favorable rate and will not be liable for any direct or indirect losses associated with the rate.  In certain instances, the Depositary may receive dividends or other distributions from the Company in Dollars that represent the proceeds of a conversion of foreign currency or translation from foreign currency at a rate that was obtained or determined by or on behalf of the Company and, in such cases, the Depositary will not engage in, or be responsible for, any foreign currency transactions and neither it nor the Company makes any representation that the rate obtained or determined by the Company is the most favorable rate and neither it nor the Company will be liable for any direct or indirect losses associated with the rate.

SECTION 4.6.Fixing of Record Date.

Whenever a cash dividend, cash distribution or any other distribution is made on Deposited Securities or rights to purchase Shares or other securities are issued with respect to Deposited Securities (which rights will be delivered to or exercised or sold on behalf of Owners in accordance with Section 4.4) or the Depositary receives notice that a distribution or issuance of that kind will be made, or whenever the Depositary receives notice that a meeting of holders of Shares will be held in respect of which the Company has requested the Depositary to send a notice under Section 4.7, or whenever the Depositary will assess a fee or charge against the Owners, or whenever the Depositary causes a change in the number of Shares that are represented by each American Depositary Share, or whenever the Depositary otherwise finds it necessary or convenient, the Depositary shall fix a record date, which shall be the same as, or as near as practicable to, any corresponding record date set by the Company with respect to Shares, (a) for the determination of the Owners (i) who shall be entitled to receive the benefit of that dividend or other distribution or those rights, (ii) who shall be entitled to give instructions for the exercise of voting rights at that meeting, (iii) who shall be responsible for that fee or charge or (iv) for any other purpose for which the record date was set, or (b) on or after which each American Depositary Share will represent the changed number of Shares.  Subject to the provisions of Sections 4.1 through 4.5 and to the other terms and conditions of this Deposit Agreement, the Owners on a record date fixed by the Depositary shall be entitled

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to receive the amount distributable by the Depositary with respect to that dividend or other distribution or those rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held by them respectively, to give voting instructions or to act in respect of the other matter for which that record date was fixed, or be responsible for that fee or charge, as the case may be.

SECTION 4.7.Voting of Deposited Shares.

(a)    Upon receipt of notice of any meeting of holders of Shares at which holders of Shares will be entitled to vote, if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter, Disseminate to the Owners a notice, the form of which shall be in the sole discretion of the Depositary, that shall contain (i) the information contained in the notice of meeting received by the Depositary, (ii) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of English law and of the articles of association or similar documents of the Company, to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Shares represented by their respective American Depositary Shares, (iii) a statement as to the manner in which those instructions may be given and (iv) the last date on which the Depositary will accept instructions (the “Instruction Cutoff Date”).  

(b)    Upon the written request of an Owner of American Depositary Shares, as of the date of the request or, if a record date was specified by the Depositary, as of that record date, received on or before any Instruction Cutoff Date established by the Depositary, the Depositary may, and if the Depositary sent a notice under the preceding paragraph shall, endeavor, in so far as practicable, to vote or cause to be voted the amount of deposited Shares represented by those American Depositary Shares in accordance with the instructions set forth in that request.  The Depositary shall not vote or attempt to exercise the right to vote that attaches to the deposited Shares other than in accordance with instructions given by Owners and received by the Depositary.

(c)    There can be no assurance that Owners generally or any Owner in particular will receive the notice described in paragraph (a) above in time to enable Owners to give instructions to the Depositary prior to the Instruction Cutoff Date.

(d)    In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Shares, if the Company will request the Depositary to Disseminate a notice under paragraph (a) above, the Company shall give the Depositary notice of the meeting, details concerning the matters to be voted upon and copies of materials to be made available to holders of Shares in connection with the meeting not less than 30 days prior to the meeting date.

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SECTION 4.8.Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited Securities.

(a)    The Depositary shall not tender any Deposited Securities in response to any voluntary cash tender offer, exchange offer or similar offer made to holders of Deposited Securities (a “Voluntary Offer”), except when instructed in writing to do so by an Owner surrendering American Depositary Shares and subject to any conditions or procedures the Depositary may require.

(b)    If the Depositary receives a written notice that Deposited Securities have been redeemed for cash or otherwise purchased for cash in a transaction that is mandatory and binding on the Depositary as a holder of those Deposited Securities (a “Redemption”), the Depositary, at the expense of the Company, shall (i) if required, surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date, (ii) Disseminate a notice to Owners (A) notifying them of that Redemption, (B) calling for surrender of a corresponding number of American Depositary Shares and (C) notifying them that the called American Depositary Shares have been converted into a right only to receive the money received by the Depositary upon that Redemption and those net proceeds shall be the Deposited Securities to which Owners of those converted American Depositary Shares shall be entitled upon surrenders of those American Depositary Shares in accordance with Section 2.5 or 6.2 and (iii) distribute the money received upon that Redemption to the Owners entitled to it upon surrender by them of called American Depositary Shares in accordance with Section 2.5 (and, for the avoidance of doubt, Owners shall not be entitled to receive that money under Section 4.1).  If the Redemption affects less than all the Deposited Securities, the Depositary shall call for surrender a corresponding portion of the outstanding American Depositary Shares and only those American Depositary Shares will automatically be converted into a right to receive the net proceeds of the Redemption.  The Depositary shall allocate the American Depositary Shares converted under the preceding sentence among the Owners pro-rata to their respective holdings of American Depositary Shares immediately prior to the Redemption, except that the allocations may be adjusted so that no fraction of a converted American Depositary Share is allocated to any Owner.  A Redemption of all or substantially all of the Deposited Securities shall be a Termination Option Event.

(c)    If the Depositary is notified of or there occurs any change in nominal value or any sub-division, consolidation or any other reclassification of the Deposited Securities or any recapitalization, reorganization, sale of assets substantially as an entirety, merger, scheme of arrangement or consolidation affecting the issuer of the Deposited Securities or to which it is a party that is mandatory and binding on the Depositary as a holder of Deposited Securities and, as a result, securities or other property have been or will be delivered in exchange, conversion, replacement or in lieu of, Deposited Securities (a “Replacement”), the Depositary shall, if required, surrender the old Deposited Securities affected by that Replacement of Shares and hold, as new Deposited Securities under this Deposit Agreement, the new securities or other property delivered to it in that Replacement.  

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However, the Depositary may elect to sell those new Deposited Securities if in the opinion of the Depositary it is not lawful or not practical for it to hold those new Deposited Securities under this Deposit Agreement because those new Deposited Securities may not be distributed to Owners without registration under the Securities Act of 1933 or for any other reason, at public or private sale, at such places and on such terms as it deems proper and proceed as if those new Deposited Securities had been Redeemed under paragraph (b) above.  A Replacement shall be a Termination Option Event.

(d)    In the case of a Replacement where the new Deposited Securities will continue to be held under this Deposit Agreement, the Depositary may call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing the new Deposited Securities and the number of those new Deposited Securities represented by each American Depositary Share.  If the number of Shares represented by each American Depositary Share decreases as a result of a Replacement, the Depositary may call for surrender of the American Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares and may sell American Depositary Shares to the extent necessary to avoid distributing fractions of American Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them.

(e)    If there are no Deposited Securities with respect to American Depositary Shares, including if the Deposited Securities are cancelled, or the Deposited Securities with respect to American Depositary Shares have become apparently worthless, the Depositary may call for surrender of those American Depositary Shares or may cancel those American Depositary Shares, upon notice to Owners, and that condition shall be a Termination Option Event.

SECTION 4.9.Reports.

The Depositary shall make available for inspection by Owners at its Office any reports and communications, including any proxy solicitation material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of those Deposited Securities by the Company.  The Company shall furnish reports and communications, including any proxy soliciting material to which this Section applies, to the Depositary in English, to the extent those materials are required to be translated into English pursuant to any regulations of the Commission.

SECTION 4.10.Lists of Owners.

Upon written request by the Company, the Depositary shall, at the expense of the Company, furnish to it a list, as of a recent date, of the names, addresses and American Depositary Share holdings of all Owners.

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SECTION 4.11.Withholding.

If the Depositary determines that any distribution received or to be made by the Depositary (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge that the Depositary is obligated to withhold, the Depositary may sell, by public or private sale, all or a portion of the distributed property (including Shares and rights to subscribe therefor) in the amounts and manner the Depositary deems necessary and practicable to pay those taxes or charges, and the Depositary shall distribute the net proceeds of that sale, after deduction of those taxes or charges, to the Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively.

Services for Owners and Holders that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, this Deposit Agreement.  

Each Owner and Holder agrees to indemnify the Company, the Depositary, the Custodian and their respective directors, employees, agents and affiliates for, and hold each of them harmless against, any claim by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced withholding at source or other tax benefit received by it.

ARTICLE 5.THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY

SECTION 5.1.Maintenance of Office and Register by the Depositary.

Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain facilities for the delivery, registration of transfers and surrender of American Depositary Shares in accordance with the provisions of this Deposit Agreement.

The Depositary shall keep a register of all Owners and all outstanding American Depositary Shares, which shall be open for inspection by the Owners and the Company at the Depositary’s Office during regular business hours, but only for the purpose of communicating with Owners regarding the business of the Company or a matter related to this Deposit Agreement or the American Depositary Shares.

The Depositary may close the register for delivery, registration of transfer or surrender for the purpose of withdrawal from time to time as provided in Section 2.6.

If any American Depositary Shares are listed on one or more stock exchanges, the Depositary shall act as Registrar or appoint a Registrar or one or more co‑registrars for registration of those American Depositary Shares in accordance with any requirements of that exchange or those exchanges.

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SECTION 5.2.Prevention or Delay of Performance by the Company or the Depositary.

None of the Depositary nor the Company nor any of their respective directors, officers, employees, agents or affiliates shall incur any liability to any Owner or Holder:

(i) if by reason of (A) any provision of any present or future law or regulation or other act of the government of the United States, any State of the United States or any other state or jurisdiction, or of any governmental or regulatory authority or stock exchange; (B) (in the case of the Depositary only) any provision, present or future, of the articles of association or similar document of the Company, or any provision of any securities issued or distributed by the Company, or any offering or distribution thereof; or (C) any event or circumstance, whether natural or caused by a person or persons, that is beyond the ability of the Depositary or the Company, as the case may be, to prevent or counteract by reasonable care or effort (including, but not limited to, earthquakes, floods, severe storms, fires, explosions, war, terrorism, civil unrest, labor disputes, criminal acts or outbreaks of infectious disease; interruptions or malfunctions of utility services, Internet or other communications lines or systems; unauthorized access to or attacks on computer systems or websites; or other failures or malfunctions of computer hardware or software or other systems or equipment), the Depositary or the Company is, directly or indirectly, prevented from, forbidden to or delayed in, or could be subject to any civil or criminal penalty on account of doing or performing and therefore does not do or perform, any act or thing that, by the terms of this Deposit Agreement or the Deposited Securities, it is provided shall be done or performed;

(ii) for any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement (including any determination by the Depositary to take, or not take, any action that this Deposit Agreement provides the Depositary may take);

(iii) for the inability of any Owner or Holder to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of this Deposit Agreement, made available to Owners or Holders; or

(iv) for any special, consequential or punitive damages for any breach of the terms of this Deposit Agreement.  

Where, by the terms of a distribution to which Section 4.1, 4.2 or 4.3 applies, or an offering to which Section 4.4 applies, or for any other reason, that distribution or offering may not be made available to Owners, and the Depositary may not dispose of that distribution or offering on behalf of Owners and make the net proceeds available to Owners, then the Depositary shall not make that distribution or offering available to Owners, and shall allow any rights, if applicable, to lapse.

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SECTION 5.3.Obligations of the Depositary and the Company.

Neither the Company nor any of its directors, officers, employees, agents or affiliates assume any obligation nor shall any of them be subject to any liability under this Deposit Agreement to any Owner or Holder, except that the Company agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.

The Depositary assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Holder (including, without limitation, liability with respect to the validity or worth of the Deposited Securities), except that the Depositary agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith, and the Depositary shall not be a fiduciary or have any fiduciary duty to Owners or Holders.

Neither the Depositary nor the Company nor any of their respective directors, officers, employees, agents or affiliates shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the American Depositary Shares on behalf of any Owner or Holder or any other person.

Each of the Depositary and the Company and their respective directors, officers, employees, agents and affiliates may rely, and shall be protected in relying upon, any written notice, request, direction or other document believed by any of them to be genuine and to have been signed or presented by the proper party or parties.

Neither the Depositary nor the Company nor any of their respective directors, officers, employees, agents or affiliates shall be liable for any action or non-action by any of them in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Owner or any other person believed by it in good faith to be competent to give such advice or information.

The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.

The Depositary shall not be liable for the acts or omissions of any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of American Depositary Shares or Deposited Securities or otherwise.

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In the absence of bad faith on its part, the Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote.  

The Depositary shall have no duty to make any determination or provide any information as to the tax status of the Company or any liability for any tax consequences that may be incurred by Owners or Holders as a result of owning or holding American Depositary Shares. The Depositary shall not be liable for the inability or failure of an Owner or Holder to obtain the benefit of a foreign tax credit, reduced rate of withholding or refund of amounts withheld in respect of tax or any other tax benefit.

No disclaimer of liability under the United States federal securities laws is intended by any provision of this Deposit Agreement.

SECTION 5.4.Resignation and Removal of the Depositary.

The Depositary may at any time resign as Depositary hereunder by written notice of its election so to do delivered to the Company, to become effective upon the appointment of a successor depositary and its acceptance of that appointment as provided in this Section.  The effect of resignation if a successor depositary is not appointed is provided for in Section 6.2.

The Depositary may at any time be removed by the Company by 90 days’ prior written notice of that removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of its appointment as provided in this Section.

If the Depositary resigns or is removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York.  Every successor depositary shall execute and deliver to the Company an instrument in writing accepting its appointment under this Deposit Agreement.  If the Depositary receives notice from the Company that a successor depositary has been appointed following its resignation or removal, the Depositary, upon payment of all sums due it from the Company, shall deliver to its successor a register listing all the Owners and their respective holdings of outstanding American Depositary Shares and shall deliver the Deposited Securities to or to the order of its successor.  When the Depositary has taken the actions specified in the preceding sentence (i) the successor shall become the Depositary and shall have all the rights and shall assume all the duties of the Depositary under this Deposit Agreement and (ii) the predecessor depositary shall cease to be the Depositary and shall be discharged and released from all obligations under this Deposit Agreement, except for its duties under Section 5.8 with respect to the time before that discharge.  A successor Depositary shall notify the Owners of its appointment as soon as practical after assuming the duties of Depositary.

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Any corporation or other entity into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

SECTION 5.5.The Custodians.

The Custodian shall be subject at all times and in all respects to the directions of the Depositary and shall be responsible solely to it.  The Depositary in its discretion may at any time appoint a substitute or additional custodian or custodians, each of which shall thereafter be one of the Custodians under this Deposit Agreement.  If the Depositary receives notice that a Custodian is resigning and, upon the effectiveness of that resignation there would be no Custodian acting under this Deposit Agreement, the Depositary shall, as promptly as practicable after receiving that notice, appoint a substitute custodian or custodians, each of which shall thereafter be a Custodian under this Deposit Agreement.  The Depositary shall require any Custodian that resigns or is removed to deliver all Deposited Securities held by it to another Custodian.

SECTION 5.6.Notices and Reports.

If the Company takes or decides to take any corporate action of a kind that is addressed in Sections 4.1 to 4.4, or 4.6 to 4.8, or that effects or will effect a change of the name or legal structure of the Company, or that effects or will effect a change to the Shares, the Company shall notify the Depositary and the Custodian of that action or decision as soon as it is lawful and practical to give that notice.  The notice shall be in English and shall include all details that the Company is required to include in any notice to any governmental or regulatory authority or securities exchange or is required to make available generally to holders of Shares by publication or otherwise.

The Company will arrange for the translation into English, if not already in English, to the extent required pursuant to any regulations of the Commission, and the prompt transmittal by the Company to the Depositary and the Custodian of all notices and any other reports and communications which are made generally available by the Company to holders of its Shares.  If requested in writing by the Company, the Depositary will Disseminate, at the Company’s expense, those notices, reports and communications to all Owners or otherwise make them available to Owners in a manner that the Company specifies as substantially equivalent to the manner in which those communications are made available to holders of Shares and compliant with the requirements of any securities exchange on which the American Depositary Shares are listed.  The Company will timely provide the Depositary with the quantity of such notices, reports, and communications, as requested by the Depositary from time to time, in order for the Depositary to effect that Dissemination.

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The Company represents that as of the date of this Deposit Agreement, the statements in Article 11 of the form of Receipt appearing as Exhibit A to this Deposit Agreement or, if applicable, most recently filed with the Commission pursuant to Rule 424(b) under the Securities Act with respect to the Company’s obligation to file periodic reports under the United States Securities Exchange Act of 1934, as amended, or its qualification for exemption from registration under that Act pursuant to Rule 12g3-2(b) under that Act, as the case may be, are true and correct.  The Company agrees to promptly notify the Depositary upon becoming aware of any change in the truth of any of those statements or if there is any change in the Company’s status regarding those reporting obligations or that qualification.

SECTION 5.7.Distribution of Additional Shares, Rights, etc.

If the Company or any affiliate of the Company determines to make any issuance or distribution of (1) additional Shares, (2) rights to subscribe for Shares, (3) securities convertible into Shares, or (4) rights to subscribe for such securities (each a “Distribution”), the Company shall notify the Depositary in writing in English as promptly as practicable and in any event before the Distribution starts and, if requested in writing by the Depositary, the Company shall promptly furnish to the Depositary either (i) evidence satisfactory to the Depositary that the Distribution is registered under the Securities Act of 1933 or (ii) a written opinion from U.S. counsel for the Company that is reasonably satisfactory to the Depositary, stating that the Distribution does not require, or, if made in the United States, would not require, registration under the Securities Act of 1933.  

The Company agrees with the Depositary that neither the Company nor any company controlled by, controlling or under common control with the Company will at any time deposit any Shares that, at the time of deposit, are Restricted Securities.

Notwithstanding anything to the contrary herein, nothing in this Deposit Agreement shall be deemed to obligate the Company to file any registration statement in respect of any proposed transactions or to endeavor to have such registration statement declared effective.

SECTION 5.8.Indemnification.

The Company agrees to indemnify the Depositary, its directors, employees, agents and affiliates and each Custodian against, and hold each of them harmless from, any liability or expense (including, but not limited to any fees and expenses incurred in seeking, enforcing or collecting such indemnity and the reasonable fees and expenses of counsel) that may arise out of or in connection with (a) any registration with the Commission of American Depositary Shares or Deposited Securities or the offer or sale thereof or (b) acts performed or omitted, pursuant to the provisions of or in connection with this Deposit Agreement and the American Depositary Shares, as the same may be amended, modified or supplemented from time to time, (i) by either the Depositary or a Custodian or their respective directors, employees, agents and affiliates, except for any liability or expense arising out of the negligence or bad faith of either of them, or (ii) by the Company or any of its directors, employees, agents and affiliates.

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The Depositary agrees to indemnify the Company, its directors, officers, employees, agents and affiliates and hold them harmless from any liability or expense (including, but not limited to any fees and expenses incurred in seeking, enforcing or collecting such indemnity and the reasonable fees and expenses of counsel) that may arise out of acts performed or omitted by the Depositary or any Custodian or their respective directors, employees, agents and affiliates due to their negligence or bad faith.

If an action, proceeding (including, but not limited to, any governmental investigation), claim or dispute (collectively, a “Proceeding”) in respect of which indemnity may be sought by either party is brought or asserted against the other party, the party seeking indemnification (the “Indemnitee”) shall promptly notify the party obligated to provide that indemnification (the “Indemnitor”) of that Proceeding.  The failure of the Indemnitee to so notify the Indemnitor shall not impair the Indemnitee's ability to seek indemnification from the Indemnitor unless such failure materially adversely affects the Indemnitor’s ability to adequately oppose or defend such Proceeding.  Upon receipt of notice from the Indemnitee of a Proceeding, the Indemnitor shall be entitled to participate in that Proceeding and, to the extent that it shall so desire and provided no conflict of interest exists as specified in item (b) below and there are no other defenses available to Indemnitee as specified in item (d) below, to assume the defense thereof, upon written notice to the Indemnitee, with counsel reasonably satisfactory to the Indemnitee (in which case all attorney's fees and expenses shall be borne by the Indemnitor and the Indemnitor shall in good faith defend the Indemnitee).  The Indemnitee shall have the right to employ separate counsel in a Proceeding and to participate in the defense thereof, but the fees and expenses of that counsel shall be borne by the Indemnitee unless (a) the Indemnitor agrees in writing to pay those fees and expenses, (b) the Indemnitee shall have reasonably and in good faith concluded that there is a conflict of interest between the Indemnitor and the Indemnitee in the conduct of the defense of that action, (c) the Indemnitor fails, within ten (10) days prior to the date the first response or appearance is required to be made in that Proceeding, to assume the defense of that Proceeding with counsel reasonably satisfactory to the Indemnitee or (d) there are legal defenses available to Indemnitee that are different from or are in addition to those available to the Indemnitor.  No compromise or settlement of a Proceeding may be effected by either the Indemnitor or the Indemnitee without the consent of the other (which consent shall not be unreasonably withheld).  Neither the Indemnitor nor the Indemnitee shall have any liability with respect to any compromise or settlement of a Proceeding effected without its consent, which consent shall not be unreasonably withheld.  The Indemnitor shall have no obligation to indemnify and hold harmless the Indemnitee from any loss, expense or liability incurred by the Indemnitee as a result of a default judgment entered against the Indemnitee in a Proceeding unless that judgment was entered after the Indemnitor agreed, in writing, to assume the defense of that Proceeding.

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SECTION 5.9.Charges of Depositary.

The following charges shall be incurred by any party depositing or withdrawing Shares or by any party surrendering American Depositary Shares or to whom American Depositary Shares are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary Shares pursuant to Section 4.3), or by Owners, as applicable:  (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Shares generally on the Share register of the Company or Foreign Registrar and applicable to transfers of Shares to or from the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable (including SWIFT) and facsimile transmission fees and expenses as are expressly provided in this Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.5, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the delivery of American Depositary Shares pursuant to Section 2.3, 4.3 or 4.4 and the surrender of American Depositary Shares pursuant to Section 2.5 or 6.2, (6) a fee of $.05 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to this Deposit Agreement, including, but not limited to Sections 4.1 through 4.4 and Section 4.8, (7) a fee for the distribution of securities pursuant to Section 4.2 or of rights pursuant to Section 4.4 (where the Depositary will not exercise or sell those rights on behalf of Owners), such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities under this Deposit Agreement (for purposes of this item 7 treating all such securities as if they were Shares) but which securities are instead distributed by the Depositary to Owners, (8) in addition to any fee charged under item 6 above, a fee of $.05 or less per American Depositary Share (or portion thereof) per annum for depositary services, which will be payable as provided in item 9 below, and (9) any other charges payable by the Depositary or the Custodian, any of the Depositary's or Custodian’s agents or the agents of the Depositary's or Custodian’s agents, in connection with the servicing of Shares or other Deposited Securities (which charges shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.6 and shall be payable at the sole discretion of the Depositary by billing those Owners for those charges or by deducting those charges from one or more cash dividends or other cash distributions).

The Depositary may collect any of its fees by deduction from any cash distribution payable, or by selling a portion of any securities to be distributed, to Owners that are obligated to pay those fees.

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In performing its duties under this Deposit Agreement, the Depositary may use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the Depositary and that may earn or share fees, spreads or commissions.

The Depositary may own and deal in any class of securities of the Company and its affiliates and in American Depositary Shares.

SECTION 5.10.Retention of Depositary Documents.

The Depositary is authorized to destroy those documents, records, bills and other data compiled during the term of this Deposit Agreement at the times permitted by the laws or regulations governing the Depositary unless the Company requests in writing, sufficiently prior to such destruction, that such papers be retained for a longer period or turned over to the Company or to a successor depositary at the Company’s expense.

SECTION 5.11.Exclusivity.

Without prejudice to the Company’s rights under Section 5.4, the Company agrees not to appoint any other depositary for issuance of depositary shares, depositary receipts or any similar securities or instruments so long as The Bank of New York Mellon is acting as Depositary under this Deposit Agreement.

SECTION 5.12.Information for Regulatory and Tax Compliance.

Each of the Company and the Depositary shall provide to the other, as promptly as practicable, information from its records or otherwise available to it that is reasonably requested by the other to permit the other to comply with applicable law or requirements of governmental, tax or regulatory authorities.

ARTICLE 6.AMENDMENT AND TERMINATION

SECTION 6.1.Amendment.

The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Holders in any respect that they may deem necessary or desirable.  Any amendment that would impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable (including SWIFT) or facsimile transmission costs, delivery costs or other such expenses), or that would otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary Shares until the expiration of 30 days after notice of that amendment has been Disseminated to the Owners of outstanding American Depositary Shares. Every Owner and Holder, at the time any amendment so becomes effective, shall be deemed, by continuing to hold American Depositary Shares or any interest therein, to consent and agree to that amendment and to be bound by this

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Deposit Agreement as amended thereby. Upon the effectiveness of an amendment to the form of Receipt, including a change in the number of Shares represented by each American Depositary Share, the Depositary may call for surrender of Receipts to be replaced with new Receipts in the amended form or call for surrender of American Depositary Shares to effect that change of ratio.  In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares and receive delivery of the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.

SECTION 6.2.Termination.

(a)    The Company may initiate termination of this Deposit Agreement by notice to the Depositary.  The Depositary may initiate termination of this Deposit Agreement if (i) at any time 60 days shall have expired after the Depositary delivered to the Company a written resignation notice and a successor depositary has not been appointed and accepted its appointment as provided in Section 5.4 or (ii) a Termination Option Event has occurred.  If termination of this Deposit Agreement is initiated, the Depositary shall Disseminate a notice of termination to the Owners of all American Depositary Shares then outstanding setting a date for termination (the “Termination Date”), which shall be at least 90 days after the date of that notice, and this Deposit Agreement shall terminate on that Termination Date.

(b)    After the Termination Date, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary under Sections 5.8 and 5.9.  

(c)    At any time after the Termination Date, the Depositary may sell the Deposited Securities then held under this Deposit Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American Depositary Shares that remain outstanding, and those Owners will be general creditors of the Depositary with respect to those net proceeds and that other cash.  After making that sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except (i) to account for the net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of this Deposit Agreement and any applicable taxes or governmental charges) and (ii) for its obligations under Section 5.8 and (iii) to act as provided in paragraph (d) below.

(d)    After the Termination Date, the Depositary shall continue to receive dividends and other distributions pertaining to Deposited Securities (that have not been sold), may sell rights and other property as provided in this Deposit Agreement and shall deliver Deposited Securities (or sale proceeds) upon surrender of American Depositary Shares (after payment or upon deduction, in each case, of the fee of the Depositary for the

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surrender of American Depositary Shares, any expenses for the account of the Owner of those American Depositary Shares in accordance with the terms and conditions of this Deposit Agreement and any applicable taxes or governmental charges).  After the Termination Date, the Depositary shall not accept deposits of Shares or deliver American Depositary Shares.  After the Termination Date, (i) the Depositary may refuse to accept surrenders of American Depositary Shares for the purpose of withdrawal of Deposited Securities (that have not been sold) or reverse previously accepted surrenders of that kind that have not been settled if in its judgment the requested withdrawal would interfere with its efforts to sell the Deposited Securities, (ii) the Depositary will not be required to deliver cash proceeds of the sale of Deposited Securities until all Deposited Securities have been sold and (iii) the Depositary may discontinue the registration of transfers of American Depositary Shares and suspend the distribution of dividends and other distributions on Deposited Securities to the Owners and need not give any further notices or perform any further acts under this Deposit Agreement except as provided in this Section.

ARTICLE 7.MISCELLANEOUS

SECTION 7.1.Counterparts; Signatures; Delivery.

This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of those counterparts shall constitute one and the same instrument.  Copies of this Deposit Agreement shall be filed with the Depositary and the Custodians and shall be open to inspection by any Owner or Holder during regular business hours.

The exchange of copies of this Deposit Agreement and manually-signed signature pages by facsimile, or email attaching a pdf or similar bit-mapped image, shall constitute effective execution and delivery of this Deposit Agreement as to the parties to it; copies and signature pages so exchanged may be used in lieu of the original Deposit Agreement and signature pages for all purposes and shall have the same validity, legal effect and admissibility in evidence as an original manual signature; the parties to this Deposit Agreement hereby agree not to argue to the contrary.

SECTION 7.2.No Third Party Beneficiaries.

This Deposit Agreement is for the exclusive benefit of the Company, the Depositary, the Owners and the Holders and their respective successors and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person.

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SECTION 7.3.Severability.

In case any one or more of the provisions contained in this Deposit Agreement or in a Receipt should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained in this Deposit Agreement or that Receipt shall in no way be affected, prejudiced or disturbed thereby.

SECTION 7.4.Owners and Holders as Parties; Binding Effect.

The Owners and Holders from time to time shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions of this Deposit Agreement and of the Receipts by acceptance of American Depositary Shares or any interest therein.

SECTION 7.5.Notices.

Any and all notices to be given to the Company shall be in writing and shall be deemed to have been duly given if personally delivered or sent by domestic first class or international air mail or air courier or sent by facsimile transmission or email attaching a pdf or similar bit-mapped image of a signed writing, addressed to Silence Therapeutics plc, 72 Hammersmith Road, London, W14 8^th, Attention: Chief Financial Officer, or any other place to which the Company may have transferred its principal office with notice to the Depositary.

Any and all notices to be given to the Depositary shall be in writing and shall be deemed to have been duly given if in English and personally delivered or sent by first class domestic or international air mail or air courier or sent by facsimile transmission or email attaching a pdf or similar bit-mapped image of a signed writing, addressed to The Bank of New York Mellon, 240 Greenwich Street, New York, New York 10286, Attention:  Depositary Receipt Administration, or any other place to which the Depositary may have transferred its Office with notice to the Company.

Delivery of a notice to the Company or Depositary by mail or air courier shall be deemed effected when deposited, postage prepaid, in a post-office letter box or received by an air courier service.  Delivery of a notice to the Company or Depositary sent by facsimile transmission or email shall be deemed effected when the recipient acknowledges receipt of that notice.

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A notice to be given to an Owner shall be deemed to have been duly given when Disseminated to that Owner.  Dissemination in paper form will be effective when personally delivered or sent by first class domestic or international air mail or air courier, addressed to that Owner at the address of that Owner as it appears on the transfer books for American Depositary Shares of the Depositary, or, if that Owner has filed with the Depositary a written request that notices intended for that Owner be mailed to some other address, at the address designated in that request.  Dissemination in electronic form will be effective when sent in the manner consented to by the Owner to the electronic address most recently provided by the Owner for that purpose.

SECTION 7.6.Appointment of Agent for Service of Process; Submission to Jurisdiction; Jury Trial Waiver.

The Company hereby (i) designates and appoints the person named in Exhibit A to this Deposit Agreement as the Company's authorized agent in the United States upon which process may be served in any suit or proceeding arising out of or relating to the Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement (a “Proceeding”), (ii) consents and submits to the jurisdiction of any state or federal court in the State of New York in which any Proceeding may be instituted and (iii) agrees that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any Proceeding.  The Company agrees to deliver to the Depositary, upon the execution and delivery of this Deposit Agreement, a written acceptance by the agent named in Exhibit A to this Deposit Agreement of its appointment as process agent.  The Company further agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue that designation and appointment in full force and effect, or to appoint and maintain the appointment of another process agent located in the United States as required above, and to deliver to the Depositary a written acceptance by that agent of that appointment, for so long as any American Depositary Shares or Receipts remain outstanding or this Deposit Agreement remains in force.  In the event the Company fails to maintain the designation and appointment of a process agent in the United States in full force and effect, the Company hereby waives personal service of process upon it and consents that a service of process in connection with a Proceeding may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices under this Deposit Agreement, and service so made shall be deemed completed five (5) days after the same shall have been so mailed.

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EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH OWNER AND HOLDER) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THIS DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF, INCLUDING, WITHOUT LIMITATION, ANY QUESTION REGARDING EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

SECTION 7.7.Waiver of Immunities.

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any immunity of that kind and consents to relief and enforcement as provided above.

SECTION 7.8.Governing Law.

This Deposit Agreement and the Receipts shall be interpreted in accordance with and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by and construed in accordance with the laws of the State of New York.

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IN WITNESS WHEREOF, SILENCE THERAPEUTICS PLC and THE BANK OF NEW YORK MELLON have duly executed this Deposit Agreement as of the day and year first set forth above and all Owners and Holders shall become parties hereto upon acceptance by them of American Depositary Shares or any interest therein.

SILENCE THERAPEUTICS PLC

By:

Name:

Title:

THE BANK OF NEW YORK MELLON,

   as Depositary

By:

Name:

Title:

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EXHIBIT A

AMERICAN DEPOSITARY SHARES

(Each American Depositary Share represents

Two deposited Shares)

THE BANK OF NEW YORK MELLON

AMERICAN DEPOSITARY RECEIPT

FOR ORDINARY SHARES OF

SILENCE THERAPEUTICS PLC

(INCORPORATED UNDER THE LAWS OF ENGLAND AND WALES)

The Bank of New York Mellon, as depositary (hereinafter called the “Depositary”), hereby certifies that_________________________________________, or registered assigns IS THE OWNER OF _____________________________

AMERICAN DEPOSITARY SHARES

representing deposited ordinary shares (herein called “Shares”) of Silence Therapeutics plc, incorporated under the laws of England and Wales (herein called the “Company”).  At the date hereof, each American Depositary Share represents two Shares deposited or subject to deposit under the Deposit Agreement (as such term is hereinafter defined) with a custodian for the Depositary (herein called the “Custodian”) that, as of the date of the Deposit Agreement, was The Bank of New York Mellon, acting through an office located in the United Kingdom.  The Depositary's Office and its principal executive office are located at 240 Greenwich Street, New York, N.Y. 10286.

THE DEPOSITARY'S OFFICE ADDRESS IS

240 GREENWICH STREET, NEW YORK, N.Y. 10286

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1. THE DEPOSIT AGREEMENT.

This American Depositary Receipt is one of an issue (herein called “Receipts”), all issued and to be issued upon the terms and conditions set forth in the Deposit Agreement dated as of __________, 2020 (herein called the “Deposit Agreement”) among the Company, the Depositary, and all Owners and Holders from time to time of American Depositary Shares issued thereunder, each of whom by accepting American Depositary Shares agrees to become a party thereto and become bound by all the terms and conditions thereof.  The Deposit Agreement sets forth the rights of Owners and Holders and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other securities, property and cash from time to time received in respect of those Shares and held thereunder (those Shares, securities, property, and cash are herein called “Deposited Securities”).  Copies of the Deposit Agreement are on file at the Depositary's Office in New York City and at the office of the Custodian.

The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made.  Capitalized terms defined in the Deposit Agreement and not defined herein shall have the meanings set forth in the Deposit Agreement.

2. SURRENDER OF AMERICAN DEPOSITARY SHARES AND WITHDRAWAL OF SHARES.

Upon surrender of American Depositary Shares for the purpose of withdrawal of the Deposited Securities represented thereby and payment of the fee of the Depositary for the surrender of American Depositary Shares as provided in Section 5.9 of the Deposit Agreement and payment of all taxes and governmental charges payable in connection with that surrender and withdrawal of the Deposited Securities, and subject to the terms and conditions of the Deposit Agreement, the Owner of those American Depositary Shares shall be entitled to delivery (to the extent delivery can then be lawfully and practicably made), to or as instructed by that Owner, of the amount of Deposited Securities at the time represented by those American Depositary Shares, but not any money or other property as to which a record date for distribution to Owners has passed (since money or other property of that kind will be delivered or paid on the scheduled payment date to the Owner as of that record date) and except that the Depositary shall not be required to accept surrender of American Depositary Shares for the purpose of withdrawal to the extent it would require delivery of a fraction of a Deposited Security.  The Depositary shall direct the Custodian with respect to delivery of Deposited Securities and may charge the surrendering Owner a fee and its expenses for giving that direction by cable (including SWIFT) or facsimile transmission.  If Deposited Securities are delivered physically upon surrender of American Depositary Shares for the purpose of withdrawal, that delivery will be made at the Custodian’s office, except that, at the request, risk and expense of the surrendering Owner, and for the account of that Owner, the Depositary shall direct the Custodian to forward any

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cash or other property comprising, and forward a certificate or certificates, if applicable, and other proper documents of title, if any, for, the Deposited Securities represented by the surrendered American Depositary Shares to the Depositary for delivery at the Depositary’s Office or to another address specified in the order received from the surrendering Owner.

3. REGISTRATION OF TRANSFER OF AMERICAN DEPOSITARY SHARES; COMBINATION AND SPLIT-UP OF RECEIPTS; INTERCHANGE OF CERTIFICATED AND UNCERTIFICATED AMERICAN DEPOSITARY SHARES.

The Depositary, subject to the terms and conditions of the Deposit Agreement, shall register a transfer of American Depositary Shares on its transfer books upon (i) in the case of certificated American Depositary Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer or (ii) in the case of uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.9 of that Agreement), and, in either case, duly stamped as may be required by the laws of the State of New York and of the United States of America. Upon registration of a transfer, the Depositary shall deliver the transferred American Depositary Shares to or upon the order of the person entitled thereto.

The Depositary, subject to the terms and conditions of the Deposit Agreement, shall upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute and deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.

The Depositary, upon surrender of certificated American Depositary Shares for the purpose of exchanging for uncertificated American Depositary Shares, shall cancel the Receipt evidencing those certificated American Depositary Shares and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares.  The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.9 of the Deposit Agreement) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for certificated American Depositary Shares, shall cancel those uncertificated American Depositary Shares and register and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

As a condition precedent to the delivery, registration of transfer, or surrender of any American Depositary Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, the Custodian, or Registrar may require payment from the depositor of the Shares or the presenter of the Receipt or instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and

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any stock transfer or registration fee required to be paid by the Depositary or the Custodian with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees as provided in the Deposit Agreement, may require the production of proof satisfactory to it as to the identity and genuineness of any signature and may also require compliance with any regulations the Depositary may establish consistent with the provisions of the Deposit Agreement.

The Depositary may refuse to accept deposits of Shares for delivery of American Depositary Shares or to register transfers of American Depositary Shares in particular instances, or may suspend deposits of Shares or registration of transfer generally, whenever it or the Company considers it necessary or advisable to do so.  The Depositary may refuse surrenders of American Depositary Shares for the purpose of withdrawal of Deposited Securities in particular instances, or may suspend surrenders for the purpose of withdrawal generally, but, notwithstanding anything to the contrary in the Deposit Agreement, only for (i) temporary delays caused by closing of the Depositary’s register or the register of holders of Shares maintained by the Company or the Foreign Registrar, or the deposit of Shares, in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the American Depositary Shares or to the withdrawal of the Deposited Securities or (iv) any other reason that, at the time, is permitted under paragraph I(A)(1) of the General Instructions to Form F-6 under the Securities Act of 1993 or any successor to that provision.

The Depositary shall not knowingly accept for deposit under the Deposit Agreement any Shares that, at the time of deposit, are Restricted Securities.

4. LIABILITY OF OWNER FOR TAXES.

If any tax or other governmental charge shall become payable by the Custodian or the Depositary with respect to or in connection with any American Depositary Shares or any Deposited Securities represented by any American Depositary Shares or in connection with a transaction to which Section 4.8 of the Deposit Agreement applies, that tax or other governmental charge shall be payable by the Owner of those American Depositary Shares to the Depositary.  The Depositary may refuse to register any transfer of those American Depositary Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until that payment is made, and may withhold any dividends or other distributions or the proceeds thereof, or may sell for the account of the Owner any part or all of the Deposited Securities represented by those American Depositary Shares, and may apply those dividends or other distributions or the net proceeds of any sale of that kind in payment of that tax or other governmental charge but, even after a sale of that kind, the Owner shall remain liable for any deficiency.  The Depositary shall distribute any net proceeds of a sale made under Section 3.2 of the Deposit Agreement that are not used to pay taxes or governmental charges to the Owners entitled to them in accordance with Section 4.1 of the Deposit Agreement.  If the number of Shares represented by each

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American Depositary Share decreases as a result of a sale of Deposited Securities under Section 3.2 of the Deposit Agreement, the Depositary may call for surrender of the American Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares and may sell American Depositary Shares to the extent necessary to avoid distributing fractions of American Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them.

5. WARRANTIES ON DEPOSIT OF SHARES.

Every person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that those Shares and each certificate therefor, if applicable, are validly issued, fully paid and nonassessable (i.e., not subject to call for payment of further capital) and were not issued in violation of any preemptive or similar rights of the holders of outstanding securities of the Company and that the person making that deposit is duly authorized so to do.  Every depositing person shall also be deemed to represent that the Shares, at the time of deposit, are not Restricted Securities.  All representations and warranties deemed made under Section 3.3 of the Deposit Agreement shall survive the deposit of Shares and delivery of American Depositary Shares. If requested in writing, the Depositary will provide the Company, as promptly as reasonably practicable and at the Company’s expense, with copies of any such proofs, certificates or other information it receives pursuant to Section 3.1 of the Deposit Agreement, to the extent that disclosure is permitted under applicable law.

6. FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

Any person presenting Shares for deposit or any Owner or Holder may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper.  The Depositary may withhold the delivery or registration of transfer of any American Depositary Shares, the distribution of any dividend or other distribution or of the proceeds thereof or the delivery of any Deposited Securities until that proof or other information is filed or those certificates are executed or those representations and warranties are made.  As conditions of accepting Shares for deposit, the Depositary may require (i) any certification required by the Depositary or the Custodian in accordance with the provisions of the Deposit Agreement, (ii) a written order directing the Depositary to deliver to, or upon the written order of, the person or persons stated in that order, the number of American Depositary Shares representing those Deposited Shares, (iii) evidence satisfactory to the Depositary that those Shares have been re-registered in the books of the Company or the Foreign Registrar (or of CREST, if applicable) in the name of the Depositary, a Custodian or a nominee of the Depositary or a Custodian, (iv) evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in each applicable jurisdiction and (v) an agreement or assignment, or

A-5

other instrument satisfactory to the Depositary, that provides for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Shares or to receive other property, that any person in whose name those Shares are or have been recorded may thereafter receive upon or in respect of those Shares, or, in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.

7. CHARGES OF DEPOSITARY.

The following charges shall be incurred by any party depositing or withdrawing Shares or by any party surrendering American Depositary Shares or to whom American Depositary Shares are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary Shares pursuant to Section 4.3 of the Deposit Agreement), or by Owners, as applicable:  (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Shares generally on the Share register of the Company or Foreign Registrar and applicable to transfers of Shares to or from the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable (including SWIFT) and facsimile transmission fees and expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.5 of the Deposit Agreement, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the delivery of American Depositary Shares pursuant to Section 2.3, 4.3 or 4.4 of the Deposit Agreement and the surrender of American Depositary Shares pursuant to Section 2.5 or 6.2 of the Deposit Agreement, (6) a fee of $.05 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to the Deposit Agreement, including, but not limited to Sections 4.1 through 4.4 and 4.8 of the Deposit Agreement, (7) a fee for the distribution of securities pursuant to Section 4.2 of the Deposit Agreement or of rights pursuant to Section 4.4 of that Agreement (where the Depositary will not exercise or sell those rights on behalf of Owners), such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities under the Deposit Agreement (for purposes of this item 7 treating all such securities as if they were Shares) but which securities are instead distributed by the Depositary to Owners, (8) in addition to any fee charged under item 6, a fee of $.05 or less per American Depositary Share (or portion thereof) per annum for depositary services, which will be payable as provided in item 9 below, and (9) any other charges payable by the Depositary or the Custodian, any of the Depositary's or Custodian’s agents or the agents of the Depositary's or Custodian’s agents, in connection with the servicing of Shares or other Deposited Securities (which charges shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.6 of the Deposit Agreement and shall be payable at the sole discretion of the Depositary by billing those Owners for those charges or by deducting those charges from one or more cash dividends or other cash distributions).

The Depositary may collect any of its fees by deduction from any cash distribution payable, or by selling a portion of any securities to be distributed, to Owners that are obligated to pay those fees.

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The Depositarymay own and deal in any class of securities of the Company and its affiliates and in American Depositary Shares.

From time to time, the Depositary may make payments to the Company to reimburse the Company for costs and expenses generally arising out of establishment and maintenance of the American Depositary Shares program, waive fees and expenses for services provided by the Depositary or share revenue from the fees collected from Owners or Holders.  In performing its duties under the Deposit Agreement, the Depositary may use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the Depositary and that may earn or share fees, spreads or commissions.  

8. DISCLOSURE OF INTERESTS.

When required in order to comply with applicable laws and regulations (including the rules and requirements of any stock exchange on which the Shares or the American Depositary Shares are, or will be traded or listed or the rules and requirements of any clearing system through which transactions in the Shares or the American Depositary Shares may be settled) or the articles of association or similar document of the Company as in effect from time to time, the Company may from time to time request each Owner and Holder to provide to the Depositary information relating to: (a) the capacity in which it holds American Depositary Shares, (b) the identity of any Holders or other persons or entities then or previously interested in those American Depositary Shares and the nature of those interests and (c) any other matter where disclosure of such matter is required for that compliance.   Each Owner and Holder agrees to provide all information known to it in response to a request made pursuant to Section 3.4 of the Deposit Agreement.  Each Holder consents to the disclosure by the Depositary and the Owner or other Holder through which it holds American Depositary Shares, directly or indirectly, of all information responsive to a request made pursuant to that Section relating to that Holder that is known to that Owner or other Holder.  Each Owner and Holder of American Depositary Shares further agrees to comply with the laws and regulation of the United Kingdom (if and to the extent applicable) with respect to disclosure requirements regarding ownership or potential for ownership of Shares, all as if the those American Depositary Shares were the Shares they represent, including, inter alia, requirements to make notifications and filings within the required timeframes to the Company and any applicable authorities in the United Kingdom.

9. TITLE TO AMERICAN DEPOSITARY SHARES.

It is a condition of the American Depositary Shares, and every successive Owner and Holder of American Depositary Shares, by accepting or holding the same, consents and agrees that American Depositary Shares evidenced by a Receipt, when the Receipt is properly endorsed or accompanied by proper instruments of transfer, shall be transferable as certificated registered securities under the laws of the State of New York, and that American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York.  The

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Depositary, notwithstanding any notice to the contrary, may treat the Owner of American Depositary Shares as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement and for all other purposes, and neither the Depositary nor the Company shall have any obligation or be subject to any liability under the Deposit Agreement to any Holder of American Depositary Shares, but only to the Owner.

10. VALIDITY OF RECEIPT.

This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose, unless this Receipt shall have been (i) executed by the Depositary by the manual signature of a duly authorized officer of the Depositary or (ii) executed by the facsimile signature of a duly authorized officer of the Depositary and countersigned by the manual signature of a duly authorized signatory of the Depositary or the Registrar or a co-registrar.

11. REPORTS; INSPECTION OF TRANSFER BOOKS.

The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and, accordingly, files certain reports with the Securities and Exchange Commission. Those reports will be available for inspection and copying through the Commission's EDGAR system or at public reference facilities maintained by the Commission in Washington, D.C.  

The Depositary will make available for inspection by Owners at its Office any reports, notices and other communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of those Deposited Securities by the Company.  The Company shall furnish reports and communications, including any proxy soliciting material to which Section 4.9 of the Deposit Agreement applies, to the Depositary in English, to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

The Depositary will maintain a register of American Depositary Shares and transfers of American Depositary Shares, which shall be open for inspection by the Owners and the Company at the Depositary’s Office during regular business hours, but only for the purpose of communicating with Owners regarding the business of the Company or a matter related to this Deposit Agreement or the American Depositary Shares.

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12. DIVIDENDS AND DISTRIBUTIONS.

Whenever the Depositary receives any cash dividend or other cash distribution on Deposited Securities, the Depositary will, if at the time of receipt thereof any amounts received in a foreign currency can in the judgment of the Depositary be converted on a reasonable basis into Dollars transferable to the United States, and subject to the Deposit Agreement, convert that dividend or other cash distribution into Dollars and distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.9 of the Deposit Agreement) to the Owners entitled thereto; provided, however, that if the Custodian or the Depositary is required to withhold and does withhold from that cash dividend or other cash distribution an amount on account of taxes or other governmental charges, the amount distributed to the Owners of the American Depositary Shares representing those Deposited Securities shall be reduced accordingly.

If a cash distribution would represent a return of all or substantially all the value of the Deposited Securities underlying American Depositary Shares, the Depositary may:

(i)  require payment of or deduct the fee for surrender of American Depositary Shares (whether or not it is also requiring surrender of American Depositary Shares) as a condition of making that cash distribution; or

(ii)  sell all Deposited Securities other than the subject cash distribution and add any net cash proceeds of that sale to the cash distribution, call for surrender of all those American Depositary Shares and require that surrender as a condition of making that cash distribution.

If the Depositary acts under this paragraph, that action shall also be a Termination Option Event.  

Subject to the provisions of Section 4.11 and 5.9 of the Deposit Agreement, whenever the Depositary receives any distribution other than a distribution described in Section 4.1, 4.3 or 4.4 of the Deposit Agreement on Deposited Securities (but not in exchange for or in conversion or in lieu of Deposited Securities), the Depositary will cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary and any taxes or other governmental charges, in any manner that the Depositary deems equitable and practicable for accomplishing that distribution (which may be a distribution of depositary shares representing the securities received); provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners entitled thereto, or if for any other reason the Depositary deems such distribution not to be lawful and feasible, the Depositary may adopt such other method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and distribution of the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.9 of the Deposit Agreement) to

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the Owners entitled thereto all in the manner and subject to the conditions set forth in Section 4.1 of the Deposit Agreement.  The Depositary may withhold any distribution of securities under Section 4.2 of the Deposit Agreement if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act of 1933.  The Depositary may sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this Article that is sufficient to pay its fees and expenses in respect of that distribution.  

If a distribution to be made under Section 4.2 of the Deposit Agreement would represent a return of all or substantially all the value of the Deposited Securities underlying American Depositary Shares, the Depositary may:

(i)  require payment of or deduct the fee for surrender of American Depositary Shares (whether or not it is also requiring surrender of American Depositary Shares) as a condition of making that distribution; or

(ii)  sell all Deposited Securities other than the subject distribution and add any net cash proceeds of that sale to the distribution, call for surrender of all those American Depositary Shares and require that surrender as a condition of making that distribution.

If the Depositary acts under this paragraph, that action shall also be a Termination Option Event.  

Whenever the Depositary receives any distribution consisting of a dividend in, or free distribution of, Shares, the Depositary may deliver to the Owners entitled thereto, an aggregate number of American Depositary Shares representing the amount of Shares received as that dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Shares and issuance of American Depositary Shares, including the withholding of any tax or other governmental charge as provided in Section 4.11 of the Deposit Agreement and the payment of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.9 of the Deposit Agreement (and the Depositary may sell, by public or private sale, an amount of Shares received (or American Depositary Shares representing those Shares) sufficient to pay its fees and expenses in respect of that  distribution).  In lieu of delivering fractional American Depositary Shares, the Depositary may sell the amount of Shares represented by the aggregate of those fractions (or American Depositary Shares representing those Shares) and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.1of the Deposit Agreement.  If and to the extent that additional American Depositary Shares are not delivered and Shares or American Depositary Shares are not sold, each American Depositary Share shall thenceforth also represent the additional Shares distributed on the Deposited Securities represented thereby.

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If the Company declares a distribution in which holders of Deposited Securities have a right to elect whether to receive cash, Shares or other securities or a combination of those things, or a right to elect to have a distribution sold on their behalf, the Depositary may, after consultation with the Company, make that right of election available for exercise by Owners in any manner the Depositary considers to be lawful and practical.  As a condition of making a distribution election right available to Owners, the Depositary may require satisfactory assurances from the Company that doing so does not require registration of any securities under the Securities Act of 1933 that has not been effected.

If the Depositary determines that any distribution received or to be made by the Depositary (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge that the Depositary is obligated to withhold, the Depositary may sell, by public or private sale, all or a portion of the distributed property (including Shares and rights to subscribe therefor) in the amounts and manner the Depositary deems necessary and practicable to pay those taxes or charges, and the Depositary shall distribute the net proceeds of that sale, after deduction of those taxes or charges, to the Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively.

Each Owner and Holder agrees to indemnify the Company, the Depositary, the Custodian and their respective directors, employees, agents and affiliates for, and hold each of them harmless against, any claim by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced withholding at source or other tax benefit received by it.  Services for Owners and Holders that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, the Deposit Agreement.

13. RIGHTS.

(a)    If rights are granted to the Depositary in respect of deposited Shares to purchase additional Shares or other securities, the Company and the Depositary shall endeavor to consult as to the actions, if any, the Depositary should take in connection with that grant of rights.  The Depositary may, to the extent deemed by it to be lawful and practical (i) if requested in writing by the Company, grant to all or certain Owners rights to instruct the Depositary to purchase the securities to which the rights relate and deliver those securities or American Depositary Shares representing those securities to Owners, (ii) if requested in writing by the Company, deliver the rights to or to the order of certain Owners, or (iii) sell the rights to the extent practicable and distribute the net proceeds of that sale to Owners entitled to those proceeds.  To the extent rights are not exercised, delivered or disposed of under (i), (ii) or (iii) above, the Depositary shall permit the rights to lapse unexercised.

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(b)If the Depositary will act under (a)(i) above, the Company and the Depositary will enter into a separate agreement setting forth the conditions and procedures applicable to the particular offering.  Upon instruction from an applicable Owner in the form the Depositary specified and upon payment by that Owner to the Depositary of an amount equal to the purchase price of the securities to be received upon the exercise of the rights, the Depositary shall, on behalf of that Owner, exercise the rights and purchase the securities.  The purchased securities shall be delivered to, or as instructed by, the Depositary.  The Depositary shall (i) deposit the purchased Shares under the Deposit Agreement and deliver American Depositary Shares representing those Shares to that Owner or (ii) deliver or cause the purchased Shares or other securities to be delivered to or to the order of that Owner.  The Depositary will not act under (a)(i) above unless the offer and sale of the securities to which the rights relate are registered under the Securities Act of 1933 or the Depositary has received an opinion of United States counsel that is satisfactory to it to the effect that those securities may be sold and delivered to the applicable Owners without registration under the Securities Act of 1933, provided that nothing in the Deposit Agreement shall create any obligation on the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such registration statement declared effective.

(c)    If the Depositary will act under (a)(ii) above, the Company and the Depositary will enter into a separate agreement setting forth the conditions and procedures applicable to the particular offering.  Upon (i) the request of an applicable Owner to deliver the rights allocable to the American Depositary Shares of that Owner to an account specified by that Owner to which the rights can be delivered and (ii) receipt of such documents as the Company and the Depositary agreed to require to comply with applicable law, the Depositary will deliver those rights as requested by that Owner.

(d)    If the Depositary will act under (a)(iii) above, the Depositary will use reasonable efforts to sell the rights in proportion to the number of American Depositary Shares held by the applicable Owners and pay the net proceeds to the Owners otherwise entitled to the rights that were sold, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any American Depositary Shares or otherwise.

(e)    Payment or deduction of the fees of the Depositary as provided in Section 5.9 of the Deposit Agreement and payment or deduction of the expenses of the Depositary and any applicable taxes or other governmental charges shall be conditions of any delivery of securities or payment of cash proceeds under Section 4.4 of that Agreement.

(f)    The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to make rights available to or exercise rights on behalf of Owners in general or any Owner in particular , or to sell rights.

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14. CONVERSION OF FOREIGN CURRENCY.

Whenever the Depositary or the Custodian receives foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary or one of its agents or affiliates or the Custodian shall convert or cause to be converted by sale or in any other manner that it may determine on a commercially reasonable basis that foreign currency into Dollars, and those Dollars shall be distributed to the Owners entitled thereto.  A cash distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners based on exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.9 of the Deposit Agreement.

If a conversion of foreign currency or the repatriation or distribution of Dollars can be effected only with the approval or license of any government or agency thereof, the Depositary may, but will not be required to, file an application for that approval or license.

If the Depositary determines that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof that is required for such conversion is not filed or sought by the Depositary or is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

If any conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make that conversion and distribution in Dollars to the extent practicable and permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold that balance uninvested and without liability for interest thereon for the account of, the Owners entitled thereto.

The Depositary may convert currency itself or through any of its affiliates, or the Custodian or the Company may convert currency and pay Dollars to the Depositary.  Where the Depositary converts currency itself or through any of its affiliates, the Depositary acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account.  The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account.  The Depositary makes no representation that the exchange rate used or obtained by it or its affiliate in any currency conversion under

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the Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.3 of that Agreement.  The methodology used to determine exchange rates used in currency conversions made by the Depositary is available upon request.  Where the Custodian converts currency, the Custodian has no obligation to obtain the most favorable rate that could be obtained at the time or to ensure that the method by which that rate will be determined will be the most favorable to Owners, and the Depositary makes no representation that the rate is the most favorable rate and will not be liable for any direct or indirect losses associated with the rate.  In certain instances, the Depositary may receive dividends or other distributions from the Company in Dollars that represent the proceeds of a conversion of foreign currency or translation from foreign currency at a rate that was obtained or determined by or on behalf of the Company and, in such cases, the Depositary will not engage in, or be responsible for, any foreign currency transactions and neither it nor the Company makes any representation that the rate obtained or determined by the Company is the most favorable rate and neither it nor the Company will be liable for any direct or indirect losses associated with the rate.

15. RECORD DATES.

Whenever a cash dividend, cash distribution or any other distribution is made on Deposited Securities or rights to purchase Shares or other securities are issued with respect to Deposited Securities (which rights will be delivered to or exercised or sold on behalf of Owners in accordance with Section 4.4 of the Deposit Agreement) or the Depositary receives notice that a distribution or issuance of that kind will be made, or whenever the Depositary receives notice that a meeting of holders of Shares will be held in respect of which the Company has requested the Depositary to send a notice under Section 4.7 of the Deposit Agreement, or whenever the Depositary will assess a fee or charge against the Owners, or whenever the Depositary causes a change in the number of Shares that are represented by each American Depositary Share, or whenever the Depositary otherwise finds it necessary or convenient, the Depositary shall fix a record date, which shall be the same as, or as near as practicable to, any corresponding record date set by the Company with respect to Shares, (a) for the determination of the Owners (i) who shall be entitled to receive the benefit of that dividend or other distribution or those rights, (ii) who shall be entitled to give instructions for the exercise of voting rights at that meeting, (iii) who shall be responsible for that fee or charge or (iv) for any other purpose for which the record date was set, or (b) on or after which each American Depositary Share will represent the changed number of Shares.  Subject to the provisions of Sections 4.1 through 4.5 of the Deposit Agreement and to the other terms and conditions of the Deposit Agreement, the Owners on a record date fixed by the Depositary shall be entitled to receive the amount distributable by the Depositary with respect to that dividend or other distribution or those rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held by them respectively, to give voting instructions or to act in respect of the other matter for which that record date was fixed, or be responsible for that fee or charge, as the case may be.

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16. VOTING OF DEPOSITED SHARES.

(a)    Upon receipt of notice of any meeting of holders of Shares at which holders of Shares will be entitled to vote, if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter, Disseminate to the Owners a notice, the form of which shall be in the sole discretion of the Depositary, that shall contain (i) the information contained in the notice of meeting received by the Depositary, (ii) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of English law and of the articles of association or similar documents of the Company, to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Shares represented by their respective American Depositary Shares, (iii) a statement as to the manner in which those instructions may be given and (iv) the last date on which the Depositary will accept instructions (the “Instruction Cutoff Date”).  

(b)    Upon the written request of an Owner of American Depositary Shares, as of the date of the request or, if a record date was specified by the Depositary, as of that record date, received on or before any Instruction Cutoff Date established by the Depositary, the Depositary may, and if the Depositary sent a notice under the preceding paragraph shall, endeavor, in so far as practicable, to vote or cause to be voted the amount of deposited Shares represented by those American Depositary Shares in accordance with the instructions set forth in that request.  The Depositary shall not vote or attempt to exercise the right to vote that attaches to the deposited Shares other than in accordance with instructions given by Owners and received by the Depositary.

(c)    There can be no assurance that Owners generally or any Owner in particular will receive the notice described in paragraph (a) above in time to enable Owners to give instructions to the Depositary prior to the Instruction Cutoff Date.

(d)    In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Shares, if the Company will request the Depositary to Disseminate a notice under paragraph (a) above, the Company shall give the Depositary notice of the meeting, details concerning the matters to be voted upon and copies of materials to be made available to holders of Shares in connection with the meeting not less than 30 days prior to the meeting date.

17. TENDER AND EXCHANGE OFFERS; REDEMPTION, REPLACEMENT OR CANCELLATION OF DEPOSITED SECURITIES.

(a)    The Depositary shall not tender any Deposited Securities in response to any voluntary cash tender offer, exchange offer or similar offer made to holders of Deposited Securities (a “Voluntary Offer”), except when instructed in writing to do so by an Owner surrendering American Depositary Shares and subject to any conditions or procedures the Depositary may require.

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(b)If the Depositary receives a written notice that Deposited Securities have been redeemed for cash or otherwise purchased for cash in a transaction that is mandatory and binding on the Depositary as a holder of those Deposited Securities (a “Redemption”), the Depositary, at the expense of the Company, shall (i) if required, surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date, (ii) Disseminate a notice to Owners (A) notifying them of that Redemption, (B) calling for surrender of a corresponding number of American Depositary Shares and (C) notifying them that the called American Depositary Shares have been converted into a right only to receive the money received by the Depositary upon that Redemption and those net proceeds shall be the Deposited Securities to which Owners of those converted American Depositary Shares shall be entitled upon surrenders of those American Depositary Shares in accordance with Section 2.5 or 6.2 of the Deposit Agreement and (iii) distribute the money received upon that Redemption to the Owners entitled to it upon surrender by them of called American Depositary Shares in accordance with Section 2.5 of that Agreement (and, for the avoidance of doubt, Owners shall not be entitled to receive that money under Section 4.1 of that Agreement).  If the Redemption affects less than all the Deposited Securities, the Depositary shall call for surrender a corresponding portion of the outstanding American Depositary Shares and only those American Depositary Shares will automatically be converted into a right to receive the net proceeds of the Redemption.  The Depositary shall allocate the American Depositary Shares converted under the preceding sentence among the Owners pro-rata to their respective holdings of American Depositary Shares immediately prior to the Redemption, except that the allocations may be adjusted so that no fraction of a converted American Depositary Share is allocated to any Owner.  A Redemption of all or substantially all of the Deposited Securities shall be a Termination Option Event.

(c)    If the Depositary is notified of or there occurs any change in nominal value or any sub-division, consolidation or any other reclassification of the Deposited Securities or any recapitalization, reorganization, sale of assets substantially as an entirety, merger, scheme of arrangement or consolidation affecting the issuer of the Deposited Securities or to which it is a party that is mandatory and binding on the Depositary as a holder of Deposited Securities and, as a result, securities or other property have been or will be delivered in exchange, conversion, replacement or in lieu of, Deposited Securities (a “Replacement”), the Depositary shall, if required, surrender the old Deposited Securities affected by that Replacement of Shares and hold, as new Deposited Securities under the Deposit Agreement, the new securities or other property delivered to it in that Replacement.  However, the Depositary may elect to sell those new Deposited Securities if in the opinion of the Depositary it is not lawful or not practical for it to hold those new Deposited Securities under the Deposit Agreement because those new Deposited Securities may not be distributed to Owners without registration under the Securities Act of 1933 or for any other reason, at public or private sale, at such places and on such terms as it deems proper and proceed as if those new Deposited Securities had been Redeemed under paragraph (b) above.  A Replacement shall be a Termination Option Event.

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(d)In the case of a Replacement where the new Deposited Securities will continue to be held under the Deposit Agreement, the Depositary may call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing the new Deposited Securities and the number of those new Deposited Securities represented by each American Depositary Share.  If the number of Shares represented by each American Depositary Share decreases as a result of a Replacement, the Depositary may call for surrender of the American Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares and may sell American Depositary Shares to the extent necessary to avoid distributing fractions of American Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them.

(e)    If there are no Deposited Securities with respect to American Depositary Shares, including if the Deposited Securities are cancelled, or the Deposited Securities with respect to American Depositary Shares become apparently worthless, the Depositary may call for surrender of those American Depositary Shares or may cancel those American Depositary Shares, upon notice to Owners, and that condition shall be a Termination Option Event.

18. LIABILITY OF THE COMPANY AND DEPOSITARY.

Neither the Depositary nor the Company nor any of their respective directors, officers, employees, agents or affiliates shall incur any liability to any Owner or Holder:

(i) if by reason of (A) any provision of any present or future law or regulation or other act of the government of the United States, any State of the United States or any other state or jurisdiction, or of any governmental or regulatory authority or stock exchange; (B) (in the case of the Depositary only) any provision, present or future, of the articles of association or similar document of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof; or (C) any event or circumstance, whether natural or caused by a person or persons, that is beyond the ability of the Depositary or the Company, as the case may be, to prevent or counteract by reasonable care or effort (including, but not limited to earthquakes, floods, severe storms, fires, explosions, war, terrorism, civil unrest, labor disputes, criminal acts or outbreaks of infectious disease; interruptions or malfunctions of utility services, Internet or other communications lines or systems; unauthorized access to or attacks on computer systems or websites; or other failures or malfunctions of computer hardware or software or other systems or equipment), the Depositary or the Company is, directly or indirectly, prevented from, forbidden to or delayed in, or could be subject to any civil or criminal penalty on account of doing or performing and therefore does not do or perform, any act or thing that, by the terms of the Deposit Agreement or the Deposited Securities, it is provided shall be done or performed;

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(ii) for any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement (including any determination by the Depositary to take, or not take, any action that the Deposit Agreement provides the Depositary may take);

(iii) for the inability of any Owner or Holder to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Owners or Holders; or

(iv) for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement.  

Where, by the terms of a distribution to which Section 4.1, 4.2 or 4.3 of the Deposit Agreement applies, or an offering to which Section 4.4 of that Agreement applies, or for any other reason, that distribution or offering may not be made available to Owners, and the Depositary may not dispose of that distribution or offering on behalf of Owners and make the net proceeds available to Owners, then the Depositary shall not make that distribution or offering available to Owners, and shall allow any rights, if applicable, to lapse.

Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the Deposit Agreement to Owners or Holders, except that they agree to perform their obligations specifically set forth in the Deposit Agreement without negligence or bad faith. The Depositary shall not be a fiduciary or have any fiduciary duty to Owners or Holders. The Depositary shall not be subject to any liability with respect to the validity or worth of the Deposited Securities.  Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit, or other proceeding in respect of any Deposited Securities or in respect of the American Depositary Shares, on behalf of any Owner or Holder or other person.  Neither the Depositary nor the Company shall be liable for any action or non-action by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Owner or Holder, or any other person believed by it in good faith to be competent to give such advice or information. Each of the Depositary and the Company may rely, and shall be protected in relying upon, any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.  The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with a matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises, the Depositary performed its obligations without negligence or bad faith while it acted as Depositary. The Depositary shall not be liable for the acts or omissions of any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of American Depositary Shares or Deposited Securities or otherwise.  In the absence of bad faith on its part, the Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities or for the manner in

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which any such vote is cast or the effect of any such vote. The Depositary shall have no duty to make any determination or provide any information as to the tax status of the Company or any liability for any tax consequences that may be incurred by Owners or Holders as a result of owning or holding American Depositary Shares.  The Depositary shall not be liable for the inability or failure of an Owner or Holder to obtain the benefit of a foreign tax credit, reduced rate of withholding or refund of amounts withheld in respect of tax or any other tax benefit.No disclaimer of liability under the United States federal securities laws is intended by any provision of the Deposit Agreement.

19. RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR CUSTODIAN.

The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of its election so to do delivered to the Company, to become effective upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement.  The Depositary may at any time be removed by the Company by 90 days’ prior written notice of that removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of its appointment as provided in the Deposit Agreement.  The Depositary in its discretion may at any time appoint a substitute or additional custodian or custodians.

20. AMENDMENT.

The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Holders in any respect which they may deem necessary or desirable.  Any amendment that would impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable (including SWIFT) or facsimile transmission costs, delivery costs or other such expenses), or that would otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary Shares until the expiration of 30 days after notice of that amendment has been Disseminated to the Owners of outstanding American Depositary Shares. Every Owner and Holder, at the time any amendment so becomes effective, shall be deemed, by continuing to hold American Depositary Shares or any interest therein, to consent and agree to that amendment and to be bound by the Deposit Agreement as amended thereby. Upon the effectiveness of an amendment to the form of Receipt, including a change in the number of Shares represented by each American Depositary Share, the Depositary may call for surrender of Receipts to be replaced with new Receipts in the amended form or call for surrender of American Depositary Shares to effect that change of ratio.  In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares and receive delivery of the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.

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21. TERMINATION OF DEPOSIT AGREEMENT.

(a)    The Company may initiate termination of the Deposit Agreement by notice to the Depositary.  The Depositary may initiate termination of the Deposit Agreement if (i) at any time 60 days shall have expired after the Depositary delivered to the Company a written resignation notice and a successor depositary has not been appointed and accepted its appointment as provided in Section 5.4 of that Agreement, or (ii) a Termination Option Event has occurred.  If termination of the Deposit Agreement is initiated, the Depositary shall Disseminate a notice of termination to the Owners of all American Depositary Shares then outstanding setting a date for termination (the “Termination Date”), which shall be at least 90 days after the date of that notice, and the Deposit Agreement shall terminate on that Termination Date.

(b)    After the Termination Date, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary under Sections 5.8 and 5.9 of that Agreement.  

(c)    At any time after the Termination Date, the Depositary may sell the Deposited Securities then held under the Deposit Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American Depositary Shares that remain outstanding, and those Owners will be general creditors of the Depositary with respect to those net proceeds and that other cash.  After making that sale, the Depositary shall be discharged from all obligations under the Deposit Agreement, except (i) to account for the net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes or governmental charges) and (ii) for its obligations under Section 5.8 of that Agreement and (iii) to act as provided in paragraph (d) below.

(d)    After the Termination Date, the Depositary shall continue to receive dividends and other distributions pertaining to Deposited Securities (that have not been sold), may sell rights and other property as provided in the Deposit Agreement and shall deliver Deposited Securities (or sale proceeds) upon surrender of American Depositary Shares (after payment or upon deduction, in each case, of the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of those American Depositary Shares in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes or governmental charges).  After the Termination Date, the Depositary shall not accept deposits of Shares or deliver American Depositary Shares.  After the Termination Date, (i) the Depositary may refuse to accept surrenders of American Depositary Shares for the purpose of withdrawal of Deposited Securities (that have not been sold) or reverse previously accepted surrenders of that kind that have not settled if in its judgment the requested withdrawal would interfere with its

A-20

efforts to sell the Deposited Securities, (ii) the Depositary will not be required to deliver cash proceeds of the sale of Deposited Securities until all Deposited Securities have been sold and (iii) the Depositary may discontinue the registration of transfers of American Depositary Shares and suspend the distribution of dividends and other distributions on Deposited Securities to the Owners and need not give any further notices or perform any further acts under the Deposit Agreement except as provided in Section 6.2 of that Agreement.

22. DTC DIRECT REGISTRATION SYSTEM AND PROFILE MODIFICATION SYSTEM.

(a)    Notwithstanding the provisions of Section 2.4 of the Deposit Agreement, the parties acknowledge that DTC’s Direct Registration System (“DRS”) and Profile Modification System (“Profile”) apply to the American Depositary Shares upon acceptance thereof to DRS by DTC.  DRS is the system administered by DTC that facilitates interchange between registered holding of uncertificated securities and holding of security entitlements in those securities through DTC and a DTC participant.  Profile is a required feature of DRS that allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register that transfer.

(b)    In connection with DRS/Profile, the parties acknowledge that the Depositary will not determine whether the DTC participant that is claiming to be acting on behalf of an Owner in requesting registration of transfer and delivery as described in paragraph (a) above has the actual authority to act on behalf of that Owner (notwithstanding any requirements under the Uniform Commercial Code).  For the avoidance of doubt, the provisions of Sections 5.3 and 5.8 of the Deposit Agreement apply to the matters arising from the use of the DRS/Profile.  The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile system and otherwise in accordance with the Deposit Agreement, shall not constitute negligence or bad faith on the part of the Depositary.

23. APPOINTMENT OF AGENT FOR SERVICE OF PROCESS; SUBMISSION TO JURISDICTION; JURY TRIAL WAIVER; WAIVER OF IMMUNITIES.

The Company has (i) appointed ______________________________________ as the Company's authorized agent in the United States upon which process may be served in any suit or proceeding arising out of or relating to the Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Agreement, (ii) consented and submitted to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agreed that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding.

A-21

EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH OWNER AND HOLDER) THEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF, INCLUDING, WITHOUT LIMITATION, ANY QUESTION REGARDING EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

To the extent that the Company or any of its properties, assets or revenues may have or hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Shares or Deposited Securities, the American Depositary Shares, the Receipts or the Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

A-22

EX-5

EXHIBIT 5.1

Claire Keast-Butler

+44 20 7556 4211

ckeastbutler@cooley.com

Silence Therapeutics plc

72 Hammersmith Road

London

W14 8TH

United Kingdom

20 August 2020

Ladies and Gentlemen:

Re: Silence Therapeutics plc – Registration Statement on Form F-1 – Exhibit 5.1

1. INTRODUCTION

1.1 We have acted as English legal advisers to Silence Therapeutics plc,  a public limited company incorporated in England and Wales (the “Company”) in connection with the registration statement on Form F-1 (such registration statement, as amended, including the documents incorporated by reference therein, the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “SEC”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”), relating to (i) the resale by the Registered Holders (as such term is defined in the Registration Statement) of up to 53,732,291 American Depositary Shares (“ADSs”), each representing 3 ordinary shares of nominal value £0.05 each in the issued share capital of the Company (“Ordinary Shares”) and (ii) the listing of the ADSs on the Nasdaq Capital Market (the “Nasdaq Listing”). We have taken instructions solely from the Company.

1.2 We are rendering this letter to you in connection with the Registration Statement (as defined above).

1.3 Except as otherwise defined in this letter, capitalised terms used have the respective meanings given to them in the Registration Statement and headings are for ease of reference only and shall not affect interpretation.

1.4 All references to legislation in this letter are to the legislation of England unless the contrary is indicated, and any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof, as in force on the date of this letter.

2. DOCUMENTS

For the purpose of issuing this letter, we have examined such matters of fact and questions of law as we have considered appropriate. We have reviewed, amongst other things, the following documents:

2.1 a copy of the Registration Statement confidentially submitted to the SEC on 22 June 2020, amended on 31 July 2020 and publicly filed with the SEC on 20 August 2020; and

2.2 a certificate dated 20 August 2020 signed by the Company’s company secretary (the “Secretary’s Certificate”) relating to certain factual matters as at the date of the Secretary’s Certificate and having annexed thereto copies (certified by the Company’s company secretary as being true, complete, accurate and up-to-date in each case) of the following documents:

(a) a PDF copy of the current articles of association of the Company adopted on 23 July 2020 (the “Articles”);

(b) a PDF copy of the certificate of incorporation of the Company dated 18 November 1994, a PDF copy of the certificate of incorporation on change of name of the Company dated

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21 June 1999 and a PDF copy of the certificate of incorporation on change of name of the Company dated 26 April 2007;

(c) a PDF executed copy of the minutes of a meeting of the board of directors of the Company (the “Board” or the “Directors”) held on 22 June 2020 (the “22 June Board Minutes”);

(d) a PDF executed copy of the minutes of a meeting of the Board held on 13 July 2020 (the “13 July Board Minutes”); and

(e) a PDF executed copy of the minutes of a meeting of the Board held on 19 August 2020 (the “19 August Board Minutes” and together with the 22 June Board Minutes and the 13 July Board Minutes, the “Board Minutes”).

3. SEARCHES

In addition to examining the documents referred to in paragraph 2 (Documents), we have carried out the following searches:

3.1 an online search at Companies House in England and Wales (“Companies House”) with respect to the Company, carried out at 10:02 a.m. (London time) on 20 August 2020 (the “Online Search”); and

3.2 a telephone enquiry at the Companies Court in London of the Central Registry of Winding-up Petitions in England and Wales with respect to the Company, carried out at 10:14 a.m. (London time) on 20 August 2020 (the “Telephone Enquiry” and, together with the Online Search, the “Searches”).

4. OPINION

Subject to the assumptions set out in paragraph 5 (Assumptions), the scope of the opinion set out in paragraph 6 (Scope of Opinion) and the reservations set out in paragraph 7 (Reservations), we are of the opinion that, as at today’s date, the Ordinary Shares underlying the ADSs being proposed for resale by the Registered Holders have been duly and validly authorised and issued, are fully paid and will not be subject to any call for payment of further capital.

5. ASSUMPTIONS

In giving the opinion in this letter, we have assumed (without making enquiry or investigation) that:

5.1 all signatures, stamps and seals on all documents are genuine. All original documents are complete, authentic and up-to-date, and all documents submitted to us as a copy (whether by email or otherwise) are complete and accurate and conform to the original documents of which they are copies and that no amendments (whether oral, in writing or by conduct of the parties) have been made to any of the documents since they were examined by us;

5.2 where a document has been examined by us in draft or specimen form, it will be or has been duly executed in the form of that draft or specimen;

5.3 the contents of the Secretary’s Certificate were true and not misleading when given and remain true and not misleading as at the date of this letter and there is no fact or matter not referred to in the Secretary’s Certificate which would make any of the information in the Secretary’s Certificate inaccurate or misleading;

5.4 the Articles remain in full force and effect as at the date of this letter;

5.5 all documents, forms and notices which should have been delivered to Companies House in respect of the Company have been so delivered;

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5.6 the information revealed by the Searches is true, accurate, complete and up-to-date in all respects, and there is no information which should have been disclosed by the Searches that has not been disclosed for any reason and there has been no alteration in the status or condition of the Companysince the date and time that the Searches were made;

5.7 in relation to the allotment and issue of the Ordinary Shares, the directors of the Company from time to time have acted and will act in the manner required by section 172 of the Companies Act and the Ordinary Shares were allotted and issued in good faith and on bona fide commercial terms and on arms’ length terms and there were reasonable grounds for believing that the allotment and issue of the Ordinary Shares was in the best interests of the Company and most likely to promote the success of the Company for the benefit of its members as a whole;

5.8 there has not been any bad faith, breach of trust, fraud, coercion, duress or undue influence on the part of any of the directors of the Company from time to time in relation to any allotment and issue of the Ordinary Shares;

5.9 the Company has complied with all applicable anti-terrorism, anti-money laundering, sanctions and human rights laws and regulations and that the allotment and issue of the Ordinary Shares was consistent with all such laws and regulations;

5.10 no Ordinary Shares or rights to subscribe for Ordinary Shares have been offered to the public in the United Kingdom in breach of the Financial Services and Markets Act 2000 (“FSMA”), the EU Prospectus Regulation (Regulation (EU) 2017/1129) or of any predecessor legislation or of any other United Kingdom laws or regulations concerning offers of securities to the public, and no communication has been or shall be made in relation to the Ordinary Shares in breach of section 21 (Restrictions on financial promotion) of FSMA or any other United Kingdom laws or regulations relating to offers or invitations to subscribe for, or to acquire rights to subscribe for or otherwise acquire, shares or other securities;

5.11 in issuing and allotting and granting rights to subscribe for the Ordinary Shares, the Company has not been carrying on a regulated activity (within the meaning of section 19 (The general prohibition) of FSMA) or any predecessor legislation;

5.12 no Ordinary Shares have at any time been allotted and issued in excess of the authorised share capital that was contained in the Company’s memorandum of association prior to 1 October 2009 or as subsequently incorporated in the Company’s articles of association as a maximum amount of shares that may be allotted by the Company, and that all of the Ordinary Shares were allotted and issued in accordance with the requirements of the Company’s memorandum and articles of association and all relevant legislation in effect as at the relevant time as applicable;

5.13 all of the Ordinary Shares were allotted and issued pursuant to a valid authority pursuant to section 551 of the Companies Act 2006, as amended (the “Companies Act”) or, prior to 1 October 2009, section 80 of the Companies Act 1985 (the “1985 Act”) and in compliance with, or pursuant to a valid disapplication of, the statutory pre-emption rights contained in section 561 of the Companies Act or, prior to 1 October 2009, section 89 of the 1985 Act.  All relevant resolutions were duly passed at general meetings or annual general meetings of the Company that were duly convened and held, at which all constitutional, statutory and other formalities were duly observed, a quorum of shareholders was present throughout and were not revoked or varied and remained in full force and effect as at the dates of allotment and issue of the relevant Ordinary Shares;

5.14 all of the Ordinary Shares have been allotted and issued pursuant to resolutions passed by the Board as constituted from time to time or a duly authorised committee thereof (to which such authority has been validly delegated in accordance with all relevant statutory provisions and the Company’s articles of association as in force as at such time) and that all such resolutions of the Board or committees of the Board were either:

(a) duly passed at meetings of the Board or such committee, duly constituted, convened and conducted and all constitutional, statutory and other formalities were duly observed (including, if applicable, those relating to the declaration of directors’

Page 4

interests or the power of interested directors to vote), a quorum was present throughout, the requisite majority of directors voted in favour of approving the resolutions and the resolutions passed at all such meetings of the Board or committee of the Board, as applicable, were duly adopted and were not revoked or varied and remained in full force and effect as at the dates of allotment and issue of the relevant Ordinary Shares; or

(b) duly passed by written resolutions of the Board in accordance with the articles of association of the Company as in force as at such time, where all eligible directors of the Company (being all the directors of the Company who would have been entitled to vote on the matter had it been proposed as a resolution at a directors’ meeting, but excluding any director whose vote is not to be counted in respect of a particular matter) signed one or more copies of such written board resolutions, that all relevant statutory provisions and the articles of association in force as at such time were complied with and duly observed (including, if applicable, those relating to the declaration of directors’ interests or the power of interested directors to vote) and such resolutions were duly adopted, and have not been revoked or varied and remained in full force and effect as at the dates of allotment and issue of the relevant Ordinary Shares;

5.15 all of the Ordinary Shares were either:

(a) allotted and issued for cash consideration (as defined in section 583(3) of the Companies Act or section 738(2) of the 1985 Act, as applicable) and such cash consideration was received in full by the Company in an amount not less than the nominal value and any premium for such Ordinary Shares; or

(b) allotted and issued for non-cash consideration and in that case the requirements of section 593 of the Companies Act have been complied with (unless an exemption under section 594 or 595 of the Companies Act applied) or, as applicable, section 103 of the 1985 Act have been complied with (unless an exemption under that section applied) and such non-cash consideration was received in full by the Company in an amount not less than the nominal value and any premium for such Ordinary Shares;

5.16 no Ordinary Shares have been allotted in consideration for an undertaking which is to be, or may be, performed more than five years after the allotment or for an undertaking by any person to do work or perform services for the Company or any other person as payment for its shares;

5.17 any Ordinary Shares issued to a subscriber to the Company’s memorandum of association complied fully with sections 104 and 106 of the 1985 Act; and

5.18 the Company’s most recent return of allotment of shares (Form SH01) filed with Companies House on 30 June 2020 accurately sets out the current allotted and issued share capital of the Company.

6. SCOPE OF OPINION

6.1 The opinion given in this letter is limited to English law as it would be applied by English courts (including the laws of the European Union to the extent having the force of law in England by virtue of section 1A of the European Union (Withdrawal) Act 2018 (as introduced by section 1 of the European Union (Withdrawal Agreement) Act 2020)) on the date of this letter.

6.2 We express no opinion in this letter on the laws of any other jurisdiction and, in particular, we express no opinion on the laws of the European Union as it affects any jurisdiction other than England. We have not investigated the laws of any country other than England and we assume that no foreign law (other than the laws of the European Union to the extent having the force of law in England) affects the opinion stated in paragraph 4 (Opinion).

6.3 We express no opinion as to any agreement, instrument or other document other than as specified in this letter.

Page 5

6.4 No opinion is expressed with respect to taxation in the United Kingdom or otherwise in this letter.

6.5 We have not been responsible for investigating or verifying the accuracy of the facts or the reasonableness of any statement of opinion or intention, contained in or relevant to any document referred to in this letter, or that no material facts have been omitted therefrom.

6.6 The opinion given in this letter is given on the basis of each of the assumptions set out in paragraph 5 (Assumptions) and is subject to each of the reservations set out in paragraph 7 (Reservations) to this letter.  The opinion given in this letter is strictly limited to the matters stated in paragraph 4 (Opinion) and does not extend, and should not be read as extending, by implication or otherwise, to any other matters.

6.7 This letter only applies to those facts and circumstances which exist as at today’s date and we assume no obligation or responsibility to update or supplement this letter to reflect any facts or circumstances which may subsequently come to our attention, any changes in laws which may occur after today, or to inform the addressee of any change in circumstances happening after the date of this letter which would alter the opinion given in this letter.

6.8 This letter is given by Cooley (UK) LLP and no partner or employee assumes any personal responsibility for it nor shall owe any duty of care in respect of it.

6.9 This letter, the opinion given in it, and any non-contractual obligations arising out of or in connection with this letter and/or the opinion given in it, are governed by and shall be construed in accordance with English law as at the date of this letter.  

7. RESERVATIONS

7.1 The Online Search described at paragraph 3.1 (Searches) is not capable of revealing conclusively whether or not:

(a) a winding-up order has been made or a resolution passed for the winding-up of a company;

(b) an administration order has been made; or

(c) a receiver, administrative receiver, administrator or liquidator has been appointed,

since notice of these matters may not be filed with the Registrar of Companies in England and Wales immediately and, when filed, may not be entered on the public database or recorded on the public microfiches of the relevant company immediately.

In addition, such a company search is not capable of revealing, prior to the making of the relevant order, whether or not a winding-up petition or a petition for an administration order has been presented.

7.2 The Telephone Enquiry described at paragraph 3.2 (Searches) relates only to a compulsory winding-up and is not capable of revealing conclusively whether or not a winding-up petition in respect of a compulsory winding-up has been presented, since details of the petition may not have been entered on the records of the Central Registry of Winding-up Petitions in England and Wales immediately or, in the case of a petition presented to a County Court in England and Wales, may not have been notified to the Central Registry of Winding-up Petitions in England and Wales and entered on such records at all, and the response to an enquiry only relates to the period of approximately four years prior to the date when the enquiry was made. We have not made enquiries of any District Registry or County Court in England and Wales.

7.3 The opinion set out in this letter is subject to: (i) any limitations arising from applicable laws relating to insolvency, bankruptcy, administration, reorganisation, liquidation, moratoria, schemes or analogous circumstances; and (ii) an English court exercising its discretion under section 426 of the Insolvency Act (co-operation between courts exercising jurisdiction in relation

Page 6

to insolvency) to assist the courts having the corresponding jurisdiction in any part of the United Kingdom or any relevant country or territory.

7.4 We express no opinion as to matters of fact.

7.5 We have not been responsible for investigation or verification of statements of fact (including statements as to foreign law) or the reasonableness of any statements of opinion in the Registration Statement, or that no material facts have been omitted therefrom.

8. REGISTRATION STATEMENT

We consent to the filing of this letter as an exhibit to the Registration Statement.  In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under section 7 of the Securities Act or the rules and regulations promulgated thereunder.

Yours faithfully

/s/ Claire Keast-Butler

Cooley (UK) LLP

EX-10

EXHIBIT 10.1

Silence
Therapeutics plc

The Silence Therapeutics plc 2018
Employee Long Term
Incentive Plan

Board adoption:

February 2^nd, 2018

Plan expires:

February 1^st, 2028

Shareholder approval:

23 July 2020

PricewaterhouseCoopers LLP, The Atrium, 1 Harefield Road, Uxbridge, Middlesex, UB8 1EX T: +44 (0) 1895 522 000, F: +44 (0) 1895 522 020, www.pwc.co.uk PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH.PricewaterhouseCoopers LLP is authorised and regulated by theFinancial Conduct Authority for designated investment business.

The Silence Therapeutics plc 2018 Employee Long Term Incentive Plan

Table of contents
1.	Grant of Awards	1
2.	Plan limits	3
3.	Individual limit	4
4.	Award Price	4
5.	Performance Target and conditions	5
6.	Malus	5
7.	Clawback	6
8.	Vesting of Awards (and exercise of Options)	9
9.	Holding Period	12
10.	Vesting of Awards (and exercise of Options) in special circumstances	13
11.	Takeover and other corporate events	15
12.	Exchange of Awards	17
13.	Lapse of Awards	18
14.	Adjustment of Awards on Reorganisation	18
15.	Tax and social security withholding	18
16.	Rights and listing of Plan Shares	19
17.	Relationship of the Plan to contract of employment	19
18.	Administration of the Plan	20
19.	Amendment of the Plan	21
20.	Notices	21
21.	Governing law and jurisdiction	21
22.	Interpretation	22

The Silence Therapeutics plc 2018 Employee Long Term Incentive Plan

1. Grant of Awards

1.1. Awards granted by Grantor

Subject to Rules 1.5, 1.6, 1.7 and 18.3, the Grantor may from time to time grant Awards to Eligible Employees.

1.2. Terms of Awards and Directors’ Remuneration Policy limitations

Subject to the Rules, the Grantor will in its absolute discretion decide whether or not any Awards are to be granted at any particular time and, if they are, to whom they are granted and the terms of such Awards. Where Awards are not granted by the Board, the terms must be approved in advance by the Board.

Where the Company has in place a binding Directors’ Remuneration Policy approved by the Company in a general meeting, the terms of an Award to be granted to an Eligible Employee who is a director of the Company must fall within the scope of the Directors’ Remuneration Policy most recently approved by the Company in a general meeting. Such terms may include by way of example but without limitation any relevant individual limit in Rule 3 and any Performance Target set under Rule 5.

1.3. Procedure for grant of Awards and Award Date

An Award shall be granted by the Grantor passing a resolution. The Award Date shall be the date on which the Grantor passes the resolution or any later date specified in the resolution and allowed by Rule 1.5. The grant of an Award shall be evidenced by a deed executed by or on behalf of the person granting the Award.

An Award Certificate or a Restricted Share Agreement (as applicable) shall be issued to each Award Holder as soon as reasonably practicable following the grant of the Award setting out details of the Award determined in accordance with Rule 1.4 and, where applicable, Rule 1.12.

1.4. Terms and conditions set at grant

The Grantor shall, at the time of grant, determine:

1. whether the Award comprises an Option, a Conditional Share Award or Restricted Shares;

2. the Award Date;

3. the number of Plan Shares subject to the Award or the basis on which the number of Plan Shares will be calculated;

4. the Award Price (if any);

5. the date or dates on which the Award will normally Vest;

6. whether or not any dividend equivalents will be payable under Rule 8.9;

7. in the case of an Option, the Exercise Period;

8. any Performance Target;

9. any Holding Period;

10. whether Rule 6 (Malus) and/or Rule 7 (Clawback) shall apply to the Award;

11. any other conditions of the Award; and

12. where the Award comprises Restricted Shares, any provisions which must be determined under Rule 1.12.

1.5. When Awards may be granted

Subject to Rule 1.6, the Grantor may grant Awards at any time after the date of adoption of the Plan.

1.6. When Awards may not be granted

Awards may not be granted:

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The Silence Therapeutics plc 2018 Employee Long Term Incentive Plan

1. when prevented by any Dealing Restrictions; or

2. after the 10th anniversary of adoption of the Plan.

1.7. Who can be granted Awards

An Award may only be granted to an individual who is an Eligible Employee at the Award Date. Unless the Board decides otherwise, an Award will not be granted to an Eligible Employee who on or before the Award Date has given or received notice of termination of employment (whether or not lawful).

1.8. Confirmation of acceptance of Award

The Grantor may require an Eligible Employee who is (or is to be) granted an Award to confirm his acceptance of the Rules and the terms of any Award granted to him by a specified date. Such confirmation will be in a form set by the Grantor (which may require the Eligible Employee to execute a document). The Grantor may provide that the Award will lapse (and as a result be treated as never having been granted) if the confirmation of acceptance is not provided by the specified date.

1.9. Right to refuse Award

An Award Holder may by notice in writing to the Company within 30 days after the Award Date say he does not want his Award in whole or part. In such a case, the Award shall to that extent be treated as never having been granted.

1.10. No payment for an Award

An Award Holder shall not be required to make payment for the grant of an Award unless the Board determines otherwise. Where an Award Holder refuses his Award pursuant to the terms of Rule 1.9, no payment in connection with the refusal is required from the Award Holder or the Grantor.

1.11. Awards non-transferable

An Award shall be personal to the Award Holder and, except in the case of the death of an Award Holder, an Award shall not be capable of being transferred, charged or otherwise alienated and shall lapse immediately if the Award Holder purports to transfer, charge or otherwise alienate the Award.

1.12. Awards which are Restricted Shares

This Rule 1.12 sets out specific provisions in relation to Restricted Shares.

1. An Eligible Employee who is to be granted Restricted Shares must enter into a Restricted Share Agreement with the Grantor providing that to the extent the Award lapses, the Restricted Shares are forfeit and the Restricted Shares will immediately be transferred for no (or nominal) consideration to any person specified by the Grantor. The Restricted Share Agreement will also provide that, except for transfer on death of the Award Holder to his personal representatives or to the extent agreed by the Grantor (and subject to such conditions as it may decide), the Award Holder will not transfer or assign the Restricted Shares subject to his Award during the Vesting Period.

2. The Award Holder must sign any document (including a blank stock transfer form) requested by the Grantor relating to the Restricted Shares. The Grantor may provide that the Award will lapse if any such document is not signed within any specified period.

3. On or as soon as practicable after the Award Date of Restricted Shares the Grantor will procure that the relevant number of Restricted Shares are transferred (including out of treasury or otherwise) to the Award Holder or another person to be held for the benefit of the Award Holder.

4. Except to the extent set out in the Restricted Share Agreement, the Award Holder shall have all the rights in respect of Restricted Shares from the date of transfer until any date on which the Award comprising the Restricted Shares lapses (whether in whole or in part).

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The Silence Therapeutics plc 2018 Employee Long Term Incentive Plan

2. Plan limits

2.1. Share Reserve

Subject to the terms of this Rule 2, Awards may be made under the Plan and the Non-Employee LTIP (taking account of Relevant Awards outstanding as at the Plan Restatement Date, but excluding any Relevant Awards that have been settled by the issuance of Plan Shares prior to the Plan Restatement Date) in an aggregate amount up to 8,700,000 Plan Shares (the Share Reserve). For the avoidance of doubt, the Plan and the Non-Employee LTIP shall be treated as a single equity award grant program for purposes of the Share Reserve, such that a grant under either the Plan or the Non-Employee LTIP shall be made from this single Share Reserve.

In addition, the Share Reserve will automatically increase on January 1st each year from 2021 and ending on (and including) January 1, 2028, in an amount equal to 5% of the total number of ordinary shares outstanding on December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of Plan Shares than would otherwise occur pursuant to the preceding sentence.

Any increase to the Share Reserve (other than as set forth in the immediately preceding paragraph) must be approved by the passing of an ordinary resolution of the Company in general meeting, if required by applicable law.

2.2. Plan Share Recycling

If all or any part of a Relevant Award (whether granted before, on, or after the Plan Restatement Date) expires, lapses or is terminated, exchanged for cash, surrendered, repurchased or cancelled without having been fully exercised, in each case after the Plan Restatement Date, the unused Plan Shares covered by such Relevant Award will return to the Share Reserve and again be available for Awards. The following actions do not result in an issuance of Plan Shares and accordingly do not reduce the number of Plan Shares subject to the Share Reserve and available for issuance under the Plan: (i) the withholding of Plan Shares that would otherwise be issued to satisfy the exercise, strike or purchase price of an Award; or (ii) the withholding of shares that would otherwise be issued to satisfy a tax withholding obligation in connection with an Award.

2.3. Adjustment

The Share Reserve shall be subject to such adjustment as the Board may determine to be appropriate upon any Reorganisation.

2.4. Scaling down

If the granting of an Award would cause the limits in this Rule 2 to be exceeded, such Award shall take effect as an Award over the maximum number of Plan Shares which does not cause the limit to be exceeded. If more than one Award is granted on the same Award Date, the number of Plan Shares which would otherwise be subject to each Award shall be reduced pro rata.

3. Individual limit

3.1. General

The terms of Awards which may be made to any one Eligible Employee shall be limited as set out in this Rule 3.

3.2. Limit

A New Award must not be granted to an Eligible Employee if the result of granting the New Award would be that, at the proposed Award Date, the Market Value of the Plan Shares subject to that Award, when aggregated with the Market Value of the Plan Shares subject to any other New Award granted to him, that Time Vest in each Time Vesting Year in relation to the proposed New Award, would exceed 250% of his Annual Remuneration, subject to the Board determining that exceptional circumstances exist which justify the grant of an Award in excess of such limit in which case the limit shall be extended to not more than 300% of the relevant Eligible Employee’s Annual Remuneration.

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For the purpose of this Rule 3.2:

1. Annual Remuneration means the higher of:

a. basic salary paid by the Group expressed as an annual rate as at the Award Date; and

b. basic salary paid by the Group for the period of 12 months ending on the last day of the month immediately preceding the month in which the Award Date occurs.

2. The Market Value of Plan Shares subject to a New Award shall be measured on the date on which that Award was granted.

3. Time Vest in relation to Plan Shares subject to a New Award means that those Plan Shares reach the date on which they normally Vest (disregarding any Performance Target).

4. Time Vesting Year in relation to a New Award means each calendar year ending on each anniversary of the Award Date of the New Award.

5. To the extent that a New Award is granted on terms that it is Time Vested on the Award Date, that New Award shall be deemed to Time Vest in the first Time Vesting Year in relation to that New Award.

6. To the extent a New Award has become incapable of exercise for any reason in relation to Plan Shares subject to it, those Plan Shares shall not subsequently Time Vest (and accordingly shall no longer be taken into account for the purposes of this Rule 3.2 in connection with further New Awards proposed to be granted to the relevant Eligible Employee).

3.3. Scaling down

If the grant of an Award would cause the limit in Rule 3.2 to be exceeded, such Award shall take effect as an Award over the maximum number of Plan Shares which does not cause the limit to be exceeded.

4. Award Price

The Award Price (if any) shall be determined by the Grantor and may be any price.

Where the Grantor has determined that an Award will be satisfied by the issue of new shares and the Award Price per Plan Share is less than the nominal value of a Plan Share, the Company will ensure that at the time of the issue of the Plan Shares arrangements are in place to pay up at least the nominal value of the relevant Plan Shares.

5. Performance Target and conditions

5.1. Setting of Performance Target and conditions

The Vesting of an Award and the extent to which it Vests will be subject to the satisfaction of any applicable Performance Target and any other conditions set by the Grantor on or before the Award Date.

5.2. Nature of Performance Target and conditions

Any Performance Target and any other conditions imposed under Rule 5.1 shall be:

1. objective; and

2. set out in, or attached in the form of a schedule to, the Award Certificate or Restricted Share Agreement, (as applicable).

5.3. Substitution, variation or waiver of Performance Target and conditions

If an event occurs which causes the Grantor to consider that any Performance Target and/or any other conditions imposed under Rule 5.1 subject to which an Award has been granted is no longer appropriate, the Grantor may substitute, vary or waive that Performance Target and/or any other conditions in such manner (and make such consequential amendments to the Rules) as:

1. is reasonable in the circumstances; and

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2. except in the case of waiver, produces a fairer measure of performance and is not materially lessdifficult to satisfythan if the event had not occurred.

The Award shall then take effect subject to the Performance Target and any other conditions as substituted, varied or waived.

5.4. Notification of Award Holders

The Grantor shall, as soon as practicable, notify each Award Holder concerned of any determination made by it under this Rule 5.

6. Malus

Notwithstanding any other provision of the Rules, the Board may, at (or at any time before) the Vesting of an Award to which the Grantor has specified under Rule 1.4 that this Rule 6 applies, reduce the number of Plan Shares subject to an Award in whole or in part (including, for the avoidance of doubt, to nil) in the following circumstances:

1. discovery of a material misstatement resulting in an adjustment in the audited consolidated accounts of the Company or the audited accounts of any Group Member; and/or

2. the assessment of any Performance Target or condition in respect of an Award was based on error, or inaccurate or misleading information; and/or

3. the discovery that any information used to determine the number of Plan Shares subject to an Award was based on error, or inaccurate or misleading information; and/or

4. action or conduct of an Award Holder which, in the reasonable opinion of the Board, amounts to negligence, fraud or serious misconduct and results or is reasonably likely to result in:

a. the censure of a Group Member by a regulatory authority; or

b. have had a significant detrimental impact on the reputation of any Group Member provided that the Board is satisfied that the relevant Award Holder was responsible for the censure or reputational damage and that the censure or reputational damage is attributable to him; or

c. a material adverse effect on the financial position of the Company, any Group Member or to a relevant business unit (as appropriate); or

d. a material adverse effect on the business opportunities and prospects for sustained performance or profitability of the Company, any Group Member or relevant business unit (as appropriate);

and/or

5. if the Award Holder (except in the proper course of his duties) uses or discloses to any third party (or permits or acquiesces to the publication or disclosure of) any Confidential Information, unless: such use or disclosure is authorised by the Company or compelled by law; or the information is already in, or comes into, the publication domain or otherwise than through the Award Holder unauthorised disclosure.

In determining any reduction which should be applied under this Rule 6, the Board shall act fairly and reasonably but its decision shall be final and binding.

For the avoidance of doubt, any reduction under this Rule 6 may be applied on an individual basis as determined by the Board. Whenever a reduction is made under this Rule 6, the relevant Award shall be treated as having lapsed to that extent.

7. Clawback

7.1. Trigger Events

In this Rule 7, Trigger Events means:

1. discovery of a material misstatement resulting in an adjustment in the audited consolidated accounts of the Company or the audited accounts of any Group Member for a period that was wholly or partly

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before the end of the period over which the Performance Target applicable to an Award was assessed; and/or

2. the discovery that the assessment of any Performance Target or condition in respect of an Award was based on error, or inaccurate or misleading information; and/or

3. the discovery that any information used to determine the number of Plan Shares subject to an Award was based on error, or inaccurate or misleading information; and/or

4. action or conduct of an Award Holder which, in the reasonable opinion of the Board, amounts to negligence, fraud or serious misconduct and results or is reasonably likely to result in:

a. the censure of a Group Member by a regulatory authority; or

b. have had a significant detrimental impact on the reputation of any Group Member provided that the Board is satisfied that the relevant Award Holder was responsible for the censure or reputational damage and that the censure or reputational damage is attributable to him; or

c. a material adverse effect on the financial position of the Company, any Group Member or to a relevant business unit (as appropriate); or

d. a material adverse effect on the business opportunities and prospects for sustained performance or profitability of the Company, any Group Member or relevant business unit (as appropriate);

and/or

5. if the Award Holder (except in the proper course of his duties) uses or discloses to any third party (or permits or acquiesces to the publication or disclosure of) any Confidential Information, unless: such use or disclosure is authorised by the Company or compelled by law; or the information is already in, or comes into, the publication domain or otherwise than through the Award Holder’s unauthorised disclosure.

7.2. Application

Notwithstanding any other provision of the Rules, if at any time during the period of two years (or such longer period as the Board considers is appropriate and has been notified to the Award Holder) following the Vesting of an Award to which the Board has specified under Rule 1.4 that this Rule 7 applies a Trigger Event occurs, then:

1. Rules 7.3 to 7.7 and 7.9 shall apply; and

2. where the Award takes the form of an Option and the Award Holder has not exercised such Option, Rule 7.8 shall also apply.

7.3. Clawback methods

Where Rule 7.2 applies, the Board may in its absolute discretion require the relevant Award Holder to:

1. transfer to the Company (or, if required by the Company, any other person specified by the Company) all or some of the Plan Shares acquired by the Award Holder (or his nominee) pursuant to the Vesting of the Award or, in the case of an Award which is an Option, the exercise of that Option; and/or

2. pay to the Company (or if required by the Company, any other person specified by the Company) an amount equivalent to all or part of the proceeds of sale or, in the event of a disposal of the Plan Shares at a price which the Board reasonably determines was less than market value at the time of disposal and where the disposal was not made at arm’s length, an amount equivalent to the market value (as reasonably determined by the Board) at the time of disposal of all or some of the Plan Shares acquired pursuant to the Vesting of the Award or, in the case of an Award that is an Option, the exercise of that Option; and/or

3. pay to the Company (or, if required by the Company, any other person specified by the Company) an amount equivalent to all or part of the amount of any cash in respect of an Award paid to or for the benefit of the Award Holder; and/or

4. pay to the Company (or, if required by the Company, any other person specified by the Company) an amount equivalent to all or part of any benefit or value derived from or attributable to the Plan Shares referred to in paragraph 1 above (including but not limited to any special dividend or additional or replacement shares) on such terms as the Board may reasonably direct,

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less in each case the amount of tax and social security contributions actually paid (or dueto be paid) by the Award Holder in respect of the acquisition of the Plan Shares and/or payment of cash in respect of an Award.

7.4. Award Holder’s obligation to recover tax

In addition to the obligation of the Award Holder as described above, the Award Holder shall use his best endeavours to seek and obtain repayment or credit from HMRC or any relevant overseas tax authority of the tax and social security contributions paid on the Award Holder’s behalf in relation to the Award as soon as reasonably practicable and to notify the Company of such claim and/or receipt of any credit or payment by HMRC (or any relevant overseas tax authority) in this regard. Following such notification the Company will be entitled to require the Award Holder to make a payment to it within 30 days of an amount equivalent to the amount of any payment or credit received from HMRC (or any relevant overseas tax authority).

7.5. Authorisation of deductions

By accepting the grant of an Award, the Award Holder authorises the Company or such other Group Member as may be the employer of the Award Holder to make deductions from any payment owing to him including but not limited to salary, bonus, holiday pay or otherwise in respect of any sum which would otherwise be payable by the Award Holder under this Rule 7.

7.6. Timing of transfers, payments and repayments

Any transfers, payments or repayments to be made by the Award Holder under this Rule 7 shall be made within 30 days of the date the Award Holder is notified in writing of the transfer required or the amount due, as appropriate.

7.7. Additional methods of effecting clawback

In addition to or in substitution for the actions described above that the Board may take under Rule 7.3 (the Actions), the Board may:

1. reduce the amount (including, for the avoidance of doubt, to nil) of any future bonus payable to the Award Holder; and/or

2. determine that the number of Plan Shares over which an award or right to acquire Plan Shares that may otherwise be granted to the Award Holder under any Employees’ Share Scheme operated by any Group Member (other than any tax-advantaged employee share plan that complies with the requirements of Schedules 2 or 3 of ITEPA 2003) shall be reduced by such number as the Board may determine (including for the avoidance of doubt to nil); and/or

3. reduce the number of Plan Shares (including, for the avoidance of doubt, to nil) subject to any award or right to acquire Plan Shares which has been granted to the Award Holder under any Employees’ Share Scheme operated by any Group Member (other than any tax-advantaged employee share plan that complies with the requirements of Schedules 2 to 4 of ITEPA 2003) before the date on which the relevant award or right vests or becomes exercisable by such number as the Board may determine; and/or

4. reduce the number of Plan Shares (including, for the avoidance of doubt, to nil) subject to any option to acquire Plan Shares which has been granted to the Award Holder under any Employees’ Share Scheme operated by any Group Member (other than any tax-advantaged employee share plan that complies with the requirements of Schedules 2 to 4 of ITEPA 2003) which has vested but not yet been exercised by such number as the Board may determine,

provided that the total amount represented by:

5. reductions under this Rule 7.7;

6. reductions under Rule 7.8; and

7. the amount represented by any transfer and any amount or value payable under Rule 7.3,

shall not, in the Board’s reasonable opinion, exceed the amount represented by any transfer and any amount or value which would have been due if the Board had only carried out the Actions.

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7.8. Reduction of unexercised Option

Where Rule 7.2 applies and the Award takes the form of an Option which the Award Holder has not exercised in full, the Board may in its absolute discretion reduce the number of Plan Shares subject to such Option (including, for the avoidance of doubt, to nil). In addition to or in substitution for reducing such Option, the Board may take any of the actions set out in Rules 7.7.1 to 7.7.4 provided that the total amount represented by reductions under Rules 7.7.1 to 7.7.4 and any reduction of the Option under this Rule 7.8 shall not, in the Board’s reasonable opinion, exceed the amount which would have been represented by the reduction of the Option only.

7.9. General provisions

In carrying out any action under this Rule 7, the Board shall act fairly and reasonably but its decision shall be final and binding.

For the avoidance of doubt, any action carried out under this Rule 7 may be applied on an individual basis as determined by the Board. Whenever a reduction of an award, right to acquire Plan Shares or option is made under this Rule 7, the relevant award, right to acquire Plan Shares or option shall be treated to that extent as having lapsed.

7.10. Interaction with other plans

The Board may determine at any time to reduce the number of Plan Shares subject to an Award (including, for the avoidance of doubt, to nil) either:

1. to give effect to one or more provisions of any form which are equivalent to those in Rule 7 (Clawback Provisions) contained in any Employees’ Share Scheme operated by any Group Member (other than the Plan) or any bonus plan operated by any Group Member; or

2. as an alternative to giving effect to any such Clawback Provisions.  

The value of any reduction under Rule 7.10.1 shall be determined in accordance with the terms of the relevant Clawback Provisions in the relevant Employees’ Share Scheme or bonus plan as interpreted by the Board in its absolute discretion.

The value of any reduction under Rule 7.10.2 shall be determined as if the terms of the relevant Clawback Provisions in the relevant Employees’ Share Scheme or bonus plan applied as interpreted by the Board in its absolute discretion.

8. Vesting of Awards (and exercise of Options)

8.1. Earliest date for Vesting of Awards

Subject to Rules 5, 10 and 11, an Award will Vest on the later of:

1. the relevant date specified under Rule 1.4.5; and

2. the date on which the Board determines that the Performance Target and/or any other conditions imposed under Rule 1.4.11 or Rule 5.1 have been satisfied.

The Grantor may determine that Vesting of the Award shall be delayed until any relevant investigation or other procedure relevant to an event falling within the scope of Rule 6 or Rule 7.10  has been completed.

8.2. Effect of Award Vesting

Subject to the Rules, the effect of an Award Vesting shall be:

1. in the case of an Option, that the Award Holder is entitled to exercise the Option at any time during the Exercise Period to the extent that it has Vested;

2. in the case of a Conditional Share Award, that the Award Holder shall become entitled to the Plan Shares to the extent that the Award has Vested; and

3. in the case of Restricted Shares, the restrictions set out in the relevant Restricted Share Agreement shall cease to apply to the extent that the Award has Vested.

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8.3. No Vesting or exercise while Dealing Restrictions apply

Where the Vesting of an Award is prevented by any Dealing Restriction, the Vesting of that Award shall be delayed until the Dealing Restriction no longer prevents it. Plan Shares may not be issued or transferred to an Award Holder while Dealing Restrictions prevent such issue or transfer.  In the case of an Option, the Option may not be exercised while Dealing Restrictions prevent such exercise.

8.4. Effect of cessation of Relevant Employment

1. Subject to Rule 10, an Old Award shall Vest and an Old Option may be exercised only while the Award Holder is in Relevant Employment and if an Award Holder ceases to be in Relevant Employment, any Old Award granted to him shall lapse on cessation.

2. An Award Holder who has given or received notice of termination of Relevant Employment (whether or not lawful) may not exercise an Old Option during any period when the notice is effective and an Old Award granted to him shall not Vest during this period, unless the Board determines otherwise. If an Old Award would otherwise have Vested during this period, and the notice is withdrawn by the relevant party, subject to the Rules the Old Award will Vest when the notice is withdrawn.

3. A New Award shall only Vest while the Award Holder is in Relevant Employment and if an Award Holder ceases to be in Relevant Employment, any part of a New Award granted to him that has not Vested at the date of cessation shall lapse on cessation.

4. Where an Award Holder ceases to be in Relevant Employment for any of the reasons set out in Rule 10.2.1 to 10.2.4 or because of termination by a Group Member of his Relevant Employment (other than summary dismissal or termination for "cause" as defined in his employment agreement with the relevant Group Member) or death (each a Good Leaver Reason), he (or, following his death, his personal representatives, having established title to the satisfaction of the Company) shall be entitled to exercise any part of a New Option that has Vested at the date of cessation for the period of one year following that cessation (or such longer or shorter period, not less than 90 days, that the Board may determine).  To the extent not exercised at the end of that period the New Option shall lapse.  Where an Award Holder ceases to be in Relevant Employment for any reason other than a Good Leaver Reason any part of a New Option that has not been exercised shall lapse on the date of cessation.

5. This Rule 8.4 shall apply where the Award Holder ceases to be in Relevant Employment in any circumstances (including, in particular, but not by way of limitation, where the Award Holder is dismissed unfairly, wrongfully, in breach of contract or otherwise).

8.5. Options may be exercised in whole or in part

Subject to Rules 8.3, 8.4 and 15, a Vested Option may be exercised in whole or in part at any time. If exercised in part, the unexercised part of the Option shall not lapse as a result and shall remain exercisable until such time as it lapses in accordance with the Rules.

8.6. Procedure for exercise of Options

An Option shall be exercised by the Award Holder giving notice to the Grantor (or any person appointed by the Grantor) in the form from time to time prescribed by the Board, which may include (for the avoidance of doubt) any electronic and/or online notification.  Such notice shall specify the number of Plan Shares in respect of which the Option is being exercised, and be accompanied by either the Award Price (if any) in full or confirmation of arrangements satisfactory to the Grantor for the payment of the Award Price, together with any payment and/or documentation required under Rule 15 and, if required, the Award Certificate.

For the avoidance of doubt, the date of exercise of an Option shall be the later of the date of receipt of a duly completed valid notice of exercise (or any later date as may be specified in that notice of exercise) and the date of compliance with the requirements of the first paragraph of this Rule 8.6.

8.7. Issue or transfer of Plan Shares

Subject to Rules 8.3, 8.8 and 15 and to any necessary consents and to compliance by the Award Holder with the Rules, the Grantor shall as soon as reasonably practicable and in any event not later than 30 days after:

1. the exercise date, in the case of an Option, arrange for the issue or transfer to the Award Holder (or a nominee specified or permitted by the Company) of the number of Plan Shares specified in the notice of

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exercise and provide to the Award Holder, in the case of the partial exercise of an Option, an Award Certificate in respect of, or the original Award Certificate updated to show, the unexercised part of the Option; and

2. the Vesting of an Award, in the case of a Conditional Share Award, arrange for the issue or transfer to the Award Holder (or a nominee specified or permitted by the Company) of the number of Plan Shares in respect of which the Award has Vested.

8.8. Net or cash settling

Subject to Rule 15, the Grantor may on exercise of an Option:

1. make a cash payment to the Award Holder equal to the Gain on the date of exercise of the Option; or

2. arrange for the issue or transfer to the Award Holder of Plan Shares with a Market Value equal to the Gain on the date of exercise of the Option (rounded down to the nearest whole Plan Share). The Award Holder shall not be required to make payment for these Plan Shares.

Subject to Rule 15, the Grantor may on the Vesting of a Conditional Share Award make a cash payment to the Award Holder equal to the Market Value of the Plan Shares in respect of which the Conditional Share Award has Vested, less the Award Price (if any).

Where the Company settles an Award in the manner described in this Rule 8.8, this shall be in full and final satisfaction of the Award Holder’s rights under the Award.

8.9. Dividend equivalents

An Award (except an Award comprising Restricted Shares where the right to dividends has not been waived) may include the right to receive an amount in Plan Shares or cash on or following Vesting equal in value to the dividends which were payable on the number of Plan Shares in respect of which the Award has Vested during the period between the Award Date and the date of Vesting (or in the case of an Option the number of Plan Shares subject to the Option shall be increased as at the date of Vesting by the relevant value in Plan Shares).

The Grantor may determine at its absolute discretion whether or not the method used to calculate the value of dividends shall assume that such dividends have been reinvested into Plan Shares.

The Grantor may decide at any time not to apply this Rule 8.9 to all or any part of a special dividend or dividend in specie.

8.10. US Taxpayers

This Rule 8.10 shall apply to US Taxpayers to the extent necessary to avoid taxation under Section 409A of the US Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder. Notwithstanding anything to the contrary contained in the Plan, no Option may be exercised later than 2.5 calendar months after the end of the Taxable Year in which the Option first becomes exercisable, provided that the Option shall lapse on the date it would have lapsed had this rule not applied. The Rules shall be interpreted accordingly.

For the purposes of this Rule 8.10, Taxable Year means the 12 month period in respect of which the Award Holder is obliged to pay US Tax or, if it would result in a longer exercise period, the 12 month period in respect of which the Award Holder’s employing company is obliged to pay tax. US Taxpayer means a person who is subject to taxation under the tax rules of the United States of America which does not include an Award Holder who is a non-resident alien throughout the period of participation in the Plan and who has no US workdays during such participation.

9. Holding Period

9.1. Definitions

In this Rule 9:

Holding Period Holder means a trustee or nominee designated by the Grantor in accordance with this Rule 9; and

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Holding Period Shares means Plan Shares which are or were the subject of an Award to which a Holding Period applies and in respect of which the Holding Period has not ended in accordance with this Rule 9.

9.2. Application

This Rule 9 applies to the extent that some or all of the Plan Shares acquired on Vesting of an Award (or exercise of an Option) are subject to a Holding Period.

9.3. Issue or transfer to Holding Period Holder

Instead of arranging for the issue or transfer of the Holding Period Shares to the Award Holder on Vesting of a Conditional Share Award or exercise of an Option under Rule 8.7, the Board may arrange for the Holding Period Shares to be issued or transferred to the Holding Period Holder, as designated by the Board, to be held for the benefit of the Award Holder. Any balance of the Plan Shares in respect of which an Award Vests or is exercised will be issued or transferred as described in Rule 8.7.

If the Award took the form of Restricted Shares, the Holding Period Shares will be transferred to (or continue to be held by) the Holding Period Holder on the terms of this Rule 9.

9.4. No transfer during Holding Period

The Award Holder or Holding Period Holder may not transfer, assign or otherwise dispose of any of the Holding Period Shares or any interest in them (and the Award Holder may not instruct the Holding Period Holder to do so) during the Holding Period except in the following circumstances:

1. the sale of sufficient entitlements nil-paid in relation to  Holding Period Shares to take up the balance of the entitlements under a rights issue; and

2. the sale of sufficient Holding Period Shares to satisfy any liability to tax or employee social security contributions (or where Rule 15.2 applies, Employer’s NIC) arising in relation to Holding Period Shares.

9.5. Shareholder rights during Holding Period

1. Unless the Board decides otherwise, the restrictions in this Rule 9 will apply to any cash or assets (other than ordinary dividends) received in respect of the Holding Period Shares and such cash or assets will be held by the Holding Period Holder until the end of the Holding Period.

2. During the Holding Period, the Holding Period Holder will be entitled to vote and have all other rights of a shareholder in respect of the Holding Period Shares.

9.6. Ceasing Relevant Employment during the Holding Period

Ceasing Relevant Employment during the Holding Period will have no impact on the provisions of this Rule 9, unless the Board decides otherwise, save where cessation is by reason of death in which case the Holding Period shall immediately be deemed to have ended.

9.7. Clawback

For the avoidance of doubt, Rule 7 shall apply to the Holding Period Shares in the same way that it applies to any Plan Shares acquired by an Award Holder following Vesting of an Award or exercise of an Option which are not Holding Period Shares.

9.8. End of Holding Period

Subject to the provisions of this Rule 9, the Holding Period will end on the earliest of the following:

1. the date set as the end of the Holding Period under Rule 1.4;

2. subject to Rule 12.1, the relevant date on which an Award would have Vested under Rules 11.1 to 11.4;

3. if the Board so allows, the circumstances in which any event described in Rule 11.5 would apply; and

4. any other circumstances in the absolute discretion of the Board. Where this paragraph 4 applies, the Board may additionally determine that the Holding Period shall end only for such number of Holding Period Shares as it may specify.

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10. Vesting of Awards (andexercise of Options) inspecial circumstances

10.1. Death: Old Awards

If an Award Holder dies, a proportion of each Old Award held by him which has not Vested will Vest immediately. The proportion of each Old Award which shall Vest shall be determined by the Board at its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the satisfaction of any Performance Target as at the date of death and any other conditions imposed under Rule 5.1.

Alternatively, the Board may decide that an Old Award held by the Award Holder which has not yet Vested will continue until the normal time of Vesting in which case any Performance Target and/or any other conditions imposed under Rule 5.1 shall be considered at the time of Vesting.

In the case of an Old Option, if an Award Holder dies, his personal representatives (having established title to the satisfaction of the Company) shall be entitled to exercise the Vested proportion of his Option (whether Vested under this Rule or otherwise) at any time during the 12 month period following death, or, if later, following Vesting or, in either case, during such other period as the Board determines. The Option shall lapse at the end of such period.

10.2. Injury, disability, redundancy, retirement etc.: Old Awards

If an Award Holder ceases to be in Relevant Employment by reason of:

1. injury, ill-health or disability evidenced to the satisfaction of the Board;

2. the Award Holder being employed by a company which ceases to be a Group Member;

3. the Award Holder being employed in an undertaking or part of an undertaking which is transferred to a person who is not a Group Member; or

4. any other circumstances if the Board decides in any particular case, except where the Award Holder is summarily dismissed,

any Old Award held by him which has not Vested will continue until the normal time of Vesting and the Performance Target and/or any other conditions imposed under Rule 5.1 shall be considered at the time of Vesting.

Alternatively, the Board may decide that an Old Award will Vest immediately in which case the proportion of the Award which shall Vest will be determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the satisfaction of any Performance Target as at the time of cessation and any other conditions imposed under Rule 5.1.

In the case of an Old Option, the Award Holder shall be entitled to exercise the Vested proportion of his Option (whether Vested under this Rule or otherwise) at any time during the period ending 90 days following cessation of Relevant Employment or, if later, following Vesting or, in either case, during such other period as the Board determines. The Option shall lapse at the end of such period.

10.3. Award Holder relocated abroad

If it is proposed that an Award Holder, while continuing to be in Relevant Employment, should work in a country other than the country in which he is currently working and, by reason of the change, the Award Holder would:

1. suffer less favourable tax treatment in respect of his Award; or

2. become subject to a restriction on his ability to exercise an Option, to have issued or transferred to him the Plan Shares subject to an Award or to hold or deal in such Plan Shares or the proceeds of sale of such Plan Shares,

an Award may, at the absolute discretion of the Board, Vest immediately either in full or to the extent determined by the Board in its absolute discretion and subject to such conditions as it may require taking into account such factors as the Board may consider relevant including, but not limited to, the period of time the relevant Award has been held and the extent to which any Performance Target and any other conditions imposed under Rule 5.1 have been met. Where the Award is an Option and has become Vested pursuant to this

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Rule 10.3, the Award Holder may exercise his Vested Option at any time during the period beginning 3months before the proposed date of his transfer and ending 3 months after the date ofhis actual transfer. If not so exercised, the Option shall not lapse but shall cease to be treated as having Vested and shall continue in force in accordance with the Rules.

10.4. Meaning of ceasing to be in Relevant Employment

For the purposes of the Plan, an Award Holder shall not be treated as ceasing to be in Relevant Employment until he no longer holds any office or employment with any Group Member. In addition, unless the Board otherwise decides an Award Holder shall not be treated as so ceasing if within 7 days he recommences employment or becomes an office holder with any Group Member.

The Board may determine that an Award Holder will be treated as ceasing to be in Relevant Employment when he gives or receives notice of termination of his employment (whether or not lawful).

10.5. Interaction of Rules

In the case of an Option:

1. if the Option has become exercisable under Rule 10.2 and, during the period allowed for the exercise of the Option under Rule 10.2 the Award Holder dies, the period allowed for the exercise of the Option shall be the period allowed by Rule 10.1; and

2. if the Option has become exercisable under Rule 8.4.4 or Rule 10 and, during the period allowed for the exercise of the Option under the relevant Rule, the Option becomes exercisable under Rule 11 also (or vice versa), the period allowed for the exercise of the Option shall end on the earlier of the end of the period allowed by Rule 8.4.4 or Rule 10 (as applicable) and the end of the period allowed by Rule 11.

11. Takeover and other corporate events

11.1. Takeover

Subject to Rule 12, where a person obtains Control of the Company as a result of making an offer to acquire Plan Shares, Awards shall Vest on the date the person obtains Control as set out below. Should a person (either alone or together with any person acting in concert with him) already have Control of the Company and makes an offer to acquire all of the ordinary shares in the capital of the company (or any shares representing them), other than those which are already owned by him, and such offer becomes wholly unconditional, Awards shall Vest on the date the offer becomes unconditional also as set out below.

The proportion of an Award which shall Vest will be determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the time the Award has been held by the Award Holder and having regard to any Performance Target and/or any other conditions imposed under Rule 5.1. The proportion of an Award that the Board determines shall not Vest will lapse immediately except in the circumstances set out below.

In the case of an Option, the Vested proportion of the Option (whether Vested under this Rule 11.1 or otherwise) may be exercised at any time during the period of one month (or, if the Board determines a longer period shall apply, that period) beginning with the time when the person making the offer has obtained Control, or if the person already has Control, at the time when the offer to acquire all of the ordinary shares in the capital of the company (or any shares representing them) becomes wholly unconditional. The Option shall lapse at the end of such period unless the Board determines that a longer period for exercise shall apply, in which case the Option shall continue in force until the end of such extended period or until it otherwise lapses in accordance with the Rules.

If the extent of Vesting of an Award which Vests under this Rule 11.1 has been reduced by the Board to reflect the period of time that the Award has been held by the Award Holder, the Board may determine that Rule 12 shall apply to the proportion of the Award reflecting such reduction which has not Vested.

11.2. Compulsory acquisition of shares in the Company

Subject to Rule 12, if a person becomes entitled or bound to acquire shares in the Company under sections 979 to 982 of the Companies Act 2006, Awards shall Vest as set out below.

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The proportion of an Award which shall Vest will be determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the time the Award has been held by the Award Holder and having regard to any Performance Target and/or any other conditions imposed under Rule 5.1.

In the case of an Option, the Vested proportion of the Option (whether Vested under this Rule 11.2 or otherwise) may be exercised at any time during the period beginning with the date the person serves a notice under section 979 and ending 7 clear days before the date on which the person ceases to be entitled to serve such a notice. The Option shall lapse at the end of the 7 days.

If the extent of Vesting of an Award which Vests under this Rule 11.2 has been reduced by the Board to reflect the period of time that the Award has been held by the Award Holder, the Board may determine that Rule 12 shall apply to the proportion of the Award reflecting such reduction which has not Vested.

11.3. Scheme of arrangement

Subject to Rule 12, if a person proposes to obtain Control of the Company in pursuance of a compromise or arrangement sanctioned by the court under section 899 of the Companies Act 2006 Awards shall Vest on the date of the court sanction as set out below.

The proportion of an Award which shall Vest will be determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the time the Award has been held by the Award Holder and having regard to any Performance Target and/or any other conditions imposed under Rule 5.1.

In the case of an Option, the Vested proportion of the Option (whether Vested under this Rule 11.3 or otherwise) may be exercised at any time during the period of one month (or, if the Board determines a longer period shall apply, that period) from the compromise or arrangement being sanctioned by the court. The Option shall lapse at the end of such period.

If the extent of Vesting of an Award which Vests under this Rule 11.3 has been reduced by the Board to reflect the period of time that the Award has been held by the Award Holder, the Board may determine that Rule 12 shall apply to the proportion of the Award reflecting such reduction which has not Vested.

11.4. Winding-up of the Company

If notice is given of a resolution for the voluntary winding-up of the Company, Awards shall Vest on the date notice is given.

The proportion of an Award which shall Vest will be determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the time the Award has been held by the Award Holder and having regard to any Performance Target and/or any other conditions imposed under Rule 5.1.

In the case of an Option, the Vested proportion of the Option (whether Vested under this Rule 11.4 or otherwise) may be exercised at any time during the period of 6 months from the date of the notice or, if earlier, on completion of the winding up. The Option shall lapse at the end of such period.

11.5. Demergers and other events

The Board may determine that Awards Vest if it becomes aware that the Company will be affected by a demerger, distribution (which is not an ordinary dividend) or other transaction not otherwise covered by the Rules.

The proportion of an Award which shall Vest will be determined by the Board in its absolute discretion subject to such conditions as it may require taking into account such factors as the Board may consider relevant including, but not limited to, the time the Award has been held by the Award Holder and having regard to any Performance Target and/or any other conditions imposed under Rule 5.1.

In the case of an Option, the Vested proportion of the Option (whether Vested under this Rule 11.5 or otherwise) may be exercised at any time during a period as shall be determined by the Board. The Option shall lapse at the end of such period.

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If the extent of Vesting of an Award which Vests under this Rule 11.5 has been reduced by the Board to reflect the period of time that the Award has been held by the Award Holder, the Board may determine that Rule 12 shall apply to the proportion of the Award reflecting such reduction which has not Vested.

11.6. Meaning of “obtains Control of the Company”

For the purpose of Rule 11 a person shall be deemed to have obtained Control of the Company if he and others Acting In Concert with him have together obtained Control of it.

11.7. References to Board within this Rule 11

For the purposes of this Rule 11, any reference to the Board shall be taken to be a reference to those individuals who were members of the Board immediately before the event by virtue of which this Rule 11 applies.

11.8. Notification of Award Holders

The Grantor shall, as soon as reasonably practicable, notify each Award Holder of the occurrence of any of the events referred to in this Rule 11 and explain how this affects his position under the Plan.

11.9. Vesting of Awards in advance of a corporate event

Where the Board is aware that an event is likely to occur under Rule 11:

1. in respect of which Awards will Vest in circumstances where the conditions for relief under Part 12 of the Corporation Tax Act 2009 may not be satisfied; or

2. if the Board in its absolute discretion considers it appropriate,

the Board may, in its absolute discretion and by notice in writing to all Award Holders, declare that all Awards that are expected to Vest as a result of the relevant event shall Vest (and in the case of any such Award which is an Option, shall be exercisable) in accordance with Rule 11 during such period prior to the relevant event as determined by the Board.

12. Exchange of Awards

12.1. Where exchange applies

An Award will not Vest under Rule 11 but will be exchanged for a new award (New Award) under this Rule to the extent that:

1. an offer to exchange the Award for a New Award is made and accepted by the Award Holder; or

2. the Board, with the consent of the persons acquiring Control if relevant, decides that Awards will be automatically exchanged for New Awards. The circumstances in which the Board may make such a decision include (but are not limited to) where an event occurs under Rules 11.1, 11.2, or 11.3 and:

a. the shareholders of the acquiring company, immediately after it has obtained Control, are substantially the same as the shareholders of the Company immediately before the event; or

b. the obtaining of Control amounts in the opinion of the Board to a merger with the Company.

12.2. Terms of exchange

The following applies in respect of the New Award:

1. The Award Date of the New Award shall be deemed to be the same as the Award Date of the Award.

2. The New Award will be in respect of the shares in a company determined by the Board.

3. In the application of the Plan to the New Award, where appropriate, references to “Company” and “Plan Shares” shall be read as if they were references to the company to whose shares the New Award relates.

4. The New Award must be equivalent to the Award, in the opinion of the Board, and subject to paragraph 5 below it will Vest at the same time and in the same manner as the Award.

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5. Either the Vesting of the New Award must be subject to performance conditions and/or any other conditions which are so far as possible, in the opinion of the Board, equivalent to any Performance Target and/or any other conditions applying to the Award or no performance conditions will apply but the value of shares comprised in the New Award shall have substantially the same value of the number of Plan Shares which would have Vested under Rule 11 as applicable.

13. Lapse of Awards

Notwithstanding any other provision of the Rules, an Award shall lapse on the earliest of:

1. in the case of Options, the expiry of the Exercise Period;

2. the Board determining that any Performance Target and/or any other conditions imposed under Rule 5.1 has not been satisfied either in whole or in part in respect of the Award and can no longer be satisfied in whole or in part in which case the Award shall lapse to the extent that the Performance Target and/or any other conditions imposed under Rule 5.1 can no longer be satisfied;

3. subject to Rule 10 and Rule 8.4.4, the Award Holder ceasing to be in Relevant Employment;

4. any date for lapse provided for under these Rules; and

5. the date on which the Award Holder becomes bankrupt or enters into a compromise with his creditors generally.

14. Adjustment of Awards on Reorganisation

14.1. Power to adjust Awards

In the event of a Reorganisation, the number of Plan Shares subject to an Award which is an Option or a Conditional Share Award, the description of the Plan Shares, the Award Price or any one or more of these shall be adjusted in such manner as the Grantor, together with the Board where relevant, shall determine.

In the case of Restricted Shares, subject to the relevant Restricted Share Agreement, the Award Holder shall have the same rights as any other shareholder in respect of Restricted Shares in the event of a Reorganisation. Any shares, securities or other rights allotted to an Award Holder for no consideration or with the proceeds of sale of such rights (but not with new consideration provided by the Award Holder) as a result of such Reorganisation shall be treated as if they were awarded to the Award Holder at the same time as the Restricted Shares in respect of which the rights were conferred and subject to the Rules and the terms of the Restricted Share Agreement.

14.2. Award Price

No adjustment shall be made to the Award Price which would result in the Plan Shares subject to an Option or Conditional Share Award being issued at a price per Plan Share lower than the nominal value of a Plan Share except where the Grantor puts in place arrangements to pay up the nominal value at the date of issue of the Plan Shares (or the difference between the adjusted Award Price and the nominal value as the case may be).

14.3. Notification of Award Holders

The Grantor shall, as soon as reasonably practicable, notify each Award Holder of any adjustment made under this Rule 14 and explain how this affects his position under the Plan.

15. Tax and social security withholding

15.1. Deductions

Unless the Award Holder discharges any liability that may arise himself, the Grantor, the Company or any Group Member or former Group Member (as the case may be) may withhold such amount, or make such other arrangements as it may determine appropriate, for example to sell or withhold Plan Shares, to meet any liability to taxes or social security contributions in respect of Awards, including, where applicable, Employer’s NIC

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transferred under 15.2.The Award Holder will be responsible for all taxes, social security contributions and other liabilities arising in respect of the Award Holder’s Awards.

15.2. Transfer of Employer’s NIC

The Grantor may, at its discretion and to the extent permitted by law, require the Award Holder to pay all or any part of the Employer’s NIC in relation to an Award.

15.3. Execution of document by Award Holder

The Grantor may require an Award Holder to execute a document in order to bind himself contractually to any such arrangement as is referred to in Rules 15.1 and 15.2 and return the executed document to the Company by a specified date. It shall be a condition of Vesting, and where applicable exercise, of the Award that the executed document be returned by the specified date unless the Grantor determines otherwise.

15.4. Tax elections

The Board may, at its discretion, determine that an Option may not be exercised and/or the Plan Shares subject to a Conditional Share Award and/or the Plan Shares the subject of an Award comprising Restricted Shares may not be issued or transferred to the Award Holder (or for his benefit) unless the Award Holder has beforehand signed an election under Chapter 2 of Part 7 of ITEPA 2003 and/or section 165 of the Taxation of Chargeable Gains Act 1992 or entered into broadly similar local arrangements.

16. Rights and listing of Plan Shares

16.1. Rights attaching to Plan Shares

Except as set out in Rule 1.12 (Restricted Shares), all Plan Shares issued or transferred under the Plan shall, as to voting, dividend, transfer and other rights, including those arising on a liquidation of the Company, rank equally in all respects and as one class with the shares of the same class in issue at the date of issue or transfer save as regards any rights attaching to such Plan Shares by reference to a record date prior to the date of such issue or transfer.

16.2. Listing and admission to trading of Plan Shares

If and so long as Plan Shares are listed on the Official List and traded on the London Stock Exchange, the Company will apply for the listing and admission to trading of any Plan Shares issued under the Plan as soon as reasonably practicable.

17. Relationship of the Plan to contract of employment

17.1. Contractual provisions

Notwithstanding any other provision of the Plan:

1. the Plan shall not form part of any contract of employment between any Group Member and an Eligible Employee;

2. unless expressly so provided in his contract of employment, an Eligible Employee has no right to be granted an Award and the receipt of an Award in one year (and the calculation of the Award Price in a particular way) is no indication that the Award Holder will be granted any subsequent Awards (or that the calculations of the Award Price will be made in the same or a similar way);

3. the Plan does not entitle any Award Holder to the exercise of any discretion in his favour;

4. the benefit to an Eligible Employee of participation in the Plan (including, in particular but not by way of limitation, any Awards held by him) shall not form any part of his remuneration or count as his remuneration for any purpose and shall not be pensionable; and

5. if an Eligible Employee ceases to be in Relevant Employment for any reason, he shall not be entitled to compensation for the loss or diminution in value of any right or benefit or prospective right or benefit

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under the Plan (including, in particular but not by way of limitation, any Awards held by him which lapse by reason of his ceasing to be in Relevant Employment) whether by way of damages for unfair dismissal, wrongful dismissal, breach of contract or otherwise or anything analogous thereto in any jurisdiction.

17.2. Deemed agreement

By accepting the grant of an Award, an Award Holder is deemed to have agreed to the provisions of these Rules, including this Rule 17.

18. Administration of the Plan

18.1. Responsibility for administration

The Board (and the Grantor, where appropriate) shall be responsible for, and shall have the conduct of, the administration of the Plan. The Board may from time to time make, amend or rescind regulations for the administration of the Plan provided that such regulations shall not be inconsistent with the Rules.

18.2. Board’s decision final and binding

The decision of the Board shall be final and binding in all matters relating to the Plan, including but not limited to the resolution of any dispute concerning, or any inconsistency or ambiguity in the Rules or any document used in connection with the Plan.

18.3. Grantor to consult with the Board

Where the Grantor is not the Company and has granted, or proposes to grant, an Award, the Grantor shall consult with, and take into account the wishes of, the Board before making any determination or exercising any power or discretion under the Plan.

18.4. Discretionary nature of Awards

All Awards shall be granted entirely at the discretion of the Grantor.

18.5. Provision of information

An Award Holder and, where the Grantor is not the Company, the Grantor shall provide to the Company or any Group Member as soon as reasonably practicable such information as the Company reasonably requests for the purpose of complying with its obligations under section 421J of ITEPA 2003 or similar requirements of local tax legislation.

18.6. Cost of the Plan

The cost of introducing and administering the Plan shall be met by the Company. The Company shall be entitled, if it wishes, to charge an appropriate part of such cost and/or the costs of an Award to a Subsidiary or the Grantor.

18.7. Data protection

The Company and any Group Member will process an Award Holder’s personal data in accordance with the applicable data privacy policy or policies adopted by the Company and any data privacy notice(s) provided to an Award Holder covering the processing of the Award Holder’s data in connection with the Plan.

18.8. Third party rights

Nothing in these Rules confers any benefit, right or expectation on a person who is not an Award Holder. No such third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any terms of these Rules.

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19. Amendment of the Plan

19.1. Power to amend the Plan

Subject to Rule 19.2, the Board may from time to time amend the Rules (including, for the purposes of establishing a sub-plan for the benefit of employees located overseas).

19.2. Rights of existing Award Holders

An amendment may not materially adversely affect the rights of an existing Award Holder except:

1. where the amendment is made to take account of any matter or circumstance which the Board reasonably considers is a legal or regulatory requirement which the Board reasonably considers is relevant and requires an amendment to be made in order for any Group Member to comply with such requirement; or

2. where the Award Holder affected by the change has been notified of such amendment and the majority of Award Holders affected by the change who have responded to such notification have approved the amendment.

20. Notices

20.1. Notice by the Grantor

Save as provided for by law, any notice, document or other communication given by, or on behalf of, the Grantor or to any person in connection with the Plan shall be deemed to have been duly given if delivered to him at his place of work, if he is in Relevant Employment, if sent by e-mail to such e-mail address as may be specified by him from time to time or, in the case of an Award Holder who remains in Relevant Employment, to such e-mail address as is allocated to him by any Group Member, or sent through the post in a pre-paid envelope to the postal address last known to the Company to be his address and, if so sent, shall be deemed to have been duly given on the date of posting.

20.2. Deceased Award Holders

Save as provided for by law, any notice, document or other communication so sent to an Award Holder shall be deemed to have been duly given notwithstanding that such Award Holder is then deceased (and whether or not the Company has notice of his death) except where his personal representatives have established title to the satisfaction of the Company and supplied to the Company an e-mail or postal address to which notices, documents and other communications are to be sent.

20.3. Notice to the Grantor

Save as provided for by law any notice, document or other communication given to the Grantor (or any relevant person appointed by the Grantor) in connection with the Plan shall be delivered by hand or sent by email, fax or post to the Company Secretary (or any relevant person appointed by the Grantor) at the Company’s registered office (or such other e-mail or postal address as may from time to time be notified to Award Holders) but shall not in any event be duly given unless it is actually received at the registered office or such e-mail or postal address.

21. Governing law and jurisdiction

21.1. Plan governed by English law

The formation, existence, construction, performance, validity and all aspects whatsoever of the Plan, any term of the Plan and any Award granted under it shall be governed by English law.

21.2. English courts to have jurisdiction

The English courts shall have jurisdiction to settle any dispute which may arise out of, or in connection with, the Plan.

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21.3. Jurisdiction agreement for benefit of the Company

The jurisdiction agreement contained in this Rule 21 is made for the benefit of the Company only, which accordingly retains the right to bring proceedings in any other court of competent jurisdiction.

21.4. Award Holder deemed to submit to such jurisdiction

By accepting the grant of an Award, an Award Holder is deemed to have agreed to submit to such jurisdiction.

22. Interpretation

22.1. Definitions

In this Plan, unless the context otherwise requires, the following words and expressions have the following meanings:

Acting In Concert has the meaning given to that expression in The City Code on Takeovers and Mergers in its present form or as amended from time to time;

Award means an Option, a Conditional Share Award or Restricted Shares granted under the Plan;

Award Certificate means a statement in a form, which may include an electronic form, determined by the Company setting out details of an Award which is an Option or a Conditional Share Award determined in accordance with Rule 1.4;

Award Date means the date on which an Award is granted in accordance with Rule 1.3;

Award Holder means an individual who holds an Award or, where the context permits, his legal personal representatives. Where relevant, Award Holder(s) shall include reference to former Award Holder(s);

Award Price means the amount (if any), expressed either as an amount per Plan Share or a total amount, payable in respect of the exercise of an Option 0r Vesting of a Conditional Share Award or for the acquisition of Restricted Shares under a Restricted Share Agreement, determined in accordance with Rule 4;

Board means, subject to Rule 11.7, the board of directors of the Company or a duly authorised committee of it or a person duly authorised by the board of directors of the Company or such committee;

Company means Silence Therapeutics plc incorporated in England and Wales under company number 02992058;

Conditional Share Award means a conditional right under the Plan to acquire Plan Shares;

Confidential Information means all information of a confidential nature, whether provided before or after the date of adoption of the Plan, relating to a Group Member, whether in writing, orally communicated, in electronic format or otherwise, and including any such information obtained through discussions with directors, officers, members of management or employees of a Group Member together with any reports, analyses, compilations, studies, copies, databases or other materials or documents prepared by the party receiving such information to the extent incorporating such information (or any part of such confidential information).

Control has the meaning given to it by section 995 of ITA 2007;

Dealing Day means any day on which the London Stock Exchange is open for the transaction of business;

Dealing Restrictions means any restrictions imposed by legislation, regulation or any other code or guidance on share dealing with which the Company seeks to comply;

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Directors’ Remuneration Policyhas the meaning given to it by section 422A(6) of the Companies Act 2006;

Eligible Employee means an individual who at the Award Date is an employee of a Group Member;

Employees’ Share Scheme has the meaning set out in section 1166 of the Companies Act 2006;

Employer’s NIC means employer’s secondary class 1 National Insurance contributions liability or any local equivalent;

Exercise Period means the period set by the Board on the Award Date during which an Option may be exercised, ending no later than the 10th anniversary of the Award Date;

Financial Conduct Authority means the “competent authority” as that expression is defined in Part VI of the Financial Services and Markets Act 2000;

Gain means the difference between (i) the Market Value of a Plan Share on the date of exercise of an Option and (ii) the Award Price, multiplied by the number of Plan Shares in respect of which the Option is being exercised;

Grantor means:

1. in relation to an Award granted by the Company, the Board;

2. in relation to an Award granted by the Trustees, the Trustees; and

3. in relation to an Award granted by any other person which the Board authorises to grant an Award, that person;

Group means the Company and its Subsidiaries from time to time and Group Member shall be interpreted accordingly;

HMRC means Her Majesty’s Revenue & Customs;

Holding Period means the period (if any) specified under paragraph 9 of Rule 1.4 (commencing from the Vesting Date of the relevant Award) during which the restrictions contained in Rule 9 apply;

ITA 2007 means the Income Tax Act 2007;

ITEPA 2003 means the Income Tax (Earnings and Pensions) Act 2003;

London Stock Exchange means the London Stock Exchange plc or any successor body;

Market Value on any day means:

1. if at the relevant time Plan Shares are listed on the Official List (or on any other recognised stock exchange within the meaning of section 1005 of ITA 2007 or the Alternative Investment Market of the London Stock Exchange), the closing middle market quotation (as derived from the Daily Official List of the London Stock Exchange or the equivalent list or record for the recognised stock exchange on which the Plan Shares are listed) or, if the Board so decides, the closing price on the preceding Dealing Day; or

2. where Plan Shares are not so listed, the market value of a Plan Share calculated as described in the Taxation of Chargeable Gains Act 1992;

New Award means an Award granted on or after 1 October 2019;

New Option means an Option granted on or after 1 October 2019;

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Non-Employee LTIP means the Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan and the US Sub-Plan thereto;

Official List means the list maintained by the Financial Conduct Authority in accordance with section 74(1) of the Financial Services and Markets Act 2000 for the purposes of Part VI of the Act;

Old Award means an Award granted before 1 October 2019;

Old Option means an Option granted before 1 October 2019;

Option means a right to acquire Plan Shares granted under the Plan;

Performance Target means a performance target imposed as a condition of the Vesting of an Award under Rule 5.1 and as substituted or varied in accordance with Rule 5.3;

Plan means the Silence Therapeutics plc 2018 Long Term Incentive Plan as amended from time to time;

Plan Restatement Date means 23 July 2020;

Plan Shares means ordinary shares in the capital of the Company (or any shares representing them);

Regulatory Information Service means a service that is approved by the Financial Conduct Authority on meeting the Primary Information Provider criteria and is on the list of Regulatory Information Services maintained by the Financial Conduct Authority (or any overseas equivalent);

Relevant Employment means employment with any Group Member;

Relevant Award means (i) an Award granted under the Plan, the Schedule, and the US Sub-Plan to the Plan; and/or (ii) an Award granted under the Non-Employee LTIP;

Reorganisation means any variation in the share capital of the Company, including but without limitation a capitalisation issue, rights issue, demerger or other distribution, a special dividend or distribution, rights offer or bonus issue and a sub-division, consolidation or reduction in the capital of the Company;

Restricted Shares means Shares where the Award Holder is the beneficial owner of the Plan Shares from the Award Date subject to the Restricted Share Agreement;

Restricted ShareAgreement means the agreement referred to in Rule 1.12;

Rules mean the rules of the Plan;

Share Reserve has the meaning given to it in Rule 2.1;

Subsidiary has the meaning set out in section 1159 of the Companies Act 2006;

Trustees means the trustees of any trust created by a Group Member which, when taken together with the Plan, constitutes an Employees’ Share Scheme;

Vest means:

1. in relation to an Option, the Award Holder becoming entitled to exercise the Option;

2. in relation to a Conditional Share Award, the Award Holder becoming entitled to have the Plan Shares issued or transferred to him (or to a nominee specified or permitted by the Company); and

3. in relation to Restricted Shares means the restrictions set out in the Restricted Share Agreement ceasing to have effect; and

Vesting Period means the period from the Award Date to the normal date of Vesting.

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22.2. Interpretation

In the Plan, unless otherwise specified:

1. save as provided for by law a reference to writing includes any mode of reproducing words in a legible form and reduced to paper or electronic format or communication including, for the avoidance of doubt, correspondence via e-mail; and

2. the Interpretation Act 1978 applies to the Plan in the same way as it applies to an enactment.

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SCHEDULE

CSOP Options

The purpose of this Schedule is to provide, in accordance with Schedule 4, benefits for employees in the form of CSOP Options. The Board may, when granting an Option to a CSOP Employee, designate it as a CSOP Option. If they do so, the provisions of the Silence Therapeutics plc 2018 Long Term Incentive Plan (the “Plan”) will apply to it, as amended by this Schedule.

1 Definitions

Words used in this Schedule have the same meaning as in the Plan unless amended as stated below:

Award Date has the meaning given in paragraph 3.2 of this Schedule;

Control has the meaning given in s995 Income Tax Act 2007 of the United Kingdom;

CSOP Employee means an employee of a Participating Company but does not include anyone who is:

a) excluded from participation because of paragraph 9 of Schedule 4 (material interests provisions); or

b) a director who is required to work less than 25 hours a week (excluding meal breaks);

CSOP Market Value in relation to a Share on a particular day means:

a) if the Shares are listed on a Recognised Stock Exchange, the closing price of the shares on the immediately preceding day (or if more than one price is shown, the lower price plus one half the difference between the two figures) if the exchange is open on that day, and if the exchange is not open on that day the relevant price for the latest previous day it was open; and

b) if the Shares are not listed on a Recognised Stock Exchange, the market value determined in accordance with the applicable provisions of Part VIII of the Taxation of Chargeable Gains Act 1992 of the United Kingdom, and any relevant published HMRC guidance, on the relevant day,

and any restriction referred to in paragraph 4(c) will be ignored when determining CSOP Market Value;

CSOP Option means an Option to which this Schedule applies;

HMRC means Her Majesty’s Revenue and Customs of the United Kingdom;

ordinary share capital has the meaning given in s989 Income Tax Act of the United Kingdom;

Participating Company means:

a) the Company and any Subsidiary;

b) any jointly-owned company (within the meaning of paragraph 34 of Schedule 4) designated by the Board; and

c) any other entity designated by the Board so long its participation would not prevent the Plan as amended by this Schedule from being a Schedule 4 Plan;

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The Silence Therapeutics plc 2018 Employee Long Term Incentive Plan

Recognised Stock Exchange has the meaning given in s1005 of the Income Tax Act 2007 of the United Kingdom¹;

Schedule 4 means Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003 of the United Kingdom;

Schedule 4 Plan means a plan in relation to which the requirements of Parts 2 to 6 of Schedule 4 are (and are being) met;

Shares means, subject to paragraph 2, ordinary shares in the capital of the Company which satisfy paragraphs 16 to 20 of Schedule 4;

Subsidiary means a company which is a subsidiary of the Company within the meaning of s1159 Companies Act 2006 of the United Kingdom which is under the Control of the Company; and

Takeover Offer means either:

a) a general offer to acquire the whole of the issued ordinary share capital of the Company which is either unconditional or which is made on a condition such that if it is satisfied the person making the offer will have Control of the Company; or

b) a general offer to acquire all the Shares,

and for these purposes the reference to the "whole of the issued ordinary share capital" and "all the Shares" shall not be taken to include any capital or Shares held by the person making the offer or a person connected with that person (within the meaning of s718 Income Tax (Earnings and Pensions) Act 2003 of the United Kingdom), and it does not matter whether the offer is made to different shareholders by different means.

2 Shares

If any Shares which are subject to a CSOP Option cease to satisfy paragraphs 16 to 20 of Schedule 4 and this Schedule is to cease to be a Schedule 4 Plan, or the CSOP Options become exercisable pursuant to paragraph 10.5, the definition of “Shares” above is changed automatically to “ordinary shares in the capital of the Company”.  A CSOP Option may not otherwise be exercised after the Shares to which it is subject cease to satisfy paragraphs 16 to 20 of Schedule 4.

3 Restrictions on terms of CSOP Options

3.1 A CSOP Option may only be granted to an Eligible Employee who is also a CSOP Employee at the Award Date.

3.2 Notwithstanding Rule 1.3 (Procedure for grant of Awards and Award Date)of the Plan, the grant of a CSOP Option shall be effected by the deed referred to in Rule 1.3.  The Award Date of a CSOP Option shall be the date that deed is executed, and not, if different, the date of the resolution referred to in that Rule.

3.3 Rules 8.8 (Net or cash settling) and 8.9 (Dividend equivalents) shall not apply to CSOP Options.

¹     Note: as at the date of adoption, this would not include AIM, but would include any exchange registered with the Securities and Exchange Commission of the United States (SEC) as a national securities exchange under section 6 of the Securities Exchange Act of 1934 (which we understand includes NASDAQ).

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The Silence Therapeutics plc 2018 Employee Long Term Incentive Plan

3.4 If the Award Price of a CSOP Option is funded by the sale of Shares acquired on exercise, the Shares must first be acquired by the Participant, and cannot be sold before the exercise of the Option.

3.5 A CSOP Option cannot be transferred during the Participant’s life, although they may be transmitted to the Participant’s personal representatives on the Participant’s death.

3.6 Any provisions in the Award Certificate for a CSOP Option shall comply with the requirements of Schedule 4.

4 Notificationof terms of CSOP Option

The Company will ensure that the Participant is notified of the following as soon as practicable after grant of a CSOP Option:

(a) the number and description of the Shares subject to the Option;

(b) the Award Price;

(c) whether or not the Shares subject to the Option are subject to any restriction (as defined in paragraph 36(3) of Schedule 4) and, if so, the details of any such restrictions;

(d) the times at which the Option may be exercised (in whole or in part);

(e) the circumstances under which the Option will lapse or be cancelled (in whole or in part), including any conditions to which the exercise of the Option (in whole or in part) is subject; and

(f) any mechanism (including any Performance Measure) by way of which any terms referred to in sub-paragraphs (a) and (c) to (e) above can be changed.

The notification may be given wholly or partly through the Award Certificate relating to the CSOP Option.

5 Award Price

The Award Price of a CSOP Option will not be less than CSOP Market Value of a Share on the date of grant.

6 HMRC limit

The aggregate CSOP Market Value of:

(a) the Shares subject to a CSOP Option; and

(b) the Shares which the Participant may acquire on exercising other CSOP Options; and

(c) the shares which he may acquire on exercising his options under any other Schedule 4 Plan established by the Company or by any of its associated companies (as defined in paragraph 35 of Schedule 4) must not be more than the amount permitted under paragraph 6(1) of Schedule 4 (currently £30,000). For the purposes of this paragraph, CSOP Market Value is calculated as at the date of grant of the relevant option.

7 Adjustment of Options

Adjustments may be made to CSOP Options under Rule 14 (Adjustment of Awards on Reorganisation) only where there is a variation of the share capital of which Shares form part and:

(a) the total Award Price after adjustment must be substantially the same as before adjustment; and

(b) the total CSOP Market Value of the Shares subject to the Option must remain substantially the same; and

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The Silence Therapeutics plc 2018 Employee Long Term Incentive Plan

(c) the Plan (as amended by this Schedule) must continue to be a Schedule 4 Plan.

An annual return relating to the Plan (as amended by this Schedule) submitted to HMRC following any such adjustment must include a declaration that the Plan (as amended by this Schedule) continues to comply with Schedule 4.

8 Material interest

A Participant may not exercise a CSOP Option while he is excluded from participation in a Schedule 4 Plan under paragraph 9 of Schedule 4 (material interest provisions).

9 Exercise – additional provisions

9.1 Save to the extent otherwise prohibited by any other provision of the Plan (as amended by this Schedule), including for the avoidance of doubt Rule 8.4 (Effect of cessation of Relevant Employment), a Participant may exercise a CSOP Option after ceasing to be a CSOP Employee.

9.2 If a Participant dies before the lapse of a CSOP Option, Rule 10.1 (Death) shall apply with the deletion of the wording "or, if later, following Vesting or, in either case, during such other period as the Board determines", and his CSOP Option may be exercised by his personal representatives at any time within 12 months after his death, notwithstanding any earlier lapse in accordance with the rules of the Plan.

10 Corporate events

10.1 Corporate events

The provisions of this paragraph 10 have effect in addition to any provisions in Rule 11 (Takeover and other corporate events). Notwithstanding the foregoing, no such provision provided in Rule 11 shall have effect if it would affect the status of the Plan as amended by this Schedule as a Schedule 4 Plan unless it is determined that the Plan as amended by this Schedule should cease to be a Schedule 4 Plan.

10.2 Takeover Offer

If any person obtains Control of the Company as a result of making a Takeover Offer the Vested proportion of any CSOP Options (whether Vested under Rule 11.1 (Takeover) or otherwise)may, subject to paragraph 10.4, be exercised within one month (or, if the Board determines a longer period not exceeding six months shall apply, that period) after the time when the person making the offer has obtained Control of the Company and any conditions subject to which the Takeover Offer is made have been satisfied.

10.3 Scheme of arrangement

If the court sanctions under s899 Companies Act 2006 a compromise or arrangement applicable to or affecting:

(a) all the ordinary share capital of the Company or all the shares of the same class as the shares to which the CSOP Options relate; or

(b) all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships, or their participation in a Schedule 4 Plan,

the Vested proportion of any CSOP Options (whether Vested under Rule 11.3 (Scheme of arrangement) or otherwise) may, subject to paragraph 10.4, be exercised within one month (or, if the Board determines a longer period not exceeding six months shall apply, that period) after the date of that court sanction.

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10.4 Option exchange

(a) If, as a result of the events specified in paragraph 10.2 or 10.3, a company has obtained Control of the Company, the Participant may, by agreement with that other company (the "Acquiring Company"), within the applicable period provided in paragraph 26(3) of Schedule 3, release each Option (the "Old Option") in consideration of the grant of an Option (the "New Option") which satisfies the conditions set out in paragraph 27 of Schedule 4.

(b) Where, in accordance with this paragraph 10.4, Options are released and New Options granted, the New Options shall not be exercisable in accordance with paragraph 10.2 or 10.3 above by virtue of the event by reason of which the New Options were granted.

(c) Where New Options are, or are to be, offered in exchange for the release of Old Options in accordance with the above provisions of this paragraph 10.4, the Board may determine that the Old Options will not become exercisable or lapse as a result of the relevant event under paragraph 10.2 or 10.3.  In such cases the Old Options will, if the Board so specifies, lapse at the end of the period for acceptance of the offer, provided that Option Holders have a period of at least 14 days in which to accept the offer.

10.5 Shares ceasing to be subject to Schedule 4

If paragraph 10.2 or 10.3 applies and, as a result of the event by virtue of which that paragraph applies, Shares in the Company would no longer meet the requirements of Part 4 of Schedule 4, the Board, acting fairly and reasonably, may decide that the CSOP Options may be exercised under that paragraph only within a 20 day period after the relevant event.

10.6 Lapse following corporate event

Where a CSOP Option becomes exercisable pursuant to this paragraph 10, if it is not exercised by the end of the period specified for exercise it shall then lapse (save where paragraph 9.2 applies).

11 Board’s powers

The Board’s powers under the Plan are further restricted in relation to CSOP Options as described in this paragraph.

11.1 No amendment to the Plan or this Schedule shall apply in relation to CSOP Options if it would result in the Plan as amended by this Schedule ceasing to be a Schedule 4 Plan, unless it is determined that it should so cease.

11.2 This Schedule, and the Plan as amended by this Schedule, shall at all times be interpreted in a manner consistent with Schedule 4 and any other legislative provisions applying to Schedule 4 Plans, save where it is determined that the Plan as amended by this Schedule should cease to be a Schedule 4 Plan.

11.3 Any exercise of discretion in relation to an outstanding CSOP Option must be done in a fair and reasonable manner.

11.4 An annual return submitted to HMRC following any change to a term of a CSOP Option which is necessary to comply with Parts 2 to 6 of Schedule 4 must include a declaration that the Plan continues to comply with Schedule 4 from the date of the change.

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EX-10

EXHIBIT 10.2

	Silence Therapeutics plc The Silence Therapeutics plc  2018 Non-Employee Long Term Incentive Plan
Board adoption: 2nd February 2018 Plan expires: 1st February 2028 Shareholder approval: 23 July 2020

PricewaterhouseCoopers LLP, The Atrium, 1 Harefield Road, Uxbridge, Middlesex,

UB8 1EX T: +44 (0) 1895 522 000, F: +44 (0) 1895 522 020, www.pwc.co.uk PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH.PricewaterhouseCoopers LLP is authorised and regulated by theFinancial Conduct Authority for designated investment business.

The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

Table of contents
1.	Grant of Awards	1
2.	Plan limits	3
3.	Individual limit	3
4.	Award Price	4
5.	Performance Target and conditions	4
6.	Malus	5
7.	Clawback	6
8.	Vesting of Awards (and exercise of Options)	8
9.	Holding Period	11
10.	Vesting of Awards (and exercise of Options) in special circumstances	12
11.	Takeover and other corporate events	14
12.	Exchange of Awards	16
13.	Lapse of Awards	16
14.	Adjustment of Awards on Reorganisation	17
15.	Accounting for Tax Liabilities	17
16.	Rights and listing of Plan Shares	18
17.	Relationship of the Plan to Relevant Contract for Services	18
18.	Administration of the Plan	19
19.	Amendment of the Plan	20
20.	Notices	20
21.	Governing law and jurisdiction	20
22.	Interpretation	21

The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

1. Grant ofAwards

1.1. Awards granted by Grantor

Subject to the terms and conditions set out in this Plan, the Grantor may from time to time grant Awards to Contractors.

1.2. Terms of Awards

Subject to the Rules, the Grantor will in its absolute discretion decide whether or not any Awards are to be granted at any particular time and, if they are, to whom they are granted and the terms of such Awards. Where Awards are not granted by the Board, the terms must be approved in advance by the Board.

1.3. Procedure for grant of Awards and Award Date

An Award shall be granted by the Grantor passing a resolution. The Award Date shall be the date on which the Grantor passes the resolution or any later date specified in the resolution and allowed by Rule 1.5. The grant of an Award shall be evidenced by a deed executed by or on behalf of the person granting the Award.

An Award Certificate or a Restricted Share Agreement (as applicable) shall be issued to each Award Holder as soon as reasonably practicable following the grant of the Award setting out details of the Award determined in accordance with Rule 1.4 and, where applicable, Rule 1.13.

1.4. Terms and conditions set at grant

The Grantor shall, at the time of grant, determine:

1. whether the Award comprises an Option, a Conditional Share Award or Restricted Shares;

2. the Award Date;

3. the number of Plan Shares subject to the Award or the basis on which the number of Plan Shares will be calculated;

4. the Award Price (if any);

5. the date or dates on which the Award will normally Vest;

6. whether or not any dividend equivalents will be payable under Rule 8.9;

7. in the case of an Option, the Exercise Period;

8. any Performance Target;

9. any Holding Period;

10. whether Rule 6 (Malus) and/or Rule 7 (Clawback) shall apply to the Award;

11. any other conditions of the Award; and

12. where the Award comprises Restricted Shares, any provisions which must be determined under Rule 1.13.

1.5. When Awards may be granted

Subject to Rule 1.6, the Grantor may grant Awards at any time after the date of adoption of the Plan.

1.6. When Awards may not be granted

Awards may not be granted:

1. when prevented by any Dealing Restrictions; or

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2. after the 10th anniversary of adoption of the Plan.

1.7. Compliance with securities and other laws

No Awards shall be granted under the Plan unless the granting of such Award is in compliance with all relevant requirements of securities and other laws applicable to that Award. Any purported grant of an Award in breach of this Rule 1.7 shall be of no effect.

1.8. Who can be granted Awards

An Award may only be granted to an person who is a Contractor at the Award Date.

1.9. Confirmation of acceptance of Award

The Grantor may require a Contractor who is (or is to be) granted an Award to confirm his acceptance of the Rules and the terms of any Award granted to him by a specified date. Such confirmation will be in a form set by the Grantor (which may require the Contractor to execute a document). The Grantor may provide that the Award will lapse (and as a result be treated as never having been granted) if the confirmation of acceptance is not provided by the specified date.

1.10. Right to refuse Award

An Award Holder may by notice in writing to the Company within 30 days after the Award Date say he does not want his Award in whole or part. In such a case, the Award shall to that extent be treated as never having been granted.

1.11. No payment for an Award

An Award Holder shall not be required to make payment for the grant of an Award unless the Board determines otherwise. Where an Award Holder refuses his Award pursuant to the terms of Rule 1.10, no payment in connection with the refusal is required from the Award Holder or the Grantor.

1.12. Awards non-transferable

An Award shall be personal to the Award Holder and, except in the case of the death of an Award Holder, an Award shall not be capable of being transferred, charged or otherwise alienated and shall lapse immediately if the Award Holder purports to transfer, charge or otherwise alienate the Award.

1.13. Awards which are Restricted Shares

This Rule 1.13 sets out specific provisions in relation to Restricted Shares.

1. A Contractor who is to be granted Restricted Shares must if required by the Board enter into a Restricted Share Agreement with the Grantor providing that to the extent the Award lapses, the Restricted Shares are forfeit and the Restricted Shares will immediately be transferred for no (or nominal) consideration to any person specified by the Grantor. The Restricted Share Agreement will also provide that, except for transfer on death of the Award Holder to his personal representatives or to the extent agreed by the Grantor (and subject to such conditions as it may decide), the Award Holder will not transfer or assign the Restricted Shares subject to his Award during the Vesting Period.

2. The Award Holder must sign any document (including a blank stock transfer form) requested by the Grantor relating to the Restricted Shares. The Grantor may provide that the Award will lapse if any such document is not signed within any specified period.

3. On or as soon as practicable after the Award Date of Restricted Shares the Grantor will procure that the relevant number of Restricted Shares are transferred (including out of treasury or otherwise) to the Award Holder or another person to be held for the benefit of the Award Holder.

4. Except to the extent set out in the Restricted Share Agreement, the Award Holder shall have all the rights in respect of Restricted Shares from the date of transfer until any date on which the Award comprising the Restricted Shares lapses (whether in whole or in part).

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2. Plan limits

2.1. Share Reserve

Subject to the terms of this Rule 2, Awards may be made under the Plan and the Employee LTIP (taking account of Relevant Awards outstanding as at the Plan Restatement Date, but excluding any Relevant Awards that have been settled by the issuance of Plan Shares prior to the Plan Restatement Date) in an aggregate amount up to 8,700,000 Plan Shares (the Share Reserve). For the avoidance of doubt, the Plan and the Employee LTIP shall be treated as a single equity award grant program for purposes of the Share Reserve, such that a grant under either the Plan or the Employee LTIP shall be made from this single Share Reserve.

In addition, the Share Reserve will automatically increase on January 1st each year from 2021 and ending on (and including) January 1, 2028, in an amount equal to 5% of the total number of ordinary shares outstanding on December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of Plan Shares than would otherwise occur pursuant to the preceding sentence.

Any increase to the Share Reserve (other than as set forth in the immediately preceding paragraph) must be approved by the passing of an ordinary resolution of the Company in general meeting, if required by applicable law.

2.2. Plan Share Recycling

If all or any part of a Relevant Award (whether granted before, on, or after the Plan Restatement Date) expires, lapses or is terminated, exchanged for cash, surrendered, repurchased or cancelled without having been fully exercised, in each case after the Plan Restatement Date, the unused Plan Shares covered by such Relevant Award will return to the Share Reserve and again be available for Awards. The following actions do not result in an issuance of Plan Shares and accordingly do not reduce the number of Plan Shares subject to the Share Reserve and available for issuance under the Plan: (i) the withholding of Plan Shares that would otherwise be issued to satisfy the exercise, strike or purchase price of an Award; or (ii) the withholding of shares that would otherwise be issued to satisfy a tax withholding obligation in connection with an Award.

2.3. Adjustment

The Share Reserve shall be subject to such adjustment as the Board may determine to be appropriate upon any Reorganisation.

2.4. Scaling down

If the granting of an Award would cause the limits in this Rule 2 to be exceeded, such Award shall take effect as an Award over the maximum number of Plan Shares which does not cause the limit to be exceeded. If more than one Award is granted on the same Award Date, the number of Plan Shares which would otherwise be subject to each Award shall be reduced pro rata.

3. Individual limit

3.1. General

The terms of Awards which may be made to any one Contractor shall be limited as set out in this Rule 3.

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3.2. Limit

A New Award must not be granted to a Contractor if the result of granting the New Award would be that, at the proposed Award Date, the Market Value of the Plan Shares subject to that Award, when aggregated with the Market Value of the Plan Shares subject to any other New Award granted to him, that Time Vest in each Time Vesting Year in relation to the proposed New Award, would exceed 250% of his Annual Fees under the Relevant Contract for Services, subject to the Board determining that exceptional circumstances exist which justify the grant of an Award in excess of such limit in which case the limit shall be extended to not more than 300% of the relevant Contractor’s Annual Fees under the Relevant Contract for Services.

For the purpose of this Rule 3.2:

1. Annual Fees means the higher of:

a. fees paid by the Group expressed as an annual rate as at the Award Date; and

b. fees paid by the Group for the period of 12 months ending on the last day of the month immediately preceding the month in which the Award Date occurs.

2. The Market Value of Plan Shares subject to an Award shall be measured on the date on which that Award was granted.

3. Time Vest in relation to Plan Shares subject to a New Award means that those Plan Shares reach the date on which they normally Vest (disregarding any Performance Target).

4. Time Vesting Year in relation to a New Award means each calendar year ending on each anniversary of the Award Date of the New Award.

5. To the extent that a New Award is granted on terms that it is Time Vested on the Award Date, that New Award shall be deemed to Time Vest in the first Time Vesting Year in relation to that New Award.

6. To the extent a New Award has become incapable of exercise for any reason in relation to Plan Shares subject to it, those Plan Shares shall not subsequently Time Vest (and accordingly shall no longer be taken into account for the purposes of this Rule 3.2 in connection with further New Awards proposed to be granted to the relevant Contractor).

3.3. Scaling down

If the grant of an Award would cause the limit in Rule 3.2 to be exceeded, such Award shall take effect as an Award over the maximum number of Plan Shares which does not cause the limit to be exceeded.

4. Award Price

The Award Price (if any) shall be determined by the Grantor and may be any price.

Where the Grantor has determined that an Award will be satisfied by the issue of new shares and the Award Price per Plan Share is less than the nominal value of a Plan Share, the Company will ensure that at the time of the issue of the Plan Shares arrangements are in place to pay up at least the nominal value of the relevant Plan Shares.

5. Performance Target and conditions

5.1. Setting of Performance Target and conditions

The Vesting of an Award and the extent to which it Vests will be subject to the satisfaction of any applicable Performance Target and any other conditions set by the Grantor on or before the Award Date.

5.2. Nature of Performance Target and conditions

Any Performance Target and any other conditions imposed under Rule 5.1 shall be:

1. objective; and

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The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

2. set out in, or attached in the form of a schedule to, the Award Certificate or Restricted Share Agreement, (as applicable).

5.3. Substitution, variation or waiver of Performance Target and conditions

If an event occurs which causes the Grantor to consider that any Performance Target and/or any other conditions imposed under Rule 5.1 subject to which an Award has been granted is no longer appropriate, the Grantor may substitute, vary or waive that Performance Target and/or any other conditions in such manner (and make such consequential amendments to the Rules) as:

1. is reasonable in the circumstances; and

2. except in the case of waiver, produces a fairer measure of performance and is not materially less difficult to satisfy than if the event had not occurred.

The Award shall then take effect subject to the Performance Target and any other conditions as substituted, varied or waived.

5.4. Notification of Award Holders

The Grantor shall, as soon as practicable, notify each Award Holder concerned of any determination made by it under this Rule 5.

6. Malus

Notwithstanding any other provision of the Rules, the Board may, at (or at any time before) the Vesting of an Award to which the Grantor has specified under Rule 1.4 that this Rule 6 applies, reduce the number of Plan Shares subject to an Award in whole or in part (including, for the avoidance of doubt, to nil) in the following circumstances:

1. discovery of a material misstatement resulting in an adjustment in the audited consolidated accounts of the Company or the audited accounts of any Group Member; and/or

2. the assessment of any Performance Target or condition in respect of an Award was based on error, or inaccurate or misleading information; and/or

3. the discovery that any information used to determine the number of Plan Shares subject to an Award was based on error, or inaccurate or misleading information; and/or

4. action or conduct of an Award Holder which, in the reasonable opinion of the Board, amounts to negligence, fraud or serious misconduct and results or is reasonably likely to result in:

a. the censure of a Group Member by a regulatory authority; or

b. have had a significant detrimental impact on the reputation of any Group Member provided that the Board is satisfied that the relevant Award Holder was responsible for the censure or reputational damage and that the censure or reputational damage is attributable to him; or

c. a material adverse effect on the financial position of the Company, any Group Member or to a relevant business unit (as appropriate); or

d. a material adverse effect on the business opportunities and prospects for sustained performance or profitability of the Company, any Group Member or relevant business unit (as appropriate);

and/or

5. if the Award Holder (except in the proper course of his duties) uses or discloses to any third party (or permits or acquiesces to the publication or disclosure of) any Confidential Information, unless: such use or disclosure is authorised by the Company or compelled by law; or the information is already in, or comes into, the publication domain or otherwise than through the Award Holder unauthorised disclosure.

In determining any reduction which should be applied under this Rule 6, the Board shall act fairly and reasonably but its decision shall be final and binding.

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The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

For the avoidance of doubt, any reduction under this Rule 6 may be applied on an individual basis as determined by the Board. Whenever a reduction is made under this Rule 6, the relevant Award shall be treated as having lapsedto that extent.

7. Clawback

7.1. Trigger Events

In this Rule 7, Trigger Events means:

1. discovery of a material misstatement resulting in an adjustment in the audited consolidated accounts of the Company or the audited accounts of any Group Member for a period that was wholly or partly before the end of the period over which the Performance Target applicable to an Award was assessed; and/or

2. the discovery that the assessment of any Performance Target or condition in respect of an Award was based on error, or inaccurate or misleading information; and/or

3. the discovery that any information used to determine the number of Plan Shares subject to an Award was based on error, or inaccurate or misleading information; and/or

4. action or conduct of an Award Holder which, in the reasonable opinion of the Board, amounts to negligence, fraud or serious misconduct and results or is reasonably likely to result in:

a. the censure of a Group Member by a regulatory authority; or

b. have had a significant detrimental impact on the reputation of any Group Member provided that the Board is satisfied that the relevant Award Holder was responsible for the censure or reputational damage and that the censure or reputational damage is attributable to him; or

c. a material adverse effect on the financial position of the Company, any Group Member or to a relevant business unit (as appropriate); or

d. a material adverse effect on the business opportunities and prospects for sustained performance or profitability of the Company, any Group Member or relevant business unit (as appropriate);

and/or

5. if the Award Holder (except in the proper course of his duties) uses or discloses to any third party (or permits or acquiesces to the publication or disclosure of) any Confidential Information, unless: such use or disclosure is authorised by the Company or compelled by law; or the information is already in, or comes into, the publication domain or otherwise than through the Award Holder’s unauthorised disclosure.

7.2. Application

Notwithstanding any other provision of the Rules, if at any time during the period of two years (or such longer period as the Board considers is appropriate and has been notified to the Award Holder) following the Vesting of an Award to which the Board has specified under Rule 1.4 that this Rule 7 applies a Trigger Event occurs, then:

1. Rules 7.3 to 7.7 and 7.9 shall apply; and

2. where the Award takes the form of an Option and the Award Holder has not exercised such Option, Rule 7.8 shall also apply.

7.3. Clawback methods

Where Rule 7.2 applies, the Board may in its absolute discretion require the relevant Award Holder to:

1. transfer to the Company (or, if required by the Company, any other person specified by the Company) all or some of the Plan Shares acquired by the Award Holder (or his nominee) pursuant to the Vesting of the Award or, in the case of an Award which is an Option, the exercise of that Option; and/or

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2. pay to the Company (or if required by the Company, any other person specified by the Company) an amount equivalent to all or part of the proceeds of sale or, in the event of a disposal of the Plan Shares at a price which the Board reasonably determines was less than market value at the time of disposal and where the disposal was not made at arm’s length, an amount equivalent to the market value (as reasonably determined by the Board) at the time of disposal of all or some of the Plan Shares acquired pursuant to the Vesting of the Award or, in the case of an Award that is an Option, the exercise of that Option; and/or

3. pay to the Company (or, if required by the Company, any other person specified by the Company) an amount equivalent to all or part of the amount of any cash in respect of an Award paid to or for the benefit of the Award Holder; and/or

4. pay to the Company (or, if required by the Company, any other person specified by the Company) an amount equivalent to all or part of any benefit or value derived from or attributable to the Plan Shares referred to in paragraph 1 above (including but not limited to any special dividend or additional or replacement shares) on such terms as the Board may reasonably direct,

less in each case any amount of relevant tax and social security contributions actually paid (or due to be paid) by the Award Holder in respect of the acquisition of the Plan Shares and/or payment of cash in respect of an Award.

7.4. Award Holder’s obligation to recover tax

In addition to the obligation of the Award Holder as described above, the Award Holder shall use his best endeavours to seek and obtain repayment or credit from HMRC or any relevant overseas tax authority of any tax and social security contributions paid on the Award Holder’s behalf in relation to the Award as soon as reasonably practicable and to notify the Company of such claim and/or receipt of any credit or payment by HMRC (or any relevant overseas tax authority) in this regard. Following such notification the Company will be entitled to require the Award Holder to make a payment to it within 30 days of an amount equivalent to the amount of any payment or credit received from HMRC (or any relevant overseas tax authority).

7.5. Authorisation of deductions

By accepting the grant of an Award, the Award Holder authorises the Company or such other Group Member  to make deductions from any payment owing to him in respect of any sum which would otherwise be payable by the Award Holder under this Rule 7.

7.6. Timing of transfers, payments and repayments

Any transfers, payments or repayments to be made by the Award Holder under this Rule 7 shall be made within 30 days of the date the Award Holder is notified in writing of the transfer required or the amount due, as appropriate.

7.7. Additional methods of effecting clawback

In addition to or in substitution for the actions described above that the Board may take under Rule 7.3 (the Actions), the Board may:

1. reduce the amount (including, for the avoidance of doubt, to nil) of any future amounts for services payable to the Award Holder; and/or

2. determine that the number of Plan Shares over which an award or right to acquire Plan Shares that may otherwise be granted to the Award Holder by any Group Member shall be reduced by such number as the Board may determine (including for the avoidance of doubt to nil); and/or

3. reduce the number of Plan Shares (including, for the avoidance of doubt, to nil) subject to any award or right to acquire Plan Shares which has been granted to the Award Holder by any Group Member before the date on which the relevant award or right vests or becomes exercisable by such number as the Board may determine; and/or

4. reduce the number of Plan Shares (including, for the avoidance of doubt, to nil) subject to any option to acquire Plan Shares which has been granted to the Award Holder by any Group Member which has vested but not yet been exercised by such number as the Board may determine,

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provided that the total amount represented by:

5. reductions under this Rule 7.7;

6. reductions under Rule 7.8; and

7. the amount represented by any transfer and any amount or value payable under Rule 7.3,

shall not, in the Board’s reasonable opinion, exceed the amount represented by any transfer and any amount or value which would have been due if the Board had only carried out the Actions.

7.8. Reduction of unexercised Option

Where Rule 7.2 applies and the Award takes the form of an Option which the Award Holder has not exercised in full, the Board may in its absolute discretion reduce the number of Plan Shares subject to such Option (including, for the avoidance of doubt, to nil). In addition to or in substitution for reducing such Option, the Board may take any of the actions set out in Rules 7.7.1 to 7.7.4 provided that the total amount represented by reductions under Rules 7.7.1 to 7.7.4 and any reduction of the Option under this Rule 7.8 shall not, in the Board’s reasonable opinion, exceed the amount which would have been represented by the reduction of the Option only.

7.9. General provisions

In carrying out any action under this Rule 7, the Board shall act fairly and reasonably but its decision shall be final and binding.

For the avoidance of doubt, any action carried out under this Rule 7 may be applied on an individual basis as determined by the Board. Whenever a reduction of an award, right to acquire Plan Shares or option is made under this Rule 7, the relevant award, right to acquire Plan Shares or option shall be treated to that extent as having lapsed.

7.10. Interaction with other plans

The Board may determine at any time to reduce the number of Plan Shares subject to an Award (including, for the avoidance of doubt, to nil) either:

1. to give effect to one or more provisions of any form which are equivalent to those in Rule 7 (Clawback Provisions) contained in any other share scheme operated by any Group Member (other than the Plan) or any bonus plan operated by any Group Member; or

2. as an alternative to giving effect to any such Clawback Provisions.  

The value of any reduction under Rule 7.10.1 shall be determined in accordance with the terms of the relevant Clawback Provisions in the relevant share scheme or bonus plan as interpreted by the Board in its absolute discretion.

The value of any reduction under Rule 7.10.2 shall be determined as if the terms of the relevant Clawback Provisions in the relevant share scheme or bonus plan applied as interpreted by the Board in its absolute discretion.

8. Vesting of Awards (and exercise of Options)

8.1. Earliest date for Vesting of Awards

Subject to Rules 5, 10 and 11, an Award will Vest on the later of:

1. the relevant date specified under Rule 1.4.5; and

2. the date on which the Board determines that the Performance Target and/or any other conditions imposed under Rule 1.4.11 or Rule 5.1 have been satisfied.

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The Grantor may determine that Vesting of the Award shall be delayed until any relevant investigation or other procedure relevant to an event falling within the scope of Rule 6 or Rule 7.10  has been completed.

8.2. Effect of Award Vesting

Subject to the Rules, the effect of an Award Vesting shall be:

1. in the case of an Option, that the Award Holder is entitled to exercise the Option at any time during the Exercise Period to the extent that it has Vested;

2. in the case of a Conditional Share Award, that the Award Holder shall become entitled to the Plan Shares to the extent that the Award has Vested; and

3. in the case of Restricted Shares, the restrictions set out in the relevant Restricted Share Agreement shall cease to apply to the extent that the Award has Vested.

8.3. No Vesting or exercise while Dealing Restrictions apply

Where the Vesting of an Award is prevented by any Dealing Restriction, the Vesting of that Award shall be delayed until the Dealing Restriction no longer prevents it. Plan Shares may not be issued or transferred to an Award Holder while Dealing Restrictions prevent such issue or transfer.  In the case of an Option, the Option may not be exercised while Dealing Restrictions prevent such exercise.

8.4. Effect of cessation of Relevant Contract for Services

1. Subject to Rule 10, an Old Award shall Vest and an Option may be exercised only while the Award Holder is a Contractor with a Relevant Contract for Services. If an Award Holder ceases to have a Relevant Contract for Services, any Award granted to him shall lapse on such cessation.

2. An Award Holder who has given or received notice of termination of the Relevant Contract for Services (whether or not lawful) may not exercise an Old Option during any period when the notice is effective and an Old Award granted to him shall not Vest during this period, unless the Board determines otherwise. If an Old Award would otherwise have Vested during this period, and the notice is withdrawn by the relevant party, subject to the Rules the Old Award will Vest when the notice is withdrawn.

3. A New Award shall only Vest while the Award Holder is a Contractor with a Relevant Contract for Services and if an Award Holder ceases to be a Contractor with a Relevant Contract for Services, any part of a New Award granted to him that has not Vested at the date of cessation shall lapse on cessation.

4. Where an Award Holder ceases to be a Contractor with a Relevant Contract for Services for any of the reasons set out in Rule 10.2.1 or 10.2.2 or because of termination by a Group Member of his Relevant Contract for Services (other than for material breach on the part of the Award Holder) or death (each a Good Leaver Reason), he (or, following his death, his personal representatives, having established title to the satisfaction of the Company) shall be entitled to exercise any part of a New Option that has Vested at the date of cessation for the period of one year following that cessation (or such longer or shorter period, not less than 90 days, that the Board may determine).  To the extent not exercised at the end of that period the New Option shall lapse.  Where an Award Holder ceases to be a Contractor with a Relevant Service Contract for any reason other than a Good Leaver Reason any part of a New Option that has not been exercised shall lapse on the date of cessation.

5. This Rule 8.4 shall apply where the Award Holder ceases to be a Contractor in any circumstances (including, in particular, but not by way of limitation, where the Relevant Contract for Services is terminated, in breach of contract or otherwise).

8.5. Options may be exercised in whole or in part

Subject to Rules 8.3, 8.4 and 15, a Vested Option may be exercised in whole or in part at any time. If exercised in part, the unexercised part of the Option shall not lapse as a result and shall remain exercisable until such time as it lapses in accordance with the Rules.

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8.6. Procedure for exercise of Options

An Option shall be exercised by the Award Holder giving notice to the Grantor (or any person appointed by the Grantor) in the form from time to time prescribed by the Board, which may include (for the avoidance of doubt) any electronic and/or online notification.  Such notice shall specify the number of Plan Shares in respect of which the Option is being exercised, and be accompanied by either the Award Price (if any) in full or confirmation of arrangements satisfactory to the Grantor for the payment of the Award Price, together with any payment and/or documentation required under Rule 15 and, if required, the Award Certificate.

For the avoidance of doubt, the date of exercise of an Option shall be the later of the date of receipt of a duly completed valid notice of exercise (or any later date as may be specified in that notice of exercise) and the date of compliance with the requirements of the first paragraph of this Rule 8.6.

8.7. Issue or transfer of Plan Shares

Subject to Rules 8.3, 8.8 and 15 and to any necessary consents and to compliance by the Award Holder with the Rules, the Grantor shall as soon as reasonably practicable and in any event not later than 30 days after:

1. the exercise date, in the case of an Option, arrange for the issue or transfer to the Award Holder (or a nominee specified or permitted by the Company) of the number of Plan Shares specified in the notice of exercise and provide to the Award Holder, in the case of the partial exercise of an Option, an Award Certificate in respect of, or the original Award Certificate updated to show, the unexercised part of the Option; and

2. the Vesting of an Award, in the case of a Conditional Share Award, arrange for the issue or transfer to the Award Holder (or a nominee specified or permitted by the Company) of the number of Plan Shares in respect of which the Award has Vested.

8.8. Net or cash settling

Subject to Rule 15, the Grantor may on exercise of an Option:

1. make a cash payment to the Award Holder equal to the Gain on the date of exercise of the Option; or

2. arrange for the issue or transfer to the Award Holder of Plan Shares with a Market Value equal to the Gain on the date of exercise of the Option (rounded down to the nearest whole Plan Share). The Award Holder shall not be required to make payment for these Plan Shares.

Subject to Rule 15, the Grantor may on the Vesting of a Conditional Share Award make a cash payment to the Award Holder equal to the Market Value of the Plan Shares in respect of which the Conditional Share Award has Vested, less the Award Price (if any).

Where the Company settles an Award in the manner described in this Rule 8.8, this shall be in full and final satisfaction of the Award Holder’s rights under the Award.

8.9. Dividend equivalents

An Award (except an Award comprising Restricted Shares where the right to dividends has not been waived) may include the right to receive an amount in Plan Shares or cash on or following Vesting equal in value to the dividends which were payable on the number of Plan Shares in respect of which the Award has Vested during the period between the Award Date and the date of Vesting (or in the case of an Option the number of Plan Shares subject to the Option shall be increased as at the date of Vesting by the relevant value in Plan Shares).

The Grantor may determine at its absolute discretion whether or not the method used to calculate the value of dividends shall assume that such dividends have been reinvested into Plan Shares.

The Grantor may decide at any time not to apply this Rule 8.9 to all or any part of a special dividend or dividend in specie.

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8.10. US Taxpayers

This Rule 8.10 shall apply to US Taxpayers to the extent necessary to avoid taxation under Section 409A of the US Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder. Notwithstanding anything to the contrary contained in the Plan, no Option may be exercised later than 2.5 calendar months after the end of the Taxable Year in which the Option first becomes exercisable, provided that the Option shall lapse on the date it would have lapsed had this rule not applied. The Rules shall be interpreted accordingly.

For the purposes of this Rule 8.10, Taxable Year means the 12 month period in respect of which the Award Holder is obliged to pay US Tax or, if it would result in a longer exercise period, the 12 month period in respect of which the Award Holder’s engaging company is obliged to pay tax. US Taxpayer means a person who is subject to taxation under the tax rules of the United States of America.

9. Holding Period

9.1. Definitions

In this Rule 9:

Holding Period Holder means a trustee or nominee designated by the Grantor in accordance with this Rule 9; and

Holding Period Shares means Plan Shares which are or were the subject of an Award to which a Holding Period applies and in respect of which the Holding Period has not ended in accordance with this Rule 9.

9.2. Application

This Rule 9 applies to the extent that some or all of the Plan Shares acquired on Vesting of an Award (or exercise of an Option) are subject to a Holding Period.

9.3. Issue or transfer to Holding Period Holder

Instead of arranging for the issue or transfer of the Holding Period Shares to the Award Holder on Vesting of a Conditional Share Award or exercise of an Option under Rule 8.7, the Board may arrange for the Holding Period Shares to be issued or transferred to the Holding Period Holder, as designated by the Board, to be held for the benefit of the Award Holder. Any balance of the Plan Shares in respect of which an Award Vests or is exercised will be issued or transferred as described in Rule 8.7.

If the Award took the form of Restricted Shares, the Holding Period Shares will be transferred to (or continue to be held by) the Holding Period Holder on the terms of this Rule 9.

9.4. No transfer during Holding Period

The Award Holder or Holding Period Holder may not transfer, assign or otherwise dispose of any of the Holding Period Shares or any interest in them (and the Award Holder may not instruct the Holding Period Holder to do so) during the Holding Period except in the following circumstances:

1. the sale of sufficient entitlements nil-paid in relation to  Holding Period Shares to take up the balance of the entitlements under a rights issue; and

2. the sale of sufficient Holding Period Shares to satisfy any liability to tax or employee social security contributions (or where Rule 15.2 applies, Employer’s NIC) arising in relation to Holding Period Shares.

9.5. Shareholder rights during Holding Period

1. Unless the Board decides otherwise, the restrictions in this Rule 9 will apply to any cash or assets (other than ordinary dividends) received in respect of the Holding Period Shares and such cash or assets will be held by the Holding Period Holder until the end of the Holding Period.

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2. During the Holding Period, the Holding Period Holder will be entitled to vote and have all other rights of a shareholder in respect of the Holding PeriodShares.

9.6. Cessation of Relevant Contract for Services during the Holding Period

Ceasing to have a Relevant Contract for Services during the Holding Period will have no impact on the provisions of this Rule 9, unless the Board decides otherwise, save where cessation is by reason of death in which case the Holding Period shall immediately be deemed to have ended.

9.7. Clawback

For the avoidance of doubt, Rule 7 shall apply to the Holding Period Shares in the same way that it applies to any Plan Shares acquired by an Award Holder following Vesting of an Award or exercise of an Option which are not Holding Period Shares.

9.8. End of Holding Period

Subject to the provisions of this Rule 9, the Holding Period will end on the earliest of the following:

1. the date set as the end of the Holding Period under Rule 1.4;

2. subject to Rule 12.1, the relevant date on which an Award would have Vested under Rules 11.1 to 11.4;

3. if the Board so allows, the circumstances in which any event described in Rule 11.5 would apply; and

4. any other circumstances in the absolute discretion of the Board. Where this paragraph 4 applies, the Board may additionally determine that the Holding Period shall end only for such number of Holding Period Shares as it may specify.

10. Vesting of Awards (and exercise of Options) in special circumstances

10.1. Death: Old Awards

If an Award Holder dies, a proportion of each Old Award held by him which has not Vested will Vest immediately. The proportion of each Old Award which shall Vest shall be determined by the Board at its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the satisfaction of any Performance Target as at the date of death and any other conditions imposed under Rule 5.1.

Alternatively, the Board may decide that an Old Award held by the Award Holder which has not yet Vested will continue until the normal time of Vesting in which case any Performance Target and/or any other conditions imposed under Rule 5.1 shall be considered at the time of Vesting.

In the case of an Old Option, if an Award Holder dies, his personal representatives (having established title to the satisfaction of the Company) shall be entitled to exercise the Vested proportion of his Option (whether Vested under this Rule or otherwise) at any time during the 12 month period following death, or, if later, following Vesting or, in either case, during such other period as the Board determines. The Option shall lapse at the end of such period.

10.2. Power to declare Awards Vested on ceasing to have a Relevant Contract for Services: Old Awards

If an Award Holder ceases to have a Relevant Contract for Services by reason of:

1. injury, ill-health or disability evidenced to the satisfaction of the Board;

2. any other circumstances if the Board decides in any particular case

any Old Award held by him which has not Vested will continue until the normal time of Vesting and the Performance Target and/or any other conditions imposed under Rule 5.1 shall be considered at the time of Vesting.

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Alternatively, the Board may decide that anOld Award will Vest immediately in which case the proportion of the Award which shall Vest will be determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the satisfaction of any Performance Target as at the time of cessation and any other conditions imposed under Rule 5.1.

In the case of an Old Option, the Award Holder shall be entitled to exercise the Vested proportion of his Option (whether Vested under this Rule or otherwise) at any time during the period ending 90 days following cessation of the Relevant Contract for Services or, if later, following Vesting or, in either case, during such other period as the Board determines. The Option shall lapse at the end of such period.

10.3. Award Holder relocated abroad

If it is proposed that an Award Holder, while continuing to be have a Relevant Contract for Services, should relocate to a country other than the country in which he currently resides and, by reason of the change, the Award Holder would:

1. suffer less favourable tax treatment in respect of his Award; or

2. become subject to a restriction on his ability to exercise an Option, to have issued or transferred to him the Plan Shares subject to an Award or to hold or deal in such Plan Shares or the proceeds of sale of such Plan Shares,

an Award may, at the absolute discretion of the Board, Vest immediately either in full or to the extent determined by the Board in its absolute discretion and subject to such conditions as it may require taking into account such factors as the Board may consider relevant including, but not limited to, the period of time the relevant Award has been held and the extent to which any Performance Target and any other conditions imposed under Rule 5.1 have been met. Where the Award is an Option and has become Vested pursuant to this Rule 10.3, the Award Holder may exercise his Vested Option at any time during the period beginning 3 months before the proposed date of his transfer and ending 3 months after the date of his actual transfer. If not so exercised, the Option shall not lapse but shall cease to be treated as having Vested and shall continue in force in accordance with the Rules.

10.4. Meaning of ceasing to be have a Relevant Contract for Services

For the purposes of the Plan, an Award Holder shall not be treated as ceasing to have a Relevant Contract for Services until he no longer holds any Relevant Contract for Services with any Group Member. In addition, unless the Board otherwise decides an Award Holder shall not be treated as so ceasing if within 7 days he is reengaged or commences employment or becomes an office holder with any Group Member.

The Board may determine that an Award Holder will be treated as ceasing to have a Relevant Contract for Services when he gives or receives notice of termination (whether or not lawful).

10.5. Interaction of Rules

In the case of an Option:

1. if the Option has become exercisable under Rule 10.2 and, during the period allowed for the exercise of the Option under Rule 10.2 the Award Holder dies, the period allowed for the exercise of the Option shall be the period allowed by Rule 10.1; and

2. if the Option has become exercisable under Rule 8.4.4 or Rule 10 and, during the period allowed for the exercise of the Option under the relevant Rule, the Option becomes exercisable under Rule 11 also (or vice versa), the period allowed for the exercise of the Option shall end on the earlier of the end of the period allowed by Rule 8.4.4 or Rule 10 (as applicable) and the end of the period allowed by Rule 11.

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11. Takeover and other corporate events

11.1. Takeover

Subject to Rule 12, where a person obtains Control of the Company as a result of making an offer to acquire Plan Shares, Awards shall Vest on the date the person obtains Control as set out below. Should a person (either alone or together with any person acting in concert with him) already have Control of the Company and makes an offer to acquire all of the ordinary shares in the capital of the company (or any shares representing them), other than those which are already owned by him, and such offer becomes wholly unconditional, Awards shall Vest on the date the offer becomes unconditional also as set out below.

The proportion of an Award which shall Vest will be determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the time the Award has been held by the Award Holder and having regard to any Performance Target and/or any other conditions imposed under Rule 5.1. The proportion of an Award that the Board determines shall not Vest will lapse immediately except in the circumstances set out below.

In the case of an Option, the Vested proportion of the Option (whether Vested under this Rule 11.1 or otherwise) may be exercised at any time during the period of one month (or, if the Board determines a longer period shall apply, that period) beginning with the time when the person making the offer has obtained Control, or if the person already has Control, at the time when the offer to acquire all of the ordinary shares in the capital of the company (or any shares representing them) becomes wholly unconditional. The Option shall lapse at the end of such period unless the Board determines that a longer period for exercise shall apply, in which case the Option shall continue in force until the end of such extended period or until it otherwise lapses in accordance with the Rules.

If the extent of Vesting of an Award which Vests under this Rule 11.1 has been reduced by the Board to reflect the period of time that the Award has been held by the Award Holder, the Board may determine that Rule 12 shall apply to the proportion of the Award reflecting such reduction which has not Vested.

11.2. Compulsory acquisition of shares in the Company

Subject to Rule 12, if a person becomes entitled or bound to acquire shares in the Company under sections 979 to 982 of the Companies Act 2006, Awards shall Vest as set out below.

The proportion of an Award which shall Vest will be determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the time the Award has been held by the Award Holder and having regard to any Performance Target and/or any other conditions imposed under Rule 5.1.

In the case of an Option, the Vested proportion of the Option (whether Vested under this Rule 11.2 or otherwise) may be exercised at any time during the period beginning with the date the person serves a notice under section 979 and ending 7 clear days before the date on which the person ceases to be entitled to serve such a notice. The Option shall lapse at the end of the 7 days.

If the extent of Vesting of an Award which Vests under this Rule 11.2 has been reduced by the Board to reflect the period of time that the Award has been held by the Award Holder, the Board may determine that Rule 12 shall apply to the proportion of the Award reflecting such reduction which has not Vested.

11.3. Scheme of arrangement

Subject to Rule 12, if a person proposes to obtain Control of the Company in pursuance of a compromise or arrangement sanctioned by the court under section 899 of the Companies Act 2006 Awards shall Vest on the date of the court sanction as set out below.

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The proportion of an Award which shall Vest will be determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the time the Award has been held by the Award Holder and having regard to any Performance Target and/or any other conditions imposed under Rule 5.1.

In the case of an Option, the Vested proportion of the Option (whether Vested under this Rule 11.3 or otherwise) may be exercised at any time during the period of one month (or, if the Board determines a longer period shall apply, that period) from the compromise or arrangement being sanctioned by the court. The Option shall lapse at the end of such period.

If the extent of Vesting of an Award which Vests under this Rule 11.3 has been reduced by the Board to reflect the period of time that the Award has been held by the Award Holder, the Board may determine that Rule 12 shall apply to the proportion of the Award reflecting such reduction which has not Vested.

11.4. Winding-up of the Company

If notice is given of a resolution for the voluntary winding-up of the Company, Awards shall Vest on the date notice is given.

The proportion of an Award which shall Vest will be determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the time the Award has been held by the Award Holder and having regard to any Performance Target and/or any other conditions imposed under Rule 5.1.

In the case of an Option, the Vested proportion of the Option (whether Vested under this Rule 11.4 or otherwise) may be exercised at any time during the period of 6 months from the date of the notice or, if earlier, on completion of the winding up. The Option shall lapse at the end of such period.

11.5. Demergers and other events

The Board may determine that Awards Vest if it becomes aware that the Company will be affected by a demerger, distribution (which is not an ordinary dividend) or other transaction not otherwise covered by the Rules.

The proportion of an Award which shall Vest will be determined by the Board in its absolute discretion subject to such conditions as it may require taking into account such factors as the Board may consider relevant including, but not limited to, the time the Award has been held by the Award Holder and having regard to any Performance Target and/or any other conditions imposed under Rule 5.1.

In the case of an Option, the Vested proportion of the Option (whether Vested under this Rule 11.5 or otherwise) may be exercised at any time during a period as shall be determined by the Board. The Option shall lapse at the end of such period.

If the extent of Vesting of an Award which Vests under this Rule 11.5 has been reduced by the Board to reflect the period of time that the Award has been held by the Award Holder, the Board may determine that Rule 12 shall apply to the proportion of the Award reflecting such reduction which has not Vested.

11.6. Meaning of “obtains Control of the Company”

For the purpose of Rule 11 a person shall be deemed to have obtained Control of the Company if he and others Acting In Concert with him have together obtained Control of it.

11.7. References to Board within this Rule 11

For the purposes of this Rule 11, any reference to the Board shall be taken to be a reference to those individuals who were members of the Board immediately before the event by virtue of which this Rule 11 applies.

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11.8. Notification of Award Holders

The Grantor shall, as soon as reasonably practicable, notify each Award Holder of the occurrence of any of the events referred to in this Rule 11 and explain how this affects his position under the Plan.

11.9. Vesting of Awards in advance of a corporate event

Where the Board is aware that an event is likely to occur under Rule 11:

1. in respect of which Awards will Vest in circumstances where the conditions for relief under Part 12 of the Corporation Tax Act 2009 may not be satisfied; or

2. if the Board in its absolute discretion considers it appropriate,

the Board may, in its absolute discretion and by notice in writing to all Award Holders, declare that all Awards that are expected to Vest as a result of the relevant event shall Vest (and in the case of any such Award which is an Option, shall be exercisable) in accordance with Rule 11 during such period prior to the relevant event as determined by the Board.

12. Exchange of Awards

12.1. Where exchange applies

An Award will not Vest under Rule 11 but will be exchanged for a new award (New Award) under this Rule to the extent that:

1. an offer to exchange the Award for a New Award is made and accepted by the Award Holder; or

2. the Board, with the consent of the persons acquiring Control if relevant, decides that Awards will be automatically exchanged for New Awards. The circumstances in which the Board may make such a decision include (but are not limited to) where an event occurs under Rules 11.1, 11.2, or 11.3 and:

a. the shareholders of the acquiring company, immediately after it has obtained Control, are substantially the same as the shareholders of the Company immediately before the event; or

b. the obtaining of Control amounts in the opinion of the Board to a merger with the Company.

12.2. Terms of exchange

The following applies in respect of the New Award:

1. The Award Date of the New Award shall be deemed to be the same as the Award Date of the Award.

2. The New Award will be in respect of the shares in a company determined by the Board.

3. In the application of the Plan to the New Award, where appropriate, references to “Company” and “Plan Shares” shall be read as if they were references to the company to whose shares the New Award relates.

4. The New Award must be equivalent to the Award, in the opinion of the Board, and subject to paragraph 5 below it will Vest at the same time and in the same manner as the Award.

5. Either the Vesting of the New Award must be subject to performance conditions and/or any other conditions which are so far as possible, in the opinion of the Board, equivalent to any Performance Target and/or any other conditions applying to the Award or no performance conditions will apply but the value of shares comprised in the New Award shall have substantially the same value of the number of Plan Shares which would have Vested under Rule 11 as applicable.

13. Lapse of Awards

Notwithstanding any other provision of the Rules, an Award shall lapse on the earliest of:

1. in the case of Options, the expiry of the Exercise Period;

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The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

2. the Board determining that any Performance Target and/or any other conditions imposed under Rule 5.1 has not been satisfied either in whole or in part in respect of the Award and can no longer be satisfied in whole or in part in which case the Award shall lapse to the extent that the Performance Target and/or any other conditions imposed under Rule 5.1 can no longer be satisfied;

3. subject to Rule 10 and Rule 8.4.4, the Award Holder ceasing to have a Relevant Contract for Services;

4. any date for lapse provided for under these Rules; and

5. the date on which the Award Holder becomes bankrupt or enters into a compromise with his creditors generally.

14. Adjustment of Awards on Reorganisation

14.1. Power to adjust Awards

In the event of a Reorganisation, the number of Plan Shares subject to an Award which is an Option or a Conditional Share Award, the description of the Plan Shares, the Award Price or any one or more of these shall be adjusted in such manner as the Grantor, together with the Board where relevant, shall determine.

In the case of Restricted Shares, subject to the relevant Restricted Share Agreement, the Award Holder shall have the same rights as any other shareholder in respect of Restricted Shares in the event of a Reorganisation. Any shares, securities or other rights allotted to an Award Holder for no consideration or with the proceeds of sale of such rights (but not with new consideration provided by the Award Holder) as a result of such Reorganisation shall be treated as if they were awarded to the Award Holder at the same time as the Restricted Shares in respect of which the rights were conferred and subject to the Rules and the terms of the Restricted Share Agreement.

14.2. Award Price

No adjustment shall be made to the Award Price which would result in the Plan Shares subject to an Option or Conditional Share Award being issued at a price per Plan Share lower than the nominal value of a Plan Share except where the Grantor puts in place arrangements to pay up the nominal value at the date of issue of the Plan Shares (or the difference between the adjusted Award Price and the nominal value as the case may be).

14.3. Notification of Award Holders

The Grantor shall, as soon as reasonably practicable, notify each Award Holder of any adjustment made under this Rule 14 and explain how this affects his position under the Plan.

15. Accounting for Tax Liabilities

15.1. Deductions

Unless the Award Holder discharges any liability that may arise himself, the Grantor, the Company or any Group Member or former Group Member (as the case may be) may withhold such amount, or make such other arrangements as it may determine appropriate, for example to sell or withhold Plan Shares, to meet any Tax Liabilities in respect of Awards.

Unless otherwise agreed, the Company will only issue Plan Shares to the Award Holder on exercise of an Option once any and all Tax Liabilities have been discharged.

The Award Holder will be responsible for all taxes, social security contributions and other liabilities arising in respect of the Award Holder’s Awards.

15.2. Transfer of Employer’s NIC

Where applicable, the Grantor may, at its discretion and to the extent permitted by law, require the Award Holder to pay all or any part of the Employer’s NIC in relation to an Award.

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The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

15.3. Execution of document by Award Holder

The Grantor may require an Award Holder to execute a document in order to bind himself contractually to any such arrangement as is referred to in Rules 15.1 and 15.2 and return the executed document to the Company by a specified date. It shall be a condition of Vesting, and where applicable exercise, of the Award that the executed document be returned by the specified date unless the Grantor determines otherwise.

15.4. Tax elections

The Board may, at its discretion, determine that an Option may not be exercised and/or the Plan Shares subject to a Conditional Share Award and/or the Plan Shares the subject of an Award comprising Restricted Shares may not be issued or transferred to the Award Holder (or for his benefit) unless the Award Holder has beforehand signed an election under Chapter 2 of Part 7 of ITEPA 2003 and/or section 165 of the Taxation of Chargeable Gains Act 1992 or entered into broadly similar local arrangements.

15.5. Indemnity by Nominated Individual

Where Tax Liabilities arise and have not been paid or otherwise accounted for by the Award Holder, in part or in whole, the Nominated Individual shall indemnify (on a pound for pound basis) the Company or any Group Member (as the case may be) against any such Tax Liabilities.

16. Rights and listing of Plan Shares

16.1. Rights attaching to Plan Shares

Except as set out in Rule 1.13 (Restricted Shares), all Plan Shares issued or transferred under the Plan shall, as to voting, dividend, transfer and other rights, including those arising on a liquidation of the Company, rank equally in all respects and as one class with the shares of the same class in issue at the date of issue or transfer save as regards any rights attaching to such Plan Shares by reference to a record date prior to the date of such issue or transfer.

16.2. Listing and admission to trading of Plan Shares

If and so long as Plan Shares are listed on the Official List and traded on the London Stock Exchange, the Company will apply for the listing and admission to trading of any Plan Shares issued under the Plan as soon as reasonably practicable.

17. Relationship of the Plan to Relevant Contract for Services

17.1. Contractual provisions

Notwithstanding any other provision of the Plan:

1. the Plan shall not form part of any contract for services between any Group Member and a Contractor;

2. unless expressly so provided in the Relevant Contract for Services, a Contractor has no right to be granted an Award and the receipt of an Award in one year (and the calculation of the Award Price in a particular way) is no indication that the Award Holder will be granted any subsequent Awards (or that the calculations of the Award Price will be made in the same or a similar way);

3. the Plan does not entitle any Award Holder to the exercise of any discretion in his favour;

4. unless otherwise specified in the Relevant Contract for Services, the benefit to a Contractor of participation in the Plan (including, in particular but not by way of limitation, any Awards held by him) shall not form any part of their fees under the Relevant Contract for Services; and

5. if a Contractor ceases to be have a Relevant Contract for Services for any reason, he shall not be entitled to compensation or any other remedy for the loss or diminution in value of any right or benefit or prospective right or benefit under the Plan (including, in particular but not by way of limitation, any Awards held by him which lapse by reason of his ceasing to have a Relevant Contract for Services) whether by way of damages for unfair dismissal, wrongful dismissal, breach of contract or otherwise or anything analogous thereto in any jurisdiction.

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The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

17.2. Deemed agreement

By accepting the grant of an Award, an Award Holder is deemed to have agreed to the provisions of these Rules, including this Rule 17.

18. Administration of the Plan

18.1. Responsibility for administration

The Board (and the Grantor, where appropriate) shall be responsible for, and shall have the conduct of, the administration of the Plan. The Board may from time to time make, amend or rescind regulations for the administration of the Plan provided that such regulations shall not be inconsistent with the Rules.

18.2. Board’s decision final and binding

The decision of the Board shall be final and binding in all matters relating to the Plan, including but not limited to the resolution of any dispute concerning, or any inconsistency or ambiguity in the Rules or any document used in connection with the Plan.

18.3. Grantor to consult with the Board

Where the Grantor is not the Company and has granted, or proposes to grant, an Award, the Grantor shall consult with, and take into account the wishes of, the Board before making any determination or exercising any power or discretion under the Plan.

18.4. Discretionary nature of Awards

All Awards shall be granted entirely at the discretion of the Grantor.

18.5. Provision of information

An Award Holder and, where the Grantor is not the Company, the Grantor shall provide to the Company or any Group Member as soon as reasonably practicable such information as the Company reasonably requests for the purpose of complying with its obligations under section 421J of ITEPA 2003 or similar requirements of local tax legislation.

18.6. Cost of the Plan

The cost of introducing and administering the Plan shall be met by the Company. The Company shall be entitled, if it wishes, to charge an appropriate part of such cost and/or the costs of an Award to a Subsidiary or the Grantor.

18.7. Data protection

The Company and any Group Member will process an Award Holder’s personal data in accordance with the applicable data privacy policy or policies adopted by the Company and any data privacy notice(s) provided to an Award Holder covering the processing of the Award Holder’s data in connection with the Plan.

18.8. Third party rights

Nothing in these Rules confers any benefit, right or expectation on a person who is not an Award Holder. No such third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any terms of these Rules.

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The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

19. Amendment of the Plan

19.1. Power to amend the Plan

Subject to Rule 19.2, the Board may from time to time amend the Rules (including, for the purposes of establishing a sub-plan for the benefit of Contractors in different territories).

19.2. Rights of existing Award Holders

An amendment may not materially adversely affect the rights of an existing Award Holder except:

1. where the amendment is made to take account of any matter or circumstance which the Board reasonably considers is a legal or regulatory requirement which the Board reasonably considers is relevant and requires an amendment to be made in order for any Group Member to comply with such requirement; or

2. where the Award Holder affected by the change has been notified of such amendment and the majority of Award Holders affected by the change who have responded to such notification have approved the amendment.

20. Notices

20.1. Notice by the Grantor

Save as provided for by law, any notice, document or other communication given by, or on behalf of, the Grantor or to any person in connection with the Plan shall be deemed to have been duly given if delivered to the Contractor or the Nominated Individual at his place of work, if sent by e-mail to such e-mail address as may be specified by him from time to time, or sent through the post in a pre-paid envelope to the postal address last known to the Company to be his address and, if so sent, shall be deemed to have been duly given on the date of posting.

20.2. Deceased Award Holders

Save as provided for by law, any notice, document or other communication so sent to an Award Holder shall be deemed to have been duly given notwithstanding that such Award Holder is then deceased (and whether or not the Company has notice of his death) except where his personal representatives have established title to the satisfaction of the Company and supplied to the Company an e-mail or postal address to which notices, documents and other communications are to be sent.

20.3. Notice to the Grantor

Save as provided for by law any notice, document or other communication given to the Grantor (or any relevant person appointed by the Grantor) in connection with the Plan shall be delivered by hand or sent by email, fax or post to the Company Secretary (or any relevant person appointed by the Grantor) at the Company’s registered office (or such other e-mail or postal address as may from time to time be notified to Award Holders) but shall not in any event be duly given unless it is actually received at the registered office or such e-mail or postal address.

21. Governing law and jurisdiction

21.1. Plan governed by English law

The formation, existence, construction, performance, validity and all aspects whatsoever of the Plan, any term of the Plan and any Award granted under it shall be governed by English law.

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The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

21.2. English courts to have jurisdiction

The English courts shall have jurisdiction to settle any dispute which may arise out of, or in connection with, the Plan.

21.3. Jurisdiction agreement for benefit of the Company

The jurisdiction agreement contained in this Rule 21 is made for the benefit of the Company only, which accordingly retains the right to bring proceedings in any other court of competent jurisdiction.

21.4. Award Holder deemed to submit to such jurisdiction

By accepting the grant of an Award, an Award Holder is deemed to have agreed to submit to such jurisdiction.

22. Interpretation

22.1. Definitions

In this Plan, unless the context otherwise requires, the following words and expressions have the following meanings:

Acting In Concert has the meaning given to that expression in The City Code on Takeovers and Mergers in its present form or as amended from time to time;

Award means an Option, a Conditional Share Award or Restricted Shares granted under the Plan;

Award Certificate means a statement in a form, which may include an electronic form, determined by the Company setting out details of an Award which is an Option or a Conditional Share Award determined in accordance with Rule 1.4;

Award Date means the date on which an Award is granted in accordance with Rule 1.3;

Award Holder means an individual who holds an Award or, where the context permits, his legal personal representatives. Where relevant, Award Holder(s) shall include reference to former Award Holder(s);

Award Price means the amount (if any), expressed either as an amount per Plan Share or a total amount, payable in respect of the exercise of an Option 0r Vesting of a Conditional Share Award or for the acquisition of Restricted Shares under a Restricted Share Agreement, determined in accordance with Rule 4;

Board means, subject to Rule 11.7, the board of directors of the Company or a duly authorised committee of it or a person duly authorised by the board of directors of the Company or such committee;

Company means Silence Therapeutics plc incorporated in England and Wales under company number 02992058;

Conditional Share Award means a conditional right under the Plan to acquire Plan Shares;

Confidential Information means all information of a confidential nature, whether provided before or after the date of adoption of the Plan, relating to a Group Member, whether in writing, orally communicated, in electronic format or otherwise, and including any such information obtained through discussions with directors, officers, members of management or employees of a Group Member together with any reports, analyses, compilations, studies, copies, databases or other materials or documents prepared by the party receiving such information to the extent incorporating such information (or any part of such confidential information).

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The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

Contractor means an individual (natural person), partnership or company who at the Award Date is providing services to a Group Member under a Relevant Contract for Services (including for the avoidance of doubt, any non-executive director who is not also employed under a contract of employment);

Control has the meaning given to it by section 995 of ITA 2007;

Dealing Day means any day on which the London Stock Exchange is open for the transaction of business;

Dealing Restrictions means any restrictions imposed by legislation, regulation or any other code or guidance on share dealing with which the Company seeks to comply;

Directors’ Remuneration Policy has the meaning given to it by section 422A(6) of the Companies Act 2006;

Employee LTIP means the Silence Therapeutics plc 2018 Employee Long Term Incentive Plan and the US Sub-Plan and Schedule thereto;

Employees’ Share Scheme has the meaning set out in section 1166 of the Companies Act 2006;

Employer’s NIC means employer’s secondary class 1 National Insurance contributions liability or any local equivalent;

Exercise Period means the period set by the Board on the Award Date during which an Option may be exercised, ending no later than the 10th anniversary of the Award Date;

Financial Conduct Authority means the “competent authority” as that expression is defined in Part VI of the Financial Services and Markets Act 2000;

Gain means the difference between (i) the Market Value of a Plan Share on the date of exercise of an Option and (ii) the Award Price, multiplied by the number of Plan Shares in respect of which the Option is being exercised;

Grantor means:

1. in relation to an Award granted by the Company, the Board;

2. in relation to an Award granted by the Trustees, the Trustees; and

3. in relation to an Award granted by any other person which the Board authorises to grant an Award, that person;

Group means the Company and its Subsidiaries from time to time and Group Member shall be interpreted accordingly;

HMRC means Her Majesty’s Revenue & Customs;

Holding Period means the period (if any) specified under paragraph 9 of Rule 1.4 (commencing from the Vesting Date of the relevant Award) during which the restrictions contained in Rule 9 apply;

ITA 2007 means the Income Tax Act 2007;

ITEPA 2003 means the Income Tax (Earnings and Pensions) Act 2003;

London Stock Exchange means the London Stock Exchange plc or any successor body;

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The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

Market Value on any day means:

1. if at the relevant time Plan Shares are listed on the Official List (or on any other recognised stock exchange within the meaning of section 1005 of ITA 2007 or the Alternative Investment Market of the London Stock Exchange), the closing middle market quotation (as derived from the Daily Official List of the London Stock Exchange or the equivalent list or record for the recognised stock exchange on which the Plan Shares are listed) or, if the Board so decides, the closing price on the preceding Dealing Day; or

2. where Plan Shares are not so listed, the market value of a Plan Share calculated as described in the Taxation of Chargeable Gains Act 1992;

New Award means an Award granted on or after 1 October 2019;

New Option means an Option granted on or after 1 October 2019;

Nominated Individual means an individual who is specified in the Relevant Contract of Services as the primary deliverer of the services (subject to any provisions permitting the replacement of such individual by a suitable alternate) or if not specified in the Relevant Contract of Services then an individual who is specified in Award Certificate;

Official List means the list maintained by the Financial Conduct Authority in accordance with section 74(1) of the Financial Services and Markets Act 2000 for the purposes of Part VI of the Act;

Old Award means an Award granted before 1 October 2019;

Old Option means an Option granted before 1 October 2019;

Option means a right to acquire Plan Shares granted under the Plan;

Performance Target means a performance target imposed as a condition of the Vesting of an Award under Rule 5.1 and as substituted or varied in accordance with Rule 5.3;

Plan means the Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan as amended from time to time;

Plan Restatement Date means 23 July 2020;

Plan Shares means ordinary shares in the capital of the Company (or any shares representing them);

Regulatory Information Service means a service that is approved by the Financial Conduct Authority on meeting the Primary Information Provider criteria and is on the list of Regulatory Information Services maintained by the Financial Conduct Authority (or any overseas equivalent);

Relevant Award means (i) an Award granted under the Plan and the US Sub-Plan to the Plan; and/or (ii) an Award granted under the Employee LTIP;

Relevant Contract for Services meansa continuing contract for the provision of services by the Contractor to the Company or a Group Member;

Reorganisation means any variation in the share capital of the Company, including but without limitation a capitalisation issue, rights issue, demerger or other distribution, a special dividend or distribution, rights offer or bonus issue and a sub-division, consolidation or reduction in the capital of the Company;

Restricted Shares means Shares where the Award Holder is the beneficial owner of the Plan Shares from the Award Date subject to the Restricted Share Agreement;

Restricted ShareAgreement means the agreement referred to in Rule 1.13;

Rules mean the rules of the Plan;

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The Silence Therapeutics plc 2018 Non-Employee Long Term Incentive Plan

Share Reserve has the meaning given to it in Rule 2.1;

Subsidiary has the meaning set out in section 1159 of the Companies Act 2006;

Tax Liabilities means any tax or social security liabilities (to include but not limited to all forms of taxation and statutory, governmental, state, federal, provincial, local, government or municipal charges, duties, imposts, contributions, levies, withholdings or liabilities wherever chargeable and whether of the United Kingdom or any other jurisdiction and any penalty, fine, surcharge, interest, charges or costs relating thereto) arising on grant of an Award, during ownership by the Award Holder of the Award, on exchange or exercise of an Award, or at any other time, where the Company or any Group Member is considered, in the reasonable opinion of the Board, to be responsible for the payment of such liabilities to HM Revenue & Customs or such overseas equivalent, including, for the avoidance of doubt, any employer’s social security liabilities;

Trustees means the trustees of any trust created by a Group Member for the purposes of effecting the Plan;

Vest means:

1. in relation to an Option, the Award Holder becoming entitled to exercise the Option;

2. in relation to a Conditional Share Award, the Award Holder becoming entitled to have the Plan Shares issued or transferred to him (or to a nominee specified or permitted by the Company); and

3. in relation to Restricted Shares means the restrictions set out in the Restricted Share Agreement ceasing to have effect; and

Vesting Period means the period from the Award Date to the normal date of Vesting.

22.2. Interpretation

In the Plan, unless otherwise specified:

1. save as provided for by law a reference to writing includes any mode of reproducing words in a legible form and reduced to paper or electronic format or communication including, for the avoidance of doubt, correspondence via e-mail; and

2. the Interpretation Act 1978 applies to the Plan in the same way as it applies to an enactment.

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EX-10

EXHIBIT 10.3

Silence Therapeutics plc

The Silence Therapeutics plc 2018 Employee Long Term Incentive Plan (the “Plan”)

US Employee Sub-Plan to the Plan

Board adoption: 22 June 2020

Shareholder approval: 23 July 2020

This US Employee Sub-Plan was adopted by the Board to permit the grant of Awards to Eligible Employees who are US residents or US taxpayers (each, a “US Award Holder”).

In the event of any inconsistency between the rules of the Plan and the rules of the US Employee Sub-Plan, the rules of the US Employee Sub-Plan shall take precedence.    

1. Definitions

In this US Employee Sub-Plan, the words and expressions used in the Plan shall bear, unless the context otherwise requires, the same meaning herein save to the extent the rules in this US Employee Sub-Plan shall provide to the contrary.

In addition:

“Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder;

“Incentive Stock Option” means an Option granted under the US Employee Sub-Plan that is intended to be, and that qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code;

“Nonstatutory Stock Option” means an Option granted under the US Employee Sub-Plan that does not qualify as an Incentive Stock Option; and

“Securities Act” means the Securities Act of 1933, as amended.

2. Application of Plan

Save as modified in this US Employee Sub-Plan, all the provisions of the Plan shall be incorporated into this US Employee Sub-Plan as if fully set out herein so as to be part of this US Employee Sub-Plan SAVE THAT any Award named a “Conditional Share Award” in the Plan shall be re-named a “Restricted Stock Unit” or “RSU” when granted under the US Employee Sub-Plan.

3. Limit on Incentive Stock Options

The number of Plan Shares which may be subject to Incentive Stock Options granted under this US Employee Sub-Plan is 26,100,000 Plan Shares.  No Incentive Stock Option shall be granted under the US Employee Sub-Plan unless there shall be sufficient Plan Shares remaining available for issuance pursuant to this Section 3 or the Board shall have approved such an increase in the Plan Shares available for issuance subject to approval by the shareholders of the Company.

4. Effective Date and Term of US Employee Sub-Plan

This US Employee Sub-Plan shall become effective on the date on which it is adopted by the Board.  No Award shall be granted under this US Employee Sub-Plan after the completion of 10 years from the earlier of (i) the date on which this US Employee Sub-Plan was adopted by the Board, or (ii) the date this US Employee Sub-Plan was approved by the Shareholders of the Company, but Awards previously granted under this US Employee Sub-Plan may extend beyond that date.  

5. Amendments

The Board may amend, suspend or terminate this US Employee Sub-Plan or any portion thereof at any time.  No amendment, suspension or termination of the US Employee Sub-Plan may materially adversely affect any Awards granted previously to any US Award Holder without the consent of the US Award Holder.

6. Compliance with Code Section 409A

Unless otherwise set forth in an applicable Award agreement, the terms applicable to Awards granted under the Plan subject to this US Employee Sub-Plan will be interpreted to the greatest extent possible in a manner that makes the Awards exempt from Section 409A of the Code, and, to the extent not so exempt, that brings the Awards into compliance with Section 409A of the Code. The Company shall have no liability to a US Award Holder, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Board.

7. No right to Employment or other Status

No person shall have any claim or right to be granted an Award under this US Employee Sub-Plan, and the grant of an Award shall not be construed as giving a US Award Holder the right to continued employment or any other relationship with any Group Member.

8. Amendment of Awards

The Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or different type, including converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the US Award Holder’s consent to such action shall be required unless the Board determine that the action, taking into account any related action, would not materially and adversely affect the US Award Holder.

9. Exercise Restriction for Non-Exempt Employees

If a US Award Holder is eligible for overtime compensation under the US Fair Labor Standards Act of 1938, as amended (that is, designated as a “non-exempt employee”), then notwithstanding the vesting schedule contained in the Award agreement, the US Award Holder may not exercise his or her Option until the US Award Holder has completed at least six (6) months of service under a Relevant Contract for Services measured from the Award Date, even if the US Award Holder has already been an employee for more than six (6) months. Consistent with the provisions of the U.S. Worker Economic Opportunity Act, the US Award Holder may exercise his or her Option as to any vested portion prior to such six (6) month anniversary in the case of (i) the US Award Holder’s death or the US Award Holder becoming disabled (within the meaning of Section 22(e)(3) of the Code) or (ii) a third party obtains Control of the Company.]

10. Conditions on Delivery of Plan Shares

The Company will not be obligated to deliver any Plan Shares pursuant to this US Employee Sub-Plan or to remove restrictions from Plan Shares previously delivered under this US Employee Sub-Plan until:

10.1. all conditions of the Award have been met or removed to the satisfaction of the Company,

10.2. in the opinion of the Company’s counsel, all other legal matters in connection with the issue, allotment and delivery of such Plan Shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and

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10.3. the US Award Holder has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

11. Options granted to US Award Holders

11.1. An Option which is not intended to be an Incentive Stock Option shall be designated a Nonstatutory Stock Option.

11.2. An Option shall have a term no longer than ten (10) years from the date it was granted or such shorter period as determined by the Board.  If an Incentive Stock Option is granted to a person who owns more than 10% of the total combined voting power of all classes of outstanding Plan Shares of the Company or any of its affiliates, the Option shall have a term no longer than five (5) years from the date it was granted.

11.3. The Exercise Price of (a) an Option intended to be an Incentive Stock Option and (b) any Nonstatutory Stock Option granted to a US Award Holder shall be not less than 100% of the fair market value of a Share on the date on which the Option is granted (which shall be determined by the Board in compliance with Section 409A of the Code or Section 422 of the Code in the case of an Incentive Stock Option and shall not be less than the nominal value of a Share) (“Fair Market Value”) unless, in the case of (b) such Option is structured to comply with Section 409A of the Code.

11.4. An Option that the Board intends to be an Incentive Stock Option shall only be granted to Employees who are also employees of the Company, any of the Company’s present or future parent or subsidiary corporations as defined in Treasury Regulation Section 1.424-1(f), and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code.  The Board or corporate action approving the grant of an Option intended to be an Incentive Stock Option must specify that the Option is intended to be an Incentive Stock Option.  If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option.  The Company shall have no liability to an Option Holder, or any other party, if an Option (or any part thereof)that is intended to be an Incentive Stock Option is not an Incentive Stock Option or for any action taken by the Board to amend, modify or terminate the rules of the Plan, this US Employee Sub-Plan or any Option, including without limitation the conversion of an Incentive Stock Option to a Nonstatutory Stock Option.

11.5. As provided by Section 422(b)(5) of the Code, an Incentive Stock Option will not be transferable except by will or by the laws of descent and distribution, and will be exercisable during the lifetime of the US Award Holder only by the US Award Holder.  If the Board elects to allow the transfer of an Option by a US Award Holder that is designated as an Incentive Stock Option, such transferred Option will automatically become a Nonstatutory Stock Option.  As provided by Section 422(c)(5) of the Code, a person who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company or any Group Member will not be eligible for the grant of an Incentive Stock Option unless (i) the exercise price is at least 110% of the Fair Market Value of a Share on the date of grant and (ii) such Incentive Stock Option by its terms is not exercisable after the expiration of five (5) years from the date of grant.  The attribution rules of Section 424(d) of the Code will be applied in determining stock ownership.  As provided by Section 422(d) of the Code and applicable regulations thereunder, to the extent that the aggregate Fair Market Value (determined at the time of grant) of Plan Shares with respect to which Incentive Stock Options are exercisable for the first time by any US Award Holder during any calendar year (under all plans of the Company and any Group Member) exceeds US$100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options.  To obtain the US federal income tax advantages associated with an Incentive Stock Option, the US Internal Revenue

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Code requires that at all times beginning on the date of grant and ending on the day three (3) months before the date of exercise of the Option, the Option Holder must be an employee of the Company or a parent or subsidiary of the Company as defined in Treasure Regulation Section 1.424-1(f) (except in the event of the Option Holder’s death or disability, in which case longer periods may apply).  

11.6. If the Option Holder disposes of Plan Shares acquired upon exercise of an Incentive Stock Option within two years from the Date of Grant or one year after such Plan Shares were acquired pursuant to exercise of such Option, the Option Holder shall notify the Company in writing of such disposition

12. Transfer of Awards

Notwithstanding rule 1.10 of the Plan:

(a) if a US Award Holder ceases to be an Eligible Employee by reason of his death his Award will be capable of transfer in accordance with the US Award Holder’s will, or the laws of descent and distribution; and

(b) subject to approval of the Board or a duly authorized officer of the Company, an Award may be transferred by a US Award Holder pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulations Section 1.421-1(b)(2); provided that if an Award is an Incentive Stock Option, such Option will be deemed to be a Nonstatutory Stock Option as a result of such transfer

13. Variation of Share Capital

Notwithstanding rule 14 of the Plan in the event of any variation of the share capital of the Company: (i) the number of Plan Shares subject to an Award; (ii) any exercise price; and (iii) the limit on Incentive Stock Options set forth in Section 3 hereof must be adjusted proportionately in a manner that complies with Sections 409A and 424 of the Code.

14. US Taxes

A US Award Holder shall make such arrangements as the Company may require for the satisfaction of any U.S. federal, state, local or foreign withholding tax obligations that may arise in connection with an Award or with the disposition of Plan Shares acquired in connection with an Award.

15. No Obligation to Notify or Minimize Taxes

The Company will have no duty or obligation to a US Award Holder to advise such holder as to the time or manner of exercising an Option, to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which an Option may not be exercised.  The Company has no duty or obligation to minimize the tax consequences of an Award granted to a US Award Holder.

17. Governing law and Jurisdiction

The formation, existence, construction, performance validity and all aspects whatsoever of the US Employee Sub-Plan, any term of the US Employee Sub-Plan and any Award granted under it shall be governed by English law.

The English courts shall have jurisdiction to settle any dispute which may arise out of, or in connection with, the US Employee Sub-Plan.

4

EX-10

EXHIBIT 10.4

Silence Therapeutics plc

The Silence Therapeutics plc 2018 Non- Employee Long Term Incentive Plan (the “Plan”)

US Non-Employee Sub-Plan to the Plan

Board adoption: 22 June 2020

This US Non-Employee Sub-Plan was adopted by the Board to permit the grant of Awards to Contractors who are US residents or US taxpayers (each, a “US Award Holder”).

In the event of any inconsistency between the rules of the Plan and the rules of the US Non-Employee Sub-Plan, the rules of the US Non-Employee Sub-Plan shall take precedence.    

1. Definitions

In this US Non-Employee Sub-Plan, the words and expressions used in the Plan shall bear, unless the context otherwise requires, the same meaning herein save to the extent the rules in this US Non-Employee Sub-Plan shall provide to the contrary.

In addition:

“Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder;

“Securities Act” means the Securities Act of 1933, as amended.

2. Application of Plan

Save as modified in this US Non-Employee Sub-Plan, all the provisions of the Plan shall be incorporated into this US Non-Employee Sub-Plan as if fully set out herein so as to be part of this US Non-Employee Sub-Plan SAVE THAT any Award named a “Conditional Share Award” in the Plan shall be re-named a “Restricted Stock Unit” or “RSU” when granted under the US Non-Employee Sub-Plan.

3. Effective Date and Term of US Non-Employee Sub-Plan

This US Non-Employee Sub-Plan shall become effective on the date on which it is adopted by the Board.  No Award shall be granted under this US Non-Employee Sub-Plan after the completion of 10 years from the date on which this US Non-Employee Sub-Plan was adopted by the Board, but Awards previously granted under this US Non-Employee Sub-Plan may extend beyond that date.  

4. Amendments

The Board may amend, suspend or terminate this US Non-Employee Sub-Plan or any portion thereof at any time.  No amendment, suspension or termination of the US Non-Employee Sub-Plan may materially adversely affect any Awards granted previously to any US Award Holder without the consent of the US Award Holder.

5. Compliance with Code Section 409A

Unless otherwise set forth in an applicable Award agreement, the terms applicable to Awards granted under the Plan subject to this US Non-Employee Sub-Plan will be interpreted to the greatest extent possible in a manner that makes the Awards exempt from Section 409A of the Code, and, to the extent not so exempt, that brings the Awards into compliance with Section 409A of the Code. The Company shall have no liability to a US Award Holder, or any other

party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Board.

6. No right to Employment or other Status

No person shall have any claim or right to be granted an Award under this US Non-Employee Sub-Plan, and the grant of an Award shall not be construed as giving a US Award Holder the right to continue as a Contractor or any other relationship with any Group Member.

7. Amendment of Awards

The Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or different type, provided that the US Award Holder’s consent to such action shall be required unless the Board determine that the action, taking into account any related action, would not materially and adversely affect the US Award Holder.

8. Eligibility Limitations for Grants to Contractors

A Contractor that is a US Award Holder is not eligible for the grant of an Option if, at the time of grant, either the offer or sale of the Company’s securities to such Contractor is not exempt under Rule 701 of the Securities Act because the Contractor is not a natural person, the services that the Contractor is providing to the Company or any Group Company are in connection with a capital raising transaction or directly or indirectly serve to promote or maintain a market for the Company’s securities, or because of any other provision of Rule 701 of the Securities Act, unless the Company determines that such grant need not comply with the requirements of Rule 701 of the Securities Act and will satisfy another exemption under the Securities Act as well as comply with the securities laws of the US state of residence of the Contractor and all other applicable jurisdictions.

9. Conditions on Delivery of Plan Shares

The Company will not be obligated to deliver any Plan Shares pursuant to this US Non-Employee Sub-Plan or to remove restrictions from Plan Shares previously delivered under this US Non-Employee Sub-Plan until:

9.1. all conditions of the Award have been met or removed to the satisfaction of the Company,

9.2. in the opinion of the Company’s counsel, all other legal matters in connection with the issue, allotment and delivery of such Plan Shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and

9.3. the US Award Holder has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

10. Transfer of Awards

Notwithstanding rule 1.10 of the Plan:

(a) if a US Award Holder ceases to be an Contractor by reason of his death his Award will be capable of transfer in accordance with the US Award Holder’s will, or the laws of descent and distribution; and

2

(b) subject to approval of the Board or a duly authorized officer of the Company, an Award may be transferred by aUS Award Holder pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulations Section 1.421-1(b)(2).

11. Variation of Share Capital

Notwithstanding rule 14 of the Plan in the event of any variation of the share capital of the Company: (i) the number of Plan Shares subject to an Award; and (ii) any exercise price; must be adjusted proportionately in a manner that complies with Sections 409A and 424 of the Code.

12. US Taxes

A US Award Holder shall make such arrangements as the Company may require for the satisfaction of any U.S. federal, state, local or foreign withholding tax obligations that may arise in connection with an Award or with the disposition of Plan Shares acquired in connection with an Award.

13. No Obligation to Notify or Minimize Taxes

The Company will have no duty or obligation to a US Award Holder to advise such holder as to the time or manner of exercising an Option, to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which an Option may not be exercised.  The Company has no duty or obligation to minimize the tax consequences of an Award granted to a US Award Holder.

17.Governing law and Jurisdiction

The formation, existence, construction, performance validity and all aspects whatsoever of the US Non-Employee Sub-Plan, any term of the US Non-Employee Sub-Plan and any Award granted under it shall be governed by English law.

The English courts shall have jurisdiction to settle any dispute which may arise out of, or in connection with, the US Non-Employee Sub-Plan.

3

EX-10

EXHIBIT 10.5

Certain information in this document, marked by [***], has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K under the Securities Act of 1933, as amended, because it is both (i) not material and (ii) would likely cause competitive harm to the registrant if publicly disclosed.

LICENSE AND COLLABORATION AGREEMENT*

by and between

SILENCE THERAPEUTICS PLC

and

MALLINCKRODT PHARMA IP TRADING DAC

Dated as of July 18, 2019

COOLEY (UK) LLP, DASHWOOD, 69 OLD BROAD STREET, LONDON EC2M 1QS, UK

T: +44 (0) 20 7583 4055 F: +44 (0) 20 7785 9355 WWW.COOLEY.COM

*                Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be furnished on a supplemental basis to the Securities and Exchange Commission upon request.

THIS LICENSE AND COLLABORATION AGREEMENT is made and entered into effective as of July 18, 2019 (the “Effective Date”) by and between

(1) SILENCE THERAPEUTICS PLC, a public limited company organized under the laws of England and Wales (“Silence”), and

(2) MALLINCKRODT PHARMA IP TRADING DAC, a designated activity company formed under the laws of Ireland (“Mallinckrodt”); and

Silence and Mallinckrodt are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

BACKGROUND

(A) Silence owns certain intellectual property rights with respect to the research and development of RNAi Products.

(B) Mallinckrodt wishes to obtain, and Silence wishes to grant to Mallinckrodt, a license under Silence’s rights in such technology and related intellectual property rights to develop and commercialize Licensed Products in respect of the C3 Target, all on the terms and conditions set forth below.

(C) Mallinckrodt also wishes to obtain, and Silence wishes to grant to Mallinckrodt, an option to obtain a license under Silence’s rights in such technology and related intellectual property rights to develop and commercialize Licensed Products in respect of additional (non-C3) Complement Targets.

(D) The Parties wish to discover and develop additional intellectual property related to the Products pursuant to the Work Plans and will perform the activities set forth in such Work Plans.

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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

As used in this Agreement and the Schedules to this Agreement the following capitalized terms, whether used in the singular or plural, shall have the meanings set out below:

1.1 “Acceptance Notice” has the meaning set forth in Section 5.3.2.

1.2 “Accounting Standards” means, with respect to (a) Silence, records and books of accounts shall be maintained in accordance with IFRS, and (b) Mallinckrodt or its Affiliates or Sublicensees, that records and books of accounts shall be maintained in accordance with United States Generally Accepted Accounting Principles.

1.3 “Acquirer” means, with respect to a Change of Control Transaction, the Third Party referenced in the definition of “Change of Control Transaction” and such Third Party’s Affiliates (other than Silence and Silence’s Affiliates determined as of immediately prior to the closing of such Change of Control Transaction).

1.4 “Advancement Criteria” means, with respect to Development of Licensed Product(s) directed to a particular Target, the criteria for the advancement of such Development from (a) Research Stage 1 to Research Stage 2 and (b) Research Stage 2 to Research Stage 3, including criteria to be met by a Licensed Product directed to the applicable Target to progress to the next Research Stage.

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1.5 “Affiliate” means, with respect to a Party, any Person that, directly or indirectly, through one (1) 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 “controlling”, “controlled by” and “under common control with” means (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, 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 Person (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity). The Parties acknowledge that in the caseof certain entities organized under the laws of certain countries outside of the United States, the maximum percentage ownership permitted by law for a foreign investor may be less than fifty percent (50%), and that in such case such lower percentage shall be substituted in the preceding sentence, provided that such foreign investor has the power to direct the management or policies of such entity.

1.6 “Agreement” means this agreement and all schedules, appendices and other addenda attached hereto as any of the foregoing may be amended in accordance with the provisions of this Agreement.

1.7 “Alliance Manager” has the meaning set forth in Section 2.9.

1.8 “Annual Net Sales” means the total Net Sales of a particular Licensed Product in a particular Year or, with respect to the Year that includes the First Commercial Sale, the period beginning on such date of First Commercial Sale through the end of the Year in which such sale occurred.

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1.9 “Applicable Law” means federal, state, local, national and supra-national laws, statutes, rules, and regulations, including any rules, regulations, guidelines, or other requirements of the Regulatory Authorities, major national securities exchanges or major securities listing organizations, that may be in effect from time to time during the Term and applicable to a particular activity or country or other jurisdiction hereunder.

1.10 “Auditor” has the meaning set forth in Section 9.6.

1.11 “Bankruptcy Code” has the meaning set forth in Section 14.6.

1.12 “Business Day” means a day other than a Saturday or Sunday on which banking institutions in London, England are open for business.

1.13 “C3 Licensed Product” means any RNAi Product that has a pharmacological effect due to (i) [***] down-regulation of the expression of the C3 Target and/or (ii) [***] down regulates the expression of the C3 Target.

1.14 “C3 Target” means the human gene complement C3, sometimes referred to as complement component 3, ARMD9, C3a anaphylatoxis, C3b, complement component C3a, complement component C3b, CPAMD1, or prepro-C3, with a chromosomal location of 19p13.3 and having the UniProt accession number P01024 and HGNC ID of HGNC:1318.

1.15 “C3 Work Plan” has the meaning set forth in Section 5.2.2.

1.16 “Centralized Approval Procedure” means the procedure through which a MAA filed with the EMA results in a single marketing authorization valid throughout the European Union.

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1.17 “Change of Control Transaction” means, with respect to a Party: (a) the acquisition by a Third Party of more than fifty percent (50%) of either (i) the then outstanding shares of common stock of such Party or (ii) the combined voting power of the then outstanding voting securities of such Party entitled to vote generally in the election of directors of such Party, or, if the percentage ownership of such Third Party in the voting securities of such Party is increased through stock redemption, cancellation, or other recapitalization, such Third Party becoming, immediately after such increase, directly or indirectly, the beneficial owner of voting securities representing more than fifty percent (50%) of the total voting power of all of the then outstanding voting securities of such Party; (b) the consummation of a merger, consolidation, recapitalization, or reorganization of such Party involving any Third Party, other than any such transaction that would result in shareholders or equity holders of such Party immediately prior to such transaction owning more than fifty percent (50%) of the outstanding voting securities of the surviving entity (or its parent entity) immediately following such transaction; or (c) the sale or transfer to a Third Party, in one or more related transactions, properties or assets representing all or substantially all of such Party’s business or assets at the time of such sale or transfer.

1.18 “Claims” has the meaning set forth in Section 13.1.

1.19 “Clinical Studies” means a Phase 1 Trial, Phase 2 Trial, Phase 3 Trial, and such other tests and studies in human subjects that are required by Applicable Law, or otherwise conducted or recommended by any applicable Regulatory Authority, to obtain or maintain Regulatory Approvals for a Licensed Product for one (1) or more indications, including tests or studies that are intended to expand the approved indications for such Licensed Product.

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1.20 “Combination Product” means a Licensed Product containing or consisting of one (1) or more RNAi Products and one (1) or more Other Active Ingredients, whether in the same or different formulations.

1.21 “Commercialization” means any and all activities directed to the preparation for sale of, offering for sale of, or sale of a molecule or product, including activities related to marketing, promoting, distributing, importing and exporting such molecule or product, and, for purposes of setting forth the rights and obligations of the Parties under this Agreement, shall be deemed to include conducting medical affairs activities and conducting Phase 4 Trials, and interacting with Regulatory Authorities regarding any of the foregoing. When used as a verb, “to Commercialize” and “Commercializing” means to engage in Commercialization, and “Commercialized” has a corresponding meaning.

1.22 “Commercially Reasonable Efforts” means, with respect to the performance of Development or Commercialization 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 a reputable pharmaceutical company (in the case of Mallinckrodt) and a reputable biotechnology company (in the case of Silence) of the size and resources of the relevant Party acting in good faith would typically devote to similar compounds or products of similar market potential at a similar stage in development or product life taking into account all relevant factors, as measured by the facts and circumstances at the time such efforts are due, including stage of development; efficacy, safety and adverse event profile of the product, including relative to competitive products in the marketplace; actual or anticipated Regulatory Approval; labeling; the nature and extent of market exclusivity (including patent coverage, proprietary position and regulatory exclusivity); the cost and time required for and likelihood of obtaining Regulatory Approval; and, in respect of Commercialization, the size of the possible patient population for the product given its authorized uses; the promotion sensitivity of the product and the relative level of clinical acceptance of the product; the nature, size and resources of any competition to the product and the relative differentiation of the

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product versus any competitive offerings; the relative difficulties associated with achieving insurance and other payor coverage for the product; the relative difficulties associated with achieving formulary acceptance for the product; the resources available to Mallinckrodt to market and sell the product to the relevant target audience; and the pricing and reimbursement dynamics associated with the product.

1.23 “Competing Product” means with respect to a particular Licensed Product any pharmaceutical product that [***].

1.24 “Complement Licensed Product” means, with respect to an Optioned Complement Target, any RNAi Product that has a pharmacological effect due to (i) [***] down- regulation of the expression of such Optioned Complement Target and/or (ii) [***] down regulates the expression of such Optioned Complement Target.

1.25 “Complement Target” means any one of the human gene complement targets as further described in Schedule 1.25 including the Restricted Targets.

1.26 “Complement Work Plan” has the meaning set forth in Section 5.2.3.

1.27 “Confidential Information” means any Information or data provided orally, visually, in writing or other form by or on behalf of one (1) Party (or an Affiliate or representative of such Party) to the other Party (or to an Affiliate or representative of such Party) in connection with this Agreement, on or after the Effective Date, including Information relating to the terms of this Agreement, any Target or any Licensed Product, any Exploitation of any Target or any Licensed Product, any Know-How with respect thereto developed by or on behalf of the disclosing Party or its Affiliates (including Mallinckrodt Research Know-How and Silence Research Know-How, as applicable), or the scientific, regulatory, or business affairs or other activities of either Party. Notwithstanding the foregoing, (a) Silence Background IP and Silence Research IP will be considered Confidential Information of Silence, (b) Mallinckrodt Background IP and Mallinckrodt Research IP will be considered Confidential Information of Mallinckrodt,

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and (c) Joint Research IP shall be deemed to be the Confidential Information of both Parties and both Parties shall be deemed to be the receiving Party and the disclosing Party with respect thereto.

1.28 “Control” means, with respect to any item of Information, material, Patent, or other property right, the possession of the right, whether directly or indirectly, and whether by ownership, license, covenant not to sue, or otherwise (other than by operation of the license and other grants in this Agreement), to grant a license, sublicense, or other right to or under such Information, material, Patent, or other property right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party; provided that neither Party shall be deemed to Control any item of Information, material, Patent, or other property right of a Third Party if access under this Agreement requires or triggers a payment obligation.

1.29 “Cost Overrun Threshold” has the meaning set forth in Section 5.4.2.

1.30 “Cover” means, with respect to a particular subject matter at issue and a relevant Patent, that, in the absence of ownership of or a license under such Patent, the manufacture, use, sale, offer for sale, or importation of such subject matter would infringe one or more Valid Claims of such Patent, or, as to a pending claim included in such Patent, the manufacture, use, sale, offer for sale, or importation of such subject matter would infringe such Patent if such pending claim were to issue in an issued patent, provided that such claim is being prosecuted in good faith.

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1.31 “Development” means all activities related to pre-clinical and other non-clinical research, 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” means to engage in Development. For purposes of clarity, Development shall include any submissions (and activities required in support thereof) required by Applicable Laws or a Regulatory Authority as a condition or in support of obtaining a pricing or reimbursement approval for an approved molecule or product.

1.32 “Development Costs Report” has the meaning set forth in Section 5.4.2.

1.33 “Dispute” has the meaning set forth in Section 15.6.

1.34 “Dollars” or “$” means United States Dollars.

1.35 “Drug Approval Application” means an application for Regulatory Approval in a country or region of the Territory, and includes a New Drug Application or a Biologics License Application as defined in the FD&C Act, or any corresponding foreign application in the Territory, including, with respect to the European Union, a Marketing Authorization Application filed with the EMA pursuant to the Centralized Approval Procedure or with the applicable Regulatory Authority of a country in the European Union with respect to the mutual recognition or any other national approval procedure.

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1.36 “Effective Date” means the effective date of this Agreement as set forth in the preamble hereto.

1.37 “EMA” means the European Medicines Agency and any successor agency(ies) or authority having substantially the same function.

1.38 “[***]” means, in respect of a particular Optioned Complement Target, [***] Licensed Products containing RNAi Products directed to such Optioned Complement Target for the indication or indications that is/are [***] for such Optioned Complement Target, [***].

1.39 “European Union” means the economic, scientific, and political organization of member states known as the European Union, as its membership may be altered from time to time, and any successor thereto.

1.40 “Exclusivity Covenant” means the covenant under Section 4.8.1 and, if applicable, Section 4.8.2.

1.41 “Exploit” or “Exploitation” means to make, have made, import, export, use, have used, sell, have sold, or offer for sale, including to Develop, Commercialize, register, modify, enhance, improve, Manufacture, have Manufactured, hold, or keep (whether for disposal or otherwise), or otherwise dispose of.

1.42 “FDA” means the United States Food and Drug Administration and any successor agency(ies) or authority having substantially the same function.

1.43 “FFDCA” means the United States Federal Food, Drug, and Cosmetic Act, , 21 U.S.C. § 301 et seq., as amended from time to time, together with any rules, regulations and requirements promulgated thereunder (including all additions, supplements, extensions, and modifications thereto).

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1.44 “Field” means the diagnosis, prevention, control, and/or treatment of any and all therapeutic conditions in humans.

1.45 “First Commercial Sale” means, with respect to a Licensed Product and a country, the first sale for monetary value for use or consumption by the end user of such Licensed Product in such country after Regulatory Approval for the sale of such Licensed Product has been obtained in such country. Sales prior to receipt of Regulatory Approval for such Licensed Product, such as so-called “treatment IND sales”, “named patient sales”, and “compassionate use sales”, shall not constitute a First Commercial Sale.

1.46 “FTE” means the equivalent of the work of one appropriately qualified individual working on a full-time basis in performing work in connection with this Agreement for a twelve (12) month period (consisting of at least a total of [[***] per year of dedicated effort). FTE efforts shall not include the work of general corporate or administrative personnel.

1.47 “FTE Costs” means the FTE Rate multiplied by the number of FTEs applied by Silence to the performance of the relevant activity (including Phase 1 Trial) in accordance with the applicable Work Plan.

1.48 “FTE Rate” means, for the period from the Effective Date to 31 December 2019, [***]. Thereafter, the FTE Rate shall be increased or decreased on 1 January of each year by the annual percentage increase or decrease in the UK Consumer Price Inflation published by the UK Office of National Statistics.

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1.49 “Generic Product” means, with respect to a Licensed Product, any product that (a) is sold by a Third Party (other than a Sublicensee) under a Drug Approval Application granted by a Regulatory Authority to a Third Party (other than a Sublicensee);(b) [***]; and (c) is approved in reliance, in whole or in part, on the prior approval (or on safety or efficacy data submitted in support of the prior approval) of such Licensed Product as determined by the applicable Regulatory Authority, including any product authorized for sale (i) in the U.S. pursuant to Section 505(b)(2) or Section 505(j) of the FFDCA (21 U.S.C. 355(b)(2) and 21 U.S.C. 355(j), respectively), (ii) in the European Union pursuant to a provision of Articles 10, 10a, or 10b of Parliament and Council Directive 2001/83/EC, as amended (including an application under Article 6.1 of Parliament and Council Regulation (EC) No 726/2004 that relies for its content on any such provision), or (iii) in any other countryor jurisdiction pursuant to all equivalents of the provisions in the foregoing subsections(i)and (ii), including any amendments and successor statutes with respect to the foregoing subsections (i) through (iii).

1.50 “GLP Toxicology Study” means an animal pharmacology and toxicology study conducted using cGLP that is used to assess whether a Licensed Product is reasonably safe for initial testing in humans and to support an IND.

1.51 “GMP” means the current minimum standards for methods to be used in, and the facilities or controls to be used for, the manufacture, processing, packing, or holding of a drug as specified by applicable laws of the relevant countries at the time of manufacturing conducted in accordance with this Agreement, defined under (a) 21 C.F.R. Parts 210 and 211, (b) Directive 2003/94/EC, (c) Volume 4, Rules Governing Medicinal Products in the European Union Part I and II, and (d) equivalent law or regulations in any other applicable jurisdiction in the Territory, in each case (a) – (d), as amended from time to time.

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1.52 “IND” means an application filed with a Regulatory Authority for authorization to commence Clinical Studies, including (a) an Investigational New Drug Application as defined in the FFDCA or any successor application or procedure filed with the FDA, (b) any equivalent of a United States IND in other countries or regulatory jurisdictions, (e.g., a Clinical Trial Application (“CTA”)), and (c) all supplements, amendments, variations, extensions, and renewals thereof that may be filed with respect to the foregoing.

1.53 “Indemnitee” has the meaning set forth in Section 13.3.

1.54 “Indemnitor” has the meaning set forth in Section 13.3.

1.55 “Indication” means a separate and distinct disease, disorder, illness, or health condition and all of its associated signs, symptoms, stages, or progression (including precursor conditions), in each case for which a separate Drug Approval Application may be or, as applicable, has been filed.

1.56 “Indirect Taxes” has the meaning set forth in Section 9.3.2.

1.57 “Information” means all knowledge of a technical, scientific, business and other nature, including know-how, 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, regulatory data, and other biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre- clinical, clinical, safety, manufacturing and quality control data and information, including study designs and protocols, reagents (e.g., plasmids, proteins, cell lines, assays and compounds) and biological methodology; in each case (whether or not confidential, proprietary, patented or patentable, of commercial advantage or not) in written, electronic, or any other form now known or hereafter developed.

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1.58 “Initial Loss of Market Share” means an event where, with respect to a particular Licensed Product in a particular country in a particular Quarter: (a) one or more Generic Products of such Licensed Product is or are sold in such country by a Third Party (other than a Sublicensee) and (b) the market penetration of such Generic Product(s) in such country in such Quarter is equal to or greater than [***], as determined by [***].

1.59 “Initiation” means, with respect to a Clinical Study, the first dosing of the first (1st) human subject in such Clinical Study, and, with respect to a GLP Toxicology Study, the first dosing of the first (1st) subject in such study. “Initiate” has a correlative meaning.

1.60 “Intellectual Property” has the meaning set forth in Section 14.6.

1.61 “Joint Research IP” means the Joint Research Patents and Joint Research Know-How.

1.62 “Joint Research Know-How” means any and all Know-How that is developed or invented after the Effective Date jointly by or on behalf of Mallinckrodt on the one hand, and by or on behalf of Silence on the other hand, in performing activities under each Work Plan. For clarity, Joint Research Know-How specifically excludes Mallinckrodt Background Know-How, Mallinckrodt Research Know-How, Silence Background Know-How, and Silence Research Know-How.

1.63 “Joint Research Patents” means any and all Patents that Cover any Joint Research Know-How.

1.64 “Joint Steering Committee” or “JSC” has the meaning set forth in Section 2.1.

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1.65 “Know-How” means any and all data, results, inventions, methods, processes, trade secrets, techniques, technology, and other proprietary Information, whether patentable or not but which are not generally known, including discoveries, formulae, materials (including chemicals), biological materials (including expression constructs, nucleic acid sequences, amino acid sequences, and cell lines), practices, test data (including pharmacological, toxicological, pre-clinical and clinical information and test data), analytical and quality control data (including drug stability data), manufacturing technology and data (including formulation data), and sales forecasts, data and descriptions.

1.66 “Licensed Mallinckrodt Research IP” has the meaning set forth in Section 4.2.2.

1.67 “Licensed Mallinckrodt Research Know-How” has the meaning set forth in Section 4.2.2.

1.68 “Licensed Mallinckrodt Research Patents” has the meaning set forth in Section 4.2.2.

1.69 “Licensed Product” means the C3 Licensed Product and/or any Complement Licensed Product(s), as the context dictates and in each case, whether alone or in combination with one (1) or more Other Active Ingredients, and in any form, formulation, dosage form and strength, and for any mode of delivery.

1.70 “[***]” means [***].

1.71 “Loss of Market Share” means an event where, with respect to a particular Licensed Product in a particular country in a particular Quarter: (a) one or more Generic Products of such Licensed Product is or are sold in such country by a Third Party (other than a Sublicensee) and (b) the market penetration of such Generic Product(s) in such country in such Quarter is equal to or greater than [***], as determined by [***].

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1.72 “Losses” has the meaning set forth in Section 13.1.

1.73 “Major European Market” means the United Kingdom, France, Germany, Italy, and Spain.

1.74 “Mallinckrodt Background IP” means the Mallinckrodt Background Patents and Mallinckrodt Background Know-How.

1.75 “Mallinckrodt Background Know-How” means any and all Know-How Controlled by Mallinckrodt or any of its Affiliates as of the Effective Date or during the Term that is developed or invented as a result of Mallinckrodt or any of its Affiliates performing activities outside the scope of each Work Plan and that is necessary for the research, discovery, or Exploitation of any Licensed Product.

1.76 “Mallinckrodt Background Patents” means any and all Patents Controlled by Mallinckrodt or any of its Affiliates on the Effective Date or during the Term that Cover any Mallinckrodt Background Know-How.

1.77 “Mallinckrodt Indemnitees” has the meaning set forth in Section 13.2.

1.78 “Mallinckrodt Research IP” means the Mallinckrodt Research Patents and Mallinckrodt Research Know-How.

1.79 “Mallinckrodt Research Know-How” means any and all Know-How that is developed or invented after the Effective Date solely by or on behalf of Mallinckrodt or its Affiliates or agents in performing activities under any Work Plan. For clarity, Mallinckrodt Research Know-How specifically excludes Mallinckrodt Background Know-How and Joint Research Know-How.

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1.80 “Mallinckrodt Research Patents” means any and all Patents Controlled by Mallinckrodt after the Effective Date that Cover any Mallinckrodt Research Know-How.

1.81 “Manufacture” and “Manufacturing” means all activities related to the synthesis, making, production, processing, purifying, formulating, filling, finishing, packaging, labelling, shipping, and holding of any molecule, product or any intermediate thereof, including process development, process qualification and validation, scale-up, pre- clinical, clinical and commercial production and analytic development, product characterization, supply chain, stability testing, quality assurance testing and release, and quality control.

1.82 “Mono Product” has the meaning set forth in the definition of “Net Sales” in Section 1.84.

1.83 “Month” means, unless it is clear that such reference is to a calendar month, a period of time beginning with the last Saturday of the previous month and ending on the close of business of the last Friday of such calendar month, which is a “month” for all Mallinckrodt accounting and business purposes, except that the first Month of the Term shall commence on the Effective Date and end on the close of business of the last Friday of the calendar month that includes the Effective Date, and the last Month shall end on the last day of the Term.

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1.84 “Net Sales” means, with respect to a Licensed Product for any period, the total amounts billed or invoiced on sales of such Licensed Product during such period by Mallinckrodt, its Affiliates, or Sublicensees in the Territory to Third Parties (including wholesalers or distributors), in bona fide arm’s length transactions, less the following deductions, in each case related specifically to the Licensed Product for the amounts accrued and subsequently adjusted for actual amounts allowed and taken by such Third Parties and not otherwise recovered by or reimbursed to Mallinckrodt, its Affiliates, or Sublicensees:

(a) trade, cash and quantity discounts;

(b) discounts, price reductions, chargebacks or rebates, retroactive or otherwise, imposed by, negotiated with or otherwise paid to governmental authorities or other payees;

(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) amounts repaid or credited by reason of rejections, defects, return goods allowance, recalls or returns, or because of retroactive price reductions;

(e) the portion of administrative fees paid during the relevant time period to group purchasing organizations, pharmaceutical benefit managers or Medicare Prescription Drug Plans relating to such Licensed Product;

(f) tariffs, import/export duties, customs duties, and other imposts;

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(g) freight, insurance, import/export, and other transportation charges included in the total amount invoiced; and

(h) [***].

Net Sales shall not include transfers or dispositions for charitable, promotional, pre- clinical, clinical, regulatory, or governmental purposes. Net Sales shall include the amount of fair market value of all other consideration received by Mallinckrodt, its Affiliates, or Sublicensees in respect of the Licensed Product, whether such consideration is in cash, payment in kind, exchange, or other form. Net Sales shall not include sales between or among Mallinckrodt, its Affiliates, or Sublicensees.

Subject to the above, Net Sales shall be calculated in accordance with the standard internal policies and procedures of Mallinckrodt, its Affiliates, or Sublicensees, which must be in accordance with Accounting Standards and consistent with the audited net sales reported externally by Mallinckrodt in its SEC filings.

For purposes of calculating Net Sales, all Net Sales shall be converted into Dollars in accordance with Section 9.2.

In the event a Licensed Product is a Combination Product, the Net Sales for such Combination Product shall be calculated as follows:

(i) If Mallinckrodt, its Affiliate, or Sublicensee separately sells in such country or other jurisdiction, (A) a product containing as its sole active ingredient an RNAi Product contained in such Combination Product (the “Mono Product”) and (B) 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 Mallinckrodt’s (or its Affiliate’s or Sublicensee’s, as applicable) average Net Sales price during the period to

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which the Net Sales calculation applies for the Mono Product in such country or other jurisdiction and “B” is Mallinckrodt’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 or other jurisdiction, for products that contain as their sole active ingredients the Other Active Ingredients in such Combination Product.

(ii) If Mallinckrodt, its Affiliate, or Sublicensee separately sells in such country or other jurisdiction the Mono Product but does not separately sell in such country or other jurisdiction products containing as their sole active ingredients the Other Active Ingredients in such Combination Product, the Net Sales attributable tosuch Combination Product shall be calculated by multiplying the Net Sales of such Combination Product by the fraction A/C where: “A” is Mallinckrodt’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 or other jurisdiction, and “C” is Mallinckrodt’s (or its Affiliate’s or Sublicensee’s, as applicable) average Net Sales price in such country or other jurisdiction during the period to which the Net Sales calculation applies for such Combination Product.

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(iii) If Mallinckrodt, its Affiliates, and Sublicensees do not separately sell in such country or other jurisdiction 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 or other jurisdiction 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 Mallinckrodt, its Affiliates, and Sublicensees do not separately sell in such country or other jurisdiction both the Mono Product and the Other Active 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 15.6.

1.85 “Neutral Expert” has the meaning set forth in Section 15.6.5.

1.86 “Option” has the meaning set forth in Section 3.1.

1.87 “Option Exercise Payment” has the meaning set forth in Section 3.2.

1.88 “Option Term” means the period commencing on the Effective Date and ending on [***].

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1.89 “Optioned Complement Target” means a Complement Target for which Mallinckrodt has exercised its Option pursuant to Section 3.1 and, if applicable, paid the Option Exercise Payment pursuant to Section 3.2.

1.90 “Other Active Ingredient” means any component that provides pharmacological activity or other direct therapeutic effect in the Field or that therapeutically affects the structure or any function of the body whereby such component: (a) is not covered by a Valid Claim of the Silence Background Patents, Silence Research Patents, or the Joint Research Patents and (b) is not derived by Mallinckrodt, its Affiliates, and/or Sublicensees from the Silence Background Know-How, Silence Research Know-How, or Joint Research Know-How.

1.91 “Patent Challenge” has the meaning set forth in Section 14.4.

1.92 “Patents” means (a) all national, regional and international patents and patent applications, including provisional patent applications and any and all rights to claim priority thereto, (b) 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, (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), including utility models, petty patents, and design patents and certificates of invention, (d) 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 or other patents resulting from post-grant proceedings ((a), (b), and (c)), and (e) any similar patent 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.

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1.93 “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.

1.94 “Phase 1 Clinical Program” means the Phase 1 Trial or Phase 1 Trials contemplated for Research Stage 3 for the applicable Licensed Product, as specified in the applicable Work Plan.

1.95 “Phase 1 Trial” means a human clinical trial of a Licensed Product that satisfies the requirements for a Phase 1 study as defined in 21 CFR § 312.21(a) (or any amended or successor regulations), regardless of where such clinical trial is conducted.

1.96 “Phase 2 Trial” means a human clinical trial of a Licensed Product that satisfies the requirements for a Phase 2 study as defined in 21 CFR § 312.21(b) (or any amended or successor regulations), regardless of where such clinical trial is conducted.

1.97 “Phase 3 Trial” means a human clinical trial of a Licensed Product that satisfies the requirements for a Phase 3 study as defined in 21 CFR § 312.21(c) (or any amended or successor regulations), regardless of where such clinical trial is conducted.

1.98 “Phase 4 Trial” means a post-marketing human clinical study for a Licensed Product with respect to any indication as to which Regulatory Approval has been received or for a use that is the subject of an investigator-initiated study program.

1.99 “PHSA” means the United States Public Health Service Act, as amended from time to time.

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1.100 “PMDA” means Japan’s Pharmaceuticals and Medical Devices Agency and any successor agency(ies) or authority having substantially the same function.

1.101 “Product Specific Claims” has the meaning set forth in Section 1.102.

1.102 “Product Specific Patent” means: (i) the Silence Background Patents listed on Schedule 1.102, (ii) with respect to Silence Background Patents or Silence Research Patents that are filed or otherwise become Controlled by Silence after the Effective Date, such Patents that: (a) specifically claim [***] and/or [***] and which do not claim subject matter which is [***], (b) specifically claim [***] and/or [***] where [***] specific to [***] and/or [***] (which shall not include any patent that is [***], (c) specifically claim [***] and, in each case, for which [***], and (iii) [***], unless, with respect to a particular [***] and/or [***]. Product Specific Patents will also include patents and pending patent applications that are divisionals or are otherwise direct continuations of any Product Specific Patent. Claims within the scope of item (ii), subparts (a), (b) and (c) are “Product Specific Claims.”

1.103 “Publishing Party” has the meaning set forth in Section 11.5.3.

1.104 “Quarter” means, unless it is clear that such reference is to a calendar quarter, a period of time beginning with the last Saturday of the calendar month immediately prior to the beginning of a calendar quarter and ending on the close of business on the last Friday of the last calendar month of such calendar quarter, which is a “quarter” for all Mallinckrodt accounting and business purposes, except that the first Quarter of the Term shall commence on the Effective Date and end on the close of business on the last Friday of the last month of the calendar quarter that includes the Effective Date, and the last Quarter shall end on the last day of the Term.

1.105 “Region” means each of [***].

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1.106 “Registration Trial” means a human clinical trial (whether or not designated a Phase 3 Trial) of a Licensed Product that is designed to ascertain efficacy and safety of such Licensed Product for the purpose of submitting a Drug Approval Application to the competent Regulatory Authorities; provided that any clinical trial that would not otherwise constitute a Phase 3 Trial shall constitute a Registration Trial if acknowledged as such in writing by the FDA (or using such other method of acknowledgement as may be used in the future by the FDA).

1.107 “Regulatory Approval” means, with respect to a country or other jurisdiction in the Territory, any and all approvals (including Drug Approval Applications), licenses, registrations, or authorizations of any Regulatory Authority necessary to Commercialize a Licensed Product in such country or other jurisdiction, including, where applicable, (a) pricing or reimbursement approval in such country or other jurisdiction, and (b) pre- and post-approval marketing authorizations (including any prerequisite Manufacturing approval or authorization related thereto).

1.108 “Regulatory Authority” means any applicable supra-national, federal, national, regional, state, provincial, or local governmental or regulatory authority, agency, department, bureau, commission, council, or other entities (e.g., the FDA, EMA, and PMDA) regulating or otherwise exercising authority with respect to activities contemplated in this Agreement, including the Exploitation of any Licensed Products in the Territory.

1.109 “Regulatory Exclusivity” means, with respect to any country or other jurisdiction in the Territory, an additional market protection, other than Patent protection, granted by a Regulatory Authority in such country or other jurisdiction which confers an exclusive Commercialization period during which Mallinckrodt or its Affiliates or Sublicensees have the exclusive right to market and sell a Licensed Product in such country or other jurisdiction through a regulatory exclusivity right (e.g., 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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1.110 “Research Budget” has the meaning set forth in Section 5.2.1.

1.111 “Research Collaboration Term” means the period commencing on [***].

1.112 “Research Stage” means Research Stage 1, Research Stage 2, and/or Research Stage 3, as the context dictates.

1.113 Research Stage 1” means the portion of the applicable Work Plan pertaining to [***] with respect to the applicable Licensed Product and specified in such plan as Research Stage 1.

1.114 “Research Stage 2” means the portion of the applicable Work Plan pertaining to [***] with respect to the applicable Licensed Product and specified in such plan as Research Stage 2.

1.115 “Research Stage 3” means the portion of the applicable Work Plan pertaining to [***] with respect to the applicable Licensed Product (including [***]) and specified in such plan as Research Stage 3.

1.116 “Research Stage 3 Costs” means the costs incurred by or on behalf of Silence in performing Research Stage 3 pursuant to a Work Plan and that are specifically identified as Research Stage 3 Costs in such Work Plan, including, as applicable (a) FTE Costs, (b) amounts that Silence pays to Third Parties involved in the performance of such [***] , (c) costs associated with any [***], (d) costs incurred in connection with [***], and (e) all other reasonable out-of-pocket costs incurred by or on behalf of Silence during the performance of such Research Stage 3 pursuant to a Work Plan that are identified as Research Stage 3 Costs in such Work Plan.

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1.117 “Research Stage Data Package” means, with respect to a particular Licensed Product and a particular Research Stage, a report in the format set forth in Schedule 1.117 of all data generated by or on behalf of Silence in performing activities under the applicable Work Plan in respect of such Licensed Product during such Research Stage, including data generated regarding the physical, chemical, and pharmaceutical properties of such Licensed Product, and data generated pursuant to non-clinical studies and Clinical Studies in respect of such Licensed Product. For clarity, all Information included in a Research Stage Data Package shall be deemed to be Joint Research Know-How, Silence Background Know-How or Silence Research Know-How, as applicable.

1.118 “Restricted Targets” means the following Complement Targets: [***], each as further described in Schedule 1.25.

1.119 “RNAi Product” means any short nucleic acid sequence (which is no less than [***] bases in length and no greater than [***] bases in length) which is designed to bind to mRNA that corresponds to a particular gene target to result in the down regulation of the expression of the protein encoded by such gene.

1.120 “Royalty Term” means, with respect to each Licensed Product and each country in the 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 (a) the expiration of the last- to-expire Valid Claim of any [***] that Covers such Licensed Product in such country, (b) the expiration of Regulatory Exclusivity for such Licensed Product in such country, and (c) the tenth (10th) anniversary of the First Commercial Sale of such Licensed Product in such country.

1.121 “Senior Officer” means, with respect to Silence, its Chief Executive Officer or his/her designee, and with respect to Mallinckrodt, its Chief Scientific Officer or his/her designee.

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1.122 “Silence Background IP” means the Silence Background Patents and Silence Background Know-How.

1.123 “Silence Background Know-How” means any and all Know-How Controlled by Silence or any of its Affiliates as of the Effective Date or during the Term that is developed or invented as a result of performing activities outside the scope of each Work Plan, or that otherwise becomes Controlled by Silence or any of its Affiliates outside the scope of a Work Plan, and that is necessary or useful for the research, discovery, or Exploitation of any Licensed Product.

1.124 “Silence Background Patents” means any and all Patents Controlled by Silence or any of its Affiliates on the Effective Date or during the Term that Cover any Silence Background Know-How, including the patents and patent applications set forth on Schedule 1.124 and including all continuation, continuation-in-part, divisional, renewal, reexamination, reissue or foreign counterpart applications or other Patents that claim priority to any such Patents and all patents that issue therefrom and all reissues, reexaminations and term extensions thereof and all patents issued from any post-grant proceeding involving any of the foregoing.

1.125 “Silence Indemnitees” has the meaning set forth in Section 13.1.

1.126 “Silence Research IP” means the Silence Research Patents and Silence Research Know- How.

1.127 “Silence Research Know-How” means any and all Know-How that is developed or invented after the Effective Date solely by or on behalf of Silence or its Affiliates or agents in performing activities under any Work Plan. For clarity, Silence Research Know-How specifically excludes Silence Background Know-How and Joint Research Know-How.

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1.128 “Silence Research Patents” means any and all Patents Controlled by Silence after the Effective Date that Cover any Silence Research Know-How, including all continuation, continuation-in-part, divisional, renewal, reexamination, reissue or foreign counterpart applications or other Patents that claim priority to any such Patents and all patents that issue therefrom and all reissues, reexaminations and term extensions thereof and all patents issued from any post-grant proceeding involving any of the foregoing.

1.129 “Sublicensee” means a Third Party to whom Mallinckrodt (or a sublicensee of Mallinckrodt) grants a sublicense to Develop, use, import, promote, offer for sale, sell, have sold, or otherwise Commercialize any Licensed Product in the Field in the Territory, beyond the mere right to purchase Products from Mallinckrodt and its Affiliates, and excluding wholesalers, full-service distributors that do not promote the sale of the Licensed Product, and other similar physical distributors.

1.130 “Subscription Option” has the meaning set forth in the Subscription Agreement.

1.131 “Subscription Agreement” means the Subscription Agreement by and between the Parties in the form of Schedule 1.131 attached hereto.

1.132 “[***]” means [***].

1.133 “Supplementary Rights Patents” has the meaning set forth in Section 10.2.4(b).

1.134 “Target” means the C3 Target and/or any Optioned Complement Target, as the context dictates.

1.135 “Technology Transfer” means the portion of the applicable Work Plan pertaining to the technology transfer for the applicable Licensed Product and specified in such plan as Technology Transfer.

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1.136 “Technology Transfer Costs” means the costs incurred by or on behalf of Silence in performing a Technology Transfer pursuant to a Work Plan and that are specifically identified as Technology Transfer Costs in such Work Plan, including, as applicable, allsuch FTE Costs and other reasonable out-of-pocket costs incurred by or on behalf of Silence during the performance of such Technology Transfer.

1.137 “Term” has the meaning set forth in Section 14.1.

1.138 “Territory” means worldwide.

1.139 “Third Party” means any Person other than Silence, Mallinckrodt, or an Affiliate of Silence or Mallinckrodt.

1.140 “Valid Claim” means either: (a) a claim of a pending Patent application that has not been pending for more than [***] years after the relevant application date for said application, which claim was filed and is being prosecuted in good faith and has not been abandoned or finally disallowed without the possibility of appeal or re-filing of the application, provided always that, in the event that a claim of a pending patent ceases to be a Valid Claim as a consequence of the expiry of the time period under this part (a) but such claim is subsequently granted, it shall be deemed to be a Valid Claim from such date pursuant to part (b) of this definition; or (b) a claim of any issued and unexpired Patent for which the validity, enforceability, or patentability has not been affected by any of the following: (x) irretrievable lapse, cancellation, abandonment, revocation, dedication to the public, or disclaimer; or (y) 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.

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1.141 “Withholding Party” has the meaning set forth in Section 9.3.

1.142 “Work Plan” means the C3 Work Plan and/or any Complement Work Plan, as the context dictates.

1.143 “Year” means, unless it is clear that such reference is to a calendar year, the period of time beginning with the last Saturday of the month immediately prior to the beginning of a calendar year and ending on the close of business on the last Friday of the last month of such calendar year, which is a “year” for all Mallinckrodt accounting and business purposes, except that the first Year of the Term shall commence on the Effective Date and end on the last day of the Year in which the Effective Date occurs and the last Year of the Term shall commence on the first day of the Year in which the Term ends and end on the last day of the Term.

1.144 In this Agreement:

1.144.1 all references to a particular clause or schedule shall be a reference to that clause or schedule in or to this Agreement as it may be amended from time to time pursuant to this Agreement;

1.144.2 the headings are inserted for convenience only and shall be ignored in construing this Agreement;

1.144.3 words importing the masculine gender shall include the feminine and vice versa and words in the singular include the plural and vice versa;

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1.144.4 words denoting persons shall include any individual, partnership, company, corporation, joint venture, trust association, organisation, or other entity, in each case whether or not having separate legal personality;

1.144.5 the words “include”, “included”, and “including” are to be construed without conveying any limitation to the generality of the preceding words;

1.144.6 reference to any statute or regulation includes any modification or re- enactment of that statute or regulation;

1.144.7 any reference to notices or consent being sought or given in writing shall require the consent or notice to be signed by an appropriately authorised person and shall not include consents or notices conveyed by email; and

1.144.8 in the event of any inconsistency or conflict between this Agreement and any of the Schedules, this Agreement shall prevail.

ARTICLE 2
COLLABORATION MANAGEMENT

2.1 Joint Steering Committee. Within fifteen (15) days after the Effective Date, or as mutually agreed to by the Parties, the Parties shall establish a joint steering committee (the “Joint Steering Committee” or “JSC”). The JSC shall consist of two (2) 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 JSC. From time to time, each Party may substitute one (1) or more of its representatives to the JSC by providing prior written confirmation (which may be by email) to the other Party. The chairperson of the JSC shall be selected by Mallinckrodt. From time to time, Mallinckrodt may change the representative who will serve as chairperson on written notice to Silence.

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2.2 Specific Responsibilities of the JSC. Until the expiration of the Research Collaboration Term with respect to a particular Target, the JSC shall review the strategy for and oversee the Development of the Licensed Product directed to such Target. In particular, the JSC shall:

2.2.1 agree on the C3 Work Plan and, with respect to any Optioned Complement Target, the applicable Complement Work Plan;

2.2.2 review and discuss the overall status of each Work Plan and the conduct of research and Development activities under the Work Plans;

2.2.3 review and discuss the results of each activity under the Work Plans, whether completed or ongoing;

2.2.4 review and agree to any amendment to a Work Plan;

2.2.5 review and discuss the prosecution strategy for Silence Research Patents and Joint Research Patents, including [***]

[***];

2.2.6 establish subcommittees to perform specific duties of the JSC, direct each such subcommittee to perform the functions for which it is established, and oversee each subcommittee, including resolution of disputes raised to the JSC by any subcommittee;

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2.2.7 perform such other functions, and direct each subcommittee to 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 Disbandment. The JSC shall continue to exist until the first to occur of: (a) the Parties mutually agreeing to disband the JSC and (b) completion of the Research Collaboration Term (unless otherwise mutually agreed in writing). Notwithstanding anything herein to the contrary, upon the first to occur of the foregoing (a) or (b), the JSC shall automatically dissolve and shall have no further rights or obligations under this Agreement, and thereafter each Party shall designate, to the extent necessary, a contact person for the exchange of Information under this Agreement or such exchange of Information shall be made through the Alliance Managers, and decisions of the JSC, if any, shall be decisions as between the Parties, subject to the other terms and conditions of this Agreement.

2.4 Location of Meetings. The JSC shall meet at least once per calendar quarter, or as otherwise agreed to by the Parties. JSC meetings may be held in person or by audio or video teleconference; provided that unless otherwise agreed, at least one (1) meeting per year shall be held in person. In-person meetings shall be held at locations alternately selected by the Parties.

2.5 Conduct of Meetings. The chairperson of the JSC shall be responsible for calling meetings on no less than fifteen (15) 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 ten (10) Business Days in advance of the applicable meeting; provided, that if the input by the JSC is required urgently, 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, conditioned, or delayed. An individual designated by the chairperson of the JSC shall prepare and circulate the minutes of each meeting for review and approval of the Parties 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 JSC.

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2.6 Procedural Rules. The JSC 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 JSC shall exist whenever there is present at a meeting at least one (1) representative appointed by each Party. Representation by proxy shall be allowed. The JSC shall take action by consensus of the representatives 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 representatives of the Parties on the JSC may attend meetings of the JSC; provided, that (a) unless the other Party agrees, no more than two (2) such persons may attend any particular meeting, (b) attendance of any non- employee must be pre-approved by the other Party, such approval not to be unreasonably withheld and (c) such attendees (i) shall not vote or otherwise participate in the decision- making process of the JSC and (ii) are bound by obligations of confidentiality and non- disclosure that are substantially similar to those set forth in ARTICLE 11.

2.7 Decision Making.

2.7.1 JSC Decisions. All JSC decisions shall be made by unanimous vote, with each Party’s representatives collectively having one (1) vote. If after reasonable discussion and good faith consideration of each Party’s view on a particular matter, the JSC cannot, or does not, reach consensus on an issue within the scope of the JSC, then the dispute shall first 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.

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2.7.2. Final Decision Making Authority. If the Senior Officers are not able to agree on the resolution of any such issue within thirty (30) days after such issue was first referred to them, then subject to the remainder of this Section 2.7.2, (a) [***] shall have the final say on [***] (including [***]), (b) [***] and the [***] and (c) [***] shall have final decision making authority with respect to [***] (including, for clarity, [***] Notwithstanding the foregoing subsections (a), (b) and (c): (u) [***] final decision making authority with respect to [***] shall not be deemed to, and cannot be used to, limit or eliminate, [***] rights under [***] below or that would result in [***] breach of its covenants under [***] and [***] final decision making authority with respect to [***] shall not be deemed to, and cannot be used to limit or eliminate [***] rights under [***] below or that would result in [***] breach of its covenants under [***], (v) with respect to [***] shall consider in good faith any comments or concerns from [***] regarding the [***] as a result of [***] (w) [***] shall not have the right to make changes to [***] that will or are likely to have a material adverse effect on the applicable [***]; provided that if or to the extent that [***]the terms of [***] shall govern the Parties’ rights and obligations in respect of any such [***], (x) with respect to any [***] for which [***], [***] shall have the right to make any decision that [***]; provided that if or to the extent that any such changes will result in [***] , the terms of [***] shall govern the Parties’ rights and obligations in respect of any such [***], (y) neither Party shall use its final decision-making authority to (i) require the other Party to violate any Applicable Law, clinical or non-clinical research ethical requirement (including the conduct of any animal study that would not [***] or any requirement necessary to comply with an informed consent form), or any agreement it may have with any Third Party, (ii) amend the terms and conditions of this Agreement, (iii) other than as specifically set out in [***], require the other Party to [***] unless the Parties have agreed as to [***], and (z) [***] shall not have the right to (i) require [***] in excess of [***] required for the [***] as set out in [***] or (ii) require [***] that is reasonably expected to result in [***] (i.e., for which neither Party has exercised its decision making authority under this Section 2.7.2).

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2.7.2 Other Disputes.For clarity, disputes arising between the Parties in connection with or relating to this Agreement or any document or instrumentdelivered in connection herewith that are outside of the jurisdiction of the JSC shall be resolved pursuant to Section 15.6.

2.8 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 the JSC unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing. The JSC does not have the power to amend, modify, or waive compliance with this Agreement, and this Agreement may only be amended or modified as provided in Section 15.8 and compliance with this Agreement may only be waived as provided in Section 15.10.

2.9 Alliance Manager. Promptly after the Effective Date, each Party shall appoint a person who shall oversee contact between the Parties for all matters between meetings of the JSC and shall have such other responsibilities as the Parties may agree in writing after the Effective Date (each, an “Alliance Manager”). If not already a member of the JSC, each Alliance Manager shall be permitted to attend JSC meetings as appropriate as non- voting participants. Each Party may replace its Alliance Manager at any time by notice in writing to the other Party. Each Party shall bear the costs of its Alliance Manager.

2.10 Expenses. Each Party shall be responsible for all travel and related costs and expenses for its members and other representatives to attend meetings of, and otherwise participate on, the JSC.

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ARTICLE 3OPTION GRANTS

3.1 Option Grant to Mallinckrodt. Silence hereby grants to Mallinckrodt, on a Complement Target-by-Complement Target basis, the exclusive right and option, exercisable at any time during the Option Term at Mallinckrodt’s sole discretion, to obtain and exercise the exclusive license under the Silence Background IP, the Silence Research IP, and Silence’s interest in the Joint Research IP as set forth in Section 4.1 with respect to the Exploitation of the corresponding Complement Licensed Products in the Field in the Territory (each, an “Option”). Mallinckrodt may exercise its Option in respect of a Complement Target by providing written notice to Silence of its election to exercise such Option at any time during the Option Term. Upon delivery of such written notice and, if applicable, payment of the applicable Option Exercise Payment, the license set forth in Section 4.1 with respect to the Exploitation of the Complement Licensed Products directed to such Complement Target in the Field in the Territory shall, and hereby does, automatically become effective.

3.2 Option Exercise Payment. In consideration of the upfront payment to Silence pursuant to Section 8.1, Mallinckrodt shall have the right to exercise its Option for up to two (2) Complement Targets for no additional payment. For the avoidance of doubt Mallinckrodt has been granted rights in relation to the C3 Target as of the Effective Date and so the C3 Target will not count towards the two (2) Complement Targets referred to in this Section 3.2. If Mallinckrodt exercises its Option with respect to more than two (2) Complement Targets, then with respect to each Option exercised by Mallinckrodt for an additional (in excess of two (2)) Complement Target, Mallinckrodt shall pay to Silence the non-refundable, non-creditable sum of [***] (the “Option Exercise Payment”) within [***] days after the exercise of such Option or, if later, upon the final determination of the Parties of the development and sales milestones payable in respect of Licensed Products directed to such Target, in accordance with Sections 8.4.3 and 8.5.3 below.

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3.3 Non-Exercise of the Option. If Mallinckrodt does not exercise its Option with respect to a Complement Target during the Option Term, or notifies Silence in writing prior to the expiration of the Option Term that Mallinckrodt will not exercise such Option, then such Option shall immediately expire with respect to such Complement Target without any further action required on the part of either Party.

3.4 Exclusivity. During the Option Term: (a) Silence shall not (and shall ensure that its Affiliates do not) license, sublicense, transfer, assign or take any other action with respect to any Silence Background IP, Silence Research IP, or Silence’s interest in the Joint Research IP that would be inconsistent with or prevent Silence from granting the license under Section 4.1.2 in respect of any Complement Target and (b) neither Party shall (and shall ensure that its Affiliates do not), itself or with or through a Third Party, Exploit any [***] and/or [***].

ARTICLE 4
LICENSE GRANTS

4.1 License Grants to Mallinckrodt. Subject to Sections 4.3 and 4.4, Silence, for itself and its Affiliates, hereby grants to Mallinckrodt:

4.1.1 an exclusive, royalty-bearing license, with the right to grant sublicenses as provided in Section 4.3, under the Silence Background IP, Silence Research IP, and Silence’s interest in the Joint Research IP to Exploit C3 Licensed Products in the Field in the Territory; and

4.1.2 upon Mallinckrodt exercising its Option in respect of a particular Complement Target and, if applicable, paying the Option Exercise Payment with respect thereto, an exclusive, royalty-bearing license, with the right to grant sublicenses as provided in Section 4.3, under the Silence Background IP, Silence Research IP, and Silence’s interest in the Joint Research IP to Exploit Complement Licensed Products directed to such Optioned Complement Target in the Field in the Territory.

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4.2 License Grants to Silence.

4.2.1 Research Collaboration License. Mallinckrodt hereby grants to Silence, during the Research Collaboration Term, a non-exclusive license, with the right to grant sublicenses to Affiliates and subcontractors, under the Mallinckrodt Background IP and Mallinckrodt Research IP, solely to conduct the activities under the Work Plans assigned to Silence.

4.2.2 Termination License. If Mallinckrodt does not provide to Silence the Acceptance Notice with respect to a Target and this Agreement terminates with respect to such Target (and all Licensed Products directed to such Target) as set forth in Section 5.3.2, if Mallinckrodt terminates this Agreement pursuant to [***], or if Silence terminates this Agreement pursuant to [***], Mallinckrodt (for itself and its Affiliates) shall, and hereby does, grant to Silence (without any further action required on the part of Mallinckrodt) a non-exclusive, royalty-free and fully paid-up, irrevocable and perpetual license, with the right to grant sublicenses (on the same terms applicable Mallinckrodt’s right to grant sublicenses under its licenses, as set forth in Section 4.3), under any Mallinckrodt Research [***] the applicable Target (such Mallinckrodt Research IP the “Licensed Mallinckrodt Research IP” and, as applicable, the “Licensed Mallinckrodt Research Patents” and/or the “Licensed Mallinckrodt Research Know-How”) solely for purposes of further Development of [***] the applicable Target, including in connection with Development of products that [***]. If Silence wishes to Commercialize any such product, then upon Silence’s request, Mallinckrodt will grant Silence a license under the Licensed Mallinckrodt Research IP for such purpose subject to the following financial terms: (i) if [***] and [***], as applicable, the license would be non-exclusive and royalty free; (ii) if [***], as applicable, then (a) if any Licensed Mallinckrodt Research Patent or Joint Research Patent [***], the license shall be exclusive and Silence shall be required to pay a royalty of no more than [***] of the net sales of such

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product; (b) if [***], but[***] the applicable Target, the license shall be exclusive and Silence shall be required to pay a royalty of no more than [***] of the net sales of such RNAi Product; (c) if [***], the license shall be exclusive and Silence shall be required to pay a royalty of no more than [***] of the net sales of such RNAi Product; (d) in the event that [***] (i.e., [***], then the maximum royalty payable by Silence on net sales of such product shall be [***]; and(e) if [***] with respect to such Target ]prior to completion of Research Stage 3] for such Target, the total net sales royalty payable to Mallinckrodt in respect of such Target, at the rate that satisfies the applicable criteria above, will be capped at [***].

4.3 Sublicenses. Mallinckrodt shall have the right to grant sublicenses, through multiple tiers of sublicenses, under the licenses granted in Section 4.1 to Sublicensees; provided that any such sublicenses shall (a) be in writing, (b) be consistent with the terms and conditions of this Agreement, and (c) require the applicable Sublicensee to comply with all applicable terms of this Agreement. Mallinckrodt shall be responsible for the performance of any Sublicensee as if such Sublicensee was “Mallinckrodt” hereunder. Each sublicense granted by Mallinckrodt to any rights licensed or granted will terminate immediately upon the termination of the license from Silence to Mallinckrodt with respect to such rights; provided, however, that with respect to any such Sublicensee that has rights to Commercialize a Licensed Product, then, unless such Sublicensee caused a breach of this Agreement that resulted in its termination, effective upon termination of this Agreement, Silence will grant such Sublicensee such rights under the Silence Background IP, Silence Research IP, and Silence’s interest in the Joint Research IP consistent with the scope of the sublicense under such rights granted by Mallinckrodt to such Sublicensee to enable such Sublicensee to wind-down such activities in a commercially reasonable manner and, upon the written request of such Sublicensee, will consider in good faith assuming such Sublicensee’s agreement with Mallinckrodt or entering into a license agreement with such Sublicensee under terms and conditions that are substantially similar, in all material respects, to those of such Sublicensee’s agreement with Mallinckrodt, to the extent such terms are within the scope of the subject

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matter of this Agreement and provided that Silence’s obligations under such agreement would not be greater than its obligations under this Agreement.

4.4 Retention of Rights. Notwithstanding the exclusive licenses granted to Mallinckrodt pursuant to Section 4.1, Silence hereby expressly reserves the right (a) under the Silence Background IP, Silence Research IP, and Silence’s interest in the Joint Research IP for internal research purposes outside the scope of Section 4.8 and to exercise its rights and perform its obligations under this Agreement, whether directly or through one or more Affiliates or subcontractors, including the right to perform those activities assigned to it under the Work Plans, and (b) to practice, and to grant licenses under, the Silence Background IP, Silence Research IP, and Silence’s interest in the Joint Research IP outside the scope of the licenses granted to Mallinckrodt in Section 4.1 and, during the Option Term, outside the scope of its covenants under Section 3.4.

4.5 No Implied Licenses. Except as expressly provided in this Agreement, neither Party shall acquire any license or other intellectual property interest, by implication, estoppel, or otherwise, under or to any Patents, Know-How, Information, or other intellectual property owned or controlled by the other Party.

4.6 No [***]. Notwithstanding anything to the contrary in this Agreement, [***].

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4.7 Confirmatory Patent License. Each Party shall, if requested to do so by the other, promptly enter into confirmatory license agreements in the form or substantially the form reasonably requested by the requesting Party for purposes of recording the licensesgranted under this Agreement with such patent offices in the Territory as requesting Party considers appropriate.

4.8 Exclusivity.

4.8.1 C3 Target. Subject to Section 14.7.4, neither Party shall, itself or with or through a Third Party, Develop or Commercialize any [***] of the C3 Target and/or [***] of the C3 Target.

4.8.2 Complement Target. Subject to Section 14.7.4, following Mallinckrodt’s exercise of its Option and, if applicable, payment of the Option Exercise Payment with respect to a particular Complement Target, neither Party shall, itself or with or through a Third Party, Develop or Commercialize any [***] of the Optioned Complement Target and/or [***] of the Optioned Complement Target.

4.9 Change of Control Transactions.

4.9.1 Each Party (or its successor), as the acquired Party, shall provide the other Party with written notice of any Change of Control Transaction of the acquired Party [***] Business Days following the closing date of such transaction.

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4.9.2 In the event that a Party is acquired in a Change of Control Transaction, then the intellectual property of the Acquirer held or developed by such Acquirer prior to or, except as provided below, after such acquisition shall be excluded from the Silence Background IP (if Silence is the acquired Party) or from the Mallinckrodt Background IP (if Mallinckrodt is the acquired Party), and suchAcquirer (and Affiliates of such Acquirer which are not controlled (as set out in the definition of Affiliate) by the acquired Party itself) shall be excluded from the Affiliate definition solely for purposes of the applicable components of the Silence Background IP (if Silence is the acquired Party) or from the Mallinckrodt Background IP (if Mallinckrodt is the acquired Party). For clarity, the foregoing shall not be deemed to modify the definitions or scope of Silence Research IP, Mallinckrodt Research IP or Joint Research IP, and, for such purposes, references to Affiliates shall include such Acquirer (and Affiliates of such Acquirer which are not controlled (as set out in the definition of Affiliate) by the acquired Party if and to the extent such Acquirer or its Affiliate performs activities under this Agreement or any Work Plan. Additionally, if Silence is the acquired Party, Silence Background IP shall include any Know-How that is developed or invented by the Acquirer or any of its Affiliates from or after closing of the Change of Control Transaction that is within the scope of [***] and Covered by [***].

4.9.3 In no event shall a Change of Control Transaction involving a Party be deemed to limit, eliminate or otherwise modify: (a) any obligations of the acquired Party or rights of the other Party existing as of the closing of such Change of Control Transaction, in, to or in respect of any Know-How or Patents Controlled by the acquired Party immediately prior to closing of such Change of Control Transaction, (b) any obligations of the acquired Party or rights of the other Party in, to or in respect of any Know-How that is developed or invented by or on behalf of either Party in performing activities under a Work Plan or any Patents Covering such Know-How, either before or after the Change of Control Transaction or (c) any obligations of the acquired

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Party to perform activities under this Agreement or any Work Plan, either before or after the Change of Control Transaction. If the Change of Control Transaction is within the scope of item (c) of that definition or if, upon or following the closing of the Change of Control Transaction, acquired Partyceases to exist, then all of the Acquirer shall continue to be bound by and subject to the terms of this Agreement that are within the scope of the immediately preceding sentence. In addition, in the event of a Change of Control Transaction involving a Party, if, prior to, on, or after such Change of Control, the Acquirer of such Party has a program or otherwise is engaged (either directly or through an Affiliate, or in collaboration with a Third Party) in any activities that would be prohibited under Section 4.8 or 3.4(b) (“Prohibited Programs”), the Acquirer and the acquired Party will institute commercially reasonable technical and administrative safeguards to ensure that the conduct of each Work Plan will be separate from the conduct of the Prohibited Programs and that no Silence Background IP, Silence Research IP, Joint Research IP or Confidential Information of Mallinckrodt (if Silence is the acquired Party) or Mallinckrodt Background IP, Mallinckrodt Research IP, Joint Research IP or Confidential Information of Silence (if Mallinckrodt is the acquired Party) will be used in connection with the Prohibited Programs, including by creating “firewalls” between the personnel working on (or who have worked on) such Prohibited Programs and the personnel working on (or who have worked on) each Work Plan or otherwise having access to data or information from activities performed under this Agreement. Except as provided in this Section 4.9.3, nothing in Section 4.8 shall apply to or bind any Acquirer of a Party.

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ARTICLE 5DEVELOPMENT AND REGULATORY

5.1 Overview. Subject to the terms and conditions of this Agreement, during the Research Collaboration Term the Parties will collaborate with respect to the performance of the Work Plans. Thereafter, Mallinckrodt shall have the sole and exclusive right and responsibility, at its own expense, for the Development of the Licensed Products in the Field in the Territory.

5.2 Work Plans.

5.2.1 General. The Work Plans shall set forth the timeline and details for all activities to be conducted pursuant to such plan, including Research Stage 1, Research Stage 2 and Research Stage 3 and Technology Transfer activities to be conducted pursuant to Section 7.2. The Work Plans shall also: (a) include a reasonably detailed budget of the Development Costs for the activities to be conducted pursuant to such plan (the “Research Budget”) on an activity-by- activity or study-by-study basis, as appropriate, (b) mutually agreed upon Advancement Criteria for each Work Plan and the consequences of satisfying or failing to satisfy such Advancement Criteria, and (c) the protocol for the applicable Phase 1 Trial. For clarity, the Parties acknowledge and agree that an initial Work Plan directed to Development of Licensed Products for a particular Target will include descriptions of activities to be conducted during Research Stage 1 and Research Stage 2 and a Research Budget for such activities, together with outlines of activities to be conducted during Research Stage 3 and the Technology Transfer and projected Research Budgets for such activities, with such descriptions, outlines, and budgets at a level of detail consistent with those descriptions, outlines, and budgets for the same Research Stage set forth in the C3 Work Plan agreed by the JSC (with such Work Plan to be based on the outline attached to this Agreement as Schedule 5.2.1). Upon achievement of appropriate Advancement Criteria, as set forth

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in the applicable Work Plan, the Parties shall prepare and agree upon, via the JSC, updates to the Work Plan to provide more detailed descriptions of activities to be conducted during Research Stage 3 and the Technology Transfer. Unless the Parties otherwise agree, initial drafts of Work Plans directed to the foregoing shall be prepared by Silence. In addition, from time to time, the Parties may prepare updates and amendments, as appropriate, to a Work Plan (including any consequential changes to the Research Budget), for review of and approval by the JSC, subject to and in accordance with the applicable provisions of ARTICLE 2, including Section 2.7. If the terms of aWork Plan contradict, or create inconsistencies or ambiguities with, the terms of this Agreement, then the terms of this Agreement shall govern.

5.2.2 C3 Work Plan. Within [***] days after the Effective Date, Silence shall present to the JSC a draft Work Plan for development of Licensed Product(s) directed to the C3 Target. Upon the JSC’s approval of such draft Work Plan (as revised by the JSC), such plan shall be the “C3 Work Plan”.

5.2.3 Complement Work Plan. Following the Effective Date and prior to Mallinckrodt’s exercise of an Option in respect of a Complement Target, the JSC shall discuss and agree upon an outline Complement Work Plan that shall form the basis for the Work Plans for the Complement Targets in respect of which Mallinckrodt expects to exercise its Option. In the event that Mallinckrodt identifies Complement Targets of particular interest for which it expects to exercise its Option, the JSC shall endeavor to incorporate components that are specific to such Complement Targets in such outline Complement Work Plan. Following exercise of an Option and, if applicable, payment of the corresponding Option Exercise Payment, the JSC shall be responsible, at its first meeting after such Option exercise, for finalizing and approving the Work Plan for such Optioned Complement Target based upon the outline Complement Work Plan; upon the JSC’s approval of the Work Plan (as revised by the JSC) for a particular Optioned Complement Target,

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such plan shall be a “Complement Work Plan”. Notwithstanding the foregoing, unless otherwise agreed in writing by Silence, Silence shall not be obligated to commence activities under a particular Complement Work Plan within [***] of having commenced work under the C3 Work Plan or another Complement Work Plan, but unless otherwise agreed in writing by Mallinckrodt, it must commence work under a particular Complement Work Plan [***] of Mallinckrodt’s exercise of its Option for the applicable Optioned Complement Target.

5.3 Research Stage Data Packages.

5.3.1 Delivery. Silence shall use Commercially Reasonable Efforts to deliver to Mallinckrodt a Research Stage Data Package promptly (i.e., within [***] days) following the completion of each Research Stage under a Work Plan in respect of a Target.

5.3.2 Acceptance Notice. Within [***] days following the delivery to Mallinckrodt of the Research Stage Data Package for Research Stage 3 in respect of a particular Target, Mallinckrodt shall elect whether it wishes to continue, and assume responsibility for, the Development of the relevant Licensed Product (and any other Licensed Products directed to such Target), or terminate this Agreement with respect to such Target. If Mallinckrodt wishes to continue and assume responsibility for the Development of Licensed Products directed to such Target, it shall provide Silence written notice thereof (each such notice, an “Acceptance Notice”) within such [***]-day period. If Mallinckrodt does not wish to continue and assume responsibility for the Development of Licensed Products directed to such Target, it shall provide Silence with written notice thereof and this Agreement shall automatically terminate with respect to such Target (and all Licensed Products directed to such Target) upon Silence’s receipt of such notice. If Mallinckrodt fails to respond to Silence within such [***] day

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period, Silence, by written notice to Mallinckrodt, may request Mallinckrodt’s affirmative notice of its intention to proceed with or terminate Development of Licensed Products directed to such Target, and if Mallinckrodt fails to provide an Acceptance Notice or affirmative notice of its intention to terminate within [***] days after such notice from Silence, this Agreement shall automatically terminate with respect to such Target (and the corresponding Licensed Products) upon the expiration of such [***] day period.

5.4 Research Expenses.

5.4.1 General. Except with respect to Research Stage 3 Costs incurred by Silence, each Party shall be solely responsible for the costs and expenses incurred by such Party in connection with the performance of the Development activities assigned to such Party under and in accordance with each Work Plan and applicable Research Budget.

5.4.2 Research Stage 3. As further set forth in and subject to this Section 5.4.2, Mallinckrodt shall be responsible for Research Stage 3 Costs incurred by Silence in the performance of the Research Stage 3 portion of each Work Plan. Prior to the beginning of each calendar quarter during which a Research Stage 3 is in process, Mallinckrodt shall pay to Silence the amount budgeted (such budget to be based on the actual expenditure expected by Silence in such calendar quarter) in the applicable Research Budget for such calendar quarter. Silence shall notify the JSC if it anticipates that its actual Research Stage 3 Costs for any Research Stage 3 Development activity will exceed the amount budgeted in the applicable Research Budget for such activity by more than [***] of the amount so budgeted for such activity (the “Cost Overrun Threshold”). Any such notice must be provided at least [***] days prior to the date upon which such activity is to be performed and shall include a description of the likely consequences of any material delay in the

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performance of such activity. Silence shall not proceed with such Development activity unless and until such Development activity has been approved by Mallinckrodt; in the absence of such approval and so long as Silence’s notice of such excess Research Stage 3 Costs complied with this Section 5.4.2 and so long as such excess Research Stage 3 Costs did not result from Silence’s breach of other activities it was required to perform under such Work Plan, Silence’s failure to carry out activities that are the subject of such notice shall not be deemed to be a breach of its obligations under such Work Plan or this Agreement. Silence shall provide Mallinckrodt (a) a non-binding, estimate within [***] days after the end of each calendar quarter, and(b) a report within [***] days after the end of each calendar quarter, in reasonable detail and format, of all Research Stage 3 Costs incurred by it and its Affiliates during such calendar quarter (the “Development Costs Report”). Within [***] Business Days following the receipt of a Development Costs Report, and without limiting Mallinckrodt’s rights under Section 9.5 below, Mallinckrodt shall have the right to request reasonable additional information related to Silence’s Research Stage 3 Costs during such calendar quarter and Silence’s payment to Third Parties for out-of- pocket costs included therein in order to confirm such Development Costs and such payments to third parties. If the Development Costs for such calendar quarter were in excess of the amounts paid to Silence by Mallinckrodt under this Section 5.4.2 for such calendar quarter and were below the Cost Overrun Threshold or approved by Mallinckrodt, then Silence shall invoice Mallinckrodt for the difference and Mallinckrodt shall pay such invoice within [***] days after receipt thereof. For the avoidance of doubt, Mallinckrodt shall have no obligation to pay any Development Costs that exceed the Cost-Overrun Threshold unless such excess costs were approved by Mallinckrodt, and Development Costs for purposes of this Section 5.4.2 shall not include costs for any work performed by or on behalf of Mallinckrodt pursuant to Section 5.4.3. If the Development Costs for such calendar quarter were less than the amounts paid to Silence by Mallinckrodt

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under this Section 5.4.2 for such calendar quarter, then any such excess shall be credited towards future amounts to be paid by Mallinckrodt under this Section 5.4.2 or, at Mallinckrodt’s option as evidenced by written notice provided to Silence within [***] days of its receipt of the Development Costs Report and to the extent a payment by Mallinckrodt is not reasonably expected to be owed to Silence within the following [***] period, refunded to Mallinckrodt, any such refund to be paid within [***] days of Silence’s receipt of Mallinckrodt’s invoice therefor.

5.4.3 Mallinckrodt  Assumption  of  Work and  Offsets. Mallinckrodt, in its discretion, may from time to time propose to the JSC that it will undertake any one or more tasks that were specified in a Work Plan to be the responsibility of Silence. In such event, the JSC (with neither Party having the final decision making authority) shall agree in writing on the scope of work to be performed by Mallinckrodt and the corresponding Research Budget. If such scope and Research Budget is so agreed by the Parties (through the JSC), Mallinckrodt shall offset the costs and expenses incurred by Mallinckrodt or its Affiliates in the performance of such tasks, but only to the extent such costs and expenses (a) were not otherwise costs and expenses for which Mallinckrodt was already responsible pursuant to such Work Plan and (b) do not exceed such Research Budget by more than [***] in the aggregate, against the next milestone payment(s) owed by Mallinckrodt to Silence pursuant to Section 8.3 or 8.4. For clarity, if Mallinckrodt assumes primary responsibility for Research Stage 3, then Mallinckrodt shall (x) not be entitled to offset any costs or expenses incurred in the performance of Research Stage 3 and (y) prepare the Research Stage Data Package for Research Stage 3 in respect of the applicable Target and deliver such Research Stage Data Package to Silence, and Mallinckrodt’s delivery of an Acceptance Notice in respect of such Target shall be due within [***] days of Mallinckrodt’s delivery of such Research Stage Data Package to Silence, and the terms of Section 5.3.2 shall otherwise apply.

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5.5 Development Updates; Information-Sharing.

5.5.1 During the Research Collaboration Term. At each regularly scheduled JSC meeting, each Party shall update the JSC in respect of any then-ongoing activities for which such Party is responsible under a Work Plan. In addition, Silence shall deliver to Mallinckrodt all data and information pertaining to a Target generated in the performance of the applicable Work Plan on a calendar quarter basis and the Parties shall review such data and information at the next regularly scheduled JSC meeting following the delivery of such data and information to Mallinckrodt. The Parties shall discuss the status, progress, and results of all such activities at such JSC meetings.

5.5.2 Following Acceptance Notice. Following Mallinckrodt’s delivery of an Acceptance Notice in respect of a Target until receipt of Regulatory Approval of the first Licensed Product directed to such Target in the United States, Japan, and at least one country that is a Major European Market, Mallinckrodt shall update Silence on a semi-annual basis regarding its Development activities with respect to Licensed Products directed to such Target at a level of detail reasonably required by Silence to determine Mallinckrodt’s compliance with its obligations under Section 5.6 of this Agreement. Following the discontinuation of the JSC pursuant to Section 2.3, Mallinckrodt shall provide further relevant information as Silence may reasonably request following the delivery of any such update.

5.6 Diligence.

5.6.1 During the Research Collaboration Term. Each Party shall use its Commercially Reasonable Efforts (i) to perform the activities assigned to such Party under a Work Plan in accordance with the terms set forth in such Work Plan (including the relevant Research Budget) and the terms of this

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Agreement, taking into account the scope of work initially planned under such Work Plan, and (ii) to achieve the objectives of the Work Plan. Each Party shall use its Commercially Reasonable Efforts to adhere to any timeframes set forth in a Work Plan. Silence shall not be obliged to undertake any work in respect of Research Stage 1 or Research Stage 2 if the cost of such work would exceed more than [***] of the Research Budget applicable to such Research Stage and if and to the extent such excess costs [***] in respect of such Research Stage; provided, that Silence must notify Mallinckrodt if it anticipates that any such work will exceed such amount promptly and, in any event at least [***] days prior to the date upon which such activity is to be performed.

5.6.2 Following Acceptance Notice. Following Mallinckrodt’s delivery of an Acceptance Notice with respect to a Target as set forth in Section 5.3.2, Mallinckrodt, directly or via its Affiliates or Sublicensees, shall use Commercially Reasonable Efforts to Develop and obtain Regulatory Approval for at least one Licensed Product directed to such Target for at least one Indication that is [***] in each of [***]. For clarity, Silence acknowledges and agrees that, as appropriate to the extent consistent with Commercially Reasonable Efforts, Mallinckrodt may conduct certain Clinical Studies of a Licensed Product in [***] prior to launching equivalent Clinical Studies of such Licensed Product in [***] so as to rely on data generated in the performance of such Clinical Studies in [***] in the design and execution of such Clinical Studies in [***]. For further clarity, Mallinckrodt acknowledges and agrees that, as appropriate to the extent consistent with such Commercially Reasonable Efforts, such Development shall include [***].

5.6.3 No Guarantee. The Parties acknowledge and agree that no outcome or success is or can be assured and that failure to achieve desired results will not in and of itself constitute a breach or default of any obligation in this Agreement.

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5.7 Subcontracting. Each Party shall have the right to subcontract its obligations under this Agreement to subcontractors and Affiliates, subject to any limitations, restrictions or other qualifications that are set forth in an applicable Work Plan; provided, that such subcontractors and Affiliates agree in writing to be subject to the applicable terms and conditions of this Agreement, including the confidentiality provisions of ARTICLE 11, and provided that the subcontracting Party directly owns all Intellectual Property that may arise as required by ARTICLE 10.

5.8 Records.

5.8.1 Creation. Each Party shall maintain complete and accurate records (including both paper and electronic records) in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, and in compliance with Applicable Law and regulatory guidance, of all work done and results achieved in the performance of any activities under the Work Plans. Such records shall be retained by each Party for at least [***] years after the expiration of the Research Collaboration Term, or for such longer period as may be required by Applicable Law.

5.8.2 Inspection. Each Party shall have the right to reasonably inspect the other Party’s records, and shall provide copies of all requested records, to the extent reasonably required for the exercise or performance of the requesting Party’s rights under this Agreement; provided, however, that the requesting Party shall maintain such records and the Information of the other Party as Confidential Information of the other Party in accordance with ARTICLE 11 hereof and shall not use such records or Information except to the extent otherwise permitted by this Agreement.

5.8.3 Other Record Keeping and Audit Rights. For clarity, Sections 9.4 and 9.5 set out the recording keeping responsibilities and audit rights of the Parties in

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respect of the Research Stage 3 Costs.

5.9 Regulatory Matters.

5.9.1 During the Research Collaboration Term. Prior to Mallinckrodt’s delivery to Silence of an Acceptance Notice in respect of a Target, Silence shall have the sole right and responsibility to prepare, obtain, and maintain all regulatory filings that are necessary for the conduct of its activities under the Work Plan applicable to such Target, including for the conduct of any GLP Toxicology Study or Clinical Study, and to conduct communications with the Regulatory Authorities, for Licensed Products directed to such Target (which shall include filings of or with respect to INDs or CTAs and other filings or communications with the applicable Regulatory Authorities in the Territory). All such activities shall be conducted in accordance with the applicable Work Plan and subject to the review and approval of the JSC. In addition, Silence shall provide Mallinckrodt with: (a) reasonable advance notice (as soon as reasonably practical, but in no event less than [***] business days advance notice whenever feasible) of substantive meetings with any Regulatory Authority that are either scheduled with, or initiated by or on behalf of, Silence or its Affiliates, and an opportunity to have at least one representative observe all face-to-face meetings with any Regulatory Authority, and in any case shall keep Mallinckrodt informed as to all material interactions with Regulatory Authorities; (b) a copy of any material documents, information and correspondence submitted to any Regulatory Authority as soon as reasonably practicable; and (c) copies of all material documents, information and correspondence received from any Regulatory Authority (including inspection reports, warning letters, and a written summary of any material communications in which such other Party did not participate).

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5.9.2 Following Acceptance Notice. Following Mallinckrodt’s delivery to Silence of an Acceptance Notice in respect of a Target: (a) Silence shall promptly transfer ownership of any INDs directed to any Clinical Studies performed in respect of such Target and (b) Mallinckrodt shall have the sole right to prepare, obtain, and maintain Drug Approval Applications (including the setting of the overall regulatory strategy therefor), other Regulatory Approvals and filings, and to conduct communications with the applicable Regulatory Authorities, for Licensed Products directed to such Target (which shall include filings of or with respect to INDs or CTAs and other filings or communications with the applicable Regulatory Authorities in the Territory).

5.10 Pharmacovigilance. Following delivery of an Acceptance Notice in respect of a Target and completion of the transfer of any INDs directed to any Clinical Studies performed in respect of such Target, Mallinckrodt shall also assume responsibility for pharmacovigilance of RNAi Products or Licensed Products directed to such Target. Within [***] days after Mallinckrodt has delivered to Silence an Acceptance Notice in respect of the first Target, the Parties shall enter into an agreement to initiate a process for the exchange of safety data in a mutually agreed format in order for Mallinckrodt to monitor the safety of the RNAi Products or Licensed Products directed to such Target and to meet reporting requirements with any applicable Regulatory Authority.

ARTICLE 6
COMMERCIALIZATION

6.1 Overview. Following Mallinckrodt’s delivery of an Acceptance Notice in respect of a Target, Mallinckrodt shall have the sole right and obligation to Exploit, itself or through its Affiliates or Sublicensees, Licensed Products directed to such Target in the Field in the Territory at its own cost and expense.

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6.2 Diligence. If Mallinckrodt receives Regulatory Approval in [***] for a Licensed Product for at least one Indication that is [***] that is directed to a Target for which it has delivered an Acceptance Notice, Mallinckrodt, directly or via its Affiliates or Sublicensees, shall thereafter use Commercially Reasonable Efforts to Commercialize such Licensed Product in each such Region and each of the other Regions in which it receives Regulatory Approval for such Licensed Product.

6.3 Reporting. Mallinckrodt shall update Silence on an annual basis regarding its significant Commercialization activities with respect to the Licensed Products in the Territory. Each such update shall summarize Mallinckrodt’s, its Affiliates’, and Sublicensees’ significant Commercialization activities in the Territory with respect to Licensed Products directed to each Target for which Mallinckrodt has provided Silence an Acceptance Notice at a level of detail reasonably required by Silence to determine Mallinckrodt’s compliance with its obligations under Section 6.2 of this Agreement.

ARTICLE 7
MANUFACTURING & SUPPLY

7.1 Silence Obligations. Silence, through one or more Third Party contract manufacturers, shall be responsible for all manufacturing activities necessary to perform any activities contemplated by a Work Plan, at, subject to Section 5.4.2, its own expense.

7.2 Cooperation and Technology Transfer.

7.2.1 Technology Transfer. Following Silence’s receipt of an Acceptance Notice in respect of a Target, Silence shall perform a Technology Transfer in respect of Licensed Products directed to such Target, as set forth in the applicable Work Plan, and shall perform any additional reasonable technical assistance requested by Mallinckrodt (or its contract manufacturer(s)) in respect of the manufacturing of the applicable Licensed Products. For clarity, (i) nothing shall require Silence to create any new Know-How, undertake any additional

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manufacturing activities, or undertake any activity not specified in the relevant Work Plan (ii) and, on a Complement Target-by-Complement Target basis, Silence’s obligation shall be limited to no more than [***] of effort to be taken within [***] months of the delivery of the Acceptance Notice in respect of such Complement Target. At Mallinckrodt’s request, Silence shall introduce Mallinckrodt to Silence’s contract manufacturer and shall facilitate the discussions so that Mallinckrodt may enter into a direct contractual relationship with such contract manufacturer for the procurement of such Licensed Product on terms substantially equivalent to those agreed with Silence.

7.2.2 Technology Transfer Costs. As further set forth in and subject to this Section 7.2.2, Mallinckrodt shall be responsible for Technology Transfer Costs incurred by Silence in the performance of the Technology Transfer portion of each Work Plan. Prior to the beginning of the calendar month during which the Technology Transfer 3 will commence, Mallinckrodt shall pay to Silence the applicable Research Budget for such Technology Transfer. Silence shall notify the JSC if it anticipates that its actual Technology Transfer Costs will exceed the amount budgeted in the applicable Research Budget for such activity by more than the Cost Overrun Threshold. Any such notice must be provided at least [***] days prior to the date upon which such activity is to be performed and shall include a description of the likely consequences of any material delay in the performance of such activity. Silence shall not proceed with such Technology Transfer activity unless and until such Technology Transfer activity has been approved by Mallinckrodt; in the absence of such approval and so long as Silence’s notice of such excess Technology Transfer Costs complied with this Section 7.2.2 and so long as such excess Technology Transfer Costs [***] Technology Transfer activities [***] under such Work Plan], Silence’s failure to carry out activities that are the subject of such notice shall not be deemed to be a breach of its obligations under such Work Plan or this Agreement. Within [***] days after the

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completion of the Technology Transfer, Silence shall provide to Mallinckrodt a report, in reasonable detail and format, of all Technology Transfer Costs incurred by it and its Affiliates during such calendar quarter. Within [***] Business Days following the receipt of such report, and without limiting Mallinckrodt’s rights under Section 9.5 below, Mallinckrodt shall have the right to request reasonable additional information to confirm such Technology Transfer Costs. If the Technology Transfer Costs were in excess of the amounts paid to Silence by Mallinckrodt under this Section 7.2.2 and were below the Cost Overrun Threshold or approved by Mallinckrodt, then Silence shall invoice Mallinckrodt for the difference and Mallinckrodt shall pay such invoice within [***] days after receipt thereof. For the avoidance of doubt, Mallinckrodt shall have no obligation to pay any Technology Transfer Costs that exceed the Cost-Overrun Threshold unless such excess costs were approved by Mallinckrodt in accordance with this Section 7.2.2. If the Technology Transfer Costs were less than the amounts paid to Silence by Mallinckrodt under this Section 7.2.2 for such calendar quarter, then any suchexcess shall be refunded to Mallinckrodt, any such refund to be paid within [***] days of Silence’s receipt of Mallinckrodt’s invoice therefor.

7.3 Mallinckrodt Obligations. Following completion of the Technology Transfer in respect of Licensed Products directed to a Target, Mallinckrodt, either directly or through one or more Third Party contract manufacturers, shall be responsible, at its own expense, for all manufacturing activities necessary for the Development and Commercialization of the Licensed Products directed to such Target.

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ARTICLE 8PAYMENTS AND RECORDS

8.1 Upfront Payment. Within [***] days after the Effective Date, Mallinckrodt shall pay to Silence the non-refundable, non-creditable sum of Twenty Million Dollars ($20,000,000).

8.2 Equity. In partial consideration of the rights and licenses granted herein, the Parties will enter into the Subscription Agreement.

8.3 Research Collaboration Milestones.

8.3.1 Development Milestone Payments. In partial consideration of the rights granted by Silence to Mallinckrodt hereunder and subject to the terms and conditions set forth in this Agreement, Mallinckrodt shall pay to Silence the non-refundable, non-creditable (as set forth in Section 8.3.4) milestone payments upon achievement of each of the following milestone events for the first Licensed Product with respect to a particular Target to achieve such milestone event:

Milestone Event	Milestone Payment
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
Total	$10,000,000

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8.3.2 Notice and Payment. Silence shall notify Mallinckrodt in writing within [***] days after the first achievement of any milestone event set forth in this Section 8.3 by or on behalf of Silence, together with documentation that validates such achievement. Mallinckrodt shall pay to Silence the applicable milestone payment within [***] days (i) after the delivery of such notice and such documentation, or, (ii) if requested by Mallinckrodt within [***] days after its receipt of such notice, after receipt of any additional documentation reasonably requested by Mallinckrodt.

8.3.3 Once Per Target. Each milestone payment in this Section 8.3 shall be payable only upon the achievement of such milestone by the first Licensed Product directed to a particular Target to achieve such milestone event and no amounts shall be due for subsequent or repeated achievements of such milestone by another Licensed Product directed to the same Target.

8.3.4 Non-Creditable. After a milestone payment due under this Section 8.3 or under Section 8.4 below has been paid, it shall not be creditable against any amounts that may be subsequently owed by Mallinckrodt to Silence; for clarity, however, milestone payments due under this Section 8.3 or under Section 8.4 below may be offset in accordance with Section 5.4.3 above.

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8.4 Development and Regulatory Milestones.

8.4.1 C3 Licensed Product Milestone Payments. In partial consideration of the rights granted by Silence to Mallinckrodt hereunder and subject to the terms and conditions set forth in this Agreement, Mallinckrodt shall pay to Silence the non-refundable, non-creditable (as set forth in Section 8.3.4) milestone payments upon achievement of each of the following milestones for the first C3 Licensed Product to achieve such milestone event as follows (whether by or on behalf of Mallinckrodt or its Affiliates or Sublicensees):

Milestone Event	Milestone Payment [***]	Milestone Payment [***]	Milestone Payment [***]
[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]

8.4.2 Notice and Payment. Mallinckrodt shall notify Silence in writing within [***] days after the first achievement of any milestone event set forth in this Section 8.4 by or on behalf of Mallinckrodt or its Affiliates or Sublicensees. Mallinckrodt shall pay to Silence the applicable milestone payment within [***] days after the delivery of such notice. For clarity, each milestone payment set forth in the table above shall be paid only once upon first achievement of the corresponding milestone event by the C3 Licensed

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Product, regardless of the number of times such event is achieved, and the maximum aggregate amount payable to Silence pursuant to this Section 8.4 in respect of the C3 Licensed Product is One Hundred Million Dollars ($100,000,000).

8.4.3 Complement Licensed Product Milestones. In connection with Mallinckrodt’s exercise of its Option with respect to any Complement Target other than the C3 Target, the Parties shall identify the milestone payments that will be due for the achievement of the milestone events set forth in the table in this Section 8.4 based upon the applicable [***] for the Complement Licensed Product directed to such Complement Target and according to the parameters set forth in Schedule 8.4.3. If the Parties fail to reach agreement on such milestone payments within [***] days after the date of Mallinckrodt’s exercise of such Option (or such longer period of time as may be mutually agreed by the Parties), then the matter shall be submitted to and finally decided  by a Neutral Expert as set forth in Section 15.6.5.  Mallinckrodt, by written notice delivered to Silence within [***] days after the Parties’ receipt of the decision of the Neutral Expert, may relinquish its Option with respect to such Complement Target. If Mallinckrodt fails to provide such notice, it shall be deemed to have agreed to the decision of the Neutral Expert regarding such milestone payments and it shall be obligated to pay the Option Exercise Payment within [***] days after the Parties’ receipt of the decision of the Neutral Expert.

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8.5 Sales-Based Milestones

8.5.1 Initial Three Complement Target Licensed Product Sales Milestone Payments. In partial consideration of the rights granted by Silence to Mallinckrodt hereunder and subject to the terms and conditions set forth in this Agreement, Mallinckrodt shall pay to Silence the following non- refundable, non-creditable milestone payments upon the first achievement of the corresponding milestone event in respect of Licensed Product in respect of each of C3 and the first two (2) Complement Targets for no additional payment is payable pursuant to Section 3.2 (a “Relevant Target”) (whether by or on behalf of Mallinckrodt or its Affiliates or Sublicensees:

Annual Net Sales of all Licensed Products directed to the C3 Target in the Territory	Sales Milestone Payments
Equal or exceed [***]	[***]
Equal or exceed [***]	[***]
Equal or exceed [***]	[***]
Equal or exceed [***]	[***]
Total	$562,500,000

8.5.2 Notice and Payment. Mallinckrodt shall notify Silence in writing of the first achievement of any milestone event set forth in this Section 8.5 by or on behalf of Mallinckrodt or its Affiliates or Sublicensees in its report provided pursuant to Section 9.1 and payment of such milestone shall be due on the date the first such statement that reflects achievement of such sales milestone payment is due. For clarity, each milestone payment set forth in the table above shall be paid only once with respect to a Relevant Target, upon first achievement of the corresponding milestone event by all Licensed Products directed to the Relevant Target, regardless of the number of times such event is achieved.

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8.5.3 Complement Licensed Product Sales Milestones. In connection with Mallinckrodt’s exercise of its Option with respect to any Complement Target in respect of which it has to make a payment pursuant to Section 3.2, the Parties shall identify the milestone payments that will be due for the achievement of the milestone events set forth in the table in this Section 8.5, which shall be similar to those set forth in such table. If the Parties fail to reach agreement on such milestone payments within [***] days of the date of Mallinckrodt’s exercise of such Option (or such longer period of time as may be mutually agreed by the Parties), then the matter shall be submitted to and finally decided by a Neutral Expert as set forth in this Section 15.6.5, who shall establish such milestone payments, which shall be similar to those set forth in the table in this Section 8.5. Mallinckrodt, by written notice delivered to Silence within [***] days of the Parties’ receipt of the decision of the Neutral Expert, may relinquish its Option with respect to such Complement Target. If Mallinckrodt fails to provide such notice, it shall be deemed to have agreed to the decision of the Neutral Expert regarding such milestone payments and it shall be obligated to pay the Option Exercise Payment within [***] days of the Parties’ receipt of the decision of the Neutral Expert.

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8.6 Royalties.

8.6.1 Royalty Rate. As further consideration for the rights granted to Mallinckrodt under this Agreement, subject to the other terms of this Section 8.6, during the Royalty Term, Mallinckrodt shall make quarterly non-refundable, non- creditable royalty payments to Silence on the annual Net Sales of each Licensed Product sold in the Territory at the applicable rate set forth below:

Annual Net Sales in the Territory of a Particular Licensed Product	Royalty Rate
For that portion of Annual Net Sales less than [***]	[***]
For that portion of Annual Net Sales equal to or greater than [***] but less than [***]	[***]
For that portion of Annual Net Sales equal to or greater than [***] but less than [***]	[***]
For that portion of Annual Net Sales equal to or greater than [***]	[***]

8.6.2 Royalty Term. Royalties shall be paid on a Licensed Product-by-Licensed Product and country-by-country basis in the Territory from [***].

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8.6.3 Reductions.

(a) In the event that it is necessary for Mallinckrodt, in order to Exploit a Licensed Product, to obtain a license under any Patents owned by a Third Party that has claims that Cover [***] such Licensed Product or the Licensed Product, Mallinckrodt shall be entitled to deduct [***] of the amount of [***] accrued and payable by Mallinckrodt to such Third Party from the royalties paid to Silence in any given Quarter (determined in accordance with the Accounting Standards) pursuant to Section 8.6, provided always that nothing in this Section 8.6.3 shall operate to reduce the amount of royalties otherwise payable to Silence to less than [***] of the royalties provided for in Section 8.6.1.

(b) On a Licensed Product-by-Licensed Product basis, if the Royalty Term does not end on the date upon which there is no Valid Claim [***] that Covers such Licensed Product in the country of sale or the country of manufacture, then with respect to sales of such Licensed Product occurring from and after such date in such country, the royalty rate used to calculate royalties due on Net Sales of such Licensed Product in such country for the remainder of the Royalty Term for such Licensed Product in such country (subject to further reduction in accordance with Section 8.6.3(c) below, but subject to Section 8.6.4 below), shall be reduced by [***] from the applicable royalty rate (i.e., [***] as applicable).

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(c) If, during the Royalty Term with respect to a Licensed Product and a particular country, one or more Generic Products of such Licensed Product are sold in such country, then (i) during each Quarter in which there is an Initial Loss of Market Share with respect to such Licensed Product in such country, then the royalty rates used to calculate royalties due on Net Sales of such Licensed Product in such country for such Quarter shall be reduced by [***] from the applicable royalty rate (i.e., [***], asapplicable) and (ii) during each Quarter in which there is a Loss of Market Share with respect to such Licensed Product in such country, then the royalty rates used to calculate royalties due on Net Sales of such Licensed Product in such country for such Quarter shall be reduced by [***] from the applicable royalty rate (i.e., [***], as applicable) it being understood that the deduction under part (ii) of this Section 8.6.3(c) is in substitution for, not in addition to, part (i) of this Section 8.6.3(c).

(d) If in a country, the Net Sales of a Licensed Product in that country in a Year are less than [***] of the Net Sales of the Licensed Product in that country in the immediately preceding Year and such decline is demonstrated to be due to a Competing Product of such Licensed Product being sold in such country, then the royalty rate used to calculate the royalties due on Net Sales of such Licensed Product in such country shall be reduced by [***] from the applicable royalty rate for such Year (such Net Sales in such Year the “Baseline Calendar Year Net Sales”) and for each Year during the remainder of the Percentage Royalty Term in which: (i) such Competing Product continues to be sold in such country and (ii) Net Sales of such Licensed Product in such country remain at or below the Baseline Calendar Year Net Sales (the “Competing Product Reduction”). With respect to the Year in which the Competing Product Reduction first occurs, then within [***] days after the end

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of such Year, Mallinckrodt shall report to Licensor the difference between the royalties actually paid in respect of Net Sales in such Year and the royalties that should have been paid in such Year taking into consideration the Competing Product Reduction and Licensor shall remit such difference to Mallinckrodt promptly after its receipt of such report. For the avoidance of doubt, the Competing ProductReduction, if any, shall be in addition to any reduction in the royalty rate pursuant to Section 8.6.3(b) or 8.6.3(c) above, but subject to Section 8.6.4 below.

8.6.4 Cumulative Reductions Floor. Notwithstanding Section 8.6.3, in no event will the reductions set forth in Sections 8.6.3(a), 8.6.3(b), 8.6.3(c), and 8.6.3(d) above operate, individually or in combination, to reduce the amount of royalties due to Silence with respect to Net Sales of a Licensed Product in a country in any given Quarter during the Royalty Term for such Licensed Product in such country by more than [***] of the amount of royalties that otherwise would have been due and payable to Silence in such Quarter for such Licensed Product in such country at the rate set out in the table in Section 8.6.1.

ARTICLE 9
PAYMENT; RECORDS; AUDITS

9.1 Royalty Payments and Reports. Mallinckrodt shall calculate all amounts payable to Silence pursuant to Section 8.6 at the end of each Quarter, which amounts shall be converted to Dollars, in accordance with Section 9.2. Mallinckrodt shall pay to Silence the royalty amounts due with respect to a given Quarter on or before [***] following the end of the Quarter in which the Net Sales on which such royalty amounts are due are deemed to have occurred. Each payment of royalties due to Silence shall be accompanied by a statement of (a) the amount of gross sales and Net Sales of each Licensed Product in each country in the Territory during the applicable Quarter

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(including such amounts expressed in local currency and as converted to Dollars), (b) the deductions applied in the calculation of Net Sales from gross sales, (c) the applicable royalty rate(s) under this Agreement (including any reduction(s) to such royalty rate(s) under Section 8.6.3), and (d) a calculation of the amount of royalty payment due on such Net Sales for such Quarter.

9.2 Mode of Payment. All payments to either Party under this Agreement shall be made, without setoff, by deposit of Dollars in the requisite amount to such bank account as Silence may from time to time designate by notice to Mallinckrodt. 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 its Sublicensee’s standard conversion methodology consistent with Accounting Standards.

9.3 Taxes.

9.3.1 Withholding Taxes. Where any sum due to be paid to either Party under this Agreement is subject to any withholding tax, the Parties shall use their commercially reasonable efforts to take all such actions, including but not limited to executing and delivering relevant documents, as will enable them to take advantage of any applicable double taxation agreement or treaty or otherwise reduce or eliminate such withholding tax. In particular, Silence shall timely provide Mallinckrodt with any tax forms that may be reasonably necessary in order for Mallinckrodt to not withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty or otherwise, to the extent legally able to do so. If and to the extent the withholding tax cannot be fully eliminated, the payor shall remit such withholding tax to the appropriate government authority, deduct the amount paid from the amount due to payee, and secure and send to payee reasonably satisfactory evidence of the payment of such withholding tax. If any withholding taxes are

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refundable, creditable or otherwise recoverable, each Party will provide the other such assistance as is reasonably required to obtain a refund of the withheld taxes, obtain a credit with respect to such taxes paid, or otherwise recover such taxes. In the event that a government authority retroactively determines that a payment made by a Party to the other pursuant to this Agreement should have been subject to withholding (or to additional withholding) taxes, and such Party (the “Withholding Party”) remits such withholding taxes to the government authority, the Withholding Party shall have the right (a) to offset such amount, including any interest and penaltiesthat may be imposed thereon (except to the extent any such interest or penalties result from the negligence of the Withholding Party), against future payment obligations of the Withholding Party under this Agreement, (b) to invoice the other Party for such amount (which shall be payable by the other Party within [***] days of its receipt of such invoice), or (c) to pursue reimbursement by any other available remedy.

9.3.2 Indirect Taxes. All payments are exclusive of value added taxes, sales taxes, consumption taxes, and other similar taxes (the “Indirect Taxes”). If any Indirect Taxes are chargeable in respect of any payments, the paying Party shall pay such Indirect Taxes at the applicable rate in respect of such payments following receipt, where applicable, of an Indirect Taxes invoice in the appropriate form issued by the receiving Party in respect of those payments. The Parties shall issue invoices for all amounts payable under this Agreement consistent with Indirect Tax requirements and irrespective of whether the sums may be netted for settlement purposes. If the Indirect Taxes originally paid or otherwise borne by the paying Party are in whole or in part subsequently determined not to have been chargeable, all reasonably necessary steps will be taken by the receiving Party to receive a refund of such undue Indirect Taxes from the applicable governmental authority or other fiscal authority and any amount of undue Indirect Taxes repaid by such authority to the receiving Party will be transferred to the paying Party within

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[***] days after receipt.

9.3.3 Taxes Resulting from a Party’s Action. Notwithstanding the foregoing in this Section 9.3, if a Party takes any action of its own discretion (not required by the terms of this Agreement or a Regulatory Authority), including any assignment, sublicense, change of place of incorporation, change in the source of payment (which shall, as of the Effective Date be Ireland in the case of Mallinckrodt and the UK in the case of Silence) or failure to comply with Applicable Laws or filing or record retention requirements, which results in an additional or increased withholding obligation with respect to payments to be made pursuant to this Agreement (“Withholding Tax Action”), then such Party shall bear the amount of such withholding to the extent associated with such Withholding Tax Action. For clarity, if Mallinckrodt undertakes a Withholding Tax Action, then the sum payable by Mallinckrodt (in respect of which such withholding is required to be made) shall be increased to the extent necessary to ensure that Silence receives a sum equal to the sum which it would have received had no such Withholding Tax Action occurred. For the avoidance of doubt, a change in Applicable Laws that results in a new or increased withholding or deduction obligation, absent either Party taking a Withholding Tax Action, shall not affect the withholding and deduction obligations provided in Section 9.3.1.

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9.4 Financial Records. Mallinckrodt shall, and shall cause its Affiliates and Sublicensees to, keep complete and accurate books and records pertaining to Net Sales of Licensed Products in sufficient detail to calculate all amounts payable hereunder with respect thereto and to verify compliance with its obligations under this Agreement. Such books and records shall be retained by Mallinckrodt and its Affiliates until [***] Years after the end of the Year to which such books and records pertain. Silence shall, and shall cause its Affiliates to, keep complete and accurate books and records pertaining to its Research Stage 3 Costs in sufficient detail to calculate all amounts payable hereunder with respect thereto. Such books and records shall be retained by Silence and its Affiliates until [***] Years after the end of the Year to which such books and records pertain.

9.5 Audit. At either Party’s request, the other Party shall, and shall cause its Affiliates to, permit one of the [***] largest (by turnover) independent public accounting firms in the country of the audited Party, the specific firm to be designated by the auditing Party, at reasonable times during normal business hours and upon reasonable notice, to audit the books and records maintained pursuant to Section 9.4 to ensure the accuracy of all reports and payments made hereunder. Such examinations may not (a) be conducted for any Quarter more than [***] Years after the end of such Year to which such books and records pertain, (b) be conducted more than once 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 Quarter, unless as a component of an examination applicable to a Year that includes such Quarter. The accounting firm shall report to the Parties with reasons whether the reports are correct or not, and the specific details concerning any discrepancies. No other information shall be shared with the auditing Party. Except as provided below, the cost of this audit shall be borne by the auditing Party, unless: (i) if the period in dispute is at least a [***] period, the audit reveals a variance of more than [***] from the reported amounts, or (ii) if the period in dispute is less than [***], the audit reveals a variance that, if [***], would be equivalent to a variance of more than [***] from the reported amounts, in which case the audited Party shall bear the cost of the audit. Unless disputed pursuant to Section 9.6 below, if such audit concludes that (x) additional amounts were owed by the audited Party, the

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audited Party shall pay the additional amounts within [***] days, or (y) excess payments were made by the audited Party and the audited Party agrees to pay the costs of such audit, 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.

9.6 Audit Dispute. In the event of a dispute with respect to any audit under Section 9.5, Silence and Mallinckrodt shall work in good faith to promptly 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 an independent Third Party accounting firm jointly selected by the Parties or to such other Person as the Parties shall mutually agree (the “Auditor”). The decision of the Auditor 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 Auditor shall determine. Not later than [***] days after such decision and in accordance with such decision, the audited Party shall pay the additional amounts, or the auditing Party shall reimburse the excess payments, as applicable.

9.7 Confidentiality. The receiving Party shall treat all information subject to review under this ARTICLE 9 in accordance with the confidentiality provisions of ARTICLE 11 and the Parties shall cause the Auditor 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.

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ARTICLE 10INTELLECTUAL PROPERTY

10.1 Ownership of Intellectual Property.

10.1.1 United States Law. Inventorship of Information and inventions conceived, discovered, developed, or otherwise made under this Agreement shall be determined 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.

10.1.2 Silence Ownership. As between the Parties, Silence or an Affiliate designated by Silence shall retain own and retain all right, title, and interest in and to any and all Silence Background IP and Silence Research IP.

10.1.3 Mallinckrodt Ownership. As between the Parties, Mallinckrodt or an Affiliate designated by Mallinckrodt shall own and retain all right, title, and interest in and to any and all Mallinckrodt Background IP and Mallinckrodt Research IP.

10.1.4 Joint Ownership. As between the Parties, the Parties shall each own an equal, undivided interest in any and to all Joint Research IP. At least once per calendar quarter (which the Parties expect would be at each JSC meeting unless the JSC has been disbanded) each Party shall disclose to the other Party in writing the development, making, conception, or reduction to practice of any Joint Research IP. Subject to the exclusive licenses granted by Silence to Mallinckrodt to Joint Research IP under Section 4.1, each Party shall have the right to Exploit (including by way of granting licenses or otherwise) the Joint Research IP without a duty of seeking consent or accounting to the other Party.

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10.1.5 Assignment Obligation. Each Party shall cause all Persons who perform Development 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 a license under, sufficient to enable such Party to Control) their rights in any Information and inventions resulting therefrom to such Party to the extent that the foregoing would be within the scope of: (i) in respect of Silence, Silence Research IP or, to the extent relating to a Licensed Product, the C3 Target or an Optioned Complement Target or otherwise to the license grants under Section 4.1, Silence Background IP, (ii) in respect of Mallinckrodt, within the scope of the Mallinckrodt Research IP licensed to Silence pursuant to Section4.2 and (iii) in respect of both Parties, Joint Research IP. For clarity, (a) Silence shall be solely responsible for any remuneration that may be due any Silence inventors under any applicable inventor remuneration laws as a result of activities performed under a Work Plan, other than to the extent such amounts are included in Research Stage 3 Costs and otherwise payable by Mallinckrodt under the terms of this Agreement and (b) Mallinckrodt shall be solely responsible for any remuneration that may be due any Mallinckrodt inventors under any applicable inventor remuneration laws as a result of activities performed under a Work Plan.

10.2 Maintenance and Prosecution of Patents.

10.2.1 Silence Patents. Silence shall prepare, file, prosecute, and maintain the Silence Background Patents and the Silence Research Patents worldwide, at Silence’s sole cost and expense, subject to and in accordance with the provisions of this Section 10.2 and, except as provided in this Section 10.2, shall be solely responsible for such matters and shall use commercially reasonable efforts to perform such activities.

10.2.2 Mallinckrodt Patents. Mallinckrodt shall have the sole right, but not the

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obligation, to prepare, file, prosecute, and maintain the Mallinckrodt Background Patents and the Mallinckrodt Research Patents worldwide, at Mallinckrodt’s sole cost and expense.

10.2.3 Joint Patents. Silence shall have the first right, but not the obligation, to prepare, file, prosecute, and maintain the Joint Research Patents worldwide, at Silence’s sole cost and expense.

10.2.4 Step-In Rights.

(a) If Silence, during the Term, determines in its sole discretion not to file a patent application directed to or to abandon or not maintain any of the Joint Research Patents that it has responsibility to prosecute or maintain, then Silence shall promptly notify Mallinckrodt of such determination and, with respect to a determination to abandon or not maintain a Joint Research Patent, Silence shall provide such notice at least [***] days before any such patent or patent application has a response due or a maintenance/annuity payment due to provide Mallinckrodt sufficient time to assume responsibility before any lapse or abandonment occurs. In such event, Mallinckrodt shall, at its sole cost and expense, have the right, but not the obligation, to file for, or continue prosecution or maintenance of, such Joint Research Patent.

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(b) If Silence, during the Term in respect of the C3 Target or any Optioned Complement Target, determines in its sole discretion to abandon or not maintain (x) any of the Product Specific Patents, (y) any Silence Background Patent (provided always that in respect ofany Silence Background Patent that [***], subject to [***] such Silence Background Patents) or Silence Research Patent that [***] or [***] or (z) any other Silence Background Patent (provided always that in respect of any Silence Background Patent that [***], subject to [***] such Silence Background Patents) or Silence Research Patent that [***], notwithstanding [***] such Silence Background Patent or Silence Research Patent, [***]  (the Silence Background Patents and Silence Research Patents described in items (y) and (z) the “Supplementary Rights Patents”) then Silence shall promptly notify Mallinckrodt of such determination and, with respect to a determination to abandon or not maintain a Product Specific Patent or a Supplementary Rights Patent, Silence shall provide such notice to Mallinckrodt at least [***] days before any such patent or patent application has a response due or a maintenance/annuity payment due to provide Mallinckrodt sufficient time to assume responsibility before any lapse or abandonment occurs. In such event, Mallinckrodt shall, at its sole cost and expense, have the right, but not the obligation, to file for, or continue prosecution or maintenance of, such Product Specific Patent or a Supplementary Rights Patent in Silence’s name.

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(c) If Mallinckrodt provides an Acceptance Notice, it will have the right to assume primary responsibility for prosecution and maintenance of any applicable Product Specific Patents in Silence’s name upon notice to Silence. If Mallinckrodt subsequently decides to cease prosecution or maintenance of any Product Specific Patent it has responsibility to prosecute and maintain, or serves notice to terminate this Agreement in respect of the relevant Complement Target, Mallinckrodt will provide notice to Silence at least [***] days before any such patent or patent application has a response due or a maintenance/annuity payment due to provide Silence sufficient time to assume responsibility before any lapse or abandonment occurs and Mallinckrodt shall execute such powers of attorney and other documents necessary to enable Silence to assume such responsibilities.

(d) If Mallinckrodt exercises its right to assume responsibility to file, prosecute or maintain any Product Specific Patent, Joint Research Patent or Supplementary Rights Patent, then on its receipt of notice of such exercise, Silence shall transfer such prosecution to Mallinckrodt, and Mallinckrodt shall assume such prosecution and maintenance in Silence’s name or, in respect of any Joint Research Patent, in the joint names of the Parties, at its sole cost and expense. Silence shall execute such powers of attorney and other documents necessary to enable Mallinckrodt to assume such responsibilities. If Mallinckrodt subsequently decides to cease prosecution or maintenance of any Product Specific Patent, Joint Research Patent or Supplementary Rights Patent it has responsibility to prosecute and maintain, or serves notice to terminate this Agreement in respect of the relevant Complement Target, Mallinckrodt will provide notice to Silence at least [***] days before any such patent or patent application has a response due or a maintenance/annuity

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payment due to provide Silence sufficient time to assumeresponsibility before any lapse or abandonment occurs and Mallinckrodt shall execute such powers of attorney and other documents necessary to enable Silence to assume such responsibilities.

10.2.5 Covenants Regarding Prosecution.

(a) Silence shall keep Mallinckrodt reasonably informed of all steps with regard to the preparation, filing, prosecution, and maintenance of all Product Specific Patents, Joint Research Patents, Silence Research Patents and any Silence Background Patents that are Supplementary Rights Patents for which Silence has the responsibility to prosecute and maintain, and shall provide Mallinckrodt with a copy of material communications to and from the patent authorities regarding such Patents, including drafts of any material filings or responses to be made to such patent authorities sufficiently in advance of submitting such filings or responses so as to allow Mallinckrodt a reasonable opportunity to review and comment thereon. Silence shall reasonably consider Mallinckrodt’s requests and shall reasonably consider incorporating Mallinckrodt’s suggestions with respect to such drafts and with respect to strategies for filing and prosecuting such Patents. Without limiting the generality of the foregoing, Silence shall not [***] or [***] that would [***] or [***] without [***] or [***] or [***] or [***] or   [***] and [***].

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(b) Silence will use commercially reasonable efforts to ensure that there is a commercially reasonable (given the nature of the Licensed Products) set of Product Specific Patents, e.g., by seeking to file divisional applications or otherwise separating claims to ensure that, for each Licensed Product, [***] Product Specific Patent (or a set of Product Specific Patents) [***] that is (or are) [***] such Product Specific Patent(s), e.g., via filing divisional or other continuation applications claiming priority to such Product Specific Patent(s[***] such Licensed Product and, if possible, [***] the relevant Licensed Product. Without limiting the generality of the foregoing, Silence acknowledges and agrees that [***] for a particular Licensed Product should include [***]: (i) [***] such Licensed Product, in each case if and to the extent [***] and (ii) [***] such Licensed Product to the extent [***]. Silence’s performance of its obligations under this Section shall be subject to the review and oversight of the JSC.

(c) The Parties, with the review and oversight of the JSC, will cooperate regarding drafting and prosecution of patent applications directed to Silence Research Know-How or Joint Research Know-How to: (i) [***] and (ii) [***].

(d) If Mallinckrodt exercises it right to assume prosecution of any Product Specific Patent pursuant to Section 10.2.4(c) above, then Mallinckrodt shall keep Silence reasonably informed of all steps with regard to the preparation, filing, prosecution, and maintenance of all Silence Research Patents for which Mallinckrodt has the responsibility to prosecute and maintain, and shall provide Silence with a copy of material communications to and from the patent authorities regarding such Product Specific Patents, including drafts of any material filings or responses to be made to such patent

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authorities sufficiently in advance of submitting such filings or responses so as to allow Silence a reasonable opportunity to review and comment thereon. Mallinckrodt shall reasonably consider and reasonably incorporate Silence’s requests and suggestions with respect to such drafts and with respect to strategies for filing and prosecuting the Product Specific Patents.

(e) Additionally, if or to the extent any Product Specific Patent, Joint Research Patent or Supplementary Rights Patent for which Mallinckrodt has the responsibility to prosecute and maintain [***], Mallinckrodt shall: (i) as instructed by Silence, [***] and (ii) not [***] absent Silence’s prior written consent.

(f) For the purpose of this 10.2: (i) “prosecution” shall include any patent interference, opposition, pre-issuance Third Party submission, ex parte re-examination, post-grant review, inter partes review or other similar proceeding, appeals or petitions to any Board of Appeals in a patent office, appeals to any court for any patent office decisions, reissue proceedings, and applications for patent term extensions and the like, regardless whether said “prosecution” occurs in any jurisdiction within the Territory or outside the Territory and (ii) a Party shall not be deemed to have made a determination to abandon a pending patent application if, following such abandonment, a patent application that includes the disclosure of such pending patent application will be pending in such jurisdiction.

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10.2.6 Orange Book, Patent Term Extension and Supplementary Protection Certificate. Save in respect of [***] decide whether a [***] will be listed in the Orange Book and [***] shall not[***] without the prior written consent of [***], unless [***], in which case [***] shall have the right to select [***] that [***] that are not [***] for listing in the Orange Book; provided that if and to the extent any such [***], then [***] for listing in the Orange Book. [***] shallhave the sole right to decide whether [***] should be listed in the Orange Book. The Parties shall cooperate on decisions regarding patent term extensions, including supplementary protection certificates and any other extensions that are now or become available in the future, wherever applicable, for [***] in any country or other jurisdiction. [***] shall have the responsibility of applying for any extension or supplementary protection certificate with respect to such Patents in the Territory. Each Party shall keep the other fully informed of its efforts to obtain such extension or supplementary protection certificate. Each Party shall provide prompt and reasonable assistance, as requested by the other, including by taking such action as patent holder as is required under any Applicable Law to obtain such patent extension or supplementary protection certificate.

10.3 Enforcement of Patents.

10.3.1 Notice. Each Party shall promptly notify the other Party in writing of any alleged or threatened infringement of the Silence Background Patent, Silence Research Patents, Mallinckrodt Research Patents, or Joint Patents in any jurisdiction in the Territory of which such Party becomes aware in connection with the Exploitation of any Licensed Product or any Competing Product or Generic Product or if such Party becomes aware that any Third Party is seeking to obtain Regulatory Approval for such a product (an “Infringement”).

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10.3.2 Silence Patents. Except as set out in Section 10.3.4 and 10.3.6, Silence shall have the sole and exclusive right, but not the obligation, to enforce and defend worldwide under its control, at its own expense, the Silence Background Patents and Silence Research Patents.

10.3.3 Mallinckrodt Patents. Mallinckrodt shall have the sole right, but not the obligation, to enforce and defend worldwide under its control, and at its own expense, the Mallinckrodt Background Patents and Mallinckrodt Research Patents.

10.3.4 Product Specific Patents. During the Term, Mallinckrodt shall have the first right, but not the obligation, to enforce and defend worldwide under its control, and at its own expense, the Product Specific Patents. If Mallinckrodt does not take commercially reasonable steps to enforce or defend any such infringement with respect to Product Specific Patents (a) within [***] days following the first notice provided to it pursuant to Section 10.3.1, or (b) if earlier, [***] Business Days before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, then Silence may prosecute such infringement with respect to such Product Specific Patents at its own expense.

10.3.5 Joint Research Patents. During the Term, Silence shall have the first right, but not the obligation, to enforce and defend worldwide under its control, and at its own expense, the Joint Research Patent that are not Product Specific Patents. If Silence does not take commercially reasonable steps to enforce or defend any such infringement with respect to Joint Research Patents (a) within [***] days following the first notice provided to it pursuant to Section 10.3.1, or (b) if earlier, [***] Business Days before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, then Mallinckrodt may prosecute such infringement with respect to such Joint Research Patent(s) at its own expense.

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10.3.6 Supplementary Rights Patents. During the Term, Silence shall have the first right, but not the obligation, to enforce and defend worldwide under its control, and at its own expense, the Supplementary Rights Patents. If (i) Silence does not take commercially reasonable steps to enforce or defend any such infringement with respect to any [***] of a Supplementary Rights Patent (a) within [***] days following the first notice provided to it pursuant to Section 10.3.1, or (b) if earlier, [***] Business Days before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, and (ii) [***] and/or [***], then Mallinckrodt may prosecute such infringement of such [***] that [***] (i.e., [***] and/or [***] of such Supplementary Rights Patent at its own expense. By way of example only, if [***], but [***], then [***] subject to this Section 10.3.6 shall [***] that [***].

10.3.7 Cooperation. The Parties agree to cooperate fully in any Infringement action pursuant to this Section 10.3. 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 Infringement litigation in accordance with this Section 10.3 shall have the right to settle such claim; provided that no Party shall have the right to settle any Infringement litigation under this Section 10.3 in a manner that (a) [***], (b) [***], or (c) [***], in each case (a) – (c) without the express written consent of such other Party, such consent not to be unreasonably withheld, conditioned, or delayed. 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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10.3.8 Recovery. 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 this Section 10.3 (whether by way of settlement or otherwise) shall be first allocated to reimburse the Parties for their costs and expenses in making such recovery (which amounts shall be allocated pro rata if insufficient to cover the totality of such expenses). Any remainder after such reimbursement is made shall be retained by the Party that has exercised its right to bring the enforcement action; provided that to the extent that any award or settlement (whether by judgment or otherwise) is paid to Mallinckrodt [***], such amounts, net of amounts allocated to reimburse the Parties as provided above, shall be treated as Net Sales of the relevant Licensed Product in the Quarter in which such award or settlement is received.

10.4 Infringement Claims by Third Parties.

10.4.1 Right to Defend. If the manufacture, sale, or use of a Licensed Product in the Territory pursuant to this Agreement results in, or may result in, any claim, suit, or proceeding by a Third Party alleging patent infringement by Mallinckrodt (or its Affiliates or Sublicensees), Mallinckrodt 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, using counsel of its own choice; provided, however, that the provisions of Section 10.3 shall govern the right of Mallinckrodt to assert a counterclaim of infringement of any Silence Background Patent or Silence Research Patent. Silence shall have the right, but not the obligation, to participate in (and to control should Mallinckrodt elect not to) the defense of any such claim, suit, or proceeding at its own expense, using counsel of its own choice.

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10.4.2 Cooperation. The Parties agree to cooperate fully with each other in connection with activities set forth in this Section 10.4, including consulting with each other as to proposed strategies for defense and any proposed settlements, and providing access to relevant documents and other evidence. The Party controlling the litigation shall keep the other Party reasonably informed of any steps taken, and 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. Neither Party shall have the right to settle any litigation under this Section10.4in a manner that (a) [***], or (b) [***], in each case (a) and (b) without the express written consent of such other Party, such consent not to be unreasonably withheld, conditioned, or delayed.

10.5 Invalidity or Unenforceability Defenses or Actions.

10.5.1 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 Silence Background Patents, Silence Research Patents, or Joint Research Patents by a Third Party, in each case in the Territory and of which such Party becomes aware.

10.5.2 Silence Patents. Silence shall have the sole right, but not the obligation, to defend and control the defense of the validity and enforceability of the Silence Background Patents and Silence Research Patents. Silence shall consult with Mallinckrodt to determine a course of action with respect to any proceeding relating to the validity and enforceability of any Product Specific Patent and Silence shall [***], with respect thereto.

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10.5.3 Joint Research Patents. Silence shall have the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the Joint Research Patents that [***]. Mallinckrodt may participate in any such claim, suit, or proceeding in the Territory related to such Joint Research Patents, in each case that [***] with counsel of its choice at its own expense; provided that Silence shall retain control of the defense in such claim, suit, or proceeding. If Silence elects not to defend or control the defense of any such Joint Research Patents, in each case that [***] in a suit brought in the Territory, or otherwise fails to initiate and maintain the defense of any such claim, suit, or proceeding, then Mallinckrodt may conduct and control the defense of any such claim, suit, or proceeding, at its own expense; provided, that Mallinckrodt shall obtain the written consent of Silence [***], such consent not to be unreasonably withheld, conditioned, or delayed. To the extent that there is any claim, suit, or proceeding of any of the Joint Research Patents in the Territory that [***], then [***] defend and control the defense of the validity and enforceability of the Joint Research Patents subject to Applicable Law.

10.5.4 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 10.5, including by being joined as a party plaintiff 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 related to Section 10.5.3, the controlling Party 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 10.5, each Party shall consult with the other as to the strategy for the defense of the Product Specific Patents and Joint Research Patents.

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ARTICLE 11CONFIDENTIALITY AND NON-DISCLOSURE

11.1 Confidentiality Obligations. At all times during the Term and for a period of [***] years following termination or expiration hereof in its entirety, each Party shall, and each of the foregoing shall cause its Affiliates and its and their respective officers, directors, employees, consultants, contractors, 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. Notwithstanding the foregoing, to the extent the receiving Party can demonstrate by documentation or other competent proof, the confidentiality and non-use obligations under this Section 11.1 with respect to any Confidential Information shall not include any information that:

11.1.1 has been published by a Third Party or otherwise is or hereafter becomes part of the public domain through no fault on the part of the receiving Party;

11.1.2 has been in the receiving Party’s possession prior to disclosure by the disclosing Party without any obligation of confidentiality with respect to such information, as evidenced by contemporaneous written record;

11.1.3 is subsequently received by the receiving Party from a Third Party without restriction and without breach of any agreement between such Third Party and the disclosing Party, as evidenced by contemporaneous written record; or

11.1.4 has been independently developed by or for the receiving Party without reference to or use of the disclosing Party’s Confidential Information, as evidenced by contemporaneous written record.

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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.

11.2 Permitted Disclosures. Each Party may disclose Confidential Information of the other Party to the extent such disclosure is reasonably necessary in the following instances:

11.2.1 (a)          filing or prosecuting Patents as contemplated by this Agreement,

(b)          prosecuting or defending litigation as contemplated by this Agreement, or

(c)          obtaining or maintaining Regulatory Approval of the Products;

11.2.2 complying with applicable court orders or governmental regulations, including regulations promulgated by securities exchanges on which the securities of the disclosing Party are listed (or to which an application for listing has been submitted);

11.2.3 disclosure to its and its Affiliates’ employees, consultants, contractors, and agents, in each case on a need-to-know basis in connection with the Development, manufacture, or Commercialization of any Product in accordance with the terms of this Agreement, in each case under obligations of confidentiality and non-use at least as stringent as those herein; and

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11.2.4 disclosure to actual and bona fide potential investors, acquirors, licensees, sublicensees, and other financial or commercial partners for the purpose of evaluating or carrying out an actual or potential investment, acquisition, or collaboration, in each case under written obligations of confidentiality and non-use at least as stringent as those herein; provided that the disclosing Party redacts the financial terms and other provisions of this Agreement that are notreasonably required to be disclosed in connection with such potential investment, acquisition, or collaboration, which redaction shall be prepared in consultation with the other Party.

11.2.5 Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to Section 11.2.1, 11.2.2 or 11.2.4, it will, except where impermissible, give reasonable advance notice to the other Party of such disclosure and comply with all reasonable requests of the disclosing Party with respect to maintaining confidence in such Confidential Information and in any event shall use the same diligent efforts to secure confidential treatment of such Confidential Information as such Party would use to protect its own Confidential Information, but in no event less than reasonable efforts. In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information. Any information disclosed pursuant to this Section 11.2 shall remain Confidential Information and subject to the restrictions set forth in this Agreement, including the foregoing provisions of this ARTICLE 11.

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11.3 Use of Name. Except as expressly provided in this Agreement, neither Party shall 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, which approval shall not be unreasonably withheld, conditioned, or delayed. The restrictions imposed by this Section 11.3 shall not prohibit either Party from making any disclosure identifying the other Party that, in the opinion of the disclosing Party’s counsel, is required by Applicable Law; provided, that such Party shall submit the proposed disclosure identifying the other Party in writing to such 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 on such disclosure.

11.4 Public Announcements. The Parties have agreed to the joint press release set out as Schedule 11.4 shall be the press release announcing the transaction contemplated by this Agreement. Other than this press release, neither Party shall issue any 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 any such disclosure that is made in connection an earnings call of such Party or, in the opinion of the disclosing Party’s counsel, is 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). In the event a Party is, in the opinion of its 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, 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. Notwithstanding anything to the contrary herein, following initial press release announcing this Agreement, each Party shall be free to disclose, without the other Party’s prior written consent, the existence of this Agreement, the identity of the other Party, and those terms of the Agreement which have already been publicly disclosed in accordance herewith.

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11.5 Publications. The Parties acknowledge that scientific publications must be strictly monitored to prevent any adverse effect from premature publication of results of the Development activities hereunder.

11.5.1 By Silence. During the Research Collaboration Term, Silence shall have the right to make any publications, presentations, or public disclosures related to a Licensed Product subject to Mallinckrodt’s prior review (but with no requirement for Mallinckrodt’s prior approval). Mallinckrodt may not make any publications, presentations, or public disclosures solely related to a Licensed Product without Silence’s prior written approval.

11.5.2 By Mallinckrodt. Following Mallinckrodt’s delivery of an Acceptance Notice in respect of a Licensed Product, (a) Mallinckrodt shall have the right to make any publications, presentations, or public disclosures related to such Licensed Product subject to Silence’s prior review (but with no requirement for Silence’s prior approval), and (b) Silence shall not make any publications, presentations, or public disclosures related to such Licensed Product without Mallinckrodt’s prior written approval.

11.5.3 Review Process. Before any paper is submitted for publication or an oral presentation is made for which review or approval rights are provided under Section 11.5, the publishing or presenting Party (the “Publishing Party”) shall deliver a then-current copy of the paper or materials for oral presentation to the non-publishing Party at least [***] Business Days prior to submitting the paper to a publisher or making the presentation where written approval is required and at least [***] Business Days prior to submitting the paper to a publisher or making the presentation where approval is not required. The non-publishing Party shall review any such paper and give its comments to such Publishing Party within [***] Business Days after the delivery of such paper to such other Party. The Publishing Party shall comply with the other Party’s request to delete references to the other Party’s Confidential

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Information in any such paper and will withhold publication of any such paper or any presentation of same for an additional [***] Business Days in order to permit the Parties to obtain Patent protection if such other Party deems it necessary.

11.6 Return of Confidential Information. Upon termination of this Agreement in its entirety, each Party shall promptly return to the other Party, or delete or destroy, all records and materials in such Party’s possession or control containing Confidential Information of the other Party; provided that the other Party shall be permitted to retain one (1) copy of such Confidential Information for the sole purpose of performing any continuing obligations under this Agreement, as required by Applicable Law, or for legal archival purposes. If this Agreement is terminated with respect to one or more Target(s), but not in its entirety, each Party shall promptly return to the other Party, or delete or destroy, all records and materials in such Party’s possession or control containing Confidential Information of the other Party that relates to the terminated Target(s). 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.

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ARTICLE 12

REPRESENTATIONS AND WARRANTIES

12.1 Mutual Warranties. Each Party hereby represents and warrants, as of the Effective Date, as follows:

12.1.1 Organization. It is a company 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.

12.1.2 Authorization. The execution and delivery of this Agreement and the performance by such Party of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and do not violate (a) such Party’s charter documents, bylaws, or other organizational documents, (b) any agreement, instrument, or contractual obligation to which such Party is bound, (c) 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.

12.1.3 Binding Agreement. This Agreement is a legal, valid, and binding obligation of such Party enforceable against it in accordance with its terms, 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).

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12.1.4 No Inconsistent Obligation. It is not under any obligation, contractual or otherwise, to any Person that conflicts with or is inconsistent with the terms of this Agreement, or that would impede the diligent and complete fulfilment of its obligations hereunder.

12.2 Additional Warranties by Silence. Silence hereby represents and warrants, as of the Effective Date, as follows:

12.2.1 all Silence IP is owned by Silence and is not held under license from any other person or entity;

12.2.2 it has the right to grant all rights and licenses it purports to grant to Mallinckrodt with respect to the Silence Background IP and Silence Research IP under this Agreement, free and clear of any rights therein granted to any Third Party;

12.2.3 it has not granted any liens or security interests on any of the Product Specific Patents;

12.2.4 it has not granted to any Third Party any right under the Silence Background IP or Silence Research IP that would conflict with the rights granted to Mallinckrodt hereunder;

12.2.5 except as set forth in Schedule 12.2, it is not the subject of any Patent proceeding in respect of any Silence Background Patent, and it is not aware of any pending or threatened action, suit, proceeding, or claim by a Third Party challenging Silence’s ownership rights in, or the validity or scope of, such Silence Background Patents and, to Silence’s knowledge, all issued and granted Silence Background Patents are valid and enforceable;

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12.2.6 Silence has prosecuted all Silence Background Patents in good faith and in accordance with Applicable Law;

12.2.7 no claim or action has been brought or, to Silence’s knowledge, threatened in writing, by any Third Party alleging that the use of the Silence Background IP infringes or misappropriates, or would infringe or misappropriate, any intellectual property right of any Third Party; and

12.2.8 to Silence’s knowledge, Silence has not, in the development, use or other exploitation of the Silence Background Know-How, infringed, misappropriated or otherwise violated any Third Party’s intellectual property rights and, to Silence’s knowledge, the Development and Exploitation of the C3 Licensed Product as contemplated by the C3 Work Plan will not infringe, misappropriate or otherwise violate any Third Party’s intellectual property rights.

12.3 Mutual Covenants. Each Party hereby covenants and agrees, in connection with the performance of its activities under this Agreement:

12.3.1 it shall not employ, contract with, or retain any person directly or indirectly to perform any of the activities under this Agreement if such person is under investigation by the FDA for debarment or is presently debarred by the FDA pursuant to the Generic Drug Enforcement Act of 1992, as amended (21 U.S.C. § 301, et seq.);

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12.3.2 all research conducted by or on behalf of it shall be performed in accordance with Applicable Laws, and applicable established internal policies and procedures (if any), including policies and procedures pertaining to research involving laboratory animals or hazardous agents and materials, as applicable. Each Party agrees that any animals used in the performance of studies under the Work Plan will be handled in accordance with established guidelines for the care and use of laboratory animals. Further, each Party covenants that all research conducted pursuant to this Agreement involving the use of animals was, or will be, reviewed and approved by its or its animal care and use committee prior to commencement of the applicable research; and

12.3.3 in the performance of its obligations under this Agreement, such Party shall comply and shall cause its and its Affiliates’ employees and contractors to comply with all Applicable Laws and, without limiting the generality of the foregoing, it shall not perform any actions that are prohibited by local or other anti-corruption laws (collectively, “Anti-Corruption Laws”) that may be applicable to such Party. Without limiting the generality of the foregoing, neither Party shall make any payments, or offer or transfer anything of value, to any government official or government employee, to any political party official or candidate for political office or to any other Third Party related to the transaction in a manner that would violate Anti-Corruption Laws.

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12.4 DISCLAIMER OF WARRANTIES. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH HEREIN, NEITHER SILENCE NOR MALLINCKRODT NOR ANY OF THEIR RESPECTIVE AFFILIATES MAKES ANY WARRANTIES, 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, 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 13

INDEMNITY

13.1 Indemnification of Silence. Mallinckrodt shall indemnify, defend, and hold harmless Silence, its Affiliates, and their respective directors, officers, employees, and agents (collectively, the “Silence Indemnitees”) from and against any and all losses, damages, liabilities, penalties, 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, “Claims”) incurred by or rendered against the Silence Indemnitees arising from or occurring as a result of:

13.1.1 the Exploitation of any Licensed Product by or on behalf of Mallinckrodt or any of its Affiliates, Sublicensees, subcontractors, agents, or consultants; or

13.1.2 the breach by Mallinckrodt of any warranty, representation, covenant, or agreement made by Mallinckrodt in this Agreement; except in each case for those Losses for which Silence, in whole or in part, has an obligation to indemnify Mallinckrodt pursuant to Section 13.2.

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13.2 Indemnification of Mallinckrodt. Silence shall indemnify, defend, and hold harmless Mallinckrodt, its Affiliates, and its and their respective directors, officers, employees, and agents (collectively, the “Mallinckrodt Indemnitees”), from and against any and all Losses in connection with any and all Claims incurred by or rendered against the Mallinckrodt Indemnitees arising from or occurring as a result of:

13.2.1 the failure by Silence to perform any Development or other activities assigned to Silence in a Work Plan in accordance with the terms of this Agreement; or

13.2.2 the breach by Silence of any warranty, representation, covenant, or agreement made by Silence in this Agreement; except in each case for those Losses for which Mallinckrodt, in whole or in part, has an obligation to indemnify Silence pursuant to Section 13.1.

13.3 Indemnification Procedure. A Party that intends to claim indemnification under this ARTICLE 13 (the “Indemnitee”) shall promptly notify the indemnifying Party (the “Indemnitor”) in writing of any Claim in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have sole control of the defense or settlement of such Claim. The Indemnitee may participate at its expense in the Indemnitor’s defense of and settlement negotiations for any Claim with counsel of the Indemnitee’s own choice. The indemnity arrangement in this ARTICLE 13 shall not apply to amounts paid in settlement of any action with respect to a Claim if such settlement is effected without the consent of the Indemnitor, which consent shall not be unreasonably withheld, conditioned, or delayed. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any action with respect to a Claim shall only relieve the Indemnitor of its indemnification obligations under this ARTICLE 13 if and to the extent the Indemnitor is actually prejudiced thereby. The Indemnitee shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action with respect to a Claim covered by this indemnification.

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13.4 Special, Indirect, and Other Losses. 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 13, NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE FOR ANY LOSS OF PROFITS OR BUSINESS INTERRUPTION OR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY, OR OTHERWISE IN CONNECTION WITH OR ARISING IN ANY WAY OUT OF THE TERMS OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE USE OF THE LICENSED COMPOUND OR LICENSED PRODUCT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. The foregoing limitation of liability shall not operate to limit or exclude either Party’s liability for (a) death or personal injury, (b) fraud, (c) willful misconduct, or (d) any other liability which, pursuant to Applicable Law, cannot be limited or excluded.

13.5 Insurance. Each Party shall maintain, at its own expense, commercial general liability insurance and product liability and other appropriate insurance in an amount consistent with sound business practice and reasonable in light of its obligations under this Agreement. Each Party shall maintain such insurance for the period commencing promptly after the Effective Date until [***] years after this Agreement. Each Party shall provide a certificate of insurance evidencing such coverage to the other Party upon request. It is understood that such insurance shall not be construed to create any limit of either Party’s obligations or liabilities with respect to its indemnification obligations under this Agreement.

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ARTICLE 14

TERM AND TERMINATION

14.1 Term. This Agreement shall commence on the Effective Date and, unless earlier terminated as provided herein, shall remain in effect, on a Licensed Product-by-Licensed Product and country-by-country basis, until the expiration of the Royalty Term for such Licensed Product in such country. Upon the expiration of the Royalty Term for a particular Licensed Product in a particular country, the licenses granted to Mallinckrodt under Section 4.1 for such Licensed Product in such country shall remain exclusive and become fully-paid, royalty-free, and perpetual.

14.2 Termination by Mallinckrodt.

14.2.1 For Convenience. Mallinckrodt shall have the right to terminate this Agreement in its entirety, or on Target-by-Target basis, for any or no reason, upon [***] days’ prior written notice to Silence.

14.2.2 No Acceptance Notice. This Agreement shall terminate with respect to a Target as set forth in Section 5.3.2.

14.3 Termination for Material Breach. Each Party shall have the right to terminate this Agreement immediately upon written notice to the other Party if such other Party materially breaches this Agreement and has not cured such breach to the reasonable satisfaction of the non-breaching Party within [***] days ([***] days with respect to any payment breach) after receipt from the non-breaching Party of written notice specifying the breach and requesting its cure.

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14.4 Termination by Silence for Patent Challenge. Silence shall have the right to terminate this Agreement in full upon written notice to Mallinckrodt in the event that Mallinckrodt or any of its Affiliates or Sublicensees directly asserts in its own respective name, or directs a Third Party to assert, a Patent Challenge; provided that with respect to any such Patent Challenge by any Sublicensee, Silence will not have the right to terminate this Agreement under this Section 14.4 if, within [***] days of Silence’s notice to Mallinckrodt under this Section 14.4, Mallinckrodt (a) causes such Patent Challenge tobe terminated or dismissed or (b) terminates the sublicense granted to such Sublicensee. For purposes of this Section, “Patent Challenge” means any challenge in a legal or administrative proceeding to the patentability, validity, ownership or enforceability of any of the Silence Background Patents, Silence Research Patents, or Joint Research Patents (or any claim thereof), including by: (x) filing or pursuing a declaratory judgment action in which any of the Silence Background Patents, Silence Research Patents, or Joint Research Patents is alleged to be invalid or unenforceable; (y) citing prior art against any of the Silence Background Patents, Silence Research Patents, or Joint Research Patents (other than art required to be cited by Applicable Law, including under a duty of candor to a patent office), filing a request for or pursuing a re-examination of any of the Silence Background Patents, Silence Research Patents, or Joint Research Patents (other than with Silence’s written agreement), or becoming a party to or pursuing an interference; or(z) filing or pursuing any opposition, cancellation, nullity, or other like proceedings against any of the Silence Background Patents, Silence Research Patents, or Joint Research Patents; but excluding any challenge raised as a defense against a claim, action, or proceeding asserted by Silence or its Affiliates against Mallinckrodt or its Affiliates or Sublicensees and excluding any activities conducted by Mallinckrodt in the prosecution of Product Specific Patents and, if applicable, other Silence Research Patents or Joint Research Patents, so long as such prosecution is conducted in good faith and in accordance with the applicable provisions of this Agreement.

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14.5 Termination for Insolvency. In the event that a Party (a) files or resolves to file for protection under (i) bankruptcy, (ii) insolvency, (iii) reorganization (save in the case of a solvent reorganization), (iv) restructuring (save in the case of a solvent restructuring), or(v)business rescue laws applicable to that Party in any jurisdiction; (b) makes an assignment for the benefit of creditors; (c) appoints or suffers appointment of a receiver, administrative receiver, bailiff or trustee or analogous appointment over substantially all of its property; (d) proposes or implements a scheme of arrangement, company voluntary arrangement or other agreement of composition, compromise or extension of its debts (other than in circumstances where such scheme, arrangement or agreement would have no adverse impact on the rights of any other Party to this Agreement); (e) proposes or is a party to any dissolution or liquidation or ceases continuation of substantially all of itsbusiness; (f) is subject to any filing of an application or a petition under any (i) bankruptcy, (ii) insolvency, (iii) reorganization (save in the case of a solvent reorganization), (iv) restructuring (save in the case of a solvent restructuring), or (v) business rescue laws or has any such application or petition filed against it that, in any such case, is not discharged, in the case of an application or petition filed in the UK, within [***] days of the filing thereof or, in the case of an application or petition filed in any other jurisdiction, within [***] days of the filing thereof; or (g) admits in writing its inability generally to meet its obligations as they fall due in the general course (providing always that a request for fulfilment of a specific obligation to be postponed for a specified time shall not amount to an admission that the Party is generally unable to meet its obligations as they fall due), then the other Party may terminate this Agreement in its entirety effective immediately upon written notice to such Party.

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14.6 Rights in Bankruptcy. All rights and licenses (collectively, the “Intellectual Property”) granted under or pursuant to this Agreement, including all rights and licenses to use improvements or enhancements developed during the Term, are intended to be, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (the “Bankruptcy Code”) or any analogous provisions in any other country or jurisdiction, licenses of rights to “intellectual property” as defined under Section 101(35A) of the Bankruptcy Code. The Parties agree that the licensee of such Intellectual Property under this Agreement shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code, including Section 365(n) of the Bankruptcy Code, or any analogous provisions in any other country or jurisdiction. All of the rights granted to either Party under this Agreement shall be deemed to exist immediately before the occurrence of any bankruptcy case in which the other Party is the debtor. If a bankruptcy proceeding is commenced by or against either Party under the Bankruptcy Code or any analogous provisions in any other country or jurisdiction, the non-debtor Party shall be entitled to a complete duplicate of (or complete access to, as appropriate) any Intellectual Property and all embodiments of such Intellectual Property, which, if not already in the non-debtor Party’s possession, shall be delivered to the non- debtor Party within [***] Business Days of such request; provided, that the debtor Party is excused from its obligation to deliver the Intellectual Property to the extent the debtorParty continues to perform all of its obligations under this Agreement and the Agreement has not been rejected pursuant to the Bankruptcy Code or any analogous provision in any other country or jurisdiction.

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14.7 Effects of Termination.

14.7.1 License Rights.

(a) Upon any termination of this Agreement with respect to a Target, all rights and licenses granted with respect to such Target and all Licensed Products directed to such Target under Sections 4.1 and 4.2.1 shall terminate and be of no further force or effect.

(b) If this Agreement terminates with respect to a Target pursuant to Section 14.2.1 or 14.2.2 or by Silence pursuant to Section 14.3, 14.4 or 14.5, Mallinckrodt hereby grants to Silence licenses on the terms set out in Section 4.2.2 in respect of the Target which is the subject of such termination, and such licences shall survive any expiration or termination of this Agreement.

14.7.2 Development Wind-Down or Transition.

(a) Phase 1 Trial. If Mallinckrodt terminates this Agreement with respect to a Target after Silence has commenced a Phase 1 Trial with respect to a Licensed Product directed to such Target, and such Phase 1 Trial is ongoing as of the effective date of termination, (a) Silence shall have the right to elect to either (i) complete such Phase 1 Trial or (ii) wind-down such Phase 1 Trial in an orderly fashion, and (b) Mallinckrodt shall be responsible for all Research Phase 3 Costs incurred by Silence in completing or winding-down such Phase 1 Trial, as the case may be, that had accrued as of the effective date of such termination, unless [***] in connection with such Target [***] in respect of such Target, in which case no further payments shall be due from Mallinckrodt in respect of such Phase 1 Trial.

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(b) Other Clinical Studies. If any Clinical Studies that were Initiated by or on behalf of Mallinckrodt prior to the termination of this Agreement (whether terminated in its entirety or with respect to a Target) are on-going as of the effective date of such termination, Mallinckrodt shall cooperate with Silence to wind-down such Clinical Study(ies) in an orderly fashion; provided, however, that [***] to transition the sponsorship of any such ongoing Clinical Study(ies) to Silence. Mallinckrodt shall not commence any Clinical Study at any time after it has given or received a notice of termination pursuant to this ARTICLE 14.

(c) Cooperation. Mallinckrodt shall provide reasonable cooperation to Silence and its designee(s) to facilitate, and the Parties shall use reasonable efforts to effect, a reasonable, orderly, and prompt transition of the Development activities relating to any terminated Target and corresponding terminated Licensed Products to Silence and/or its designee(s) following delivery of notice of termination so that Silence is able to assume responsibility for same as of the effective date of termination. Where the same cannot be fully achieved prior to the effective date of termination, Mallinckrodt shall continue to provide such reasonable cooperation to Silence and its designee(s) for a period of no more [***] after the effective date of termination for the purpose of facilitating such transition and providing access to Silence any Mallinckrodt Research Know-How that is the subject of the license granted to Silence pursuant to Section 4.2.2 that is not already in Silence’s possession, to the extent reasonably necessary for Silence to exercise such license rights. For clarity, the foregoing shall not require Mallinckrodt to create any new Know-How.

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14.7.3 Contract Transfer. At Silence’s request, Mallinckrodt shall use Commercially Reasonable Efforts to transfer or transition to Silence or its designee all then-existing commercial arrangements relating specifically to Licensed Products to the extent reasonably necessary for Silence to continue the Development and/or Commercialization of the Licensed Products in the Territory. If any such contract between Mallinckrodt and a Third Party is not assignable to Silence or its designee (whether by such contract’s terms or because such contract does not relate specifically to the Licensed Products) but is otherwise reasonably necessary for Silence to continue the Development and/or Commercialization of the Licensed Products in the Territory, or if Mallinckrodt is performing such work for the Licensed Product itself (and thus there is no contract to assign), then Mallinckrodt shall reasonably cooperate with Silence to negotiate for the continuation of such services for Silence from such entity, or Mallinckrodt shall continue to perform such work for Silence, as applicable, for a reasonable period (not to exceed [***]) after termination at Silence’s cost until Silence establishes an alternate, validated source of such services.

14.7.4 Exclusivity. Upon any termination of this Agreement with respect to a Target, each Party’s obligations under Section 4.8 with respect to such Target shall terminate.

14.7.5 Patent Prosecution. Upon any termination of this Agreement with respect to a Target, Mallinckrodt’s rights in respect of the prosecution and enforcement of any Silence Background Patents and Silence Research Patents, including any Product Specific Patents, shall terminate. If Mallinckrodt has assumed the prosecution of any Product Specific Patent pursuant to Section 10.2.1, Mallinckrodt shall ensure that the prosecution of such Product Specific Patent(s) is transferred to Silence in a prompt and orderly fashion such that no deadline is missed in respect of such prosecution and/or enforcement and that the scope of such Patents is not limited or restricted as a consequence of such transfer. Unless and to the extent the Parties otherwise agree,

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Mallinckrodt and Silence will continue to cooperate regarding prosecution and maintenance of any Joint Research Patents, in accordance with Section 10.2.3.

14.7.6 Confidential Information. Upon any termination of this Agreement with respect to a Target, each Party shall destroy, return or cause to be returned to the other Party all Confidential Information of the other Party relating to such Target as provided in Section 11.6. Upon any termination of this Agreement in its entirety, each Party shall destroy, return or cause to be returned to the other Party all Confidential Information of the other Party as provided in Section 11.6.

14.8 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.

14.9 Accrued Rights; Surviving Obligations. Termination or expiration of this Agreement 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, the following Sections shall survive any such termination or expiration: [ARTICLE 1, Section 4.2.2 (to the extent specified in such Section), Section 5.8, Section 9.4, Section 9.5, Section 9.6, Section 9.7, Section 10.1, ARTICLE 11, ARTICLE 12 (to the extent applicable to continuing obligations under ARTICLE 13), ARTICLE 13, and Sections 14.7, 14.8, 14.9, 15.3, 15.4, 15.5, 15.6, 15.7, 15.8, 15.9, 15.10, 15.11, 15.12, 15.13 and 15.14].

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ARTICLE 15

MISCELLANEOUS

15.1 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 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 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.

15.2 Export Control. Neither Party shall 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.

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15.3 Assignment. Except as expressly provided hereunder, neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise transferred by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld, conditioned, or delayed); provided, however, that either Partymay assign or otherwise transfer this Agreement and its rights and obligations hereunder without the other Party’s consent:

15.3.1 in connection with a Change of Control Transaction, subject to and as further set out in Section 4.9; or

15.3.2 to an Affiliate.

The rights and obligations of the Parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties, and the name of a Party appearing herein will be deemed to include the name of such Party’s successors and permitted assigns to the extent necessary to carry out the intent of this Section 15.3. Any assignment not in accordance with this Section 15.3 shall be null and void.

15.4 Severability. If, for any reason, any part of this Agreement is adjudicated invalid, unenforceable, or illegal by a court of competent jurisdiction, such adjudication shall not, to the extent feasible, affect or impair, in whole or in part, the validity, enforceability, or legality of any remaining portions of this Agreement. All remaining portions shall remain in full force and effect as if the original Agreement had been executed without the invalidated, unenforceable, or illegal part. In such event, the Parties shall negotiate promptly to replace such invalid, unenforceable, or illegal part with a valid, enforceable, and legal provision which most closely effectuates the Parties’ original intent.

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15.5 Governing Law. This Agreement or the performance, breach, or termination hereof shall be interpreted, governed by, and construed in accordance with the laws of [***], 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; provided, that all questions concerning (a) inventorship of Patents under this Agreement shall be determined in accordance with Section 10.1.1 and (b) the construction or effect of Patents shall be determined in accordance with the laws of the country or other jurisdiction in which the particular Patent has been filed or granted, as the case may be. The parties agree to exclude the application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods.

15.6 Dispute Resolution. Except for disputes resolved by the procedures set forth in Sections 2.7.2 and 9.6, if a dispute arises between the Parties in connection with or relating to this Agreement or any document or instrument delivered in connection herewith (a “Dispute”), it shall be resolved pursuant to this Section 15.6.

15.6.1 General. Any Dispute shall first 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 (or such other period of time as mutually agreed by the Senior Officers) after such issue was first referred to them, then, except as otherwise set forth in Section 15.6.2 and Section 15.6.5, if a Party wishes to pursue further resolution of such Dispute, such Dispute shall be subject to exclusive jurisdiction of the courts of [***] or, if the Parties mutually agree, the Parties may initiate arbitration proceedings pursuant to the procedures set forth in Section 15.6.3 for purposes of having the matter finally settled. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BETWEEN THE PARTIES, DIRECTLY OR

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INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR ANY DISPUTES RELATED HERETO OR THERETO. EACH PARTY HERETO (A) CERTIFIES THAT NO AGENT, REPRESENTATIVE OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THEMUTUAL WAIVERS AND CERTIFICATIONS SET FORTH IN THIS SECTION 15.6.1.

15.6.2 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 15.6.1, unless otherwise agreed by the Parties in writing, such Dispute shall not be submitted to arbitration in accordance with Section 15.6.3 and instead, either Party may initiate litigation in a court of competent jurisdiction, in accordance with Section 15.5, in any country or other jurisdiction in which such intellectual property rights apply.

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15.6.3 Arbitration. If the Parties mutually agree to resolve a dispute by binding arbitration, then the Parties shall submit such dispute for resolution by binding arbitration before a tribunal of three (3) arbitrators under the [***] Rules, as then in effect. The seat, or legal place, of the arbitration shall be [***]. Each Party shall nominate one arbitrator and the third arbitrator shall be nominated by the two Party- nominated arbitrators within [***] days after the second arbitrator’s appointment. If a Party does not nominate its arbitrator within [***] days following the expiry of the allotted period, then such arbitrator shall be appointed by the [***] in accordance with its rules. Any arbitrator appointed by the [***] shall have substantial experience in the pharmaceutical industry. The arbitration shall be conducted, and all documents submitted to the arbitrators shall be, in English. Each Party shall bear its own legal costs for its counsel and other expenses, and the Parties shall equally share the fees of the arbitration; provided that the arbitrators shall have the discretion to provide that the losing party is responsible for all or a portion of such costs and fees and in such case the arbitral award will so provide. The arbitrators shall have no power to award punitive, special, incidental, or consequential damages. In no event shall the arbitrators assign a value to any issue greaterthan the greatest value for such issue claimed by either Party or less than the smallest value for such issue for such item claimed by either Party. The award shall be final and binding upon the Parties and the Parties undertake to carry out any award without delay. Judgment on the award rendered by arbitration may be entered in any court of competent jurisdiction. Except to the extent necessary to confirm, enforce, or challenge an award of the arbitration, to protect or pursue a legal right, or as otherwise required by applicable law or regulation or securities exchange, neither Party nor any arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both Parties. Notwithstanding anything to the contrary in the foregoing, in no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy, or claim would be barred by the applicable [***] statute of limitations. Any disputes concerning the propriety of the commencement of the arbitration shall be finally settled by the arbitral tribunal.

15.6.4 Interim Relief. Notwithstanding anything herein to the contrary, nothing in this Section 15.6 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 prior to or following the initiation of arbitration procedures set forth in Section 15.6.3, if necessary to protect the interests of such Party. This Section shall be specifically enforceable.

15.6.5 Baseball Determination. Any Dispute for which determination pursuant to this Section 15.6.5 is specifically provided for in this Agreement shall be finally decided by expedited expert determination in accordance with the following procedures:

(a) Either Party may send the other Party a written notice that it wishes to resolve the Dispute by using a disinterested individual who is (a) neutral and independent of both Parties and their respective Affiliates, (b) possesses appropriate expertise to resolve the applicable dispute, and (c) is not and has not been an employee, officer, director, or, during the previous [***] years, a consultant or contractor of either Party or any of its Affiliates (the “Neutral Expert”). The date of the other Party’s receipt of such written notices shall be the “Notice Date”.

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(b) Within [***] Business Days after the Notice Date, the Parties shall meet and agree in good faith the appointment of a Neutral Expert within [***] Business Days after the Notice Date. In the event that the Parties cannot agree such appointment in such time, either Party may apply to the [***] for the appointment of a Neutral Expert and the appointment by the [***] shall be binding on both Parties.

(c) Within [***] Business Days after the appointment of the Neutral Expert, each Party shall submit to the other Party and the Neutral Expert a written summary regarding its position with respect to the Dispute. Contemporaneously with the submission of its written summary regarding its position, each Party shall provide the other Party and the Neutral Expert with copies of all documents it relied upon in its written summary; provided that each Party may redact any portion of such documents which are covered by an applicable privilege or do not relate to the subject matter of this Agreement. Within [***] Business Days after receipt of the other Party’s written summary regarding its position, each Party may submit an opposition statement. Neither Party will be allowed to conduct any discovery. Neither Party may have any communications (either written or oral) with the Neutral Expert other than for the sole purpose of engaging the Neutral Expert or as expressly permitted in this Section 15.6.5; provided, that oral presentations and follow-up written submissions may be made to the Neutral Expert at such Neutral Expert’s request. Evaluating each Party’s written submissions, the Neutral Expert shall, within [***] Business Days after receipt of the written opposition statements, evaluate each Party’s written submissions and select which of either Mallinckrodt’s submission or Silence’s submission most closely reflects the intent of the Parties with respect to the relevant subject matter (i.e. [***]) and determine the manner in which the expenses and fees of the Neutral Expert shall be allocated. Such decision shall be final, binding and not appealable.

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(d) If the Neutral Expert determines that the submissions of both Parties represented good faith efforts to comply with the intent of the Parties with respect to the relevant subject matter, the Neutral Expert shall allocate the expenses and fees of the Neutral Expert equally between the Parties. Otherwise, the Neutral Expert shall allocate such expenses and fees to the Party whose submission is not selected.

15.7 Notices. Any notice or other communication required under this Agreement shall be in writing, shall refer specifically to this Agreement, and shall be deemed given only if (a) delivered by hand or (b) sent by internationally recognized overnight delivery service addressed to the Parties at their respective addresses specified below or to such other address as a Party may specify in accordance with this Section 15.7. Such notice shall be deemed to have been given as of the date delivered by hand or on the second business day (at the place of delivery) after deposit with an internationally recognized overnight delivery service. This Section 15.7 is not intended to govern the day-to-day business ommunications necessary between the Parties in performing their obligations under the terms of this Agreement.

If to Mallinckrodt, to:

Mallinckrodt Pharma IP Trading DAC c/o Mallinckrodt LLC

675 McDonnell Blvd.

Hazelwood, MO 63042

Telephone: (314) 654-8995

Fax: (314) 654-6174

Attention: Bobby Torgoley, Associate General Counsel – Business Development

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With a copy to:

Stephanie Hosler

Bryan Cave Leighton Paisner LLP 211 N. Broadway, Suite 3600

St. Louis, MO 63102 Telephone: (314) 259-2797

Fax: (314 259-2020

If to Silence, to:

Silence Therapeutics Plc 72 Hammersmith Road London W14 8TH United Kingdom

Attention:JohnStrafford, VP, Head of Business Development

15.8 Entire Agreement; Amendments. 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 Agreement between the Parties dated [***]; provided that all “Confidential Information” disclosed or received under such Confidential Disclosure Agreement shall be deemed “Confidential Information” under this Agreement and subject to the terms and conditions of this Agreement). 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.

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15.9 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.

15.10 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 the Party waiving such term or condition. The waiver by either Party of any right or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right 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.

15.11 No Benefit to Third Parties. Except as provided in ARTICLE 13, 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.

15.12 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.

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15.13 Relationship of the Parties. Silence and Mallinckrodt are independent contractors and the relationship between the Parties shall not constitute a partnership, joint venture, or agency, including for tax purposes. Neither Party 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 Party, without the prior written consent of such other Party. 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.

15.14 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 (1) 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.

{SIGNATURE PAGE FOLLOWS}

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THIS LICENSE AND COLLABORATION AGREEMENT IS EXECUTED by the authorized representatives of the Parties as of the Effective Date.

MALLINCKRODT PHARMA IP
By:	/s/ Alasdair J. Fenlon
Name:	Alasdair J. Fenlon
Title:	Director and Company Secretary
SILENCE THERAPEUTICS PLC
By:	/s/ David Horn Solomon
Name:	David Horn Solomon
Title:	CEO

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EX-10

EXHIBIT 10.6

Certain information in this document, marked by [***], has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K under the Securities Act of 1933, as amended, because it is both (i) not material and (ii) would likely cause competitive harm to the registrant if publicly disclosed.

RESEARCH COLLABORATION, OPTION AND LICENSE AGREEMENT*

by and between

Silence Therapeutics PLC

and

ASTRAZENECA AB

Dated as of March 24, 2020

Cooley (UK) LLP, Dashwood, 69 Old Broad Street, London EC2M 1QS, UK
T: +44 (0) 20 7583 4055  F: +44 (0) 20 7785 9355 www.cooley.com

*                Schedules have been omitted pursuant to item 601(a)(5) of regulation s-k and will be furnished on a supplemental basis to the securities and exchange commission upon request.

Confidential

TABLE OF CONTENTS

		Page
ARTICLE 1 DEFINITIONS		2
ARTICLE 2 COLLABORATION MANAGEMENT		32
2.1	Joint Steering Committee.	32
2.2	Specific Responsibilities of the JSC	32
2.3	Disbandment.	34
2.4	Location of Meetings.	34
2.5	Conduct of Meetings.	34
2.6	Procedural Rules.	35
2.7	Decision Making.	36
2.8	Limitations on Authority.	37
2.9	Alliance Manager.	37
2.10	Expenses	38
ARTICLE 3 TARGET SELECTION		38
3.1	Collaborative Process to Identify Potentially Eligible Targets.	38
3.2	Review of Nominated Target.	38
3.3	Eligible Target Pool.	39
3.4	Validation Research.	41
3.5	Designation of Selected Targets	41
3.6	Total Number of Selected Targets	41
3.7	Research of Selected Targets.	42
3.8	Staggering of Selected Target Selection.	42
3.9	Substitute Targets.	42
ARTICLE 4 RESEARCH		44
4.1	Overview.	44
4.2	Research Plans.	44
4.3	Conduct of the Research Plan.	45
4.4	Conclusion of the Research Plan; Development Candidate Data Package.	50
4.5	Material Increases in Silence Obligations under a Research Plan.	51
ARTICLE 5 EXCLUSIVITY		52
5.1	Mutual Exclusivity During the Exclusivity Period.	52
5.2	AZ Exclusivity after the Option Exercise.	53
ARTICLE 6 OPTION GRANTS		53
6.1	Option Grant to AZ.	53
6.2	Antitrust Clearance.	53

Confidential

6.3	Option Exercise Payment.	55
6.4	Non-Exercise of the Option	55
ARTICLE 7 LICENSE GRANTS		56
7.1	License Grants to AZ.	56
7.2	License Grants to Silence	56
7.3	Sublicenses.	57
7.4	Distributorships and Promotion.	57
7.5	Retention of Rights.	57
7.6	No Implied Licenses.	58
7.7	No [***].	58
7.8	Confirmatory Patent License.	58
ARTICLE 8 DEVELOPMENT AND COMMERCIALIZATION		58
8.1	Overview.	58
8.2	Transfer of Know-How	59
8.3	Diligence	59
8.4	Reporting.	59
8.5	Regulatory Support	59
8.6	Co-Development Option.	60
ARTICLE 9 MANUFACTURING & SUPPLY		62
9.1	Silence Manufacturing.	62
9.2	AZ Obligations.	63
9.3	Cooperation and Technology Transfer.	63
ARTICLE 10 PAYMENTS AND RECORDS		64
10.1	Upfront Payment.	64
10.2	Research Collaboration Milestones.	64
10.3	Sales-Based Milestones	67
10.4	Royalties.	68
10.5	Compulsory License.	71
10.6	Estimated Sales Levels	71
ARTICLE 11 PAYMENT; RECORDS; AUDITS		72
11.1	Royalty Payments and Reports	72
11.2	Mode of Payment.	72
11.3	Taxes.	72
11.4	Financial Records	75
11.5	Audit.	76
11.6	Audit Dispute	76
11.7	Confidentiality.	77

Confidential

ARTICLE 12 INTELLECTUAL PROPERTY		77
12.1	Patent Working Group.	77
12.2	Ownership of Intellectual Property.	77
12.3	Maintenance and Prosecution of Patents.	79
12.4	Enforcement of Patents.	84
12.5	Infringement Claims by Third Parties.	89
12.6	Invalidity or Unenforceability Defenses or Actions.	89
12.7	UPC.	94
ARTICLE 13 CONFIDENTIALITY AND NON-DISCLOSURE		95
13.1	Confidentiality Obligations.	95
13.2	Permitted Disclosures.	96
13.3	Use of Name.	97
13.4	Public Announcements	98
13.5	Publications.	98
13.6	Return of Confidential Information	100
ARTICLE 14 REPRESENTATIONS AND WARRANTIES		101
14.1	Mutual Warranties	101
14.2	Additional Warranties by Silence	102
14.3	Mutual Covenants.	104
14.4	Additional Covenants of Silence.	105
14.5	Certification of Representations and Warranties of Silence.	106
14.6	Disclaimer of Warranties.	106
ARTICLE 15 INDEMNITY		106
15.1	Indemnification of Silence	106
15.2	Indemnification of AZ.	107
15.3	Indemnification Procedure.	108
15.4	Special, Indirect, and Other Losses.	108
15.5	Insurance.	109
ARTICLE 16 TERM AND TERMINATION		109
16.1	Term.	109
16.2	Termination by AZ for Convenience.	109
16.3	Termination for Material Breach.	110
16.4	Termination by Silence for Patent Challenge.	110
16.5	Termination for Insolvency	111
16.6	Effects of Termination.	112
ARTICLE 17 MISCELLANEOUS		120
17.1	Force Majeure.	120

Confidential

17.2	Export Control.	120
17.3	Silence Change of Control	121
17.4	Assignment	123
17.5	Severability	123
17.6	Governing Law	124
17.7	Dispute Resolution.	124
17.8	Interim Relief	125
17.9	Notices.	125
17.10	Entire Agreement; Amendments	126
17.11	English Language.	126
17.12	Waiver and Non-Exclusion of Remedies	126
17.13	No Benefit to Third Parties	127
17.14	Further Assurance.	127
17.15	Rights in Bankruptcy	127
17.16	Relationship of the Parties	128
17.17	Counterparts; Facsimile Execution.	128
17.18	AZ Affiliates	129

Confidential

THIS LICENSE AND COLLABORATION AGREEMENT (“Agreement”) is madeand entered into effective as of March 24, 2020 (the “Effective Date”) by and between

(1) Silence Therapeutics PLC, a public limited company organized under the laws of England and Walesunder no. 2992058 and with its registered office at 27 Eastcastle Street, London, UK W1W 8DH (“Silence”), and

(2) ASTRAZENECA AB, a corporation organized under the laws of Sweden under no. 556011-7482 with its registered office at SE-151 85 Södertälje, Sweden and with offices at Pepparedsleden 1, SE-431 83 Mölndal, Sweden (“AZ”); and

Silence and AZ are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

Background

(A) Silence owns certain intellectual property rights with respect to the research and development of RNAi Molecules (as defined below).

(B) AZ is a leading global, science-led biopharmaceutical company researching, developing and commercializing innovative medicines for patients worldwide.

(C) The Parties have agreed to collaborate to perform drug discovery and research on certain Eligible Targets and Selected Targets, which will be chosen by the Parties, for the treatment of human disease, including cardiovascular, renal, metabolic and respiratory diseases.  AZ wishes to obtain, and Silence wishes to grant to AZ, an option to obtain a license under Silence’s rights in such technology and related intellectual property rights to develop and commercialize Licensed Products directed to those Selected Targets.

(D) The Parties intend to collaborate using Silence’s established GalNAc-siRNA platform to inhibit liver-expressed Selected Targets, and also will explore delivery of RNAi Molecules to extrahepatic tissues, including cardiac, renal and lung tissues.

NOW, THEREFORE, in consideration of 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:

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ARTICLE 1DEFINITIONS

As used in this Agreement, the following capitalized terms, whether used in the singular or plural, shall have the meanings set out below:

1.1 “Accounting Standards” means, with respect to each Party, International Financial Reporting Standards (IFRS).

1.2 “Affiliate”means, with respect to a Party, any Person that, directly or indirectly, through one (1) or more intermediaries, controls, is controlled by or is under common control with such Party.  For the purposes of this definition, “control” and, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”, means (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, 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 Person (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity).

1.3 “Agreement” means this agreement and all schedules, appendices and other addenda attached hereto as any of the foregoing may be amended in accordance with the provisions of this Agreement.

1.4 “Alliance Manager” has the meaning set forth in Section 2.9.

1.5 “Annual Net Sales” means, on a Licensed Product-by-Licensed Product basis, the total Net Sales of such Licensed Product in a particular Year or, with respect to the Year that includes the First Commercial Sale, the period beginning on such date of First Commercial Sale through to the end of the Year in which such First Commercial Sale occurred.

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Confidential

1.6 “Anti-Corruption Laws” has the meaning set forth in Section 14.3.3.

1.7 “Antisense Oligonucleotide Molecule” means any exogenous single-stranded oligonucleotide molecule (i.e., DNA, chimeric DNA-RNA, RNA or derivatives and variants thereof either modified or unmodified) complementary to a messenger RNA molecule of a gene target capable of inducing the degradation of such messenger RNA molecule.

1.8 “Antitrust Clearance” means clearance for AZ’s exercise of an Option and the transactions contemplated thereby required under applicable Antitrust Laws, including (as applicable), the expiration or termination of any waiting periods.

1.9 “Antitrust Laws” means all statutes, rules, regulations, orders, decrees, administrative and judicial doctrines, and other Applicable Laws (such as and including the HSR Act) that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade.

1.10 “Applicable Law”means federal, state, local, national and supra-national laws, statutes, rules, and regulations, including any rules, regulations, guidelines, or other requirements of the Governmental Authorities, major national securities exchanges or major securities listing organizations, that may be in effect from time to time during the Term and applicable to a particular activity or country or other jurisdiction hereunder.

1.11 “Auditor” has the meaning set forth in Section 11.6.

1.12 “AZ Background IP” means the AZ Background Patents and AZ Background Know-How.

1.13 “AZ Background Know-How” means any and all Know-How Controlled by AZ or any of its Affiliates as of the Effective Date or during the Term that is developed or invented by or on behalf of AZ or any of its Affiliates performing activities outside the scope of any Research Plan.

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Confidential

1.14 “AZ Background Patents” means any and all Patents Controlled by AZ or any of its Affiliates on the Effective Date or during the Term that Cover any AZ Background Know-How.

1.15 “AZ Indemnitees” has the meaning set forth in Section 15.2.

1.16 “AZ Proprietary Target” means any Eligible Target or Selected Target provided by AZ to Silence that, as of the date the Eligible Target or Selected Target is proposed by AZ to Silence, is identified in writing as being a target which is proprietary to AZ and, at the time when the status of the Eligible Target or Selected Target is being assessed as an AZ Proprietary Target: (a) [***] or (b) meets all of the following criteria: (i) [***] (ii) [***]and (iii) [***].

1.17 “AZ Research IP” means the AZ Research Patents and AZ Research Know-How.

1.18 “AZ Research Know-How” means any and all Know-How that is developed or invented after the Effective Date solely by or on behalf of AZ or its Affiliates in performing activities under any Research Plan.  For clarity, AZ Research Know-How specifically excludes AZ Background Know-How and Joint Research Know-How.

1.19 “AZ Research Patents” means any and all Patents Controlled by AZ after the Effective Date that Cover any AZ Research Know-How.

1.20 “Bispecific Product” means a Licensed Product containing either (i) a single Licensed Compound containing a conjugation of two (2) RNAi Molecules designed to [***] two (2) Selected Targets, or (ii) a combination of two (2) Licensed Compounds each [***] a separate Selected Target, whether such combination is achieved by formulation, co-administration or otherwise.

1.21 “Business Day” means a day other than a Saturday or Sunday on which banking institutions in Stockholm, Sweden and London, England are open for business.

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1.22 “Candidate Delivery” has the meaning set forth in Section4.4.2.

1.23 “Candidate Failure” has the meaning set forth in Section 4.4.2.

1.24 “Centralized Approval Procedure” means the procedure through which an MAA filed with the EMA results in a single marketing authorization valid throughout the European Union.

1.25 “Change of Control Election Notice” has the meaning set forth in Section 17.3.3.

1.26 “Claims”has the meaning set forth in Section 15.1.

1.27 “Clinical Studies” means a Phase 1 Trial, Phase 2 Trial, Phase 3 Trial, Phase 4 Trial, and such other tests and studies in human subjects that are required by Applicable Law, or otherwise conducted or recommended by any applicable Regulatory Authority, to obtain or maintain Regulatory Approvals for a Licensed Product for one (1) or more Indications, including tests or studies that are intended to expand the approved Indications for such Licensed Product.

1.28 “Collaboration” means the collaboration between the Parties which is the subject matter of this Agreement.

1.29 “Combination Product” means a Licensed Product containing or consisting of one (1) or more Licensed Compounds and one (1) or more Other Active Ingredients, whether in the same or different formulations.

1.30 “Commercialization”means any and all activities directed to the preparation for sale of, offering for sale of, or sale of an RNAi Molecule, Licensed Compound or Licensed Product, including activities related to marketing, promoting, distributing, importing and exporting such molecule or product, and, for purposes of setting forth the rights and obligations of the Parties under this Agreement, shall be deemed to include conducting medical affairs activities and conducting Phase 4 Trials, and interacting with Regulatory Authorities regarding any of the foregoing.  When used as a verb, “to Commercialize”

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Confidential

and “Commercializing” means to engage in Commercialization, and “Commercialized” has a corresponding meaning.

1.31 “Commercially Reasonable Efforts”means:

1.31.1 with respect to a Party’s activities, the carrying out of such activities using efforts and resources that such Party and its Affiliates would typically devote to carrying out such activities, acting in good faith, to compounds or products of similar market potential at a similar stage in development or product life, taking into account all scientific, commercial and other factors that such Party and its Affiliates would typically take into account, including (i) issues of expected and actual cost and time to develop, (ii) the stage of development, (iii) efficacy and safety, (iv) actual or anticipated Regulatory Approval, (v) the expected and actual labeling, (vi) expected and actual profitability (including royalties and other payments required hereunder), (vii) expected and actual competitiveness of alternative Third Party products (including generic products) in the marketplace, (viii) and the nature and extent of expected and actual market exclusivity (including patent coverage, proprietary position and Regulatory Exclusivity), (ix) the expected and actual reimbursability and pricing and (x) the expected and actual amounts of marketing and promotional expenditures required; provided, that in any event such efforts and resources shall be no less than the efforts used by similarly situated and reputable companies in each Party’s respective industry (taking into account the foregoing scientific, commercial and other factors); and

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1.31.2 with respect to an activity that is [***] as permitted hereunder, the exercise of such care and the dedication of such efforts by such Party or its Affiliate with respect to (a) [***], (b) [***], and (c) [***], in each case ((a), (b), and (c)), as are consistent with the standards typically applied by [***] and, in any event, at least the level of efforts and resources required of such Party as set forth in Section 1.31.1.

1.32 “Competitive Infringement” has the meaning set forth in Section 12.4.1.

1.33 “Competitive Program” means any program [***], including any [***].

1.34 “Confidential Information” means any Information or data provided orally, visually, in writing or other form by or on behalf of one (1) Party (or an Affiliate or representative of such Party) to the other Party (or to an Affiliate or representative of such Party) in connection with this Agreement, whether prior to, on, or after the Effective Date, including Information relating to the terms of this Agreement, any Eligible Target, Selected Target, any Restricted Target or any Licensed Product, any Exploitation of any Eligible Target, Selected Target or any RNAi Molecule, Licensed Compound or Licensed Product, any Know-How with respect thereto developed by or on behalf of the disclosing Party or its Affiliates (including AZ Research Know-How and Silence Research Know-How, as applicable), or the scientific, regulatory, or business affairs or other activities of either Party.  Notwithstanding the foregoing, (a) Silence Background IP and Silence Research IP will be considered Confidential Information of Silence, (b) AZ Background IP and AZ Research IP will be considered Confidential Information of AZ, and (c) Joint Research IP shall be deemed to be the Confidential Information of both Parties and both Parties shall be deemed to be the receiving Party and the disclosing Party with respect thereto.

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1.35 “Control”means, with respect to any item of Information, Know-How, material, Patent, or other property right, the possession of the right, whether directly or indirectly, and whether by ownership, license, covenant not to sue, or otherwise (other than by operation of the license and other grants in this Agreement), to grant a license, sublicense, or other right to or under such Information, Know-How, material, Patent, or other property right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party; provided, however, that if (a) the grant to the other Party of access to or a license under such item or right and/or (b) the exercise by the other Party of rights under such license, as provided herein, in either case ((a) or (b)), would trigger a payment obligation by a Party to a Third Party, such item or right, as applicable, shall only be deemed to be Controlled by a Party if the other Party agrees to (i) assume such payment obligation with respect thereto, (ii) be bound by any obligations that are required to be passed on to any sublicensees with respect thereto, and (iii) indemnify the Party deemed to Control such Information, Know-How, material, Patent or other property right, on terms reasonably acceptable to such indemnified Party in respect of all Third Party claims relating to the use by the other Party of such Information, Know-How, material, Patent or other property right.

1.36 “Cover” means, with respect to a particular subject matter at issue and a relevant Patent, that, in the absence of ownership of or a license under such Patent, the manufacture, use, sale, offer for sale, or importation of such subject matter would infringe one or more issued Valid Claims of such Patent, or, as to a pending claim included in such Patent, the manufacture, use, sale, offer for sale, or importation of such subject matter would infringe such Patent if such pending claim were to issue in an issued patent.

1.37 “CTA” has the meaning set forth in the definition of “IND” in Section 1.37.

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1.38 “Development” means, excluding all activities to be carried out by Silence hereunder, all activities related to non-clinical or clinical development of an RNAi Molecule, Licensed Compound and/or Licensed Product conducted on or after the filing of a first IND in respect thereof, including, without limitation, 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” means to engage in Development.  For purposes of clarity, Development shall include any submissions (and activities required in support thereof) required by Applicable Laws or a Regulatory Authority as a condition or in support of obtaining a pricing or reimbursement approval for an approved Licensed Product.

1.39 “Development Candidate Criteria” means, on a Selected Target-by-Selected Target basis, those specific development candidate criteria set out in the relevant Research Plan, which in each case shall be consistent with the criteria set out in the general form of Research Plan attached hereto as Schedule 1.116.

1.40 “Development Candidate Data Package” means, with respect to a particular Licensed Compound, a report setting out the data generated by or on behalf of the Parties in performing activities under the applicable Research Plan in respect of such Licensed Compound with the intended aim of demonstrating its compliance with the Development Candidate Criteria, and any other information identified in the applicable Research Plan that is agreed to form part of the Development Candidate Data Package.

1.41 “Dispute”has the meaning set forth in Section 17.7.

1.42 “Distributor” has the meaning set forth in Section 7.4.

1.43 “Dollars” or “$” means United States Dollars.

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1.44 “Dose Range Finding Study” or “DRF Study” means an animal toxicology study designed to provide toxicological and toxicokinetic assessment early in the drug development process.  Data from DRF Studies are used to determine potential target tissues of toxicity and also to select doses for future GLP Toxicology Studies.

1.45 “Drug Approval Application” means (a) a New Drug Application, submitted to the FDA pursuant to 21 CFR § 314.50 (“NDA”); (b) a Biologics License Application submitted to the FDA pursuant to Section 351(a) of the Public Health Service Act and the regulations promulgated thereunder (“BLA”); (c) an application for authorization to market and/or sell a biological or pharmaceutical product submitted to a Regulatory Authority in any country or jurisdiction other than the U.S., including, with respect to the European Union, a marketing authorization application filed with the EMA pursuant to the Centralized Approval Procedure or with the applicable Regulatory Authority of a country in the European Economic Area with respect to the decentralized procedure, mutual recognition or any national approval procedure (“MAA”); or (d) with respect to any biological or pharmaceutical product for which a NDA, BLA or MAA has been approved by the applicable Regulatory Authority, an application to supplement or amend such NDA, BLA or MAA to expand the approved label for such biological product to include use of such biological product for an additional Indication.

1.46 “Effective Date”means the effective date of this Agreement as set forth in the preamble hereto.

1.47 “Eligible Target” has the meaning given in Section 3.2.

1.48 “Eligible Target Pool” has the meaning given in Section 3.2.

1.49 “Eligible Target Pool Cap” has the meaning given in Section 3.2.

1.50 “EMA”means the European Medicines Agency and any successor agency or authority having substantially the same function.

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1.51 “European Union” means the economic, scientific, and political organization of member states known as the European Union, as its membership may be altered from time to time, and any successor thereto.

1.52 “Exclusivity Period” means, on an Eligible Target-by-Eligible Target (or, as applicable, Selected Target-by-Selected Target) basis, that period of time beginning on the date that [***] or the date that [***], and ending on the date that the first of the following events occurs in respect of such Eligible Target or Selected Target (as applicable):

1.52.1 such Eligible Target is [***] for any reason, other than [***];

1.52.2 such Selected Target is [***];

1.52.3 [***] in respect of such Selected Target [***];

1.52.4 in the event that [***] in respect of such Selected Target occurs; or

1.52.5 [***] (whether [***], or [***]relates to such Eligible Target or Selected Target, as the case may be) [***].

1.53 “Expired Target” has the meaning set forth in Section 6.4.

1.54 “Exploit” or “Exploitation” means to make, have made, import, have imported, export, have exported, use, have used, sell, have sold, offer for sale, or have offered for sale, including to Research, Develop, Commercialize, register, modify, enhance, improve, Manufacture, have Manufactured, hold, or keep (whether for disposal or otherwise), or otherwise dispose of.

1.55 “FDA”means the United States Food and Drug Administration and any successor agency or authority having substantially the same function.

1.56 “Field” means all therapeutic, prophylactic, palliative and diagnostic uses in humans and animals.

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1.57 “First Commercial Sale” means, with respect to a Licensed Product and a country, the first sale for monetary value for use or consumption by the end user of such Licensed Product in such country after Regulatory Approval for the sale of such Licensed Product has been obtained in such country.  Sales prior to receipt of Regulatory Approval for such Licensed Product, such as so-called “treatment IND sales”, “named patient sales”, and “compassionate use sales”, shall not constitute a First Commercial Sale.

1.58 “FTE” means the equivalent of the work of one (1) appropriately qualified individual working on a full-time basis in performing work in connection with this Agreement for a twelve (12) month period (consisting of at least a total of [***] hours per Year of scientific, technical or operational work (excluding administrative services)).

1.59 “FTE Cost” means the FTE Rate multiplied by the number of FTEs applied by Silence to the performance of the relevant activity in accordance with the applicable Research Plan.

1.60 “FTE Rate” means, for the period from the Effective Date to 31 December 2020, [***]. Thereafter, the FTE Rate shall be increased or decreased on 1 January of each year by the annual percentage increase or decrease in the UK Consumer Price Inflation published by the UK Office of National Statistics.

1.61 “Fully Burdened Manufacturing Cost” or “FBMC” means (a) in respect of the Manufacture and supply of a Licensed Product by Silence, the actual cost of such Manufacturing incurred by Silence, including the costs of raw materials, direct and identifiable labor costs (calculated at the FTE Rate), intermediates and components, drug substance and drug product manufacturing, labelling and packaging, quality assurance and stability testing, QC release testing of drug substance and drug product, QA batch record review and release of product, storage and freight, shipping, tariffs and export fees; provided that the actual cost of such Manufacturing incurred by Silence will be calculated in accordance with Accounting Standards and Silence and its Affiliates’ policies and procedures for its other products, in each case consistently applied (and such plant operations and support services costs will be allocated consistent with accounting

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principles and the other products in that facility); and, notwithstanding anything to the contrary, such actual cost will exclude all costs which cannot be linked to a specific Manufacturing activity such as charges for corporate overhead which are not controllable by the Manufacturing plant, together with any idle or excess capacity costs that are not reasonably necessary to meet the supply demand as set forth in the applicable Research Plan or Supply Agreement, any indirect taxes, and any amounts payable by Silence to a Third Party due to the negligence or misconduct of Silence or its Affiliates; and (b) in respect of any activities subcontracted to a Third Party, the amount invoiced by the relevant Third Party for such activity, which amount shall be passed-through to AZ without any mark-up by Silence or its Affiliates.

1.62 “Generic Competition” has the meaning set forth in Section 10.4.3(b).

1.63 “Generic Product” means, with respect to a Licensed Product, (a) any product that is sold by a Third Party under a Regulatory Approval granted by a Regulatory Authority to a Third Party, which Third Party has not obtained the right to market or sell such product from AZ (including as a Sublicensee, subcontractor, or Distributor of AZ or any of its Affiliates) and [***] and (b) is approved in reliance, in whole or in part, on the prior approval (or on data supporting safety or efficacy data submitted in support of the prior approval) of such Licensed Product as determined by the applicable Regulatory Authority, including but not limited to any product authorized for sale (i) in the U.S. pursuant to Section 505(b)(2) or Section 505(j) of the FD&C Act (21 U.S.C. 355(b)(2) and 21 U.S.C. 355(j), respectively), (ii) in the E.U. pursuant to a provision of Articles 10, 10a or 10b of Parliament and Council Directive 2001/83/EC as amended (including an application under Article 6.1 of Parliament and Council Regulation (EC) No 726/2004 that relies for its content on any such provision), or (iii) in any other country or jurisdiction pursuant to the equivalents of such provisions, including any amendments and successor statutes with respect to the subsections (i) through (iii).  A Licensed Product authorized by AZ or any of its Affiliates or Sublicensees as an authorized generic product whether or not marketed by AZ or a Third Party will not constitute a Generic Product.

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1.64 “GLP Toxicology Study” means an animal pharmacology and toxicology study conducted using current good laboratory practice that is used to assess whether a Licensed Product is reasonably safe for initial testing in humans and to support an IND.

1.65 “Governmental Authority” means any court, administrative body, local authority or other governmental or quasi-governmental entity with competent jurisdiction, any supra-national, national, federal, state, municipal, provincial or local governmental, regulatory or administrative authority, agency, commission, court tribunal, arbitral body, self-regulated entity, private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority or other governmental entity, including any relevant Regulatory Authority.

1.66 “Government Official” means (a) any Person acting on behalf of a government, government-controlled agency or entity or public international organization, (b) any political party, party official or candidate, (c) any Person who holds or performs the duties of an appointment, office or position created by custom or convention or (d) any Person who holds himself out to be the authorized intermediary of any of the foregoing.

1.67 “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and all rules and regulations promulgated thereunder.

1.68 “IND” means an application filed with a Regulatory Authority for authorization to commence Clinical Studies, including (a) an Investigational New Drug Application as defined in the United States Federal Food, Drug, and Cosmetic Act, as amended, or any successor application or procedure filed with the FDA, (b) any equivalent of a United States IND in other countries or regulatory jurisdictions, (e.g., a Clinical Trial Application (“CTA”)), and (c) all supplements, amendments, variations, extensions, and renewals thereof that may be filed with respect to the foregoing.

1.69 “Indemnitee”has the meaning set forth in Section 15.3.

1.70 “Indemnitor” has the meaning set forth in Section 15.3.

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1.71 “Indication” means a disease, disorder, illness, or health condition and all of its associated signs, symptoms, stages, or any progression of the foregoing (including precursor conditions), in each case, for which a separate Phase 3 Trial is required.

1.72 “Indirect Taxes” has the meaning set forth in Section 11.3.2.

1.73 “Information” means all knowledge of a technical, scientific, business or other nature, including know-how, 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, regulatory data, and other biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre-clinical, clinical, safety, manufacturing and quality control data and information, including study designs and protocols, reagents (e.g., plasmids, proteins, cell lines, assays and compounds) and biological methodology; in each case (whether or not confidential, proprietary, patented or patentable, or of commercial advantage) in written, electronic, or any other form now known or hereafter developed.

1.74 “Initiation” means, with respect to a Clinical Study, the first dosing of the first (1^st) human subject in such Clinical Study.  “Initiate” has a correlative meaning.

1.75 “Joint Research IP” means the Joint Research Patents and Joint Research Know-How.

1.76 “Joint Research Know-How” means any and all Know-How that is developed or invented after the Effective Date jointly by or on behalf of AZ on the one hand, and by or on behalf of Silence on the other hand, in performing activities under each Research Plan.  For clarity, Joint Research Know-How specifically excludes AZ Background Know-How, AZ Research Know-How, Silence Background Know-How, and Silence Research Know-How.

1.77 “Joint Research Patents” means any and all Patents that Cover any Joint Research Know-How.

1.78 “Joint Steering Committee” or “JSC” has the meaning set forth in Section 2.1.

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1.79 “Know-How” means any and all data, results, inventions, methods, processes, practices, trade secrets, techniques, technology, and other proprietary Information, whether patentable or not, but which are not generally known, including discoveries, formulae, materials (including chemicals), biological materials (including expression constructs, nucleic acid sequences, amino acid sequences, and cell lines), clinical trial and patient selection designs and methodology, test data (including pharmacological, toxicological, pre-clinical and clinical information and test data), analytical and quality control data (including drug stability data), manufacturing technology and data (including formulation data), and sales forecasts, data and descriptions.

1.80 “Knowledge” means the actual knowledge of Silence’s Chief Executive Officer (or equivalent thereof, including, if applicable, the Executive Chairman) and each officer reporting directly thereto (including but not limited to the Head of Business Development, General Counsel, Chief Patent Officer, Chief Financial Officer, Head of Human Resources, Head of Manufacturing, Head of Research & Development and Chief Medical Officer), in each case, after reasonable due inquiry.

1.81 “Licensed Compound” means a compound [***]. Each Licensed Compound includes [***] that are incorporated into such Licensed Compound.  For the avoidance of doubt, all compounds which fall within the scope of this definition shall constitute “Licensed Compounds,” as set forth more fully in Section 7.1.2, notwithstanding [***].  For clarity, [***] means that [***] of a Selected Target by [***] than [***] non-selected target [***].

1.82 “Licensed Product”means a pharmaceutical product containing one (1) or more Licensed Compounds as an active pharmaceutical ingredient, whether alone or in combination with one (1) or more Other Active Ingredients, and in any form, formulation, dosage form and strength, and for any mode of delivery.  For clarity, pharmaceutical products which contain identical Licensed Compound(s) whether or not with Other Active Ingredients, and whether or not they are in a different pharmaceutical form, formulation, dosage form, dosage strength, or which have a different mode of delivery, shall be treated as one and the same Licensed Product for the purposes of this definition.

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1.83 “Losses” has the meaning set forth in Section 15.1.

1.84 “Major Market” means any of [***].

1.85 “Manufacture” and “Manufacturing” means all activities related to the synthesis, making, production, processing, purifying, formulating, filling, finishing, packaging, labelling, shipping, and holding of any molecule, product or any intermediate thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial production and analytic development, product characterization, supply chain, stability testing, quality assurance testing and release, and quality control.

1.86 “Mono Product” has the meaning set forth in the definition of “Net Sales” in Section 1.87.

1.87 “Net Sales” means, with respect to a Licensed Product for any period, the total amounts billed or invoiced on sales of such Licensed Product during such period by AZ, its Affiliates, or Sublicensees in the Territory to Third Parties (including to Distributors), in bona fide arm’s length transactions, less the following deductions, in each case related specifically to the Licensed Product and not otherwise recovered by or reimbursed to AZ, its Affiliates, or Sublicensees:  

(a) trade, cash and quantity discounts;

(b) 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;

(c) amounts repaid or credited by reason of rejections, defects, return goods allowance, recalls or returns, or because of retroactive price reductions;

(d) rebates (or their equivalent), administrative fees, chargebacks and retroactive price adjustments and any other similar allowances granted to Third Parties (including to Governmental Authorities, purchasers, reimbursers, customers, distributors, wholesalers, and managed care organizations (and other similar

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entities and institutions)) which effectively reduce the selling price or gross sales of such Licensed Product;

(e) the portion of administrative fees paid during the relevant time period to group purchasing organizations, pharmaceutical benefit managers or Medicare Prescription Drug Plans relating to such Licensed Product;

(f) freight, insurance, import/export, and other transportation charges to the extent added to the sale price and set forth separately as such in the total amount invoiced;

(g) [***]; and

(h) [***] provided always that [***].

Net Sales shall not include transfers or dispositions for charitable, promotional, pre-clinical, clinical, regulatory, or governmental purposes, provided such transfers or dispositions take place for no consideration.  Net Sales shall include the amount or fair market value of all other consideration received by AZ, its Affiliates, or Sublicensees in respect of a Licensed Product, whether such consideration is in cash, payment in kind, exchange, or other form.  Net Sales shall not include sales between or among AZ, its Affiliates, or Sublicensees.

Subject to the above, Net Sales shall be calculated in accordance with the standard internal policies and procedures of AZ, its Affiliates, or Sublicensees, which must be in accordance with Accounting Standards and consistent with the audited net sales reported externally by AZ.

For the purposes of calculating Net Sales, all Net Sales shall be converted into Dollars in accordance with Section 11.2.

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In the event a Licensed Product is a Combination Product, the Net Sales for such Combination Product shall be calculated as follows:

i. If AZ, its Affiliate, or Sublicensee separately sells in such country or other jurisdiction, (A) a product containing as its sole active ingredient a Licensed Compound contained in such Combination Product (the “Mono Product”) and (B) 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 AZ’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 or other jurisdiction and “B” is AZ’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 or other jurisdiction, for products that contain as their sole active ingredients the Other Active Ingredients in such Combination Product.

ii. If AZ, its Affiliate, or Sublicensee separately sells in such country or other jurisdiction the Mono Product but does not separately sell in such country or other jurisdiction 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 AZ’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 or other jurisdiction, and “C” is AZ’s (or its Affiliate’s or Sublicensee’s, as applicable) average Net Sales price in such country or other jurisdiction during the period to which the Net Sales calculation applies for such Combination Product.

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iii. If AZ, its Affiliates, and Sublicensees do not separately sell in such country or other jurisdiction 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 or other jurisdiction 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 AZ, its Affiliates, and Sublicensees do not separately sell in such country or other jurisdiction both the Mono Product and the Other Active 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(s).  If the Parties cannot agree on such relative value, the Dispute shall be resolved pursuant to Section 17.7.

1.88 “Nominated Target” means those human gene targets proposed pursuant to Section 3.1.

1.89 “Option” has the meaning set forth in Section 6.1.

1.90 “Option Exercise Date” means, on an Option-by-Option basis, the date that Silence receives written notification that AZ wishes to exercise such Option, pursuant to Section 6.1.

1.91 “Option Exercise Effective Date” means on an Option-by-Option basis, the later of (i) the Option Exercise Date and (ii) the date on which the last applicable Antitrust Clearance is obtained.

1.92 “Option Exercise Payment” has the meaning set forth in Section 6.2.

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1.93 “Option Term” means, on a Selected Target-by-Selected Target basis, the period of time commencing on the date that such human gene target is selected as a Selected Target pursuant to Section 3.4.2, and expiring on the earlier of: (i)[***]calendar days after an Option Trigger Event with respect to such Selected Target, (ii) termination of this Agreement as a whole, or (iii) termination of this Agreement to the extent relating to the relevant Selected Target.  Notwithstanding anything to the contrary in this Section 1.93, the Parties may (in their absolute discretion) mutually agree in writing to an alternative date for expiration of any Option Term.

1.94 “Option Trigger Event” means [***] or [***].

1.95 “Other Active Ingredient” means any component that provides pharmacological activity or other direct therapeutic effect in the Field or that therapeutically affects the structure or any function of the body whereby such component (a) is not Covered by a Valid Claim of the Silence Background Patents, Silence Research Patents, or the Joint Research Patents, and (b) is not derived by AZ, its Affiliates, and/or Sublicensees from the Silence Background Know-How, Silence Research Know-How, or Joint Research Know-How.

1.96 “Patent Challenge” has the meaning set forth in Section 16.4.

1.97 “Patents” means (a) all national, regional and international patents and patent applications, including provisional patent applications and any and all rights to claim priority thereto, (b) 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, (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), including utility models, petty patents, and design patents and certificates of invention, (d) 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 or other patents resulting from post-grant proceedings ((a), (b), and

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(c)), and (e) any similar patent 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.

1.98 “Patent Working Group” has the meaning set forth in Section 12.1.

1.99 “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.

1.100 “Phase 1 Trial” means a human clinical trial of a Licensed Product that satisfies the requirements for a Phase 1 study as defined in 21 CFR § 312.21(a) (or any amended or successor regulations), regardless of where such clinical trial is conducted.

1.101 “Phase 2 Trial” means a human clinical trial of a Licensed Product that satisfies the requirements for a Phase 2 study as defined in 21 CFR § 312.21(b) (or any amended or successor regulations), regardless of where such clinical trial is conducted.

1.102 “Phase 3 Trial” means a human clinical trial of a Licensed Product that satisfies the requirements for a Phase 3 study as defined in 21 CFR § 312.21(c) (or any amended or successor regulations), regardless of where such clinical trial is conducted.

1.103 “Phase 4 Trial” means a human Clinical Trial of a Licensed Product conducted after Regulatory Approval of such Licensed Product has been obtained from an appropriate Regulatory Authority, and includes (a) trials conducted voluntarily for enhancing marketing or scientific knowledge of an approved indication and (b) trials conducted after Regulatory Approval due to request or requirement of a Regulatory Authority or as a condition of a previously granted Regulatory Approval, including studies conducted in response to a pediatric written request or condition of approval studies.

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1.104 “PMDA”means Japan’s Pharmaceuticals and Medical Devices Agency and any successor agency or authority having substantially the same function.

1.105 “Product Specific Patent” means [***] that (a) specifically and solely claims [***] (including [***]) and/or [***], and (b) does not claim [***] that [***] other than [***].

1.106 “Publishing Party” has the meaning set forth in Section 13.5.3.

1.107 “Quality Agreement” has the meaning set forth in Section 9.1.2.

1.108 “Quarter” means each successive period of three (3) calendar months commencing on January 1, April 1, July 1 and October 1, except that the first Quarter of the Term shall commence on the Effective Date and end on the day immediately prior to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date, and the last Quarter shall end on the last day of the Term.

1.109 “Regulatory Approval” means, with respect to a country or other jurisdiction in the Territory, any and all approvals (including Drug Approval Applications), licenses, registrations, or authorizations of any Regulatory Authority necessary to Commercialize a Licensed Product in such country or other jurisdiction, including, where applicable, pricing or reimbursement approval in such country or other jurisdiction.

1.110 “Regulatory Authority” means any applicable supra-national, federal, national, regional, state, provincial, or local governmental or regulatory authority, agency, department, bureau, commission, council, or other entities (e.g., the FDA, EMA, and PMDA) regulating or otherwise exercising authority with respect to activities contemplated in this Agreement, including the Exploitation of any Licensed Products in the Territory.

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1.111 “Regulatory Exclusivity” means, with respect to any country or other jurisdiction in the Territory,an additional market protection, other than Patent protection, granted by a Regulatory Authority in such country or other jurisdiction which confers an exclusive Commercialization period during which AZ or its Affiliates or Sublicensees have the exclusive right to market and sell a Licensed Product in such country or other jurisdiction through a regulatory exclusivity right (e.g., new chemical entity exclusivity, new use or indication exclusivity, new formulation exclusivity, orphan drug exclusivity, pediatric exclusivity, or any applicable data exclusivity).

1.112 “Replaced Target” has the meaning set out in Section 4.3.3(a).

1.113 “Research” means (i) all activities to be carried out by Silence hereunder and (ii) all activities carried out by or on behalf of a Party hereunder (whether on its own or jointly with the other Party) that is related to pre-clinical research and development of an RNAi Molecule, Licensed Compound and/or Licensed Product, conducted prior to the filing of a first IND in respect thereof.  When used as a verb, “Researching” means to engage in Research.  For purposes of clarity, Research shall not include Development, Commercialization, or any other activities conducted in respect of an RNAi Molecule, Licensed Compound and/or Licensed Product following the filing of a first IND in respect thereof.

1.114 “Research Budget” has the meaning set forth in Section 4.2.

1.115 “Research Collaboration Term” means the period commencing on the Effective Date and ending upon the later of (i) the expiration of the Option Term relating to the final Selected Target in the Selected Target Cap or (ii) the Option Exercise Effective Date relating to the final Selected Target in the Selected Target Cap unless this Agreement is terminated earlier, in which case such early termination also terminates the Research Collaboration Term.

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1.116 “Research Plan” means the specific research plan that shall form the basis of the Research work for a Selected Target, and which shall be consistent in format with the general form of Research Plan attached hereto as Schedule 1.116.

1.117 “Research Plan Team Leader” means the representative designated by each Party pursuant to Section 3.7 who will have responsibility for overseeing the day-to-day activities of such Party to be conducted pursuant to the applicable Research Plan, and who will be the primary point of contact between the Parties with respect to the applicable Research Plan.

1.118 “Research Plan Term” means the term of any Research Plan in respect of a particular Selected Target, which shall commence on the date that the Parties agree that activities thereunder shall begin and shall not exceed [***] after commencement of such activities, unless otherwise agreed in writing or which is extended pursuant to Section 4.5.

1.119 “Restricted Targets” means those human gene targets which, at the time that AZ proposes them as Nominated Targets, are:

1.119.1 [***];

1.119.2 [***]; or  

1.119.3 [***].

1.120 “Returned Target” has the meaning set out in Section 16.6.1.

1.121 “RNA” means ribonucleic acid.

1.122 “RNAi Molecule” means any exogenous double-stranded oligonucleotide (i.e. RNA or modified variants thereof) molecule inducing RISC-mediated cleavage and degradation of the target RNA (where RISC means RNA-induced silencing complex).

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1.123 “Royalty Term” means, with respect to each Licensed Product and each country in the 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 (a) the expiration of the last-to-expire Valid Claim of any [***] that Covers the composition of matter of the Licensed Compound contained in such Licensed Product in such country, (b) the expiration of Regulatory Exclusivity for such Licensed Product in such country, and (c) the [***] anniversary of the First Commercial Sale of such Licensed Product in such country.

1.124 “Selected Target” means any one of the human gene targets designated by AZ as a Selected Target in accordance with Section 3.5, provided that [***].

1.125 “Selected Target Cap” has the meaning set forth in Section 3.6.

1.126 “Selected Target Cap Option” has the meaning set forth in Section 3.6.

1.127 “Senior Officer” means, with respect to Silence, its Chief Executive Officer (or equivalent thereof, including, if applicable, the Executive Chairman) or his/her designee, and with respect to AZ, its Executive Vice-President, BioPharmaceuticals R&D or his/her designee.

1.128 “Silence Acquiror” means any AZ Competitor acquiring a Controlling Interest in Silence (or in a Holding Company of Silence) or its property or business pursuant to a Silence Change of Control.

1.129 “Silence Background IP” means the Silence Background Patents and Silence Background Know-How.

1.130 “Silence Background Know-How” means any and all Know-How Controlled by Silence or any of its Affiliates (i) on the Effective Date or (ii) which has been generated solely by or on behalf of Silence during the Term otherwise than in the performance of this Agreement, and in each case (i) and (ii) solely to the extent that such Know-How is necessary or reasonably useful to Exploit Licensed Compounds or Licensed Products.

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1.131 “Silence Background Patents” means any and all Patents Controlled by Silence or any of its Affiliates on the Effective Date(including the Patents set forth on Schedule 1.131 which may be amended in writing from time to time) or during the Term that solely Cover any Silence Background Know-How.

1.132 “Silence Change of Control” means:

(a) a transaction in which Silence (or a Holding Company of Silence) sells, conveys or otherwise disposes of all or substantially all of its property or business; or

(b) (i) a transaction in which Silence (or a Holding Company of Silence) merges or consolidates with any other Person (other than a wholly-owned subsidiary of Silence (or of a Holding Company of Silence)), or (ii)  any other transaction or series of transactions; in each case of clause (i) or (ii), in consequence of which any Person and/or any group of Persons acting in concert (as such expression is defined in the Code) acquires a Controlling Interest in Silence (or in a Holding Company of Silence).

Notwithstanding the foregoing subsection (b), a Silence Change of Control will not include any transaction or series of related transactions principally conducted by Silence (or a Holding Company of Silence) for bona fide equity financing purposes in which cash is received, or indebtedness is cancelled or converted, or a combination thereof occurs and pursuant to which the Person and/or any group of Persons acting in concert (as such expression is defined in the Code) acquiring the Controlling Interest in Silence (or in a Holding Company of Silence) is not an AZ Competitor.

For purposes of Section 1.128 and this Section 1.132, the following capitalized terms shall have the meanings set out below:

“AZ Competitor” means a Person that is (a) [***] and/or (b) [***]; and

“Code” means the City Code on Takeovers and Mergers;

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“Controlling Interest” means an interest in shares giving to the holder or holders the power to secure (a) by means of the holding of shares or the possession of voting power in relation to that or any other body corporate and/or (b) as a result of any powers conferred by the articles of association or other document regulating that or any other body corporate (i) the election of a majority of the members of the company’s board of directors or similar governing body and/or (ii) that the affairs of the company are conducted in accordance with such holder or holder’s wishes; and

“Holding Company” has the meaning given to “holding company” in section 1159 of the Companies Act 2006.

1.133 “Silence COC Notification Date” has the meaning set forth in Section 17.3.

1.134 “Silence Indemnitees” has the meaning set forth in Section 15.1.

1.135 “Silence Research IP” means the Silence Research Patents and Silence Research Know-How.

1.136 “Silence Research Know-How” means any and all Know-How that is developed or invented after the Effective Date solely by or on behalf of Silence or its Affiliates in performing activities under any Research Plan.  For clarity, Silence Research Know-How specifically excludes Silence Background Know-How and Joint Research Know-How.

1.137 “Silence Research Patents” means any and all Patents Controlled by Silence after the Effective Date that Cover any Silence Research Know-How.

1.138 “Subcontractor” has the meaning set forth in Section 4.3.4

1.139 “Sublicensee”means a Third Party, other than a Distributor, to whom AZ (or a sublicensee of AZ) grants a sublicense to Develop, use, import, promote, offer for sale, sell, have sold, or otherwise Commercialize any Licensed Product in the Field in the Territory.

1.140 “Supply Agreement” has the meaning set forth in Section 9.1.2.

1.141 “Term” has the meaning set forth in Section 16.1.

1.142 “Territory”means worldwide.

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1.143 “Third Party”means any Person other than Silence, AZ, or an Affiliate of Silence or AZ.

1.144 “Valid Claim” means either: (a) a claim of a pending Patent application, which claim was filed and is being prosecuted in good faith and has not been abandoned or finally disallowed without the possibility of appeal or re-filing of the application, provided that such prosecution has not been on-going for more than [***] years from its earliest priority date and provided further that if, thereafter, a patent containing such claim issues, then such claim shall thereafter be considered a Valid Claim in accordance with clause (b) below; or (b) a claim of any issued and unexpired Patent for which the validity, enforceability, or patentability has not been affected by any of the following: (x) irretrievable lapse, abandonment, revocation, dedication to the public, or disclaimer; or (y) 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.

1.145 “Validation Cap” has the meaning set forth in Section 3.4.1

1.146 “Validation Tool Compound” has the meaning set forth in Section 3.4.1

1.147 “Withholding Party” has the meaning set forth in Section 11.3.1.

1.148 “Year” means each successive period of twelve (12) calendar months commencing on January 1 and ending on December 31, except that the first Year of the Term shall commence on the Effective Date and end on December 31 of the year in which the Effective Date occurs and the last Year of the Term shall commence on January 1 of the year in which the Term ends and end on the last day of the Term.

1.149 In this Agreement:

1.149.1 all references to a particular clause or schedule shall be a reference to that clause or schedule in or to this Agreement as it may be amended from time to time pursuant to this Agreement;

1.149.2 the headings are inserted for convenience only and shall be ignored in construing this Agreement;

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1.149.3 words importing the masculine gender shall include the feminine and vice versa and words in the singular include the plural and vice versa;

1.149.4 the words “include”, “included”, and “including” are to be construed without conveying any limitation to the generality of the preceding words;

1.149.5 reference to any statute or regulation includes any modification or re-enactment of that statute or regulation;

1.149.6 any reference to notices or consent being sought or given in writing shall require the consent or notice to be signed by an appropriately authorized person and shall not include consents or notices conveyed by email; and

1.149.7 in the event of any inconsistency or conflict between this Agreement and any of the schedules attached hereto, the provision set forth in the main body of this Agreement shall prevail over the conflicting provision in the attached schedule.

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ARTICLE 2COLLABORATION MANAGEMENT

2.1 Joint Steering Committee.  Within fifteen (15) days after the Effective Date, or as mutually agreed to by the Parties, the Parties shall establish a joint steering committee (the “Joint Steering Committee” or “JSC”).  The JSC shall consist of two (2) 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 responsibility of the JSC.  From time to time, notwithstanding good faith efforts to ensure the continuity of the key personnel representing the Parties on the JSC, each Party may substitute one (1) or more of its representatives to the JSC by providing prior written confirmation (which may be by email) to the other Party, provided such substituted JSC member possesses the requisite experience and seniority to enable such person to make decisions on behalf of the Parties as provided herein.  The chairperson of the JSC shall be selected by AZ.  From time to time, AZ may change the representative who will serve as chairperson on written notice to Silence.

2.2 Specific Responsibilities of the JSC.  The JSC shall review the strategy for and oversee the Research Plans for the Collaboration Research of the RNAi Molecules and the Licensed Compounds directed to such Selected Target under each Research Plan.  In particular, the JSC shall:

2.2.1 collaboratively discuss and identify human gene targets which the Parties may be interested to pursue as part of the Collaboration;

2.2.2 receive notification from Silence as to whether a Nominated Target is or is not a Restricted Target;

2.2.3 review and discuss the outcome of all validation research activities;

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2.2.4 review, discuss and determine whether to suspend the Eligible Target Pool Cap in accordance with Section 3.3.1;

2.2.5 discuss whether or not an Eligible Target is suitable for designation as a Selected Target;

2.2.6 review and discuss the activities to be conducted in each Research Plan for confirmation by the Parties pursuant to Section 3.7.

2.2.7 identify a Research Plan Team Leader for each Party, which individuals shall establish a project team for each Research Plan;

2.2.8 review and discuss the overall status of each Research Plan and the conduct of Research activities under each Research Plan;

2.2.9 review and discuss the results of each activity under each Research Plan, whether completed or ongoing;

2.2.10 review and agree to any amendment to a Research Plan;

2.2.11 establish a Patent Working Group to review and discuss the prosecution strategy for Silence Research Patents and Joint Research Patents, as set forth more fully in Section 12.1;

2.2.12 review and discuss the Manufacturing requirements for DRF Studies, GLP Toxicology Studies and the first Phase 1 Trial in relation to a particular Selected Target, pursuant to Sections 9.1.1(b) and 9.1.1(c);

2.2.13 on an as-needed basis, establish subcommittees to perform specific duties of the JSC, direct each such subcommittee to perform the functions for which it is established, and oversee each subcommittee, including resolution of disputes raised to the JSC by any subcommittee;

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2.2.14 perform such other functions, and direct each subcommittee to 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 Disbandment.  The JSC shall continue to exist until the first to occur of (a) the Parties mutually agreeing to disband the JSC and (b) completion of the Research Collaboration Term (unless otherwise mutually agreed in writing).  Notwithstanding anything herein to the contrary, upon the first to occur of the foregoing (a) or (b), the JSC shall automatically dissolve and shall have no further rights or obligations under this Agreement, and thereafter (i) each Party shall designate, to the extent necessary, a contact person for the exchange of Information under this Agreement or such exchange of Information shall be made through the Alliance Managers, and (ii) decisions of the JSC, if any, shall be decisions as between the Parties, subject to the other terms and conditions of this Agreement.  For clarity, the Patent Working Group shall survive dissolution of the JSC until such time as the Parties mutually agree to disband it.

2.4 Location of Meetings.  The JSC shall meet at least once per Quarter, or as otherwise agreed to by the Parties.  JSC meetings may be held in person or by audio or video teleconference; provided that unless otherwise agreed, at least one (1) meeting per Year shall be held in person.  In-person meetings shall be held at locations in any of the United Kingdom, Germany or Sweden, as alternately selected by the Parties.

2.5 Conduct of Meetings.  The chairperson of the JSC shall be responsible for calling meetings on no less than fifteen (15) 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 ten (10) Business Days in advance of the applicable meeting; provided that if the input by the JSC is required urgently, 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, conditioned, or delayed.  Notwithstanding the foregoing, either Party may instruct the chairperson to call

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a meeting of the JSC on less than fifteen (15) Business Days’ notice in the event that such Party reasonably believes that a significant matter must be addressed by the JSC within such sooner timeframe, and such Party shall provide any materials reasonably adequate to enable an informed decision to be made by the JSC at such meeting.  An individual designated by the chairperson of the JSC shall prepare and circulate the minutes of each meeting for review and approval of the Parties 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 JSC.

2.6 Procedural Rules.  The JSC 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 JSC shall exist whenever there is present at a meeting at least one (1) representative appointed by each Party.  Representation by proxy shall be allowed.  The JSC shall take action by consensus of the representatives 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 which may be delivered by way of email confirmation.  Employees or consultants of either Party that are not representatives of the Parties on the JSC may attend meetings of the JSC; provided that (a) unless the other Party agrees, no more than two (2) such persons may attend any particular meeting, (b) attendance of any non-employee must be pre-approved by the other Party, such approval not to be unreasonably withheld, conditioned or delayed, (c) such attendees shall not vote or otherwise participate in the decision-making process of the JSC, and (d) such attendees are bound by obligations of confidentiality and non-disclosure that are substantially similar to those set forth in ARTICLE 13.

2.7 Decision Making.

2.7.1 JSC Decisions.  All JSC decisions shall be made by unanimous vote, with each Party’s representatives collectively having one (1) vote.  If after reasonable discussion and good faith consideration of each Party’s view on a particular matter, the JSC cannot, or does not, reach consensus on an issue

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within the scope of the JSC, then the dispute shall first 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 by the Senior Officers shall be conclusive and binding on the Parties.

2.7.2 Final Decision Making Authority.  If the Senior Officers are not able to agree on the resolution of any such issue within thirty (30) days after such issue was first referred to them, then subject to the remainder of this Section 2.7.2:

(a) [***] shall have final decision-making authority as to [***]:

(i) the disputed issue relates to [***] in relation to [***], or [***]; or

(ii) subject to the provisions of [***], the disputed issue relates to [***]or [***], as further set out [***];

provided that (and in the case of [***], subject to [***]), in no event shall either Silence or AZ have any obligation to [***] that [***] or [***];

(b) [***] shall have final decision-making authority as to [***]:

(i) [***];

(ii) [***] set forth in the [***]; or

(iii) the disputed issue relates to [***] in relation to [***], or [***],

provided that: (x) [***] shall not use its final decision-making authority to (a) [***] or (b) subject to [***], [***] that [***] or [***].

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2.7.3 Other Disputes.  For clarity, disputes arising between the Parties in connection with or relating to this Agreement or any document or instrument delivered in connection herewith that are outside of the jurisdiction of the JSC shall be resolved pursuant to Section 17.7.

2.8 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 the JSC unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing.  The JSC does not have the power to amend, modify, or waive compliance with this Agreement; this Agreement may only be amended or modified as provided in Section 17.10, and compliance with this Agreement may only be waived as provided in Section 17.12.

2.9 Alliance Manager.  Promptly after the Effective Date, each Party shall appoint a person who shall oversee contact between the Parties for all matters between meetings of the JSC and shall have such other responsibilities as the Parties may agree in writing after the Effective Date (each, an “Alliance Manager”).  The Alliance Managers shall work together to manage and facilitate the communication between the Parties under this Agreement, including the resolution (in accordance with the terms of this Agreement) of issues between the Parties that arise in connection with this Agreement.  The Alliance Managers shall not have final decision-making authority with respect to any matter under this Agreement.  If not already a member of the JSC, each Alliance Manager shall support the efforts of the JSC and shall be permitted to attend JSC meetings as appropriate as non-voting participants.  Each Party may replace its Alliance Manager at any time by thirty (30) days’ prior notice in writing to the other Party.  Each Party shall bear the costs of its Alliance Manager.

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2.10 Expenses.  Each Party shall be responsible for all travel and related costs and expenses for its members and other representatives to attend meetings of, and otherwise participate in, the JSC.

ARTICLE 3TARGET SELECTION

3.1 Collaborative Process to Identify Potentially Eligible Targets.  Throughout the Research Collaboration Term (including through the JSC) the Parties will collaboratively discuss and identify human gene targets that the Parties are potentially interested to Research (each such potential human gene target identified through this collaborative process, a “Nominated Target”), and determine, via the JSC, whether each such Nominated Target is eligible for designation (i) as an Eligible Target pursuant to Section 3.2 or (ii) directly as a Selected Target pursuant to Section 3.5(ii).

3.2 Review of Nominated Target. If the Parties determine that a Nominated Target should be considered for designation as an Eligible Target or be designated directly as a Selected Target pursuant to Section 3.5(ii), then they shall notify the JSC accordingly.  The JSC shall then notify Silence of such Nominated Target for consideration and Silence shall confirm to the JSC whether such Nominated Target is or is not a Restricted Target.  Upon confirmation that a particular Nominated Target is not a Restricted Target, then AZ shall, in its sole discretion, either (i) designate such Nominated Target as an “Eligible Target” which target shall, subject to Section 3.3, become part of a pool of Eligible Targets (the “Eligible Target Pool”) or (ii) designate such Nominated Target directly as a Selected Target pursuant to Section 3.5(ii).

3.3 Eligible Target Pool.  The Parties agree that:

3.3.1 (i) the Eligible Target Pool shall not include more than [***] Eligible Targets at any time during the Research Collaboration Term (“Eligible Target Pool Cap”); and (ii) no more than [***] Nominated Targets can be added to the Eligible Target Pool in any calendar year; provided that the JSC shall have the authority to suspend either such limitation in the event that it determines there

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is a compelling business reason to do so, including in the event of the publication of meaningful and relevant new data relating to the applicable human gene target, providedfurther that the decision to approve such suspension of such limitation may only be made by unanimous vote of the JSC and, failing such agreement by the JSC, may not be submitted for further consideration by the Senior Officer pursuant to Section 2.7.1 or be subject to a Party’s final decision making authority established in Section 2.7.2;

3.3.2 a human gene target may retain its designation as an Eligible Target for up to [***] months.  After such [***] month period has expired, such Eligible Target must either (i) be removed from the Eligible Target Pool pursuant to Section 3.4.3, (ii) designated as a Selected Target pursuant to Section 3.5 or (iii) subject to the unanimous agreement of the JSC (with no submission to Senior Officers pursuant to Section 2.7.1 and neither Party having the final say pursuant to Section 2.7.2) redesignated as a Nominated Target for reconsideration as an Eligible Target pursuant to Section 3.3.3; and

3.3.3 once an Eligible Target has been removed from the Eligible Target Pool for any reason, then the same human gene target as such Eligible Target may (subject to the unanimous agreement of the JSC (with no submission to Senior Officers pursuant to Section 2.7.1 and neither Party having the final say pursuant to Section 2.7.2)) be redesignated as an Eligible Target, provided that such human gene target is first redesignated as a Nominated Target for confirmation that it is not a Restricted Target.

3.4 Validation Research.

3.4.1 Validation Research Activities.  AZ shall be entitled to request that Silence provide AZ with certain [***] tool compounds designed to [***] (the “Validation Tool Compounds”).  Upon receipt of a written request to provide Validation Tool Compounds for an Eligible Target, Silence will use its Commercially Reasonable Efforts (a) to [***] Validation Tool Compounds, [***]of which [***] of such Eligible Target [***], and (b) to [***] Validation Tool Compounds for such Eligible Target to the extent that [***] at the time

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of receipt of AZ’s written request, providedthat,unless the Parties agree otherwise in writing, Silence shall not be required to perform (i) activities [***] Validation Tool Compounds in respect of more than [***] Eligible Targets (the “Validation Cap”) and (ii) any activities or incur any costs, fees or expenses in relation to [***]Validation Tool Compounds for a particular Eligible Target [***]. For clarity, Silence’s obligation in relation to the validation research activities is limited to the use of Commercially Reasonable Efforts to [***] the relevant Validation Tool Compounds, and[***]Validation Tool Compounds [***] reasonably available to Silence, as set out above, and AZ shall conduct all other validation research activities.  Silence hereby grants to AZ a non-exclusive, non-sublicensable, non-transferable and fully paid-up license to all Validation Tool Compounds for the sole purpose of validating the Eligible Target relating to which such Validation Tool Compounds [***].  Each Party shall be solely responsible for the costs and expenses incurred in connection with the performance of its activities to validate an Eligible Target.

3.4.2 Review of Validation Research Activities. At each meeting of the JSC, AZ shall update the JSC regarding the progress, if any, of all validation research activities it is performing, and Silence shall provide an update on any activities it has performed in relation to the creation and screening of Validation Tool Compounds.

3.4.3 Removal from Eligible Target Pool.  If an Eligible Target:

(a) is designated by AZ as a Selected Target pursuant to Section 3.5(i);

(b) is determined by AZ not to meet the AZ validation criteria;

(c) has been designated as an Eligible Target for longer than [***] months; or

(d) AZ notifies the JSC that it wishes to remove such Eligible Target from the Eligible Target Pool,

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then, such Eligible Target will no longer be included in the Eligible Target Pool, and, subject to the provisions of Sections 3.2 and 3.3, the Parties shall be entitled to designate a different Nominated Target to take its place as an Eligible Target pursuant to Section 3.2.  For the avoidance of doubt, any Eligible Target which fails to become a Selected Target shall not count towards the total number of Selected Targets AZ is entitled to designate pursuant to Section 3.6.

3.5 Designation of Selected Targets. Subject to Sections 3.6 and 3.8, AZ may designate as a Selected Target (i) any Eligible Target or (ii) any Nominated Target that is confirmed not to be a Restricted Target in accordance with Section 3.2, without first designating it as an Eligible Target.

3.6 Total Number of Selected Targets.  AZ has the right to include up to a total of five (5) Selected Targets (the “Selected Target Cap”) in the Collaboration.  AZ will use its Commercially Reasonable Efforts to designate all such five (5) Selected Targets within [***] years of the Effective Date, or such other time as may be mutually agreed in writing by the Parties (together, the “Initial Selected Target Cap Period”).  In the event that the Selected Target Cap is reached before the expiration of such Initial Selected Target Cap Period, then AZ shall have a freely exercisable option (the “Selected Target Cap Option”), exercisable on written notice to Silence, to increase the Selected Target Cap from five (5) Selected Targets to ten (10) Selected Targets, provided that all such ten (10) Selected Targets are designated pursuant to Sections 3.1 to 3.5 within [***] years of the Effective Date.

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3.7 Research of Selected Targets. Within [***] days of the designation of a Selected Target pursuant to Section 3.5, the Parties shall prepare and agree a Research Plan for such Selected Target, setting out the agreed upon Research activities, pursuant to Sections4.2 and 4.3.2(b).  In addition, each Party will designate one (1) of its representatives as its Research Plan Team Leader, it being understood that either Party may appoint an alternative Research Plan Team Leader at any time during the Research Plan Term upon prior written notice to the other Party.

3.8 Staggering of Selected Target Selection.  In the first [***] months after the Effective Date, AZ shall designate [***] Selected Target pursuant to Section 3.5.  The Parties agree that (a) no more than [***] Selected Targets shall be designated in each [***] month period of the Research Collaboration Term, beginning on the Effective Date and (b) Silence shall not be required to initiate work on more than [***] Selected Target in any [***] month period.  For clarity, in the event that AZ requests that Silence commence a single Research Plan with a view to advancing a Licensed Product directed to [***] Selected Targets, then each Selected Target to which such Licensed Product is to be directed shall count separately towards the Selected Target Cap and each of the limitations set forth in this Section 3.8; provided that [***].

3.9 Substitute Targets.

3.9.1 If, prior to the Option Exercise Date with respect to a particular Selected Target, AZ acting reasonably, forms the view that a compound meeting the Development Candidate Criteria will not be identified, then, upon written notice to Silence, AZ may substitute such Selected Target for a new Selected Target (a “Substitute Target”) provided that:

(a) no more than [***] Selected Targets may be substituted pursuant to this Section 3.9;

(b) no more than [***] years of the relevant Research Plan Term relating to the Replaced Target has elapsed;

(c) any Substitute Target is deemed a Selected Target pursuant to the process set out in Section 3.5; and

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(d) unless [***] AZ will:

(i) deliver to Silence all its right, title and interest in and to all RNAi Molecules, Licensed Compounds and Licensed Products generated in the relevant Research Plan and which are directed to such Replaced Target, and Silence will be free to Exploit such Replaced Target, together with such RNAi Molecules, Licensed Compounds and Licensed Products directed to such Replaced Target as Silence, in its sole discretion, deems appropriate; provided that [***] such RNAi Molecules, Licensed Compounds and Licensed Products in respect of the Replaced Target [***]; and

(ii) grant to Silence the license set out in Section 16.6.1 in respect of each Replaced Target, and all associated RNAi Molecules, Licensed Compounds and Licensed Products generated in the relevant Research Plan.

For clarity, if [***], AZ shall [***] any RNAi Molecules, Licensed Compounds or Licensed Products generated in the relevant Research Plan and which are directed to such Replaced Target, [***] grant to Silence any licenses to intellectual property in respect thereof.

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3.9.2 No Substitute Target will count towards the Selected Target Cap.  By way of example only, if there are ten (10) Selected Targets, and AZ wishes to replace one of its Selected Targets for a Substitute Target, it shall be entitled to do so, subject to the requirements of this Section 3.9.  Once such substitution process has been completed, AZ will still be deemed to have designated only ten (10) Selected Targets.

ARTICLE 4
RESEARCH

4.1 Overview.  Subject to the terms and conditions of this Agreement, during the Research Collaboration Term the Parties will collaborate with respect to the performance of the Research Plans and shall keep the JSC informed of such activities.

4.2 Research Plans.

4.2.1 Each Research Plan shall set forth the timeline and details for all Research activities to be conducted pursuant to such plan, based upon the general form of Research Plan set out in Schedule 1.116.  Each Research Plan shall also (a) include a reasonably detailed budget of the costs and expenses for the activities to be conducted pursuant to such plan (the “Research Budget”) on an activity-by-activity or study-by-study basis, as appropriate, (b) require Silence to identify or create RNAi Molecules in respect of the applicable Selected Target(s), which will then be screened to identify the preferred Licensed Compound(s) in respect of the relevant Selected Target(s), and (c) set out the mutually agreed Development Candidate Criteria for such Research Plan.

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4.2.2 Updates.  From time to time, the Parties may prepare updates and amendments, as appropriate, to a Research Plan (including any consequential changes to the Research Budget), for review of and approval by the JSC, subject to and in accordance with the applicable provisions of ARTICLE 2, including Section 2.7.

4.2.3 Order of Precedence.  If the terms of a Research Plan contradict, or create inconsistencies or ambiguities with, the terms of this Agreement, then the terms of this Agreement shall govern.

4.3 Conduct of the Research Plan.

4.3.1 Diligence.

(a) Silence shall not be required to perform any activities beyond those activities assigned to it in the applicable Research Plan.

(b) The Parties shall use their respective Commercially Reasonable Efforts to carry out the tasks allocated to them in each agreed Research Plan,taking into account the scope of work initially planned under such Research Plan.  Each Party shall use its Commercially Reasonable Efforts to adhere to any timeframes set forth in a Research Plan.

(c) The Parties acknowledge and agree that, notwithstanding the use of their respective Commercially Reasonable Efforts, no outcome or success is or can be assured and that failure to achieve desired results will not in and of itself constitute a breach or default of any obligation in this Agreement.

4.3.2 Research Budget; Costs.

(a) Generally.  Except as provided in this Section 4.3.2 and Section 4.5, each Party shall be solely responsible for the costs and expenses

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incurred by such Party in connection with the performance of the Research activities assigned to such Party under and in accordance with each Research Plan and applicable Research Budget, unless otherwise expressly agreed in writing; and Silence shall not be required to incur any costs, fees or expenses beyond what is set forth in the applicable Research Plan.

(b) Research Plan Budget Caps.In respect of any Research Plan,Silence shall not be required to perform any activities or incur any costs, fees or expenses which (i) were not included in the applicable Research Budget, or (ii) arise after the expiry of the applicable Research Plan Term.  Under no circumstances shall Silence be required to expend more than a total of [***] FTE effort for each Selected Target in each Research Plan, unless otherwise expressly agreed in writing.  

(c) Manufacturing Costs.All Manufacturing costs arising under a Research Plan shall be borne as set out in such Research Plan, and all Manufacturing costs arising under the Supply Agreement shall be borne by AZ, as set out in further detail in the Supply Agreement.

4.3.3 Substitute Targets

(a) Substitute Target Budget.  In the event of a Substitute Target where Silence has utilized, with respect to a Selected Target replaced by a Substitute Target (such replaced Selected Target the “Replaced Target”), [***] or more of the Research Budget allocated to the Replaced Target, then Silence shall only be required to expend Research Budget on the Substitute Target to the extent that such Research Budget was not utilized for the performance of activities conducted on, or in relation to, the Replaced Target, unless otherwise agreed by the Parties in writing.  For clarity, in the event

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of a Substitute Target where Silence has utilized less than [***] of the Research Budget allocated to the Replaced Target which such Substitute Target replaced, then Silence shall be required to expend [***] of the Research Budget allocated to the Replaced Target for the performance of activities conducted on, or in relation to, the Substitute Target, unless otherwise agreed by the Parties in writing.

(b) Substitute Target Research Plan Term.  The Research Plan Term in respect of a Substitute Target shall not be reduced by any period of time spent on Research for the corresponding replaced Selected Target (whether or not the corresponding Research Budget is re-set pursuant to Section 4.3.3(a)) and shall be fully re-set in all cases, unless otherwise agreed by the Parties in writing.

4.3.4 Subcontracting.  Each Party shall have the right to subcontract its obligations under this Agreement to contractors, subcontractors and other vendors (each, a “Subcontractor”) and Affiliates, subject to any limitations, restrictions or other qualifications that are set forth in an applicable Research Plan or in the Supply Agreement; provided, that, (a) any limitations, restrictions or other qualifications in relation to subcontracting supply related activities shall be contained in the Supply Agreement and (b) in relation to the conduct of other activities under a Research Plan, (i) after AZ’s exercise of its Option with respect to the Selected Target(s) under a Research Plan, Silence may not engage any Subcontractor to perform any activities under such Research Plan without AZ’s prior written consent (such consent not to be unreasonably withheld, delayed or conditioned) except as specifically identified in such Research Plan, (ii) any Subcontractor agrees in writing to be subject to the applicable terms and conditions of this Agreement, including the confidentiality provisions of ARTICLE 13, (iii) appropriate agreements or other measures are in place ensuring that any intellectual property rights, to the extent related to a relevant Licensed Compound that are created under this

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Agreement, conceived, discovered, developed, or otherwise made by such Subcontractors or Affiliates will vest in, are assigned to or shall be licensed to one of the Parties in accordance with ARTICLE 12, and (iv) Silence shall be responsible for the management of all of its Subcontractors and shall remain fully liable to AZ for the acts and omissions of such Subcontractors.

4.3.5 Materials.  In order to facilitate the performance of activities under the Research Plans, either Party may provide to the other Party certain materials for use by the other Party in furtherance of the Research Plans.  All such materials will be used by the receiving Party in accordance with the terms and conditions of this Agreement solely for purposes of exercising its rights and performing its obligations under this Agreement, and the receiving Party will not transfer such materials to any Third Party unless expressly contemplated by this Agreement or upon the written consent of the supplying Party.

4.3.6 Applicable Laws and Bioethics.  The Research to be conducted by each Party (including by its Subcontractors) pursuant to this Agreement will be carried out in good scientific manner to attempt to achieve efficiently and expeditiously the objectives of the applicable Research Plan, and in compliance with all Applicable Laws.  In addition, each Research Plan will be carried out in compliance with the AZ bioethics policy set out in Schedule 4.3.6 (as such schedule may be updated by written agreement by the Parties).  Prior to award of any subcontract by Silence to perform animal studies under a Research Plan, the Parties will work together to secure compliance with AZ’s bioethics policy.  If a Subcontractor that Silence has previously used does not comply with such policy, the Parties will discuss in good faith and agree whether such Subcontractor can be brought into compliance within a reasonable time or whether to use a different Subcontractor.

4.3.7 Research Records.

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(a) Creation.  Each Party shall maintain complete and accurate records (including both paper and electronic records) in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, and in compliance with Applicable Law and regulatory guidance, of all work done and results achieved in the performance of any activities under the Research Plans.  Such records shall be retained by each Party for at least [***] years after the termination or expiration of the Agreement, or for such longer period as may be required by Applicable Law.

(b) Inspection.  Each Party shall have the right to reasonably inspect the other Party’s records, and shall provide copies of all requested records, to the extent reasonably required for the exercise or performance of the requesting Party’s rights under this Agreement; provided, however, that the requesting Party shall maintain such records and the Information of the other Party as Confidential Information of the other Party in accordance with ARTICLE 13 hereof and shall not use such records or Information except to the extent otherwise permitted by this Agreement.

4.3.8 Updates; Information-Sharing.  At each regularly scheduled JSC meeting, each Party shall update the JSC in respect of any then-ongoing Research activities for which such Party is responsible under a Research Plan.  The Parties shall discuss the status, progress, and results of all such activities at such JSC meetings.

4.4 Conclusion of the Research Plan; Development Candidate Data Package.

4.4.1 Provision of the Development Candidate Data Package to the JSC.  When (i) the Parties’ respective Research Plan Team Leaders agree that they have a Licensed Compound that is reasonably likely to meet the Development Candidate Criteria, or (ii) the Research Plan Term in respect of a particular Selected Target or Selected Targets has expired, the Research Plan Team

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Leaders shall provide the Development Candidate Data Package to the JSC for review.  The JSC shall promptly review the Development Candidate Data Package for confirmation as to the extent to which the Development Candidate Criteria have been achieved.

4.4.2 Evaluation of the Development Candidate Data Package.  As soon as reasonably possible after receipt of the Development Candidate Data Package, and in any event within [***] days after receipt thereof, the JSC shall inform the Parties of its determination that either: (x) the Development Candidate Criteria have been sufficiently achieved in relation to the applicable Licensed Compound(s) (“Candidate Delivery”); or (y) the Development Candidate Criteria have not been sufficiently met (“Candidate Failure”), in which case the JSC shall identify in what respect(s) the Development Candidate Criteria have not been sufficiently met. In the event that the JSC does not respond within [***] days of the delivery of the Development Candidate Data Package, then an Option Trigger Event shall be deemed to have taken place on the date after the expiry of such period.

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4.4.3 Candidate Failure.  In the event of a Candidate Failure, if the applicable Research Plan Term has not yet expired and the applicable Research Budget has not all been spent, then, upon AZ’s election, the Parties will re-commence Research activities for the applicable Selected Target(s) for the remainder of the Research Plan Term, until the Research Budget is fully spent, or until a new Development Candidate Data Package is submitted pursuant to this Section 4.4.  If, however, the applicable Research Plan Term has expired and/or the applicable Research Budget has been spent, the JSC shall meet to determine what (if any) further work is necessary to achieve the Development Candidate Criteria, whether such further work would be commissioned pursuant to Section 4.5, or, alternatively, whether to terminate this Agreement to the extent relating to the relevant Selected Target(s).  In the event of a Candidate Failure, if the Parties cannot agree on the scope or costs of further work after a good-faith negotiation, then an Option Trigger Event shall be deemed to have taken place [***] days after the date on which the JSC informs both Parties of the Candidate Failure.

4.4.4 Option Evaluation by AZ.  Following an Option Trigger Event, AZ will communicate to Silence in writing prior to expiry of the applicable Option Term whether AZ elects to exercise its Option in accordance with Section 6.1.

4.5 Material Increases in Silence Obligations under a Research Plan.

4.5.1 Increase to Research Obligations.  If AZ wishes to commission further work in relation to a particular Selected Target or Licensed Compound following a Candidate Failure (as defined in Section 4.4, above), then the Parties may agree on a suitable extension to the relevant Research Plan, setting out the additional work to be performed; provided that any such Research Plan extension shall be limited to [***] months’ additional work beyond that anticipated by the existing applicable Research Plan, unless otherwise expressly agreed by the Parties in writing.  At the end of such additional work, the Parties shall deliver an updated Development Candidate Data Package to

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the JSC, which updated package shall be reviewed in accordance with the process set forth in Section 4.4.

4.5.2 Increase to Research Budget; Costs.  In the event Silence’s obligations pursuant to a Research Plan are increased as provided in Section 4.5.1, AZ shall bear all costs agreed to in such Research Plan extension, including all costs of FTEs involved in performing such work by or on behalf of Silence (which costs shall be charged by Silence to AZ at the FTE Cost).

ARTICLE 5EXCLUSIVITY

5.1 Mutual Exclusivity During the Exclusivity Period.

5.1.1 Research and Development.  During the Exclusivity Period, on an Eligible Target-by-Eligible Target and Selected Target-by-Selected Target basis, each Party shall not, and shall ensure that its respective Affiliates do not, whether on their own or with or through a Third Party, Research or Develop any [***] the relevant Eligible Target or Selected Target, except in the performance of their respective obligations under this Agreement.

5.1.2 Commercialization.  During the Exclusivity Period, on an Eligible Target-by-Eligible Target and Selected Target-by-Selected Target basis, each Party shall not, and shall ensure that its respective Affiliates do not, whether on their own or with or through a Third Party, Commercialize [***] the relevant Eligible or Selected Target, except in the performance of their respective obligations under this Agreement.

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5.2 AZ Exclusivity after the Option Exercise.  In addition to the exclusivity obligations set out in Section 5.1, on a Selected Target-by-Selected Target basis, from the Option Exercise Effective Date until [***], AZ shall not, and shall ensure that its Affiliates do not, whether on their own or with or through a Third Party,[***] the Selected Target [***].

ARTICLE 6
OPTION GRANTS

6.1 Option Grant to AZ.  Silence hereby grants to AZ, on a Selected Target-by-Selected Target basis, the exclusive right and option, exercisable at any time during the Option Term at AZ’s sole discretion, to obtain and exercise an exclusive license under the Silence Background IP, the Silence Research IP, and Silence’s interest in the Joint Research IP as set forth in Section 7.1 with respect to the Exploitation of Licensed Products containing the corresponding one or more Licensed Compounds directed to such Selected Target,in the Field in the Territory (each, an “Option”).  AZ may exercise its Option in respect of a Selected Target by providing written notice to Silence of its election to exercise such Option at any time during the Option Term (each, an “Option Exercise Notice”).  Upon the later of (i) delivery of the Option Exercise Notice, (ii) if applicable, the receipt of the last applicable Antitrust Clearance and (iii) payment of the applicable Option Exercise Payment, the license set forth in Section 7.1 shall, and thereby does, automatically become effective.

6.2 Antitrust Clearance.If AZ reasonably determines in good faith prior to the expiration of an Option Term that any Antitrust Clearance is required in connection with the exercise of the relevant Option, AZ shall notify Silence, as part of its written notice of exercise of the Option or earlier (at AZ’s discretion) and the Parties shall file the relevant documents with the U.S. Federal Trade Commission (“FTC”) and/or any other Governmental Authority as required, in any event no later than [***] days after AZ’s written notice of the exercise of the relevant Option.  The Parties shall cooperate in good faith with respect to such filings with the objective of obtaining prompt Antitrust Clearances and/or all other such clearances and AZ shall request early termination of all

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applicable waiting periods.  Where AZ has made its filings within the aforementioned time limit, the Option Exercise Effective Date shall automatically be extended until all applicable Antitrust Clearances (and/or all other such clearances) are granted, unless applicable Antitrust Laws permit a notified deal to close before Antitrust Clearance.  Nothing in this Section 6.2 or otherwise in this Agreement shall require either Party to divest any assets, or to take action (beyond cooperation with the other Party) to respond to any “Second Request” from the FTC or similar request from any other Governmental Authority, in connection with any clearance filing.  Each Party shall be responsible for all costs and expenses, including filing fees and attorneys’ fees, incurred by such Party in connection with the preparation and filings associated with obtaining Antitrust Clearance, and/or in connection with any other such clearance needed from any other Governmental Authority; provided, that AZ will bear all filing fees required by FTC or another Governmental Authority for submission in connection with obtaining Antitrust Clearance under the HSR Act or any applicable Antitrust Laws outside the Major Markets.  In the event that all applicable Antitrust Clearances, in jurisdictions where applicable Antitrust Laws do not permit a notified deal to close before Antitrust Clearance,have not been granted within [***] days after the provision of written notice of the exercise of the relevant Option by AZ to Silence then Silence or AZ may terminate this Agreement insofar as it relates to the relevant Selected Target and the provisions of Section 6.4 shall apply to such Selected Target; provided, however, that such right to terminate shall not be available to a Party to the extent any action or failure to act by such Party has resulted in the failure of any applicable Antitrust Clearance to be obtained within such period of time.

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6.3 Option Exercise Payment.  With respect to each Option exercised by AZ, AZ shall pay to Silence the non-refundable, non-creditable sum of Ten Million Dollars ($10,000,000) (the “Option Exercise Payment”) within [***] days after receipt by AZ of Silence’s invoice delivered on or after the Option Exercise Effective Date,provided that, if a Licensed Product directed to two (2) Selected Targets is developed, Silence shall invoice and AZ shall be required to pay the Option Exercise Payment once per Selected Target to which such Licensed Product is directed.

6.4 Non-Exercise of the Option.  If AZ does not exercise its Option with respect to a Selected Target during the Option Term, or if AZ notifies Silence in writing prior to the expiration of the Option Term that it will not exercise such Option, then such Option shall immediately expire with respect to such Selected Target (an “Expired Target”) without any further action required on the part of either Party.  In such an event, unless [***], AZ will:

6.4.1 deliver to Silence all its right, title and interest in and to all RNAi Molecules, Licensed Compounds and Licensed Products Researched or Developed pursuant to this Agreement and which are directed to such Expired Target, and Silence shall be free to exploit such Expired Target, together with the RNAi Molecules, Licensed Compounds, and Licensed Products directed to such Expired Target as Silence, in its sole discretion, deems appropriate; provided that [***] such RNAi Molecules, Licensed Compounds and Licensed Products in respect of the Expired Target [***]; and

6.4.2 grant to Silence the license set out in Section 16.6.1 in respect of each Expired Target, and all associated RNAi Molecules, Licensed Compounds and Licensed Products.

For clarity, if [***], AZ shall [***] any RNAi Molecules, Licensed Compounds or Licensed Products generated in the relevant Research Plan and which are directed to such Expired Target, [***] grant to Silence any licenses to intellectual property in respect thereof.

ARTICLE 7
LICENSE GRANTS

7.1 License Grants to AZ.

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7.1.1 Research Collaboration License.  Silence hereby grants to AZ, during the Research Collaboration Term, a non-exclusive license, with the right to grant sublicenses to Affiliates and subcontractors, under the Silence Background IP and Silence Research IP, solely to conduct the activities assigned to AZ under the Research Plans.

7.1.2 Option License.  Subject to Sections 7.3 and 7.5, Silence, for itself and its Affiliates, hereby grants to AZ upon satisfaction of the conditions set forth in the last sentence of Section 6.1 in respect of a particular Selected Target, an exclusive (even as to Silence), royalty-bearing license, with the right to grant sublicenses as provided in Section 7.3, under the Silence Background IP, Silence Research IP, and Silence’s interest in the Joint Research IP to Exploit the Licensed Compounds and Licensed Products directed to such Selected Target in the Field in the Territory.  For clarity, the license set out in this Section 7.1 includes a license to all Licensed Compounds in relation to which activities were performed under the applicable Research Plan, whether or not such Licensed Compounds were shown to meet the Development Candidate Criteria.

7.2 License Grants to Silence.  AZ hereby grants to Silence, during the Research Collaboration Term, a non-exclusive license, with the right to grant sublicenses to Affiliates and Subcontractors, under the AZ Background IP and AZ Research IP, solely to conduct the activities assigned to Silence under the Research Plans.

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7.3 Sublicenses. AZ shall have the right to grant sublicenses, through multiple tiers of sublicenses, and on a Licensed Product-by-Licensed Product basis, under the licenses granted in Section 7.1 to Sublicensees; providedthat any such sublicenses shall (a) be in writing, (b) be consistent with the terms and conditions of this Agreement, and (c) require the applicable Sublicensee to comply with all applicable terms of this Agreement.  AZ shall be responsible for the performance of any Sublicensee as if such Sublicensee was “AZ” hereunder.

7.4 Distributorships and Promotion.  For theavoidance of doubt, AZ and its Affiliates will have the right, in their sole discretion except as limited in this Section 7.4, to grant to any Third Party the right to import, market, distribute, promote and sell any Licensed Product in the Field, where title to such Licensed Product transfers to such Third Party and the rights granted are consistent with the scope of the licenses granted to AZ hereunder (with or without packaging and/or labelling rights) (each such Third Party, a “Distributor”); provided that (a) such grant does not include the grant of a sublicense under any Silence Background Patent, Silence Research Patent or Joint Research Patent to Develop or Manufacture (other than fill/finish) Licensed Products, (b) the appointed Distributor purchases its requirements of Licensed Products from AZ or its Affiliates but does not otherwise pay royalties, upfront payments, milestone payments or other payments to AZ with respect to the Licensed Product, and (c) any such arrangement between AZ or its Affiliate and such Distributor is consistent with the distribution arrangements AZ enters into for its similar drugs in the same AZ franchise.

7.5 Retention of Rights. Notwithstanding the exclusive licenses granted to AZ pursuant to Section 7.1, Silence hereby expressly reserves the right (a) under the Silence Background IP, Silence Research IP, and Silence’s interest in the Joint Research IP for internal research purposes and/or to exercise its rights and perform its obligations under this Agreement, whether directly or through one or more Affiliates or Subcontractors, including the right to perform those activities assigned to it under the Research Plans, and (b) to practice, and to grant licenses under, the Silence Background IP, Silence Research IP, and Silence’s interest in the Joint Research IP outside the scope of the

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licenses granted to AZ in Section 7.1 and outside the scope of its covenants under Section 5.1.

7.6 No Implied Licenses.  Except as expressly provided in this Agreement, neither Party shall acquire any license or other intellectual property interest, by implication, estoppel, or otherwise, under or to any Patents, Know-How, Information, or other intellectual property owned or controlled by the other Party.

7.7 No [***]. Notwithstanding anything to the contrary in this Agreement, AZ shall not, directly or indirectly, [***].

7.8 Confirmatory Patent License.  Each Party shall, if requested to do so by the other, promptly enter into confirmatory license agreements in the form or substantially the form reasonably requested by the requesting Party for purposes of recording the licenses granted under this Agreement with such patent offices in the Territory as the requesting Party considers appropriate.

ARTICLE 8
DEVELOPMENT AND COMMERCIALIZATION

8.1 Overview.  On a Selected Target-by-Selected Target basis, following exercise of an Option by AZ and for the remainder of the Term with respect to such Selected Target, as between the Parties, AZ shall have the sole right to Exploit, whether by itself or through its Affiliates or Sublicensees, the Licensed Compounds and Licensed Products in the Field and in the Territory at its own cost and expense (except as otherwise expressly set forth herein).

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8.2 Transfer of Know-How.  For a period of up to [***] days after AZ’s exercise of each Option, Silence, [***], shall provide AZ with all assistance reasonably required in order to transfer to AZ all the Know-How licensed to AZ under Section 7.1.2.  The foregoing assistance will include Silence making available to AZ, including at AZ’s facilities, those of Silence’s representatives as AZ may reasonably request for purposes of transferring such Know­How licensed to AZ or for purposes of AZ acquiring expertise on the practical application of such licensed Know-How.  On a per Selected Target basis, under no circumstances shall Silence be required to expend more than [***] FTE hours in performing its obligations under this Section 8.2. Notwithstanding the foregoing, the Parties agree that the provision of all Manufacturing and CMC-related Information shall be governed by the terms of the Supply Agreement and not the terms of this Section 8.2.

8.3 Diligence.  On a Selected Target-by-Selected Target basis, following exercise of an Option by AZ and for the remainder of the Term with respect to such Selected Target, AZ will use its Commercially Reasonable Efforts: (i) to Develop and obtain Regulatory Approval for at least one (1) Licensed Product directed to such Selected Target in each country within the Major Markets, and (ii) to Commercialize at least one (1) Licensed Product directed to such Selected Target for use in humans in the Field in each country within the Major Markets.

8.4 Reporting.  AZ shall provide to Silence within [***] days following the end of each Year of the Term (commencing as of the Option Exercise Effective Date of the first Option exercise) copies of written reports containing sufficient detail to enable Silence to assess AZ’s compliance with Section 8.3.  All such reports and the information contained therein shall constitute the Confidential Information of AZ.

8.5 Regulatory Support. Silence shall support AZ, as AZ may from time to time specifically request in writing to Silence, as may be reasonably necessary to file INDs for the Licensed Product and in the activities in support thereof, including providing all documents or other materials Controlled by Silence or any of its Affiliates as may be necessary or useful for AZ or any of its Affiliates or its or their Sublicensees to file INDs for the Licensed Product.  Except to the extent prohibited by Applicable Law, all

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regulatory documentation (including all Regulatory Approvals) relating to the Licensed Products with respect to the Territory developed or granted after the effective date of AZ’s exercise of the Option applicable to such Licensed Product shall be owned by and shall be held in the name of AZ or its designated Affiliate, Sublicensee or designee, and Silence, as of the Option Exercise Effective Date of such Option exercise, hereby assigns to AZ all of its right, title, and interest in and to all such regulatory documentation (including such Regulatory Approvals).  On a per Licensed Product basis, under no circumstances shall Silence be required to expend more than [***] FTE hours in performing its obligations under this Section 8.5. Notwithstanding the foregoing, the Parties agree that the provision of all Manufacturing and CMC-related Information shall be governed by the terms of the Supply Agreement and not the terms of this Section8.5.

8.6 Co-Development Option.

8.6.1 Silence shall have the option, subject to the agreement of the relevant terms, to co-Develop any Licensed Products and Licensed Compounds directed to a Selected Target (or if any Licensed Product is directed to more than one (1) Selected Target, then to such Selected Targets as such Licensed Product is directed to), to take effect from the Initiation of the first Phase 2 Trial of a Licensed Product directed to such Selected Target (the “Co-Development Option”).  Silence may exercise the Co-Development Option by written notice to AZ to be received by AZ no later than [***] days after [***] (the “Co-Development Option Period”).  On receipt of such notice by AZ, AZ and Silence shall negotiate the terms of a co-Development agreement in good faith for a period of [***] days or such longer period as Silence and AZ may otherwise agree in writing.  Any such agreement shall include (i) Silence’s respective contribution to such Co-Development and (ii) any additional compensation payable by AZ in consideration of Silence’s additional Development work and/or costs incurred in such co-development of the relevant Licensed Product.

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8.6.2 If Silence fails to exercise its Co-Development Option within the Co-Development Option Period in respect of a particular Selected Target, or if Silence and AZ, despite good faith efforts, fail to agree to the terms of a co-Development agreement in respect of a particular Selected Target as set out in Section 8.6.1, that Co-Development Option shall expire in respect of that Selected Target.  Silence shall have the right to exercise the Co-Development Option in respect of each Selected Target, provided that Silence shall not, as a result of this Section 8.6, receive the right to Co-Develop Licensed Products and Licensed Compounds directed to more than two (2) Selected Targets (save that, if any Licensed Product is directed to more than one (1) Selected Target, then all Selected Targets that such Licensed Product is directed to, shall count as one (1) Selected Target for the purposes of this Section8.6.2).

8.6.3 In the event of [***], (i) [***] shall become [***], (ii) [***] Co-Development Options shall [***], (iii) [***] Co-Development Option Period shall [***], (iv) [***] to exercise any Co-Development Option or to negotiate any Co-Development Agreement [***], and (v) the terms of any Co-Development Agreement, including [***], shall [***] Co-Development Option.

ARTICLE 9
MANUFACTURING & SUPPLY

9.1 Silence Manufacturing.

9.1.1 Silence, either directly or through one or more Third Party contract manufacturers, shall:

(a) be responsible for all Manufacturing activities necessary to perform any of its obligations under a Research Plan, [***];

(b) upon receipt of a written request by AZ or as agreed between the Parties in the applicable Research Plan, use its Commercially Reasonable Efforts to Manufacture such quantity as expressly

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agreed in writing between the Parties, of Licensed Product for each DRF Study for each Selected Target;and

(c) upon receipt of a written request by AZ, following the Option Exercise Effective Date in relation to a particular Selected Target, or earlier as outlined in the Research Plan or requested by AZ, use its Commercially Reasonable Efforts to Manufacture [***], or such other quantity expressly agreed in writing between the Parties, of Licensed Product for GLP Toxicology Studies and for the first Phase 1 Trial of Licensed Products directed to that Selected Target.

9.1.2 To govern the terms by which Silence will perform its Manufacturing obligation under this Section 9.1, within [***] days after the Effective Date, the Parties shall negotiate in good faith and enter into such additional agreements that are reasonable and customary in connection with Manufacturing Licensed Product, including clinical supply agreements (each a “Supply Agreement”) and quality agreements (each a “Quality Agreement”).  Each Supply Agreement and Quality Agreement shall contain mutually agreed terms and conditions consistent with this Agreement including Schedule 9.1.2 hereof, in addition to other terms that are reasonable and customary, including provisions to ensure quality and audit by or on behalf of AZ.

9.2 AZ Obligations.  Subject to Section 9.1.1(c), following the Option Exercise Effective Date in respect of Licensed Products directed to a Selected Target, AZ, either directly or through one or more Third Party contract manufacturers, shall be responsible, at its own expense, for all Manufacturing activities necessary for the Exploitation of the Licensed Products directed to such Selected Target.

9.3 Cooperation and Technology Transfer.  Following the exercise of each Option, Silence shall share any Manufacturing-related Silence Background Know-How and Silence Research Know-How pertaining to the Licensed Products directed to such Selected

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Target.  AZ shall reimburse Silence for its costs and expenses incurred in complying with this Section 9.3 at the relevant FTE Cost.  For clarity, (i) nothing shall require Silence to create any new Know-How, undertake any additional Manufacturing activities, or undertake any activity not specified in the relevant Research Plan (ii) and, on an Selected Target-by-Selected Target basis, Silence’s obligation shall be limited to no more than [***] of effort ([***])to be taken within [***] months of the date that the first material is delivered to AZ by or on behalf of Silence pursuant to Section 9.1.1(c), in respect of such Selected Target.

ARTICLE 10
PAYMENTS AND RECORDS

10.1 Upfront Payment.  

10.1.1 Within [***] days after receipt of an invoice in respect thereof, which invoice may be delivered by Silence on the Effective Date, AZ shall pay to Silence the non-refundable, non-creditable sum of Twenty Million Dollars ($20,000,000).

10.1.2 Within [***] days after receipt of an invoice in respect thereof, which invoice may be delivered by Silence on [***] of the Effective Date, AZ shall pay to Silence the non-refundable, non-creditable sum of Forty Million Dollars ($40,000,000).

10.2 Research Collaboration Milestones.

10.2.1 Development Milestone Payments.  In partial consideration of the rights granted by Silence to AZ hereunder and subject to the terms and conditions set forth in this Agreement, AZ shall pay to Silence the non-refundable, non-creditable milestone payments upon the achievement of each of the following milestone events for the first Licensed Product with respect to a particular Selected Target to achieve such milestone event (whether by or on behalf of AZ, its Affiliates or Sublicensees):

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Milestone Event	Milestone Payment
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
Total	$140,000,000

10.2.2 Notice and Payment.  AZ shall notify Silence in writing within [***] days after the first achievement of any milestone event set forth in this Section 10.2 by or on behalf of AZ.  In the event that any Development Milestone is skipped for any reason, then such skipped milestone shall become payable on the achievement of the following milestone, as if both the following milestone and the skipped milestone had been achieved simultaneously.  By way of example only, if a Licensed Product were to [***], and then [***], without [***], then the milestone payment in respect of both the “[***]” milestone, and the “[***]” milestone, would become payable upon the [***] of such Licensed Product.  AZ shall pay to Silence the applicable milestone payment within [***] days after receipt by Silence of such notification.

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10.2.3 Once Per Selected Target.  Each milestone payment in this Section 10.2 shall be payable only upon the achievement of such milestone by the first Licensed Product directed to a particular Selected Target to achieve such milestone event and no amounts shall be due for subsequent or repeated achievements of such milestone by another Licensed Product directed to the same Selected Target.  In the event that any Licensed Product (being a Bispecific Product)is directed to two Selected Targets, then the applicable milestone payments shall be paid once per Selected Target that such Licensed Product is directed to;provided, however, that for the first [***] Bispecific Products, respectively, the Selected Targets against which such Bispecific Products are directed, the milestones pursuant to this Section 10.2.3, shall be payable as follows:

(A) (i) Only one of each of the milestones shall be payable for such Bispecific Product upon the achievement of any of the milestone events set forth in this Section 10.2, irrespective of such Bispecific Product being designed to [***] two Selected Targets, and (ii) such milestones shall only be payable to the extent they have not already been paid for each of the Monospecific Products (as defined below) designed to [***] one of the Selected Targets, against which the Bispecific Product is directed;

(B) If a Licensed Product is designed to [***] only one of the Selected Targets, against which the relevant Bispecific Product is directed (a “Monospecific Product”), each of the milestones shall, to the extent it has already been paid for the Bispecific Product, be payable only once upon the achievement of any of the milestone events by the first Monospecific Product, but not by the second and any further Monospecific Products.  Schedule 10.2.3 provides some exemplary scenarios for how the milestones are determined pursuant to this Section 10.2 for a Bispecific Product and its corresponding Monospecific Products.

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10.2.4 Hybrid Trials.  In the event that AZ or any of its Affiliates or Sublicensees initiates a Clinical Trial with hybrid phase designations, such Clinical Trial of hybrid phase designations constitutes a Clinical Trial of [***] for the purpose of determining milestone event qualification under this Section 10.2.  By way of example only, if AZ or any of its Affiliates or Sublicensees initiates a [***] Clinical Trial, the commencement of such trial will [***] and will [***] and [***].

10.3 Sales-Based Milestones

10.3.1 Licensed Product Sales Milestone Payments.  In partial consideration of the rights granted by Silence to AZ hereunder and subject to the terms and conditions set forth in this Agreement, AZ shall pay to Silence, on a Licensed Product-by-Licensed Product basis, the following non-creditable, non-refundable milestone payments upon the achievement of each of the following milestone events for the Licensed Product (whether by or on behalf of AZ, its Affiliates or Sublicensees); provided, however, if the aggregate, worldwide Net Sales of the relevant Licensed Product do not, within [***] Years from the First Commercial Sale of such Licensed Product, equal or exceed [***], any such sales milestone shall only be payable to the extent the respective milestone event occurs during the [***] Years period from the First Commercial Sale.

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Annual Net Sales of Any Licensed Product	Sales Milestone Payments
Equals or exceeds [***]	[***]
Equals or exceeds [***]	[***]
Equals or exceeds [***]	[***]
Equals or exceeds [***]	[***]
Total	$250,000,000

10.3.2 Notice and Payment.  AZ shall notify Silence in writing of the first achievement of any milestone event set forth in this Section 10.3 by or on behalf of AZ or its Affiliates or Sublicensees in its report provided pursuant to Section 11.1 and payment of such milestone shall be due on the date the first such statement that reflects achievement of such sales milestone payment is due.  For clarity, each milestone payment set forth in the table above shall be paid only once upon first achievement of the corresponding milestone event by a Licensed Product, regardless of the number of times such event is achieved.

10.4 Royalties.

10.4.1 Royalty Rate.  As further consideration for the rights granted to AZ under this Agreement, subject to the other terms of this Section 10.4, during the Royalty Term, AZ shall make quarterly non-refundable, non-creditable royalty payments to Silence on the Net Sales of each Licensed Product sold in the Territory at the applicable rate set forth below:

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Net Sales of a Licensed Product	Royalty Rate
For that portion of Net Sales of a particular Licensed Product in any Year which are up to [***]	[***]
For that portion of Net Sales of a particular Licensed Product in any Year which are greater than [***] but up to [***]	[***]
For that portion of Net Sales of a particular Licensed Product in any Year which are greater than [***]but up to [***]	[***]
For that portion of Net Sales of a particular Licensed Product in any Year which are greater than [***]	[***]

10.4.2 Royalty Term.  Royalties shall be paid on a Licensed Product-by-Licensed Product and country-by-country basis in the Territory from the First Commercial Sale of such Licensed Product in a country by or on behalf of AZ, its Affiliates, or Sublicensees, until the expiration of the Royalty Term for such Licensed Product in such country.  For the avoidance of doubt, any sales of a Licensed Product made after the expiration of the Royalty Term for such Licensed Product in a country shall not be included in the Territory-wide calculation of Net Sales for the Year of such expiration for the purposes of calculating royalties under Section 10.4.1.

10.4.3 Reductions.

(a) In the event that (i) AZ enters into an agreement with a Third Party to obtain a license or other right under any Patents owned by a Third Party with respect to [***] a Licensed Product or a Licensed Compound, and (ii) such license or other Third Party Right is reasonably required for AZ or its Affiliates’ Development or Commercialization of a Licensed Product, AZ shall be entitled to deduct from any royalties payable hereunder [***] of [***] paid to

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such Third Party pursuant to such agreementfrom the royalties due to Silence pursuant to Section 10.4.

(b) In the event that one (1) or more Generic Products with respect to a Licensed Product are commercially available in a given country in the Territory (“Generic Competition”), in a given Quarter, then AZ shall be entitled to deduct (i) [***] from the royalties due to Silence with respect to such Licensed Product in such country if Net Sales of such Licensed Product in such country in such Quarter equals between [***] and [***] of the average Net Sales of such Licensed Product over the [***] consecutive Quarters immediately prior to the Quarter in which one or more Generic Products first became commercially available in such country, or (ii) [***] from the royalties due to Silence with respect to such Licensed Product in such country if Net Sales of such Licensed Product in such country in such Quarter equals less than [***] of the average Net Sales of such Licensed Product over the [***] consecutive Quarters immediately prior to the Quarter in which one or more Generic Products first became commercially available in such country, in each case of (i) and (ii), in such Quarter and thereafter in each Quarter during the Royalty Term in which there is Generic Competition at either such level, with respect to such Licensed Product in such country.

(c) In no event will the aggregate amount of royalties due to Silence for a Licensed Product in a country in the Territory in any given Quarter during the Royalty Term for such Licensed Product in such country be reduced by more than [***] of the amount that otherwise would have been due and payable to Silence in such Quarter for such Licensed Product in such country under Section 10.4.1 but for the reductions set forth in Sections 10.4.3(a) and (b) above.  Any

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amounts qualifying for a reduction from payments according to Section 10.5.3, which, in any Quarter cannot be deducted according to this Section 10.5.3(c), may be carried into future Quarters, subject to the foregoing sentence.

10.5 Compulsory License.  If a court or a Governmental Authority of competent jurisdiction requires, by issuing a written decree or order or otherwise, AZ or any of its Affiliates or Sublicensees to grant a compulsory license to a Third Party (each, a “Compulsory Sublicensee”) permitting such Third Party to make and sell a Licensed Product in such country, (i) such Compulsory Sublicensee will not be considered a Sublicensee for the purpose of this Agreement, and (ii) such grant will be permitted and deemed consented to by Silence.  At such time as AZ or any of its Affiliates or Sublicensees enters into a sublicense with a Compulsory Sublicensee, in lieu of the royalty due under Section 10.4.1, the Parties will discuss, and mutually agree upon the sharing between Silence and AZ of the consideration received by AZ under such compulsory license, with such sharing designed to match the sharing between the Parties of profits from countries where no compulsory licenses are granted.

10.6 Estimated Sales Levels.  Silence acknowledges and agrees that the sales levels set forth in Section 10.3 and Section 10.4 shall not be construed as representing an estimate or projection of anticipated sales of the Licensed Products in the Territory and that the sales levels set forth in those Sections are merely intended to define AZ’s royalty and other payment obligations, as applicable, in the event such sales levels are achieved.

ARTICLE 11PAYMENT; RECORDS; AUDITS

11.1 Royalty Payments and Reports.  AZ shall calculate all amounts payable to Silence pursuant to Section 10.4 at the end of each Quarter, which amounts shall be converted to Dollars, in accordance with Section 11.2.  AZ shall pay to Silence the royalty amounts due with respect to a given Quarter within [***] days of the end of such Quarter.  Each payment of royalties due to Silence shall be accompanied by a statement of (a) the amount

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of gross sales and Net Sales of each Licensed Product in each country in the Territory during the applicable Quarter (including such amounts expressed in local currency and as converted to Dollars), (b) the deductions applied in the calculation of Net Sales from gross sales, (c) the applicable royalty rate(s) under this Agreement (including any reduction(s) to such royalty rate(s) under Section 10.4.3), and (d) a calculation of the amount of royalty payment due on such Net Sales for such Quarter.

11.2 Mode of Payment.  All payments to either Party under this Agreement shall be made, without setoff, by deposit of Dollars in the requisite amount from an entity domiciled in the United States, the United Kingdom or Sweden, to such bank account as the payee 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 its Sublicensee’s standard conversion methodology consistent with Accounting Standards.

11.3 Taxes.

11.3.1 Withholding Taxes. Where any sum due to be paid to either Party under this Agreement is subject to any withholding tax, the Parties shall use their commercially reasonable efforts to take all such actions, including but not limited to executing and delivering relevant documents, as will enable them to take advantage of any applicable double taxation agreement or treaty or otherwise reduce or eliminate such withholding tax. In particular, Silence shall timely provide AZ with any tax forms that may be reasonably necessary in order for AZ to not withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty or otherwise, to the extent legally able to do so.  If and to the extent the withholding tax cannot be fully eliminated, the payor shall remit such withholding tax to the appropriate government authority, deduct the amount paid from the amount due to payee, and secure and send to payee reasonably satisfactory evidence of the payment of such withholding tax.  If any withholding taxes are refundable, creditable or otherwise recoverable, each Party will provide the other such assistance as is

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reasonably required to obtain a refund of the withheld taxes, obtain a credit with respect to such taxes paid, or otherwise recover such taxes.  In the event that a government authority retroactively determines that a payment made by a Party to the other pursuant to this Agreement should have been subject to withholding (or to additional withholding) taxes, and such Party (the “Withholding Party”) remits such withholding taxes to the government authority, the Withholding Party shall have the right (a) to offset such amount, including any interest and penalties that may be imposed thereon (except to the extent any such interest or penalties result from the negligence of the Withholding Party), against future payment obligations of the Withholding Party under this Agreement, (b) to invoice the other Party for such amount (which shall be payable by the other Party within [***] days of its receipt of such invoice), or (c) to pursue reimbursement by any other available remedy.

11.3.2 Indirect Taxes.  All payments are exclusive of value added taxes, sales taxes, consumption taxes, and other similar taxes (the “Indirect Taxes”).  If any Indirect Taxes are chargeable in respect of any payments, the paying Party shall pay such Indirect Taxes at the applicable rate in respect of such payments following receipt, where applicable, of an Indirect Taxes invoice in the appropriate form issued by the receiving Party in respect of those payments.  The Parties shall issue invoices for all amounts payable under this Agreement consistent with Indirect Tax requirements and irrespective of whether the sums may be netted for settlement purposes.  If the Indirect Taxes originally paid or otherwise borne by the paying Party are in whole or in part subsequently determined not to have been chargeable, all reasonably necessary steps will be taken by the receiving Party to receive a refund of such undue Indirect Taxes from the applicable Governmental Authority or other fiscal authority and any amount of undue Indirect Taxes repaid by such authority to the receiving Party will be transferred to the paying Party within [***] days after receipt.

11.3.3 Taxes Resulting from a Party’s Action.  Notwithstanding the foregoing in this Section 11.3, if a Party takes any action of its own discretion (not required

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by the terms of this Agreement or a Regulatory Authority), including any assignment, sublicense, change of place of incorporation, or failure to comply with Applicable Laws or filing or record retention requirements, which results in an additional or increased withholding obligation with respect to payments to be made pursuant to this Agreement (“Withholding Tax Action”), then such Party shall bear the amount of such withholding to the extent associated with such Withholding Tax Action.  For clarity, if AZ undertakes a Withholding Tax Action, then the sum payable by AZ (in respect of which such withholding is required to be made) shall be increased to the extent necessary to ensure that Silence receives a sum equal to the sum which it would have received had no such Withholding Tax Action occurred.  For the avoidance of doubt, a change in Applicable Laws that results in a new or increased withholding or deduction obligation, absent either Party taking a Withholding Tax Action, shall not affect the withholding and deduction obligations provided in Section11.3.1.

11.3.4 Prevention of Facilitation of Tax Evasion.

(a) Each Party represents, warrants and undertakes that neither it nor its Affiliates shall commit a tax evasion facilitation offence under Part 3 of the UK Criminal Finances Act 2017 in connection with or attributable to this Agreement or the transactions contemplated hereby.

(b) Each Party shall promptly report to the other Party any apparent breach of Section 11.3.4(a) and shall (i) answer, in reasonable detail, any written or oral inquiry from the other Party related to its and its Affiliates compliance with Section 11.3.4(a), (ii) facilitate the interview of employees of such Party by the other Party (or any agent of such Party) at any reasonable time specified by the inquiring Party related to such Party’s compliance with Section 11.3.4(a) and (iii) cooperate with the inquiring Party or any Governmental Authority in relation to any investigation relating to

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the matters referred to in Section 11.3.4(a), in all cases, as reasonably required to enable that other Party to comply with its undertaking in Section 11.3.4(a).

11.4 Financial Records.  Each Party shall, and shall cause its Affiliates and Sublicensees to, keep complete and accurate financial books and records pertaining to the Exploitation of Eligible Targets, Selected Targets, Licensed Compounds and/or Licensed Products (including, with respect to AZ, Net Sales of Licensed Products) in sufficient detail to calculate all amounts payable hereunder with respect thereto and to verify compliance with its obligations under this Agreement.  Such books and records shall be retained by the Parties and their Affiliates until [***] years after the end of the Year to which such books and records pertain.

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11.5 Audit.  At either Party’s request, the other Party shall, and shall cause its Affiliates to, permit an independent public accounting firm of nationally recognized standing designated by the auditing Party and reasonably acceptable to the audited Party, at reasonable times during normal business hours and upon reasonable notice, to audit the books and records maintained pursuant to Section 11.4 to ensure the accuracy of all reports and payments made hereunder.  Such examinations may not (a) be conducted for any Quarter more than [***] years after the end of such Year to which such books and records pertain, (b) be conducted more than once 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 Quarter, unless as a component of an examination applicable to a Year that includes such Quarter.  The accounting firm shall report to the Parties with reasons whether the reports are correct or not, and the specific details concerning any discrepancies.  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 [***] from the amounts due, in which case the audited Party shall bear the cost of the audit.  Unless disputed pursuant to Section 11.6 below, if such audit concludes that (x) additional amounts were owed by the audited Party, the audited Party shall pay the additional amounts within [***] days, or (y) excess payments were made by the audited Party and the audited Party agrees to pay the costs of such audit, 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.

11.6 Audit Dispute.  In the event of a dispute with respect to any audit under Section 11.5, Silence and AZ shall work in good faith to promptly 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 an independent Third Party accounting firm (acting as an expert and not as an arbitrator) jointly selected by the Parties or to such other Person as the Parties shall mutually agree (the “Auditor”).  Absent agreement as to who the Auditor should be, the Auditor shall be appointed by or on behalf of [***] at the relevant time.  The decision of the Auditor shall be final and the costs of such determination as well as the initial audit shall be borne between the Parties

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in such manner as the Auditor shall determine.  Not later than [***] days after such decision and in accordance with such decision, the audited Party shall pay the additional amounts, or the auditing Party shall reimburse the excess payments, as applicable.

11.7 Confidentiality.  The receiving Party shall treat all information subject to review under this ARTICLE 11 in accordance with the confidentiality provisions of ARTICLE 13 and the Parties shall cause any independent public accounting firm appointed in accordance with Section 11.5, and the Auditor, to enter into reasonably acceptable confidentiality agreements with the audited Party obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement.

ARTICLE 12
INTELLECTUAL PROPERTY

12.1 Patent Working Group.  The JSC shall establish a working group to assist in the communication with respect to the prosecution and maintenance of Joint Research Patents and Product Specific Patents (the “Patent Working Group”), and each Party (through its representatives on the Patent Working Group) shall use its Commercially Reasonable Efforts to [***] to [***] and to [***].  The Patent Working Group shall meet as necessary to perform its responsibilities or as otherwise directed by the JSC, and shall continue to exist only for so long as the Parties determine it is reasonably necessary.

12.2 Ownership of Intellectual Property.

12.2.1 United States Law.  For purposes of establishing the Parties’ respective ownership of intellectual property conceived, discovered, developed, or otherwise made under this Agreement, inventorship of Information and inventions conceived, discovered, developed, or otherwise made under this Agreement shall be determined 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.

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12.2.2 Silence Ownership.  As between the Parties, Silence or an Affiliate designated by Silence shall own and retain all right, title, and interest in and to any and all Silence Background IP and Silence Research IP, and AZ hereby assigns all of its right, title and interest in and to any Silence Research IP to Silence.

12.2.3 AZ Ownership.  As between the Parties, AZ or an Affiliate designated by AZ shall own and retain all right, title, and interest in and to any and all AZ Background IP and AZ Research IP, and Silence hereby assigns all of its right, title and interest in and to any AZ Research IP to AZ.

12.2.4 Joint Ownership.  As between the Parties, the Parties shall each own an equal, undivided interest in any and to all Joint Research IP.  At least once per Quarter (which the Parties expect would be through the Patent Working Group) each Party shall disclose to the other Party in writing the development, making, conception, or reduction to practice of any Joint Research IP.  Subject to the exclusive licenses granted by Silence to AZ to Joint Research IP under Section 7.1,each Party shall have the right to Exploit (including by way of granting licenses, assignments, mortgages or otherwise, in each case, solely over its share of the Joint Research IP) the Joint Research IP without a duty of seeking consent or accounting to the other Party.

12.2.5 Assignment Obligation.  Each Party shall cause all Persons who perform Research or Development 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 a license under) their rights in any Information, Know-How and inventions resulting therefrom to such Party to the extent that the foregoing relates specifically to a Licensed Product.

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12.3 Maintenance and Prosecution of Patents.

12.3.1 Silence Patents.  Except with respect to the Product Specific Patents, Silence shall have the sole right, but not the obligation, to prepare, file, prosecute, and maintain the Silence Background Patents and the Silence Research Patents worldwide, at Silence’s sole cost and expense.  Silence shall keep AZ reasonably informed of all steps with regard to the preparation, filing, prosecution, and maintenance of the Silence Background Patents and Silence Research Patents.  If Silence, during the Term, determines in its sole discretion to abandon or not maintain any of the Silence Background Patents or the Silence Research Patents in the Territory, and such Silence Background Patent or Silence Research Patent [***], then Silence shall provide AZ with prior written notice sufficiently in advance of any abandonment to enable AZ, at its sole discretion, to maintain such Silence Background Patents and the Silence Research Patents and assume the prosecution, at its sole cost and expense, and on receipt of such notice, Silence shall transfer such prosecution to AZ.

12.3.2 AZ Patents.  AZ shall have the sole right, but not the obligation, to prepare, file, prosecute, and maintain the AZ Background Patents and the AZ Research Patents worldwide, at AZ’s sole cost and expense.  AZ shall keep Silence reasonably informed of all steps with regard to the preparation, filing, prosecution, and maintenance of the AZ Research Patents.  If AZ, during the Term, determines in its sole discretion to abandon or not maintain any AZ Research Patent in the Territory, and such AZ Research Patent [***], then AZ shall provide Silence with prior written notice sufficiently in advance of any abandonment to enable Silence, at its sole discretion, to maintain such AZ Research Patent and assume the prosecution, at its sole cost and expense, and on receipt of such notice, AZ shall transfer such prosecution to Silence.

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12.3.3 Product Specific Patents.

(a) Prior to AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Licensed Compounds and/or Licensed Products Covered by such Product Specific Patents relate, Silence shall have the first right, but not the obligation, to prepare, file, prosecute, and maintain the Product Specific Patents related to the applicable Selected Target(s) worldwide, at Silence’s sole cost and expense.  Silence shall keep AZ reasonably informed of all steps with regard to the preparation, filing, prosecution, and maintenance of such Product Specific Patents, and shall provide AZ with a copy of material communications to and from the patent authorities regarding such Product Specific Patents, including drafts of any material filings or responses to be made to such patent authorities sufficiently in advance of submitting such filings or responses so as to allow AZ a reasonable opportunity to review and comment thereon.  Silence shall reasonably consider and reasonably incorporate AZ’s reasonable requests and suggestions with respect to such drafts and with respect to strategies for filing and prosecuting the Product Specific Patents.  If Silence, during the Term, determines in its sole discretion to abandon or not maintain any of the Product Specific Patents in the Territory, then Silence shall provide AZ with prior written notice sufficiently in advance of any abandonment to enable AZ, at its sole discretion, to maintain such Product Specific Patent and assume the prosecution, at its sole cost and expense, and on receipt of such notice, Silence shall transfer such prosecution to AZ.

(b) Upon AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Licensed Compounds and/or Licensed Products Covered by such Product Specific Patents relate, AZ shall

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have the first right, but not the obligation, to prepare, file, prosecute, and maintain the Product Specific Patents (including any such Product Specific Patents filed prior to the Option Exercise Effective Date) that relate specifically to the relevant Selected Target worldwide, at AZ’s sole cost and expense.  AZ shall keep Silence reasonably informed of all steps with regard to the preparation, filing, prosecution, and maintenance of such Product Specific Patents, and shall provide Silence with a copy of material communications to and from the patent authorities regarding such Product Specific Patents, including drafts of any material filings or responses to be made to such patent authorities sufficiently in advance of submitting such filings or responses so as to allow Silence a reasonable opportunity to review and comment thereon.  AZ shall reasonably consider and reasonably incorporate Silence’s reasonable requests and suggestions with respect to such drafts and with respect to strategies for filing and prosecuting the Product Specific Patents.  If AZ, during the Term, determines in its sole discretion to abandon or not maintain any of the Product Specific Patents in the Territory, then AZ shall provide Silence with prior written notice sufficiently in advance of any abandonment to enable Silence, at its sole discretion, to maintain such Product Specific Patent and assume the prosecution, at its sole cost and expense, and on receipt of such notice, AZ shall transfer such prosecution to Silence.

12.3.4 Joint Research Patents.

(a) Prior to AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Joint Research Patents relate, Silence shall have the first right, but not the obligation, to prepare, file, prosecute, and maintain the Joint Research Patents worldwide, at Silence’s sole cost and expense.  Silence shall keep AZ reasonably

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informed of all steps with regard to the preparation, filing, prosecution, and maintenance of such Joint Research Patents, and shall provide AZ with a copy of material communications to and from the patent authorities regarding such Joint Research Patents, including drafts of any material filings or responses to be made to such patent authorities sufficiently in advance of submitting such filings or responses so as to allow AZ a reasonable opportunity to review and comment thereon.  Silence shall reasonably consider and reasonably incorporate AZ’s requests and suggestions with respect to such drafts and with respect to strategies for filing and prosecuting the Joint Research Patents.  If Silence, during the Term, determines in its sole discretion to abandon or not maintain any of the Joint Research Patents in the Territory, then Silence shall provide AZ with prior written notice sufficiently in advance of any abandonment to enable AZ, at its sole discretion, to maintain such Joint Research Patent and assume the prosecution, at its sole cost and expense, and on receipt of such notice, Silence shall transfer such prosecution to AZ.

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(b) Upon AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Joint Research Patents relate, AZ shall have the first right, but not the obligation, to prepare, file, prosecute, and maintain such Joint Research Patents as relate specifically to the relevant Selected Target, worldwide, at AZ’s sole cost and expense.  AZ shall keep Silence reasonably informed of all steps with regard to the preparation, filing, prosecution, and maintenance of such Joint Research Patents, and shall provide Silence with a copy of material communications to and from the patent authorities regarding such Joint Research Patents, including drafts of any material filings or responses to be made to such patent authorities sufficiently in advance of submitting such filings or responses so as to allow Silence a reasonable opportunity to review and comment thereon.  AZ shall reasonably consider and reasonably incorporate Silence’s requests and suggestions with respect to such drafts and with respect to strategies for filing and prosecuting the Joint Research Patents.  If AZ, during the Term, determines in its sole discretion to abandon or not maintain any of the Joint Research Patents in the Territory, then AZ shall provide Silence with prior written notice sufficiently in advance of any abandonment to enable Silence, at its sole discretion, to maintain such Joint Research Patent and assume the prosecution, at its sole cost and expense, and on receipt of such notice, AZ shall transfer such prosecution to Silence.

12.3.5 Patent Term Extension and Supplementary Protection Certificate.  The Parties shall cooperate on decisions regarding patent term extensions, including supplementary protection certificates and any other extensions that are now or become available in the future, wherever applicable, for [***] in any country or other jurisdiction.  [***] shall have the first right, but not the obligation, to apply for any extension or supplementary protection certificate with respect to such Patents in the Territory and where [***] elects not to

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make an application for any extension or supplementary protection certificate with respect to such Patents in the Territory, it shall inform [***] in sufficient time for [***] to make such application and provide a copy of all documents and other information [***] may need to make such application.  Each Party shall keep the other fully informed of its efforts to obtain such extension or supplementary protection certificate.  Each Party shall provide prompt and reasonable assistance, as requested by the other, including by taking such action as patent holder as is required under any Applicable Law to obtain such patent extension or supplementary protection certificate.

12.4 Enforcement of Patents.

12.4.1 Notice.  Each Party shall promptly notify the other Party in writing of any alleged or threatened infringement of the Silence Background Patents, the Silence Research Patents, the AZ Research Patents, the Product Specific Patents or Joint Research Patents in any jurisdiction in the Territory of which such Party becomes aware in connection with the Exploitation of any Licensed Product or any product that competes with a Licensed Product (an “Infringement”), in each case to the extent such Infringement involves, as to a Licensed Product, a competing product in the Field (a “Competitive Infringement”).

12.4.2 Silence Patents.  Except as set out in Section 12.4.4, Silence shall have the sole and exclusive right, but not the obligation, to enforce and defend worldwide under its control, at its own expense, the Silence Background Patents and Silence Research Patents, provided however, if (A) [***] (B) either (i) [***] or (ii) [***], and (C) Silence does not initiate an infringement or other appropriate suit against such Competitive Infringement in such country, within [***] days (or such shorter period of time as required by Applicable Law to avoid loss of material enforcement rights) after Silence’s receipt of a notice of a Competitive Infringement with respect to any Silence Background Patents or Silence Research Patents, AZ may in its sole

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discretion, bring and control any legal action in connection therewith at its sole expense.

12.4.3 AZ Patents.  AZ shall have the sole right, but not the obligation, to enforce and defend worldwide under its control, and at its own expense, the AZ Background Patents and AZ Research Patents.

12.4.4 Product Specific Patents.

(a) (i) Prior to AZ’s exercise of the Option corresponding to the applicable Selected Target(s) to which the Licensed Compounds and/or Licensed Products Covered by such Product Specific Patents relate, or

(ii) on or after AZ’s exercise of the Option corresponding to the applicable Selected Target(s) to which the Licensed Compounds and/or Licensed Products Covered by such Product Specific Patents relate, where Silence has assumed the maintenance and prosecution of such Product Specific Patent pursuant to Section 12.3.3(b),  

Silence shall have the first right, but not the obligation, to enforce and defend worldwide under its control, and at its own expense, the relevant Product Specific Patents.  If Silence does not exercise Commercially Reasonable Efforts to enforce or defend any such Infringement with respect to Product Specific Patents (a) within [***] days following the first notice provided to it pursuant to this Section 12.4.4, or (b) if earlier, [***] Business Days before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, then AZ may enforce such Product Specific Patents at its own expense.

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Products Covered by such Product Specific Patents relate,unless and until Silence assumes the maintenance and prosecution of such Product Specific Patent pursuant to Section 12.3.3(b), AZ shall have the first right, but not the obligation, to enforce and defend worldwide under its control, and at its own expense, the Product Specific Patents that relate specifically to the relevant Selected Target.  If AZ does not exercise Commercially Reasonable Efforts to enforce or defend any such Infringement with respect to such Product Specific Patents (a) within [***] days following the first notice provided to it pursuant to this Section 12.4.4, or (b) if earlier, [***] Business Days before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, then Silence may enforce such Product Specific Patents at its own expense.

12.4.5 Joint Research Patents.

(a) (i) Prior to AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Joint Research Patents relate, or

(ii)on or after AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Joint Research Patents relate, where Silence has assumed the maintenance and prosecution of such Joint Research Patent pursuant to Section 12.3.4(b),  

Silence shall have the first right, but not the obligation, to enforce and defend worldwide under its control, and at its own expense, the relevant Joint Research Patents.  If Silence does not take Commercially Reasonable Efforts to enforce or defend any such Infringement with respect to such Joint Research Patents (a) within [***] days following the first notice provided to it pursuant to this Section 12.4.5, or (b) if earlier, [***] Business Days before the time

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limit, if any, set forth in appropriate laws and regulations for filing of such actions, then AZ may enforce such Joint Research Patent(s) at its own expense.

(b) Upon AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Joint Research Patents relate, unless and until Silence assumes the maintenance and prosecution of such Joint Research Patent pursuant to Section 12.3.4(b), AZ shall have the first right, but not the obligation, to enforce and defend worldwide under its control, and at its own expense, the Joint Research Patents that relate specifically to the relevant Selected Target.  If AZ does not take commercially reasonable steps to enforce or defend any such Infringement with respect to such Joint Research Patents (a) within [***] days following the first notice provided to it pursuant to this Section 12.4.5, or (b) if earlier, [***] Business Days before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, then Silence may enforce such Joint Research Patent(s) at its own expense.

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12.4.6 Cooperation.  The Parties agree to cooperate fully in any Infringement action pursuant to this Section 12.4.6.  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 Infringement litigation in accordance with this Section 12.4.6 shall have the right to settle such claim; provided that no Party shall have the right to settle any Infringement litigation under this Section 12.4.6 in a manner that (a) [***], (b) [***], or (c) [***], in each case (a) – (c) without the express written consent of such other Party, such consent not to be unreasonably withheld, conditioned, or delayed.  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.

12.4.7 Recovery.  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 this Section 12.4.7 (whether by way of settlement or otherwise) shall be first allocated to reimburse the Parties for their costs and expenses in making such recovery (which amounts shall be allocated pro rata if insufficient to cover the totality of such expenses).  Any remainder after such reimbursement is made shall be retained by the Party that has exercised its right to bring the enforcement action; provided that to the extent that any award or settlement (whether by judgment or otherwise) is paid to AZ (excluding any reimbursement) [***], such amounts shall be treated as Net Sales of the relevant Licensed Product in the Quarter in which such award or settlement is received.

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12.5 Infringement Claims by Third Parties.  If the Exploitation of a Licensed Product in the Territory pursuant to this Agreement results in, or may result in, any claim, suit, or proceeding by a Third Party alleging patent infringement by AZ (or its Affiliates or Sublicensees), AZ 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, using counsel of its own choice; provided, however, that the provisions of Section 12.4.2 shall govern the right of AZ to assert a counterclaim of infringement of any Silence Background Patent or Silence Research Patent.

12.6 Invalidity or Unenforceability Defenses or Actions.

12.6.1 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 Silence Background Patents, Silence Research Patents, or Joint Research Patents by a Third Party, in each case in the Territory and of which such Party becomes aware.

12.6.2 Silence Patents.  Except as set out in Section 12.6.4, Silence shall have the sole right, but not the obligation, to defend and control the defense of the validity and enforceability of the Silence Background Patents and Silence Research Patents.  Silence shall consult with AZ to determine a course of action with respect to any proceeding relating to the validity and enforceability of any Silence Background Patent and Silence Research Patent and Silence shall [***], with respect thereto.

12.6.3 AZ Patents.  AZ shall have the sole right, but not the obligation, to defend and control the defense of the validity and enforceability of the AZ Background Patents and AZ Research Patents.

12.6.4 Product Specific Patents.

(a) (i) Prior to AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Licensed Compounds

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and/or Licensed Products Covered by such Product Specific Patents relate, or

(ii)on or after AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Licensed Compounds and/or Licensed Products Covered by such Product Specific Patents relate, where Silence has assumed the maintenance and prosecution of such Product Specific Patent pursuant to Section 12.3.3(b),  

Silence shall have the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the relevant Product Specific Patents.  AZ may participate in any such claim, suit, or proceeding in the Territory related to such Product Specific Patents with counsel of its choice at its own expense; provided that Silence shall retain control of the defense in such claim, suit, or proceeding.  If Silence elects not to defend or control the defense of any such Product Specific Patents, or otherwise fails to initiate and maintain the defense of any such claim, suit, or proceeding, then AZ may conduct and control the defense of any such claim, suit, or proceeding, at its own expense; provided that AZ shall obtain the written consent of Silence [***], such consent not to be unreasonably withheld, conditioned, or delayed.

(b) Upon AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Licensed Compounds and/or Licensed Products Covered by such Product Specific Patents relate, unless and until Silence assumes the maintenance and prosecution of such Product Specific Patent pursuant to Section 12.3.3(b), AZ shall have the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the Product Specific Patents that relate specifically to the relevant Selected Target.  Silence may participate in any such claim, suit, or proceeding in the

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Territory related to such Product Specific Patents with counsel of its choice at its own expense; provided that AZ shall retain control of the defense in such claim, suit, or proceeding.  If AZ elects not to defend or control the defense of any such Product Specific Patents, or otherwise fails to initiate and maintain the defense of any such claim, suit, or proceeding, then Silence may conduct and control the defense of any such claim, suit, or proceeding, at its own expense; provided that Silence shall obtain the written consent of AZ [***], such consent not to be unreasonably withheld, conditioned, or delayed.

12.6.5 Joint Research Patents.

(a) (i)Prior to AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Joint Research Patents relate, or

(ii) on or after AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Joint Research Patents relate, where Silence has assumed the maintenance and prosecution of such Joint Research Patent pursuant to Section 12.3.4(b),  

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Silence shall have the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the relevant Joint Research Patents.  AZ may participate in any such claim, suit, or proceeding in the Territory related to such Joint Research Patents, in each case that [***] with counsel of its choice at its own expense; provided that Silence shall retain control of the defense in such claim, suit, or proceeding.  If Silence elects not to defend or control the defense of any such Joint Research Patents, in each case that [***] in a suit brought in the Territory, or otherwise fails to initiate and maintain the defense of any such claim, suit, or proceeding, then AZ may conduct and control the defense of any such claim, suit, or proceeding, at its own expense; provided, that AZ shall obtain the written consent of Silence [***], such consent not to be unreasonably withheld, conditioned, or delayed.  To the extent that there is any claim, suit, or proceeding of any of the Joint Research Patents in the Territory that [***], then [***] defend and control the defense of the validity and enforceability of the Joint Research Patents subject to Applicable Law.

(b) Upon AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Joint Research Patents relate, unless and until Silence assumes the maintenance and prosecution of such Joint Research Patent pursuant to Section 12.3.4(b), AZ shall have the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the Joint Research Patents that [***].  Silence may participate in any such claim, suit, or proceeding in the Territory related to such Joint Research Patents, in each case that [***] with counsel of its choice at its own expense; provided that AZ shall retain control of the defense in such claim, suit, or proceeding.  If AZ elects not to defend or control the defense of any such Joint Research Patents, in each case that Cover Licensed

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Product in a suit brought in the Territory, or otherwise fails to initiate and maintain the defense of any such claim, suit, or proceeding, then Silence may conduct and control the defense of any such claim, suit, or proceeding, at its own expense; provided, that Silence shall obtain the written consent of AZ [***] such consent not to be unreasonably withheld, conditioned, or delayed. To the extent that there is any claim, suit, or proceeding of any of the Joint Research Patents in the Territory that [***], then [***] defend and control the defense of the validity and enforceability of the Joint Research Patents subject to Applicable Law.

12.6.6 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 12.6, including by being joined as a party plaintiff 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 related to Section 12.6.5, the controlling Party 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 12.6, each Party shall consult with the other as to the strategy for the defense of the Product Specific Patents and Joint Research Patents.

12.7 UPC.

12.7.1 Prior to AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Licensed Compounds and/or Licensed Products Covered by a particular Product Specific Patent or Joint Research Patent relate, or on or after AZ’s exercise of the Option corresponding to the applicable Selected Target to which such Product Specific Patent and/or Joint Research Patent relates where Silence has assumed the maintenance and prosecution of such

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Patent, Silence will have the right to determine whether to opt in or opt out (and to opt in again) of the Unified Patent Court system and if requested by Silence, AZ will promptly do all things reasonably necessary and execute all documents required to give effect to such decision(s), provided that Silence will reimburse AZ its reasonable out-of-pocket expenses incurred in performing such acts.

12.7.2 Upon AZ’s exercise of the Option corresponding to the applicable Selected Target to which the Licensed Compounds and/or Licensed Products Covered by such Product Specific Patents or Joint Research Patent relate, unless and until Silence assumes the maintenance and prosecution of such Patents pursuant to Section 12.3.3(b) or 12.3.4(b), AZ will have the right to determine whether to opt in or opt out (and to opt in again) of the Unified Patent Court system and if requested by AZ, Silence will promptly do all things reasonably necessary and execute all documents required to give effect to such decision(s), provided that AZ will reimburse Silence its reasonable out-of-pocket expenses incurred in performing such acts.

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ARTICLE 13CONFIDENTIALITY AND NON-DISCLOSURE

13.1 Confidentiality Obligations.  At all times during the Term and for a period of [***] years following termination or expiration hereof in its entirety, each Party shall, and each of the foregoing shall cause its Affiliates and its and their respective officers, directors, employees, consultants, contractors, 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.  Notwithstanding the foregoing, to the extent the receiving Party can demonstrate by documentation or other competent proof, the confidentiality and non-use obligations under this Section 13.1 with respect to any Confidential Information shall not include any information that:

13.1.1 has been published by a Third Party or otherwise is or hereafter becomes part of the public domain through no fault on the part of the receiving Party;

13.1.2 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;

13.1.3 is subsequently received by the receiving Party from a Third Party without restriction and without breach of any agreement between such Third Party and the disclosing Party;

13.1.4 that is generally made available to Third Parties by the disclosing Party without restriction on disclosure; or

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13.1.5 have been independently developed by or for the receiving Party without reference to or use of 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.

13.2 Permitted Disclosures.  Each Party may disclose Confidential Information of the other Party to the extent such disclosure is reasonably necessary in the following instances:

13.2.1 (a) filing or prosecuting Patents as contemplated by this Agreement, (b) prosecuting or defending litigation as contemplated by this Agreement, or (c) obtaining or maintaining Regulatory Approval of the Licensed Products;

13.2.2 complying with applicable court orders or governmental regulations, including regulations promulgated by securities exchanges on which the securities of the disclosing Party are listed (or to which an application for listing has been submitted);

13.2.3 disclosure to its and its Affiliates’ respective officers, directors, employees, consultants, contractors, and agents, in each case on a need-to-know basis in connection with the Exploitation of any Product in accordance with the terms of this Agreement, in each case under written obligations of confidentiality and non-use at least as stringent as those herein; and

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13.2.4 disclosure to actual and bona fide potential investors, acquirors, licensees, sublicensees, and other financial or commercial partners for the purpose of evaluating or carrying out an actual or potential investment, acquisition, or collaboration, in each case under written obligations of confidentiality and non-use at least as stringent as those herein; provided that the disclosing Party redacts the financial terms and other provisions of this Agreement that are not reasonably required to be disclosed in connection with such potential investment, acquisition, or collaboration, which redaction shall be prepared in consultation with the other Party.

Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to Section 13.2.1 or 13.2.2, it will, except where impermissible, give reasonable advance notice to the other Party of such disclosure and comply with all reasonable requests of the disclosing Party with respect to maintaining confidence in such Confidential Information and in any event shall use the same diligent efforts to secure confidential treatment of such Confidential Information as such Party would use to protect its own Confidential Information, but in no event less than reasonable efforts.  In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information.  Any information disclosed pursuant to this Section 13.2 shall remain Confidential Information and subject to the restrictions set forth in this Agreement, including the foregoing provisions of this ARTICLE 13.

13.3 Use of Name.  Except as expressly provided in this Agreement, neither Party shall 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, which approval shall not be unreasonably withheld, conditioned, or delayed.  The restrictions imposed by this Section 13.3 shall not prohibit either Party from making any disclosure identifying the other Party that, in the opinion of the disclosing Party’s counsel, is required by Applicable Law; provided, that such Party shall

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submit the proposed disclosure identifying the other Party in writing to such 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 on such disclosure.

13.4 Public Announcements.  The Parties have agreed the press releases set out as Schedule 13.4 shall be the press release announcing the transaction contemplated by this Agreement.  Other than this press release, neither Party shall issue any 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 any such disclosure that is, in the opinion 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).  In the event a Party is, in the opinion of its 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, 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.  Notwithstanding anything to the contrary herein, following the initial press release announcing this Agreement, each Party shall be free to disclose, without the other Party’s prior written consent, the existence of this Agreement, the identity of the other Party, and those terms of the Agreement which have already been publicly disclosed in accordance herewith.

13.5 Publications. The Parties acknowledge that scientific publications must be strictly monitored to prevent any adverse effect from premature publication of results of the Research and Development activities hereunder.

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13.5.1 By Silence.  During the Research Collaboration Term, Silence shall have the right to make any publications, presentations, or public disclosures related to an RNAi Molecule or a Licensed Compound subject to AZ’s prior review and approval.  Prior to AZ’s exercise of an Option in respect of a particular Selected Target, AZ may not make any publications, presentations, or public disclosures solely related to an RNAi Molecule, Licensed Compound or Licensed Product without Silence’s prior written approval.

13.5.2 By AZ.  Following AZ’s exercise of an Option in respect of a particular Selected Target, AZ shall, subject to such publications, presentations, or public disclosures not including any Silence Confidential Information, have the right to make any publications, presentations, or public disclosures related to RNAi Molecules, Licensed Compounds and Licensed Products directed to such Selected Target without Silence’s prior review and approval, provided that, with respect to each Licensed Compound, AZ shall obtain Silence’s prior review and approval for any such publications, presentations, or public disclosures to be submitted prior to the later of (i) [***] and (ii) [***]. Following AZ’s exercise of an Option in respect of a particular Selected Target, Silence shall not make any publications, presentations, or public disclosures related to such RNAi Molecules, Licensed Compounds or Licensed Products without AZ’s prior written approval.

13.5.3 Review Process.  Before any paper is submitted for publication or an oral presentation is made for which review or approval rights are provided under Section 13.5, the publishing or presenting Party (the “Publishing Party”) shall deliver a then-current copy of the paper or materials for oral presentation to the non-publishing Party at least [***] days prior to submitting the paper to a publisher or making the presentation.  The non-publishing Party shall review any such paper and give its comments to such Publishing Party within [***] days after the delivery of such paper to such other Party.  The Publishing Party shall comply with the other Party’s request to delete references to the other

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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 such other Party deems it necessary.

13.6 Return of Confidential Information.  Upon termination of this Agreement in its entirety, each Party shall promptly return to the other Party, or delete or destroy, all records and materials in such Party’s possession or control containing Confidential Information of the other Party; provided that the other Party shall be permitted to retain one (1) copy of such Confidential Information for the sole purpose of performing any continuing obligations under this Agreement, as required by Applicable Law, or for legal archival purposes.  If this Agreement is terminated with respect to one or more Selected Target, but not in its entirety, each Party shall promptly return to the other Party, or delete or destroy, all records and materials in such Party’s possession or control containing Confidential Information of the other Party that relates to the terminated Selected Target.  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.

ARTICLE 14
REPRESENTATIONS AND Warranties

14.1 Mutual Warranties.  Each Party hereby represents and warrants, as of the Effective Date, as follows:

14.1.1 Organization.  It is a company 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.

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14.1.2 Authorization.  The execution and delivery of this Agreement and the performance by such Party of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and do not violate (a) such Party’s charter documents, bylaws, or other organizational documents, (b) any agreement, instrument, or contractual obligation to which such Party is bound, (c) 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.

14.1.3 Binding Agreement.  This Agreement is a legal, valid, and binding obligation of such Party enforceable against it in accordance with its terms, 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).

14.1.4 No Inconsistent Obligation.  It is not under any obligation, contractual or otherwise, to any Person that conflicts with or is inconsistent with the terms of this Agreement, or that would impede the diligent and complete fulfilment of its obligations hereunder.

14.2 Additional Warranties by Silence.  Except as set forth in Schedule 14.2, Silence hereby represents and warrants to AZ, as of the Effective Date, as follows:  

14.2.1 it or its Affiliates are the sole owner of the Silence Background IP all of which are free and clear of any liens, charges and encumbrances, except such liens, charge and encumbrances that do not adversely affect or diminish Silence’s ability to perform its obligations or grant any license under this Agreement, and (a) neither any license granted by Silence or its Affiliates to any Third Party, nor any license granted by any Third Party to Silence or its Affiliates conflicts with the license grants and/or contemplated license grants to AZ hereunder, (b) Silence is entitled to grant all rights, options and licenses under the Silence Background IP that it purports to grant or that are otherwise

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anticipated to be granted to AZ under this Agreement, and (c)Silence Background IP does not include any intellectual property that is in-licensed from a Third Party;

14.2.2 to Silence’s Knowledge (a) the issued patents within the Silence Background Patents existing as of the Effective Date are valid and enforceable patents and (b) Silence has not received any written notice of any, nor is there any ongoing, claim or threatened claim by any Third Party (i) challenging the scope, validity or enforceability of any issued Silence Background Patents, (ii) asserting the misuse or non-infringement of any of the Silence Background IP, or (iii) challenging Silence’s Control of any of the Silence Background IP;

14.2.3 (a) it and its Affiliates have, to Silence’s Knowledge, materially complied with all applicable disclosure requirements of the applicable Governmental Authority, in connection with the prosecution and maintenance of the Silence Background Patents existing as of the Effective Date, (b) the pending applications included in Silence Background Patents are being diligently prosecuted in the respective patent offices in the Territory in which Silence has chosen to file in accordance with Applicable Law, (c) to Silence’s Knowledge, Silence has presented all relevant references, documents and information of which it and the inventors are aware to the relevant patent examiner at the relevant patent office, and (d) it has timely paid all filing and renewal fees payable with respect to any such Silence Background Patents;

14.2.4 Silence and its Affiliates have taken commercially reasonable measures consistent with industry practices to protect the secrecy, confidentiality and value of all information within the Silence Background Know-How existing as of the Effective Date that Silence purports to be confidential or trade secret information;

14.2.5 the information provided by Silence to AZ regarding the Silence Background IP is true and correct in all material respects and Silence does not have

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Knowledge of any material adverse information with respect to the Silence Background IP intended to be used in any Research Plan that has not been disclosed to AZ;

14.2.6 to Silence’s Knowledge, there is no (a) claim, demand, suit, proceeding, arbitration, inquiry, investigation or other legal action of any nature, civil, criminal, regulatory or otherwise, pending or, to the Knowledge of Silence, threatened against Silence or any of its Affiliates, or (b) judgment or settlement against or owed by Silence or any of its Affiliates; in each case of (a) and (b) in connection with the Silence Background IP or relating to the transactions contemplated by this Agreement;

14.2.7 to Silence’s Knowledge, all individuals who are current or former officers, employees, agents, advisors, consultants, contractors or other representatives of Silence or any of its Affiliates who are inventors of or have otherwise contributed in a material manner to the creation or development of any Silence Background IP have executed and delivered to Silence or the applicable Affiliate a valid and enforceable assignment;

14.2.8 to Silence’s Knowledge, no current officer, employee, agent, advisor, consultant or other representative of Silence or any of its Affiliates is in violation of any term of any assignment, license, consulting, employment or other agreement with Silence or such Affiliate regarding the protection of any of the Silence Background IP;

14.2.9 to Silence’s Knowledge, the development of Silence Background IP as contemplated under this Agreement has been conducted in compliance in all material respects with all Applicable Law; and

14.2.10 it has not employed (and, to Silence’s Knowledge,has not used a contractor or consultant that has employed) any Person debarred by the FDA (or subject to a similar sanction of foreign equivalent), or any Person that is the subject

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of an FDA debarment investigation or proceeding (or similar proceeding of foreign equivalent), in any capacity in connection with this Agreement.

14.3 Mutual Covenants.  Each Party hereby covenants and agrees, in connection with the performance of its activities under this Agreement:

14.3.1 it shall not employ, contract with, or retain any person directly or indirectly to perform any of the activities under this Agreement if such person is under investigation by the FDA for debarment or is presently debarred by the FDA pursuant to the Generic Drug Enforcement Act of 1992, as amended (21 U.S.C. § 301, et seq.);

14.3.2 all Research conducted by or on behalf of it shall be performed in accordance with Applicable Laws, and applicable established internal policies and procedures (if any), including policies and procedures pertaining to research involving laboratory animals or hazardous agents and materials, as applicable.  Each Party agrees that any animals used in the performance of studies under each Research Plan will be handled in accordance with established guidelines for the care and use of laboratory animals.  Further, each Party covenants that all Research conducted pursuant to this Agreement involving the use of animals was, or will be, reviewed and approved by its or its animal care and use committee prior to commencement of the applicable Research; and

14.3.3 in the exercise of rights and performance of its obligations under this Agreement, such Party shall comply and shall cause its and its Affiliates’ employees and contractors to comply with all Applicable Laws and, without limiting the generality of the foregoing, it shall not perform any actions that are prohibited by local or other anti-corruption laws (collectively, “Anti-Corruption Laws”) that may be applicable to such Party.  Without limiting the generality of the foregoing, neither Party shall make any payments, or offer or transfer anything of value, to any Government Official or government employee, to any political party official or candidate for political office or to

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any other Third Party, in each case, related to the transaction in a manner that would violate Anti-Corruption Laws.

14.4 Additional Covenants of Silence.  Silence hereby covenants to AZ that it will not (a) license, sell, assign or otherwise transfer Silence Background IP or Silence Research IP (or agree to do any of the foregoing) in a manner that conflicts with the rights granted to AZ hereunder, (b) incur or permit to exist, with respect to any Silence Background IP or Silence Research IP, any lien, encumbrance, charge, security interest, mortgage, liability, grant of license to Third Parties or other restriction (including in connection with any indebtedness) which conflicts with the rights granted to AZ hereunder, or (c) during the Term, enter into any material agreements or contracts that would be inconsistent with its obligations under this Agreement.

14.5 Certification of Representations and Warranties of Silence. On a Selected Target-by-Selected Target basis, [***] days after the date of Silence’s receipt of a written inquiry from AZ, which may be provided only once per applicable Option Term, Silence will provide written notice to AZ stating any exceptions to the veracity of the representations and warranties set forth in Section 14.2 as of the date of such notice of which Silence has Knowledge.

14.6 Disclaimer of Warranties.  Except for the express warranties set forth herein, neither Silence nor AZ nor any of their respective Affiliates makes any warranties, 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, 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 15INDEMNITY

15.1 Indemnification of Silence.  AZ shall indemnify, defend, and hold harmless Silence, its Affiliates, and their respective directors, officers, employees, consultants, contractors

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and agents (collectively, the “Silence Indemnitees”) from and against any and all losses, damages, liabilities, penalties, 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, “Claims”) incurred by or rendered against the Silence Indemnitees arising from or occurring as a result of:

15.1.1 the Exploitation of any Licensed Product by or on behalf of AZ or any of its Affiliates, Sublicensees, subcontractors, agents, or consultants; or

15.1.2 the breach by AZ of any warranty, representation, covenant, or agreement made by AZ in this Agreement; or

15.1.3 the negligence, recklessness or willful misconduct of any AZ Indemnitee;

provided that such indemnity shall not apply to the extent Silence has an indemnification obligation pursuant to Section 15.2 for such Losses, as to which Losses each Party shall indemnify the other to the extent of their respective liability for such Losses.

15.2 Indemnification of AZ.  Silence shall indemnify, defend, and hold harmless AZ, its Affiliates, and its and their respective directors, officers, employees, consultants, contractors and agents (collectively, the “AZ Indemnitees”), from and against any and all Losses in connection with any and all Claims incurred by or rendered against the AZ Indemnitees arising from or occurring as a result of:

15.2.1 the breach by Silence of any warranty, representation, covenant, or agreement made by Silence in this Agreement; or

15.2.2 the negligence, recklessness or willful misconduct of any Silence Indemnitee; or

15.2.3 following the grant of the license set out in Section 16.6.1, the Exploitation of any Licensed Product Covered by such license, by or on behalf of Silence or any of its Affiliates, Sublicensees, subcontractors, agents, or consultants;

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provided that such indemnity shall not apply to the extent AZ has an indemnification obligation pursuant to Section 15.1 for such Losses, as to which Losses each Party shall indemnify the other to the extent of their respective liability for such Losses.

15.3 Indemnification Procedure.  A Party that intends to claim indemnification under this ARTICLE 15 (the “Indemnitee”) shall promptly notify the indemnifying Party (the “Indemnitor”) in writing of any Claim in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have sole control of the defense or settlement of such Claim.  The Indemnitee may participate at its expense in the Indemnitor’s defense of and settlement negotiations for any Claim with counsel of the Indemnitee’s own choice.  The indemnity arrangement in this ARTICLE 15 shall not apply to amounts paid in settlement of any action with respect to a Claim if such settlement is effected without the consent of the Indemnitor, which consent shall not be unreasonably withheld, conditioned, or delayed.  The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any action with respect to a Claim shall only relieve the Indemnitor of its indemnification obligations under this ARTICLE 15 if and to the extent the Indemnitor is actually prejudiced thereby.  The Indemnitee shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action with respect to a Claim covered by this indemnification.

15.4 Special, Indirect, and Other Losses.  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 15, neither Party nor any of its Affiliates shall be liable for any loss of profits or business interruption or any indirect, incidental, special, exemplary, punitive, or consequential or other damages which are not probable and reasonably foreseeable, including, however caused and on any theory of liability, whether in contract, tort, negligence, breach of statutory duty, or otherwise in connection with or arising in any way out of the terms of this agreement or the transactions contemplated hereby or the use of the Licensed Compound or Licensed Product, even if advised of the possibility of such damage.  The foregoing limitation of liability shall not operate to limit or exclude either Party’s liability for (a) death or personal injury, (b) willful misconduct (including fraud and fraudulent misrepresentation), or (c) any other liability which, pursuant to Applicable Law, cannot be limited or excluded.

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15.5 Insurance.  Each Party shall have and maintain, at its sole cost and expense, an adequate liability insurance or self-insurance program (including product liability insurance) to protect against potential liabilities and risk arising out of activities to be performed under this Agreement and any agreement related hereto and upon such terms (including coverages, deductible limits and self-insured retentions) as are customary in the pharmaceutical industry generally for the activities to be conducted by such Party under this Agreement.  Such liability insurance or self-insurance program shall insure against all types of liability, including personal injury, physical injury or property damage arising out of such Party’s activities hereunder.  This Section 15.5 shall not create any limitation on the Parties’ liability under this Agreement.  Such insurance information shall be kept in confidence in the same manner as any other Confidential Information disclosed by the Parties hereunder.

ARTICLE 16
Term and Termination

16.1 Term.  This Agreement shall commence on the Effective Date and, unless earlier terminated as provided herein, shall remain in effect, on a Licensed Product-by-Licensed Product and country-by-country basis, until the expiration of the Royalty Term for such Licensed Product in such country (the “Term”).  Upon the expiration of the Royalty Term for a particular Licensed Product in a particular country, the licenses granted to AZ under Section 7.1 for such Licensed Product in such country shall become fully-paid, royalty-free, perpetual, and non-exclusive.

16.2 Termination by AZfor Convenience.  AZ shall have the right to terminate this Agreement in its entirety, or after the Option Exercise Effective Date with respect to any Selected Target, for any or no reason, upon [***] days’ prior written notice to Silence.  AZ shall have the right to terminate this Agreement with respect to any Selected Target prior to the Option Exercise Effective Date with respect to such Selected Target, together with the associated Research Plan, for any or no reason, upon [***] days’ prior written notice to Silence.

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16.3 Termination for Material Breach.Each Party shall have the right to terminate this Agreement with respect to any Selected Target (including all RNAi Molecules, Licensed Compounds and Licensed Product(s) directed thereto), in the event that the other Party materially breaches this Agreement with respect to such Selected Target, and such breach shall have continued for [***] days (or [***] days with respect to any payment breach) after receipt from the non-breaching Party of written notice specifying the breach and requesting its cure.  For clarity, in the event that a material breach relates to all Selected Targets then this Agreement may be terminated in its entirety.  On receipt of a notice by the alleged breaching Party pursuant to this Section 16.3, the non-breaching Party shall immediately make its Alliance Manager available for discussion at the request of the alleged breaching Party.

16.4 Termination by Silence for Patent Challenge.  Silence shall have the right to terminate this Agreement with respect to any Selected Target (including all RNAi Molecules, Licensed Compounds and Licensed Product(s) directed thereto), upon [***] day advance written notice to AZ, during which [***] day period, the Parties shall confer in good faith on the resolution of any disputed issue, in the event that AZ or any of its Affiliates or Sublicensees directly asserts in its own name, or directs a Third Party to assert, a Patent Challenge with respect to such Selected Target; provided that with respect to any such Patent Challenge, Silence will not have the right to terminate under this Section 16.4 if, within [***]  days of Silence’s notice to AZ under this Section 16.4, AZ (a) causes such Patent Challenge to be terminated or dismissed or (b) terminates the sublicense granted to such Sublicensee that has asserted, or directed a Third Party to assert, such Patent Challenge.  For purposes of this Section 16.4, “Patent Challenge” means any challenge in a legal or administrative proceeding to the patentability, validity, ownership or enforceability of any of the Silence Background Patents, Silence Research Patents or Joint Research Patents (or any claim thereof), including by: (x) filing or pursuing a declaratory judgment action in which any of the Silence Background Patents, Silence Research Patents or Joint Research Patents is alleged to be invalid or unenforceable; (y) citing prior art against any of the Silence Background Patents, Silence Research Patents or Joint Research Patents (other than art required to be cited by Applicable Law,

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including under a duty of candor to a patent office), filing a request for or pursuing a re-examination of any of the Silence Background Patents, Silence Research Patents or Joint Research Patents (other than with Silence’s written agreement), or becoming a party to or pursuing an interference; or (z) filing or pursuing any opposition, cancellation, nullity, or other like proceedings against any of the Silence Background Patents, Silence Research Patents or Joint Research Patents; but excluding (i) any challenge raised by AZ or its Affiliates as a defense against a claim, action, or proceeding asserted by Silence or its Affiliates against AZ or its Affiliates or Sublicensees; (ii) any existing challenges, whether in a court or administrative proceeding, against a Silence Background Patent, raised by a Third Party that is acquired by AZ or its Affiliates after the Effective Date, provided that AZ, and AZ procures that its Affiliates, promptly withdraws from any such existing challenge; and (iii)any legal or administrative proceeding derived from a bona fide inventorship dispute between AZ or its Affiliates and Silence or its Affiliates for any AZ Research Patent, Joint Research Patent or Silence Research Patent.

16.5 Termination for Insolvency.  In the event that a Party (a) files or resolves to file for protection under (i) bankruptcy, (ii) insolvency, (iii) reorganization (save in the case of a solvent reorganization), (iv) restructuring (save in the case of a solvent restructuring), or (v) business rescue laws applicable to that Party in any jurisdiction; (b) makes an assignment for the benefit of creditors; (c) appoints or suffers appointment of a receiver, administrative receiver, bailiff or trustee or analogous appointment over substantially all of its property; (d) proposes or implements a scheme of arrangement, company voluntary arrangement or other agreement of composition, compromise or extension of its debts (other than in circumstances where such scheme, arrangement or agreement would have no adverse impact on the rights of any other Party to this Agreement); (e) proposes or is a party to any dissolution or liquidation or ceases continuation of substantially all of its business; (f) is subject to any filing of an application or a petition under any (i) bankruptcy, (ii) insolvency, (iii) reorganization (save in the case of a solvent reorganization), (iv) restructuring (save in the case of a solvent restructuring), or (v) business rescue laws or has any such application or petition filed against it that, in any such case, is not discharged, in the case of an application or petition filed in the UK,

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within [***] days of the filing thereof or, in the case of an application or petition filed in any other jurisdiction, within [***] days of the filing thereof; or (g) admits in writing its inability generally to meet its obligations as they fall due in the general course (providing always that a request for fulfilment of a specific obligation to be postponed for a specified time shall not amount to an admission that the Party is generally unable to meet its obligations as they fall due), then the other Party may terminate this Agreement in its entirety effective immediately upon written notice to such Party.

16.6 Effects of Termination.

16.6.1 License Grant to Silence.If (i) this Agreement is terminated with respect to a particular Selected Target (and, in the event that this Agreement is terminated in its entirety, to all Selected Targets), (ii) any Selected Target becomes an Expired Target pursuant to Section 6.4; or (iii) AZ replaces any Selected Target with a Substitute Target, then, in each case of (i)-(iii), in respect of the replaced Selected Target (any such Selected Target being a “Returned Target”), unless such Returned Target [***], then as of the date that any Selected Target first becomes a Returned Target, AZ hereby:

(a) grants to Silence (without any further action required on the part of AZ) an exclusive, royalty-free and fully paid-up, irrevocable and perpetual license, with the right to grant sublicenses, under any [***] for such Returned Target and necessary to Exploit RNAi Molecules, Licensed Compounds and Licensed Products directed to such Returned Target in the Field in the Territory, for the sole purpose of Exploiting the RNAi Molecules, Licensed Compounds and Licensed Products Developed pursuant to this Agreement, and any Licensed Compounds and/or Licensed Products Exploited by AZ pursuant to this Agreement, which in each case are directed to such Returned Target in the Field in the Territory; and

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(b) agrees, upon Silence’s written request, to enter into good faith negotiations for a commercially reasonable agreement pursuant to which Silence will obtain a license under [***](i) [***] that is reasonably necessary for Silence to Exploit a Licensed Product containing a RNAi Molecule targeting such Returned Target and (ii) that [***] the Research, Development and/or Commercialization of a Licensed Product relating to such Returned Target.

(c) For clarity, the license set out in this Section 16.6.1 shall survive any expiration or termination of this Agreement.  Notwithstanding anything to the contrary set forth herein, (i) AZ shall not be obligated to grant any licenses pursuant to this Section 16.6.1 for any Returned Targets [***], and (ii) any licenses granted under this Section 16.6.1 shall be [***].

16.6.2 License Termination.  Upon any termination of this Agreement with respect to a Selected Target, all rights and licenses granted with respect to such Selected Target under Section 7.1 shall terminate and be of no further force or effect; provided, however, that upon any termination of this Agreement in its entirety or with respect to a Selected Target for any reason, Silence shall negotiate in good faith agreements or other arrangements with all sub-licensees that (i) have been granted sublicenses by AZ of the rights granted to AZ under Section 7.1 pursuant to this Agreement, (ii) are not in material breach of the terms of such sublicense and (iii) had such sublicensee been party to this Agreement, would not be in material breach of any of the terms of this Agreement, under which such sublicensee(s) will obtain equivalent licenses directly from Silence. Further, if this Agreement is terminated (x) by AZ pursuant to Section 16.2, (y) by Silence pursuant to Section 16.3 for a material breach by AZ, or (z) by Silence pursuant to Section 16.4, Silence shall not have any obligation to negotiate or execute a substitute license with an existing AZ sub-licensee, but any negotiations undertaken by Silence shall be conducted in good faith with the intention of agreeing upon commercially

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reasonable terms and conditions. In any event, Silence shall not be required to negotiate a substitute license agreement if the sub-licensee is in material breach under the respective sublicense Agreement or if the sub-licensee caused a material breach of AZ under this Agreement.

16.6.3 Development Wind-Down or Transition.

(a) Clinical Studies.

(i) AZ shall, in its discretion and on written notice to Silence, either (i) wind down all Clinical Studies that were Initiated by or on behalf of it prior to the termination of this Agreement (whether terminated in its entirety or with respect to a Selected Target) (“Ongoing Clinical Studies”), or (ii) be responsible for completing (in accordance with the established protocols) all Ongoing Clinical Studies; provided, that if AZ has elected to continue Ongoing Clinical Studies, the Parties may agree in writing to transition such Ongoing Clinical Studies to Silence.

(ii) AZ shall not commence any Clinical Studies with respect to any Licensed Product directed to a terminated Selected Target at any time after it has given or received a notice of termination pursuant to this ARTICLE 16 in respect of such Selected Target.

(b) Cooperation.

(i) In the event AZ elects not to wind down Ongoing Clinical Studies, and the Parties agree that Silence will assume responsibility for such Ongoing Clinical Studies, AZ shall provide reasonable cooperation to Silence and its designee(s) to facilitate, and the Parties shall use reasonable efforts to effect, a reasonable, orderly, and prompt transition of the Ongoing Clinical Studies and other Development activities relating to any terminated Selected Target and

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corresponding terminated Licensed Products to Silence and/or its designee(s) following delivery of notice of termination so that Silence is able to assume responsibility for same as of the effective date of termination.  Where the same cannot be fully achieved prior to the effective date of termination, AZ shall continue to provide such reasonable cooperation to Silence and its designee(s) until such transition has been completed.  Without limiting the generality of the foregoing, AZ shall provide reasonable consultation and assistance for a period of no more than [***] days after termination for the purpose of transferring or transitioning to Silence AZ Background Know-How and AZ Research Know-How not already in Silence’s possession in each case, to the extent reasonably necessary for Silence to continue the Ongoing Clinical Studies of the Licensed Products in the Territory.

(ii) In the event this Agreement is terminated [***], AZ shall bear all costs and expenses of the disposition of Ongoing Clinical Studies as set forth in this Section 16.6.3.

(iii) In the event this Agreement is terminated [***], Silence shall bear all costs and expenses of the disposition of Ongoing Clinical Studies as set forth in this Section 16.6.3.

(iv) In the event that this Agreement is terminated for any reason, subject to the Parties agreeing pursuant to Section 16.6.3(b)(i) that Silence will assume responsibility for such Ongoing Clinical Studies, at the request of Silence, as soon as reasonably practicable thereafter the Parties shall enter into a Transitional Assistance Agreement which shall be agreed in good faith, setting out in further detail, the terms on which the assistance set out in Section 16.6.3(b)(i) shall be provided.  The aim of such agreement shall be to ensure

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that Silence is able to assume responsibility for any Ongoing Clinical Studies and any other Development activities relating to any terminated Selected Target and/or terminated Licensed Product as promptly and efficiently as possible, to ensure that all necessary Regulatory Approvals are maintained and filed for in good time and that Silence has access to all documents, records, information, and correspondence reasonably required in connection therewith.

16.6.4 Commercial Wind-Down.

(a) AZ, its Affiliates and Sublicensees shall be entitled to continue to sell (but not to actively promote after the effective date of termination) any existing inventory of Licensed Products directed to a Selected Target in respect of which this Agreement has been terminated, and for which Regulatory Approval therefor has been obtained, in accordance with the terms and conditions of this Agreement, for a period of [***] months after the effective date of such termination.

(b) In the event this Agreement is terminated [***], Silence shall have the right, at its discretion, to purchase from AZ any or all of the inventory of Licensed Products and Licensed Compounds held by or on behalf of AZ at the date of termination at a price equal to [***]; provided that [***]. Silence shall notify AZ [***] days of the effective date of termination whether Silence elects to exercise such right.

16.6.5 Contract Transfer.  At Silence’s request, AZ shall use Commercially Reasonable Efforts to assign to Silence or its designee all then-existing commercial agreements relating to Licensed Products directed to terminated

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Selected Targets to the extent reasonably necessary for Silence to continue the Development and/or Commercialization of such Licensed Products in the Territory.

16.6.6 Rights in Respect of Terminated Selected Targets.  Subject to Sections 16.6.3 and 16.6.4, if this Agreement is terminated with respect to a particular Selected Target (and, in the event that this Agreement is terminated in its entirety, to all Selected Targets), unless such Selected Target [***], AZ will deliver to Silence all its right, title and interest in and to all RNAi Molecules, Licensed Compounds and Licensed Products Developed pursuant to this Agreement and which are directed to such terminated Selected Target, and Silence will be free to Exploit such terminated Selected Target, together with such RNAi Molecules, Licensed Compounds and Licensed Products directed to such terminated Selected Target as Silence, in its sole discretion, deems appropriate; provided that [***] such RNAi Molecules, Licensed Compounds and Licensed Products in respect of the terminated Selected Target [***].

16.6.7 Exclusivity.  Upon any termination of this Agreement with respect to a Selected Target, each Party’s obligations under ARTICLE 5 with respect to such Selected Target shall terminate.

16.6.8 Patent Prosecution.  Upon any termination of this Agreement with respect to a Selected Target, AZ’s rights in respect of the prosecution and enforcement of any Silence Background Patents, Silence Research Patents, and Product Specific Patents which relate to such Selected Target (and no continuing Selected Target) shall terminate.  If AZ has assumed the prosecution of any Patents pursuant to Section 12.3.3, and such Patent does not relate to any Selected Target to which AZ has any continuing rights, then AZ shall ensure that the prosecution of such Patents is transferred to Silence in a prompt and orderly fashion such that no deadline is missed in respect of such prosecution and/or enforcement and that the scope of such Patents is not limited or restricted as a consequence of such transfer.

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16.6.9 Confidential Information.  Upon any termination of this Agreement with respect to a Selected Target, each Party shall return or cause to be returned to the other Party all Confidential Information of the other Party relating to such Selected Target as provided in Section 13.6.  Upon any termination of this Agreement in its entirety, each Party shall return or cause to be returned to the other Party all Confidential Information of the other Party as provided in Section 13.6.

16.6.10 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.

16.6.11 Payments.  If AZ terminates this Agreement in its entirety pursuant to Section 16.2 prior to making the payment set forth in Section 10.1.2, AZ shall pay such amount within [***] days after receipt of an invoice in respect thereof, which invoice may be delivered by Silence on the effective date of such termination.

16.6.12 Accrued Rights; Surviving Obligations.  Termination or expiration of this Agreement 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, the following Articles and Sections shall survive any such termination or expiration: Articles 1 and 15 and Sections 2.7.1, 4.3.7, 11.4, 11.5., 11.6, 11.7, 12.2.5, 13.1, 13.2, 13.3, 13.4, 13.6, 14,6, 16.6, 17.5, 17.6, 17.7, 17.8, 17.9, 17.10, 17.11, 17.2, 17.13, 17.14 and 17.18.

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ARTICLE 17Miscellaneous

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 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 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.  Neither Party shall 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.

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17.3 Silence Change of Control.  Silence (or its successor) shall provide AZ with written notice of any Silence Change of Control within [***] Business Days following the earlier of the first public announcement of the execution of any agreement with respect to such transaction and the closing date of such transaction (the “Silence COC Notification Date”).  In the event of a Silence Change of Control:

17.3.1 The intellectual property of the Silence Acquiror held or developed by such Silence Acquiror prior to or after such acquisition shall be excluded from the Silence Background Patents and Silence Background Know-How, and such Silence Acquiror (and Affiliates of such Silence Acquiror which are not controlled by (as defined under the Affiliate definition in Section 1.2) Silence itself) shall be excluded from the Affiliate definition solely for purposes of the applicable components of the Silence Background Patents and Silence Background Know-How and for the purposes of ARTICLE 5.

17.3.2 If the Silence Acquiror has or initiates any Competitive Program:

(a) Silence (or its successor) will, immediately following the Silence Change of Control or initiation of the Competitive Program, as applicable, establish and implement appropriate firewall procedures to segregate all activities (and the personnel conducting such activities) in such Competitive Program from the activities performed by or on behalf of Silence pursuant to this Agreement, including ensuring that personnel directly involved in working in such Competitive Program shall not have access to any Confidential Information of either Party with respect to activities under this Agreement;

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(b) Silence (or its successor) shall provide AZ with a reasonably detailed written description of the applicable firewall procedures reasonably in advance to the consummation of such Silence Change of Control and AZ shall have the opportunity to comment on such firewall procedures, which comments Silence shall consider in good faith for incorporation into such procedures; and

(c) following the Silence Change of Control, [***] shall have the right to [***] otherwise required to [***] or [***] compliance with its obligations hereunder and [***] shall have the right to [***] or [***].

17.3.3 At AZ’s sole discretion and upon prior written notice to Silence (“Change of Control Election Notice”), the following amendments and further provisions shall apply to this Agreement notwithstanding anything herein to the contrary:

(a) [***] shall be amended such that [***] shall be [***]. By way of example only, if [***] then the [***].  If [***] then [***].

(b) For clarity, (i) AZ shall [***] pursuant to [***] and [***] in accordance with the provisions of [***]; and (ii) Silence shall [***] pursuant to (and subject to the limits in) [***].

(c) [***] shall [***];

(d) The provisions of [***] shall [***] for [***] days after the Silence COC Notification Date; and

(e) In respect of any [***] within [***] days of the Silence COC Notification Date, whether such [***] or not shall be [***] of such Silence Change of Control.

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17.4 Assignment.  Except as expressly provided hereunder, neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise transferred by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld, conditioned, or delayed); provided, however, that either Party may assign or otherwise transfer this Agreement and its rights and obligations hereunder without the other Party’s consent:

17.4.1 in connection with the transfer or sale of all or substantially all of the business or assets of such Party relating to this Agreement to a Third Party, whether by merger, consolidation, divesture, restructure, sale of stock, sale of assets, or otherwise; provided that in the event of any such transaction (whether this Agreement is actually assigned or is assumed by the acquiring Party by operation of law (e.g., in the context of a reverse triangular merger)), (a) the Know-How, Patents, and other intellectual property rights of the acquiring party to such transaction (if other than one of the Parties to this Agreement) shall not be included in the technology for which rights have been granted under this Agreement, and (b) written notice is provided to the other Party; or

17.4.2 to an Affiliate.

The rights and obligations of the Parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties, and the name of a Party appearing herein will be deemed to include the name of such Party’s successors and permitted assigns to the extent necessary to carry out the intent of this Section 17.4.  Any assignment not in accordance with this Section 17.4 shall be null and void.

17.5 Severability.  If, for any reason, any part of this Agreement is adjudicated invalid, unenforceable, or illegal by a court of competent jurisdiction, such adjudication shall not, to the extent feasible, affect or impair, in whole or in part, the validity, enforceability, or legality of any remaining portions of this Agreement.  All remaining portions shall remain in full force and effect as if the original Agreement had been executed without the invalidated, unenforceable, or illegal part.  In such event, the Parties shall negotiate

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promptly to replace such invalid, unenforceable, or illegal part with a valid, enforceable, and legal provision which most closely effectuates the Parties’ original intent.

17.6 Governing Law.  This Agreement or the performance, breach, or termination hereof shall be interpreted, governed by, and construed in accordance with the laws of [***] 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; provided, that all questions concerning (a) inventorship of Patents under this Agreement shall be determined in accordance with Section 12.2.1 and (b) the construction or effect of Patents shall be determined in accordance with the laws of the country or other jurisdiction in which the particular Patent has been filed or granted, as the case may be.  The parties agree to exclude the application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods.

17.7 Dispute Resolution.  Except for disputes resolved by the procedures set forth in Sections 2.7.2 and 11.6, if a dispute arises between the Parties in connection with or relating to this Agreement or any document or instrument delivered in connection herewith (a “Dispute”), it shall be resolved pursuant to this Section 17.7.  Any Dispute shall first 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 (or such other period of time as mutually agreed by the Senior Officers) after such issue was first referred to them, then, if a Party wishes to pursue further resolution of such Dispute, such Dispute shall be subject to exclusive jurisdiction of the courts of [***].

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17.8 Interim Relief.  Notwithstanding anything herein to the contrary, nothing in Section 17.7 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.

17.9 Notices.  Any notice or other communication required under this Agreement shall be in writing, shall refer specifically to this Agreement, and shall be deemed given only if (a) delivered by hand or (b) sent by internationally recognized overnight delivery service addressed to the Parties at their respective addresses specified below or to such other address as a Party may specify in accordance with this Section 17.9.  Such notice shall be deemed to have been given as of the date delivered by hand or on the second (2^nd) Business Day (at the place of delivery) after deposit with an internationally recognized overnight delivery service.  This Section 17.9 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.

If to AZ, to:

AstraZeneca AB

Pepparedsleden 1,

SE-431 83 Mölndal, Sweden

Attention: Legal Department

[***]

With a copy (which shall not constitute notice) to:

AstraZeneca Pharmaceuticals LP

1800 Concord Pike

Wilmington, Delaware

19803

USA

Attention:  Head of Business Development
for BioPharmaceuticals R&D

[***]

If to Silence, to:

Silence Therapeutics Plc

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72 Hammersmith Road

London W14 8TH

United Kingdom

Attention: John Strafford, VP, Head of Business Development

[***]

17.10 Entire Agreement; Amendments.  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 Agreement between the Parties dated [***]; provided that all “Confidential Information” disclosed or received under such Confidential Disclosure Agreement shall be deemed “Confidential Information” under this Agreement and subject to the terms and conditions of this Agreement).  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.

17.11 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.

17.12 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 the Party waiving such term or condition.  The waiver by either Party of any right or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right 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

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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.  Except as provided in ARTICLE 15, 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 Rights in Bankruptcy.All rights and licenses granted under or pursuant to this Agreement by AZ or Silence 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 (a) 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

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Confidential

(b) if not delivered under subsection (a) 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.  The Parties acknowledge and agree that payments made under Sections 10.2 or 10.3 or pursuant to any supply agreement entered into in connection with this Agreement shall not (a) constitute royalties within the meaning of Section 365(n) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction or (b) relate to licenses of intellectual property hereunder.

17.16 Relationship of the Parties.  Silence and AZ are independent contractors and the relationship between the Parties shall not constitute a partnership, joint venture, or agency, including for tax purposes.  Neither Party 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 Party, without the prior written consent of such other Party.  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.

17.17 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 (1) 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.

17.18 AZ Affiliates

Silence acknowledges that AZ is an Affiliate of all Persons whose ultimate parent is AstraZeneca plc.  In recognition of the foregoing and without prejudice to the provisions of any Section in this Agreement that explicitly refers to AZ’s Affiliates, the Parties agree that any Affiliates of AZ may exercise any of the rights granted to AZ in this Agreement

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Confidential

or perform any of AZ’s obligations in this Agreement provided that AZ shall be responsible for the performance of any of its obligations that are performed by its Affiliates.

{SIGNATURE PAGE FOLLOWS}

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Confidential

THIS RESEARCH COLLABORATION, OPTION AND LICENSE AGREEMENT IS EXECUTED by the authorized representatives of the Parties as of the Effective Date.

SILENCE THERAPEUTICS PLC
By:	/s/ Iain Ross
Name:	Iain Ross
Title:	Executive Chairman

ASTRAZENECA AB (publ)
By:	/s/Regina Fritsche Danielson
Name:	Regina Fritsche Danielson
Title:	SVP, Early CVRM

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EX-10

Exhibit 10.7

INDEMNITY DEED - DIRECTORS

SILENCE THERAPEUTICS PLC

[Name of Director]

[Address]

____ August 2020

Dear [Name of Director],

Silence Therapeutics plc (the “Company”) and your role as a director and/or officer of the Company

As you are aware the articles of association of the Company (the “Articles”), at Article 155, contemplate that the Company will indemnify the Company’s directors in relation to specific liabilities incurred by them in the performance of their duties. We are taking this opportunity to afford you the direct benefit of this indemnity in the form of a deed for your benefit (this “Deed”). The arrangements contemplated by this Deed are within the scope of permitted directors’ indemnities under the Companies Act 2006 (the “Act”).

1. Interpretation

1.1 In this Deed:

1.1.1 any defined terms (to the extent undefined herein) shall have the meanings given to them in the Articles;

1.1.2 any reference to a statute or statutory provision is a reference to it as amended, extended or re-enacted from time to time;

1.1.3 unless the context otherwise requires, reference to paragraphs are to paragraphs of this Deed;

1.1.4 any words following the terms including, include, in particular, for example or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms; and

1.1.5 other and otherwise are illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding them.

2. Indemnity

2.1 Subject to paragraph 2.2, without prejudice to any indemnity to which you may otherwise be entitled pursuant to Article 155 of the Articles or otherwise and subject to the terms of this Deed, you shall be indemnified and held harmless by the Company to the fullest extent permitted by law against all costs, charges, expenses, losses and liabilities (“Liabilities”) arising out of or in connection with any civil, criminal, regulatory or other proceeding connected with any application under section 144(3) or (4) or section 727 of the Act whether instigated, imposed or incurred under the laws of England and Wales or the laws of any other jurisdiction (“Proceedings”) which relate to any act done or omitted or alleged to be done or omitted by

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you whilst in the course of acting or purporting to act as a director or officer (or equivalent position under the laws of any relevant jurisdiction) of the Company and/or any associated company of the Company (as defined in section 256(b) of the Act for these purposes) (an “AssociatedCompany”) or which arises by virtue of you holding or having held such a position (“Claim”).

2.2 The indemnity in paragraph 2.1 shall not apply to:

2.2.1 the extent prohibited by the Act or otherwise prohibited by law;

2.2.2 any Liability incurred by you:

2.2.2.1 in defending any criminal Proceedings in which you are convicted;

2.2.2.2 in defending any civil Proceedings brought by the Company or any Associated Company in which judgement is given against you; and

2.2.2.3 in connection with any application under section 661(3) or (4) or section 1157 of the Act (a “Relevant Application”) in which the court refuses to grant you relief on the application,

where, in any such case, any such conviction, judgement or refusal of relief has become final (reference in this paragraph 2.2.2 to a conviction, judgement or refusal of relief being “final” shall be construed in accordance with section 234(4) and (5) of the Act);

2.2.3 any Liability incurred by you to the Company or any Associated Company;

2.2.4 any fine imposed in any criminal Proceedings;

2.2.5 any sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (howsoever arising);

2.2.6 any Liability relating to any taxation or national insurance payable by you in connection with your remuneration or other benefits received from the Company or any Associated Company;

2.2.7 the extent you are entitled to recover from any other person (including under any policy of insurance) any amount in relation to a Claim; or

2.2.8 any Liability incurred by, or Claim made against, you which the board of directors of the Company (the “Board”) reasonably determines arises out of your fraud, wilful deceit, wilful misconduct, reckless conduct, dishonesty or act of bad faith (“Misconduct”), save that if a court, tribunal or regulatory authority thereafter finally determines that the relevant Liability or Claim did not arise as a result of your Misconduct, you may, by notice to the Company, request payment of such amount from the Company as the Company would have been liable to pay under this Deed had the Board not made such a determination and the Company shall make a payment to you upon satisfaction of the obligation in paragraph 2.5.

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2.3 Without prejudice and in addition to any indemnity to which you may otherwise be entitled pursuant to Article 155 of the Articles or otherwise and subject to the terms of this Deed, you shall be indemnified and held harmless by the Company to the fullest extent permitted by law against all Liabilities incurred by you and Claims in connection with the Company’s activities as a trustee of an occupational pension scheme (as defined by section 235(6) of the Act) established under a trust provided that no such indemnity shall extend to any Liability arising out of your fraud or dishonesty or the obtaining by you of any personal profit or advantage to which you were not entitled and you shall not be entitled to be indemnified for:

2.3.1 any fine imposed in any criminal Proceedings;

2.3.2 any sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (howsoever arising); and

2.3.3 any Liability incurred by you in defending any criminal Proceedings in which you are convicted where such conviction has become final (reference in this paragraph 2.3.3 to a conviction becoming “final” shall be construed in accordance with section 235(4) and (5) of the Act).

2.4 References in paragraphs 2.1 and 2.3 to acts or omissions are to acts or omissions made or omitted to be made before, on or after the date of this Deed, however:

2.4.1 if a company ceases to be an Associated Company after the date of this Deed, the Company shall only be liable to indemnify you in respect of Liabilities arising from acts done or omitted or alleged to be done or omitted in relation to that company before the date on which the company ceased to be an Associated Company; and

2.4.2 you, as director or officer (or equivalent position under the laws of any relevant jurisdiction) of any company which becomes an Associated Company after the date of this Deed, shall be indemnified only in respect of Liabilities arising from acts done or omitted or alleged to be done or omitted after the date on which that company becomes an Associated Company.

2.5 The Company’s obligation to make any payment to you under paragraphs 2.1 and/or 2.3 is conditional upon you having made an application in writing to the Company supported by such documentation and evidence which, in the reasonable opinion of the Board, is satisfactory to prove that:

2.5.1 the Liability suffered or incurred by you and of the date(s) on which it was suffered or incurred and that it falls within the scope of the indemnities given in paragraphs 2.1 and/or 2.3; and

2.5.2 any costs and expenses of any third party (including legal costs) which are to be reimbursed by the Company in accordance with paragraphs 2.1 and/or 2.3 were properly incurred and reasonable in amount,

and where the Company is satisfied that these conditions have been fulfilled, the Company shall make payment to you within 20 Business Days (being a day that is not a Saturday or Sunday or a public holiday in England) of receipt of such application.

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3. Defence Costs

3.1 Subject to the Act and the provisions of this Deed, the Company will advance to you (subject to repayment in accordance with paragraph 3.3) such amounts as are required to meet the legal and other reasonable costs, charges and expenses incurred or to be incurred by you:

3.1.1 in defending any criminal or civil Proceedings in connection with any alleged negligence, default, breach of duty or breach of trust by you in relation to the Company or an Associated Company; or

3.1.2 in connection with any Relevant Application.

3.2 The Company shall advance any such amount as provided for in paragraph 3.1 (“Advance Amounts”) to you within fourteen days of receiving a notice in writing from you of the amount required, together with such evidence of the costs as the Company may reasonably require.  No interest shall accrue on the Advance Amounts.

3.3 All Advance Amounts outstanding to you in respect of particular Proceedings shall be repaid by you if:

(a) in respect of criminal Proceedings, you are convicted;

(b) in respect of civil Proceedings, judgement is given against you; or

(c) in respect of any Relevant Application, the court refuses to grant you relief on the application,

and such outstanding Advance Amounts shall be repaid no later than the date when the conviction, judgement or refusal of relief becomes final (reference in this paragraph 3.3 to a conviction, judgement or refusal of relief being “final” shall be construed in accordance with section 205(3) and (4) of the Act).

3.4 The Company shall not be required to advance any amount under paragraph 3.1, and any amounts advanced shall become immediately repayable upon demand from the Company, to the extent that the Board reasonably determines that the relevant Proceedings arose out of your Misconduct.

3.5 In the event that the relevant Proceedings are either (i) abandoned, withdrawn or discontinued, (ii) settled, (iii) a permanent stay is granted, or (iv) a final determination of the court is made (or Proceedings otherwise finally conclude) without any of the events referred to in paragraph 3.3 (as applicable) occurring (each such conclusion of Proceedings being referred to hereafter as a “Favourable Conclusion”) then the indemnity provided under paragraph 2.1 shall thereafter apply with respect to all legal and other reasonable costs, charges and expenses of those Proceedings as were incurred by you.  Any liability of the Company to so indemnify you shall be set-off against any liability of you to repay to the Company any Advance Amounts outstanding in respect of those Proceedings and shall be subject to the exclusions and limitations contained in paragraph 2.2, and paragraph 5 shall be applied (with such changes as are appropriate).

3.6 In the event that a Favourable Conclusion is reached in relation to particular Proceedings but any Advance Amount advanced to you in relation to those Proceedings remains outstanding in

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circumstances where the Company is (for any reason) not liable or is no longer liable to indemnify you in relation to those Proceedings, then all such Advance Amounts which remain outstanding shall be repayable upon demand from the Company.

4. Directors’ and Officers’ Liability Insurance

The Company shall use all reasonable endeavours to provide and maintain appropriate directors’ and officers’ liability insurance (including ensuring that premiums are properly paid) for your benefit for so long as any Claims may lawfully be brought against you.

5. Notification and Conduct

5.1 If you receive any demand relating to a Claim or become aware of any circumstances which might or may be reasonably expected to give rise to the Company being required to indemnify you pursuant to this Deed and before incurring any costs, charges or expenses in respect of any Claim (including securing legal representation), you shall:

5.1.1 as soon as reasonably practicable, give written notice of the circumstances to the Company, as well as any other information which the Company may reasonably request from time to time;

5.1.2 take all reasonable actions to mitigate any Liability you suffer in respect of the circumstances giving rise to the Claim (including any action that the Company may reasonably request to avoid, dispute, resist, appeal or defend any Claim and shall not make any admission of liability, agreement or compromise with any person in relation to any Claim without the prior written consent of the Company);

5.1.3 forward all documents you receive in respect of such Claim to the Company as soon as reasonably practical following receipt;

5.1.4 assist the Company as it may reasonably require in resisting, defending or settling the Claim; and

5.1.5 provide to the Company all such information in relation to any Claim or Liabilities as the Company may reasonably request, and take all such action as the Company may reasonably request.

5.2 Notwithstanding the provisions of paragraph 5.1, you shall not be required to provide any document or information to the Company where doing so would result in a loss of privilege in that document or information.

5.3 The Company or an Associated Company (as the case may be) will be entitled to take over, negotiate and conduct in your name the defence to or settlement of any Claim or to prosecute in your name for its own behalf any proceedings relating to a Claim.

5.4 If the Company or an Associated Company exercises its right pursuant to paragraph 5.3, the Company or relevant Associated Company shall:

5.4.1 consult with you in relation to the conduct of the Claim or Proceedings on aspects of the Claim or Proceedings materially relevant to you and keep you reasonably informed

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of material developments in the Claim or Proceedings, provided that the Company or Associated Company shall be under no obligation to provide any information the provision of which is reasonably likely to adversely affect the ability of the Company or an Associated Company to claim in respect of the relevant loss under any applicable policy of insurance;

5.4.2 take into account your reasonable requests relating to the Claim or Proceedings (including any settlement) on issues which may be reasonably likely to result in material damage to your reputation; and

5.4.3 have full discretion in the conduct or settlement of the Claim or Proceedings relating to such Claim provided you are not required to make any contribution to the settlement and the settlement contains no admission of liability by you.

5.5 The Company’s obligations owed to you under this Deed (including the obligation to indemnify you in paragraphs 2.1 and 2.3) are conditional upon your compliance with the provisions of this paragraph 5.

6. Miscellaneous

6.1 Effect of Ceasing to be a Director or Officer of the Company or any Associated Company

In the event that you cease to be a director or officer (or equivalent position under the laws of any relevant jurisdiction) of the Company or any Associated Company, this Deed shall remain in force and you will continue to be indemnified in accordance with the terms and conditions of this Deed, until such time as any relevant limitation periods for bringing Claims against you have expired, or for so long as you remain liable for any Liabilities, notwithstanding that you may have ceased to be a director or officer (or equivalent position under the laws of any relevant jurisdiction) of the Company or any Associated Company.

6.2 Payments

The Company shall, in the event that a payment is made to you under this Deed in respect of a particular Liability, be entitled to recover from you an amount equal to any payment received by you under any policy of insurance or from any other third party source to the extent that such payment relates to the Liability, or if the payment received by you is greater than the payment made under this Deed, a sum equal to the payment made under this Deed. You shall pay over such sum promptly on the Company’s request.

6.3 Taxation

The Company shall pay such amount to you as shall after the payment of any tax thereon leave you with sufficient funds to meet any Liability to which this Deed applies.  For the avoidance of doubt, when calculating the amount of any such tax the amount of any tax deductions, credits or reliefs which are or may be available to you in respect of the relevant payment under this Deed received by you or any payment made by you to a third party in respect of the relevant Liability will be taken into account.  In the event that any amount is paid to you under this Deed but a tax deduction, credit or relief is or becomes available to you in respect of the relevant payment or any payment made by you to a third party in respect of the relevant Liability which was not taken into account in calculating the amount payable in respect of the relevant payment

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under this Deed, you shall make a payment to the Company of such an amount as is equal to the benefit of such deduction, credit or relief which was not taken into account.

6.4 No Double Recovery

You shall not be entitled to recover any Liability more than once and in the event that the Company makes payment under this Deed, the Company shall be subrogated to the extent of such payment to all of your rights of recovery against third parties (including any claim under any applicable directors’ and officer’s insurance policy) in respect of the payment and you shall do everything that may be necessary to secure any such rights including:

6.4.1 the execution of any documents necessary to enable the Company effectively to bring an action in your name; and

6.4.2 the provision of assistance as a witness.

6.5 Assignment

The Company may at any time assign, mortgage, charge, subcontract, delegate, declare a trust over or deal in any other manner with any or all of its rights under this Deed, provided that it gives notice of such dealing to you. You shall not assign, transfer, mortgage, charge, subcontract, declare a trust over or deal in any other manner with any of your rights and obligations under this Deed.

6.6 Entire Agreement

This Deed constitutes the entire agreement between the parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.

6.7 Severance

If any provision or part-provision of this Deed is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this paragraph 6.7 shall not affect the validity and enforceability of the rest of this Deed. If one party gives notice to the other of the possibility that any provision or part-provision of this Deed is invalid, illegal or unenforceable, the parties shall negotiate in good faith to amend such provision so that, as amended, it is legal, valid and enforceable, and, to the greatest extent possible, achieves the intended commercial result of the original provision.

6.8 Notices and Demands

6.8.1 Any notice or demand given to a party under or in connection with this Deed:

6.8.1.1 shall be in writing and in English;

6.8.1.2 shall be signed by or on behalf of the party giving it;

6.8.1.3 shall be sent by a method listed in paragraph 6.8.2; and

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6.8.1.4 is deemed received as set out in paragraph 6.8.2if prepared and sent in accordance with this paragraph.

6.8.2 This paragraph 6.8.2 sets out the delivery methods for sending a notice to a party under this Deed and, for each delivery method, the date and time when the notice is deemed to have been received (provided that all other requirements of this paragraph have been satisfied and subject to the provisions in paragraph 6.8.3):

(a) if delivered by hand, on signature of a delivery receipt or at the time the notice is left at the address;

(b) if sent by pre-paid first class post or other next working day delivery service, at the time recorded by the delivery service; or

(c) if sent by pre-paid airmail, at the time recorded by the delivery service.

6.8.3 If deemed receipt under paragraph 6.8.2 would occur outside business hours in the place of receipt, it shall be deferred until business hours resume. In this paragraph, business hours means 9.00 a.m. to 5.00 p.m. Monday to Friday on a day that is not a public holiday in the place of receipt.

6.8.4 This paragraph 6.8 does not apply to the service of any proceedings or other documents in any legal action or, where applicable, any arbitration or other method of dispute resolution.

6.9 Variation

6.9.1 No variation of this Deed shall be effective unless it is in writing and signed by the parties (or their authorised representatives).

6.9.2 No failure or delay by a party to exercise any right or remedy provided under this Deed or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy.

6.10 Counterparts

6.10.1 This Deed may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all the counterparts shall together constitute the one deed.

6.10.2 Transmission of an executed counterpart of this Deed (but for the avoidance of doubt not just a signature page) by email (in PDF, JPEG or other agreed format), shall take effect as delivery of an executed counterpart of this Deed.

6.10.3 No counterpart shall be effective until each party has executed and delivered at least one counterpart.

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6.11 Third Party Rights

Unless this Deed expressly states otherwise, this Deed does not confer any rights on any person or party (other than the parties to this Deed and any Associated Company) pursuant to the Contracts (Rights of Third Parties) Act 1999.

6.12 Governing Law and Jurisdiction

6.12.1 This Deed and any dispute or claim arising out of or in connection with its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.

6.12.2 You and the Company irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Deed or its subject matter or formation (including non-contractual disputes or claims).

[Deliberately left blank, signature page to follow.]

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IN WITNESS WHEREOF, this Deed has been executed as a deed by the Company and you on the day and year first above written.

EXECUTED as a DEED by SILENCE
THERAPEUTICS PLC acting by [Name ofDirector], a director and [Name of Director], a director	Director
	Director
EXECUTED as a DEED and delivered by [Name of Director]
In the presence of:
Witness signature:
Name:
Address:
Occupation:

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EX-10

Exhibit 10.8

INDEMNITY DEED – OFFICERS

SILENCE THERAPEUTICS PLC

[Name of Officer]
[Address]

____ August 2020

Dear [Name of Officer],

Silence Therapeutics plc (the “Company”) and your role as an officer of the Company

You are [describe nature of the office] at the Company.  The Company has agreed to indemnify you on the terms and conditions set out in this deed of indemnity (this “Deed”).

1. Interpretation

1.1 In this Deed:

1.1.1 any defined terms (to the extent undefined herein) shall have the meanings given to them in the articles of association (“the Articles”) of the Company;

1.1.2 any reference to a statute or statutory provision is a reference to it as amended, extended or re-enacted from time to time;

1.1.3 unless the context otherwise requires, reference to paragraphs are to paragraphs of this Deed;

1.1.4 any words following the terms including, include, in particular, for example or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms; and

1.1.5 other and otherwise are illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding them.

2. Indemnity

2.1 Subject to paragraph 2.2, without prejudice to any indemnity to which you may otherwise be entitled pursuant to Article 155 of the Articles or otherwise and subject to the terms of this Deed, you shall be indemnified and held harmless by the Company to the fullest extent permitted by law against all costs, charges, expenses, losses and liabilities (“Liabilities”) arising out of or in connection with any civil, criminal, regulatory or other proceeding connected with any application under section 144(3) or (4) or section 727 of the Act whether instigated, imposed or incurred under the laws of England and Wales or the laws of any other jurisdiction (“Proceedings”) which relate to any act done or omitted or alleged to be done or omitted by you whilst in the course of acting or purporting to act as a director or officer (or equivalent position under the laws of any relevant jurisdiction) of the Company and/or any associated company of the Company (as defined in section 256(b) of the Act for these purposes) (an

1

“AssociatedCompany”) or which arises by virtue of you holding or having held such a position (“Claim”).

2.2 The indemnity in paragraph 2.1 shall not apply to:

2.2.1 any Liability relating to any taxation or national insurance payable by you in connection with your remuneration or other benefits received from the Company or any Associated Company;

2.2.2 the extent you are entitled to recover from any other person (including under any policy of insurance) any amount in relation to a Claim;

2.2.3 any Liability incurred by, or Claim made against, you which the board of directors of the Company (the “Board”) reasonably determines arises out of your fraud, wilful deceit, wilful misconduct, reckless conduct, dishonesty or act of bad faith (“Misconduct”), save that if a court, tribunal or regulatory authority thereafter finally determines that the relevant Liability or Claim did not arise as a result of your Misconduct, you may, by notice to the Company, request payment of such amount from the Company as the Company would have been liable to pay under this Deed had the Board not made such a determination and the Company shall make a payment to you upon satisfaction of the obligation in paragraph 2.4; or

2.2.4 any Claim initiated by you, including any Claim initiated by you against the Company or an Associated Company or any of their respective directors, officers, employees or other indemnified persons, unless the Board has authorised the Claim prior to its initiation.

2.3 References in paragraph 2.1 to acts or omissions are to acts or omissions made or omitted to be made before, on or after the date of this Deed, however:

2.3.1 if a company ceases to be an Associated Company after the date of this Deed, the Company shall only be liable to indemnify you in respect of Liabilities arising from acts done or omitted or alleged to be done or omitted in relation to that company before the date on which the company ceased to be an Associated Company; and

2.3.2 you, as an officer (or equivalent position under the laws of any relevant jurisdiction) of any company which becomes an Associated Company after the date of this Deed, shall be indemnified only in respect of Liabilities arising from acts done or omitted or alleged to be done or omitted after the date on which that company becomes an Associated Company.

2.4 The Company’s obligation to make any payment to you under paragraph 2.1 depends on you having made an application in writing to the Company supported by such documentation and evidence which, in the reasonable opinion of the Board, is satisfactory to prove that:

2.4.1 the Liability suffered or incurred by you and of the date(s) on which it was suffered or incurred and that it falls within the scope of the indemnity given in paragraph 2.1; and

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2.4.2 any costs and expenses of any third party (including legal costs) which are to be reimbursed by the Company in accordance with paragraph 2.1were properly incurred and reasonable in amount,

and to the extent that the Company is satisfied that these conditions have been fulfilled, the Company shall make payment to you within 20 Business Days (being a day that is not a Saturday or Sunday or a public holiday in England) of receipt of such application.

3. Defence Costs

3.1 Without prejudice to the generality of the indemnity set out in paragraph 2.1 of this Deed, and subject to the remainder of this paragraph 3, the Company agrees to fund such amounts as are required to meet such legal and other reasonable costs and expenses incurred by you in connection with any Claims.

3.2 Any request for funding under this paragraph shall be made by you to the Company and made subject to such conditions as the Board thinks fit.  The Company shall provide the relevant funding within fourteen days of receipt of any such written request.

3.3 The Company shall not be required to pay any amounts due under paragraph 3.1, and any amounts paid shall become immediately repayable upon demand from the Company, to the extent that the Board reasonably determines that the relevant Proceedings arose out of your Misconduct.

3.4 The Company shall not be required to fund any legal or other costs and expenses incurred by you in respect of any Claims initiated by you, including any Claim initiated by you against the Company or an Associated Company or any of their respective directors, officers, employees or other indemnified persons, unless the Board has authorised the Claim prior to its initiation.

4. Directors’ and Officers’ Liability Insurance

The Company shall use all reasonable endeavours to provide and maintain appropriate directors’ and officers’ liability insurance (including ensuring that premiums are properly paid) for your benefit for so long as any Claims may lawfully be brought against you.

5. Notification and Conduct

5.1 If you receive any demand relating to a Claim or become aware of any circumstances which might or may be reasonably expected to give rise to the Company being required to indemnify you pursuant to this Deed and before incurring any costs, charges or expenses in respect of any Claim (including securing legal representation), you shall:

5.1.1 as soon as reasonably practicable, give written notice of the circumstances to the Company, as well as any other information which the Company may reasonably request from time to time;

5.1.2 take all reasonable actions to mitigate any Liability you suffer in respect of the circumstances giving rise to the Claim (including any action that the Company may reasonably request to avoid, dispute, resist, appeal or defend any Claim and shall not

3

make any admission of liability, agreement or compromise with any person in relation to any Claim without the prior written consent of the Company);

5.1.3 forward all documents you receive in respect of such Claim to the Company as soon as reasonably practical following receipt;

5.1.4 assist the Company as it may reasonably require in resisting, defending or settling the Claim; and

5.1.5 provide to the Company all such information in relation to any Claim or Liabilities as the Company may reasonably request, and take all such action as the Company may reasonably request.

5.2 Notwithstanding the provisions of paragraph 5.1, you shall not be required to provide any document or information to the Company where doing so would result in a loss of privilege in that document or information.

5.3 The Company or an Associated Company (as the case may be) will be entitled to take over, negotiate and conduct in your name the defence to or settlement of any Claim or to prosecute in your name for its own behalf any proceedings relating to a Claim.

5.4 If the Company or an Associated Company exercises its right pursuant to paragraph 5.3, the Company or relevant Associated Company shall:

5.4.1 consult with you in relation to the conduct of the Claim or Proceedings on aspects of the Claim or Proceedings materially relevant to you and keep you reasonably informed of material developments in the Claim or Proceedings, provided that the Company or Associated Company shall be under no obligation to provide any information the provision of which is reasonably likely to adversely affect the ability of the Company or an Associated Company to claim in respect of the relevant loss under any applicable policy of insurance;

5.4.2 take into account your reasonable requests relating to the Claim or Proceedings (including any settlement) on issues which may be reasonably likely to result in material damage to your reputation; and

5.4.3 have full discretion in the conduct or settlement of the Claim or Proceedings relating to such Claim provided you are not required to make any contribution to the settlement and the settlement contains no admission of liability by you.

5.5 The Company’s obligations owed to you under this Deed (including the obligation to indemnify you in paragraph 2.1) is conditional upon your compliance with the provisions of this paragraph 5.

6. Miscellaneous

6.1 Effect of Ceasing to be an Officer of the Company or any Associated Company

In the event that you cease to be an officer (or equivalent position under the laws of any relevant jurisdiction) of the Company or any Associated Company, this Deed shall remain in force and

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you will continue to be indemnified in accordance with the terms and conditions of this Deed, until such time as any relevant limitation periods for bringing Claims against you have expired, or for so long as you remain liable for any Liabilities, notwithstanding that you may have ceased to be an officer (or equivalent position under the laws of any relevant jurisdiction) of the Company or any Associated Company.

6.2 Payments

The Company shall, in the event that a payment is made to you under this Deed in respect of a particular Liability, be entitled to recover from you an amount equal to any payment received by you under any policy of insurance or from any other third party source to the extent that such payment relates to the Liability, or if the payment received by you is greater than the payment made under this Deed, a sum equal to the payment made under this Deed. You shall pay over such sum promptly on the Company’s request.

6.3 Taxation

The Company shall pay such amount to you as shall after the payment of any tax thereon leave you with sufficient funds to meet any Liability to which this Deed applies.  For the avoidance of doubt, when calculating the amount of any such tax the amount of any tax deductions, credits or reliefs which are or may be available to you in respect of the relevant payment under this Deed received by you or any payment made by you to a third party in respect of the relevant Liability will be taken into account.  In the event that any amount is paid to you under this Deed but a tax deduction, credit or relief is or becomes available to you in respect of the relevant payment or any payment made by you to a third party in respect of the relevant Liability which was not taken into account in calculating the amount payable in respect of the relevant payment under this Deed, you shall make a payment to the Company of such an amount as is equal to the benefit of such deduction, credit or relief which was not taken into account.

6.4 No Double Recovery

You shall not be entitled to recover any Liability more than once and in the event that the Company makes payment under this Deed, the Company shall be subrogated to the extent of such payment to all of your rights of recovery against third parties (including any claim under any applicable directors’ and officers’ insurance policy) in respect of the payment and you shall do everything that may be necessary to secure any such rights including:

6.4.1 the execution of any documents necessary to enable the Company effectively to bring an action in your name; and

6.4.2 the provision of assistance as a witness.

6.5 Assignment

The Company may at any time assign, mortgage, charge, subcontract, delegate, declare a trust over or deal in any other manner with any or all of its rights under this Deed, provided that it gives notice of such dealing to you. You shall not assign, transfer, mortgage, charge, subcontract, declare a trust over or deal in any other manner with any of your rights and obligations under this Deed.

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6.6 Entire Agreement

This Deed constitutes the entire agreement between the parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.

6.7 Severance

If any provision or part-provision of this Deed is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this paragraph 6.7 shall not affect the validity and enforceability of the rest of this Deed. If one party gives notice to the other of the possibility that any provision or part-provision of this Deed is invalid, illegal or unenforceable, the parties shall negotiate in good faith to amend such provision so that, as amended, it is legal, valid and enforceable, and, to the greatest extent possible, achieves the intended commercial result of the original provision.

6.8 Notices and Demands

6.8.1 Any notice or demand given to a party under or in connection with this Deed:

6.8.1.1 shall be in writing and in English;

6.8.1.2 shall be signed by or on behalf of the party giving it;

6.8.1.3 shall be sent by a method listed in paragraph 6.8.2; and

6.8.1.4 is deemed received as set out in paragraph 6.8.2 if prepared and sent in accordance with this paragraph.

6.8.2 This paragraph 6.8.2 sets out the delivery methods for sending a notice to a party under this Deed and, for each delivery method, the date and time when the notice is deemed to have been received (provided that all other requirements of this paragraph have been satisfied and subject to the provisions in paragraph 6.8.3):

(a) if delivered by hand, on signature of a delivery receipt or at the time the notice is left at the address;

(b) if sent by pre-paid first class post or other next working day delivery service, at the time recorded by the delivery service; or

(c) if sent by pre-paid airmail, at the time recorded by the delivery service.

6.8.3 If deemed receipt under paragraph 6.8.2 would occur outside business hours in the place of receipt, it shall be deferred until business hours resume. In this paragraph, business hours means 9.00 a.m. to 5.00 p.m. Monday to Friday on a day that is not a public holiday in the place of receipt.

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6.8.4 This paragraph 6.8 does not apply to the service of any proceedings or other documents in any legal action or, where applicable, any arbitration or other method of dispute resolution.

6.9 Variation

6.9.1 No variation of this Deed shall be effective unless it is in writing and signed by the parties (or their authorised representatives).

6.9.2 No failure or delay by a party to exercise any right or remedy provided under this Deed or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy.

6.10 Counterparts

6.10.1 This Deed may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all the counterparts shall together constitute the one deed.

6.10.2 Transmission of an executed counterpart of this Deed (but for the avoidance of doubt not just a signature page) by email (in PDF, JPEG or other agreed format), shall take effect as delivery of an executed counterpart of this Deed.

6.10.3 No counterpart shall be effective until each party has executed and delivered at least one counterpart.

6.11 Third Party Rights

Unless this Deed expressly states otherwise, this Deed does not confer any rights on any person or party (other than the parties to this Deed and any Associated Company) pursuant to the Contracts (Rights of Third Parties) Act 1999.

6.12 Governing Law and Jurisdiction

6.12.1 This Deed and any dispute or claim arising out of or in connection with its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.

6.12.2 You and the Company irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Deed or its subject matter or formation (including non-contractual disputes or claims).

[Deliberately left blank, signature page to follow.]

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IN WITNESS WHEREOF, this Deed has been executed as a deed by the Company and you on the day and year first above written.

EXECUTED as a DEED by SILENCE THERAPEUTICS PLC acting by [Name ofDirector], a director and [Name of Director], a director
	Director
	Director
EXECUTED as a DEED and delivered by
[Name of Officer]
In the presence of:
Witness signature:
Name:
Address:
Occupation:

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EX-21

EXHIBIT 21.1

Subsidiaries of Silence Therapeutics plc

Name of Subsidiary	Jurisdiction of Organization
Silence Therapeutics Inc.	Delaware
Silence Therapeutics GmbH	Germany
Silence Therapeutics (London) Ltd.	United Kingdom
Innopeg Ltd.	United Kingdom

EX-23

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form F-1 of Silence Therapeutics plc of our report dated June 22, 2020 relating to the financial statements of Silence Therapeutics plc, which appears in this Registration Statement.  We also consent to the referenceto us under the heading“Experts” in such Registration Statement.

/s/PricewaterhouseCoopers LLP

August 20, 2020